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« Two Headed Beast | Main | The Next Evolution: Enterprise Architecture Guidance »
Wednesday
Oct182006

Should IT include a business architecture function?

I have had a couple of discussions recently about the place of Business Architecture in an organisation.

The first conversation was with the CIO of a Bank who asked me “Should IT include a business architecture function?” My response was that if the purpose of the business architecture function was to design the business operating model then “no”. If the purpose was to capture and formalise the business operating model then “possibly”.

A well-managed mature organisation will be continually re-evaluating its objectives, processes, external relations and structure. The function that carries out these activities may be called “strategy” or “business change” or something else but it is the business architecture function.

Ideally, this business architecture function will formalise the business design as a set of models. The operational business functions will take these high level models, develop them further, and create migration plans. With the IT function, they will identify areas for automation or changes to existing automation. The IT architecture function will develop a coordinated set of migration plans to deliver the required IT support.

In the real world, very few organisations operate like this. I have worked with one. The requirement for business change is not completely coordinated, it emerges in a somewhat haphazard manner, it is often not fully thought through, the objectives may not be explicit, political agendas will be accommodated.

In this case, clarifying the business operating model is essential if IT is to deliver effectively. The process will also resolve inconsistencies and anomalies in the business model. This becomes the role of business architecture within IT. It is not to design the business but to capture and formalise it.

A few days later, I was talking to the Business Architecture Manager of the insurance company that had implemented model-based business architecture as part of a business change function. She made me re-evaluate the conclusions above.

Her view was that, in general, business functions take a short-term view – the current budget, the next product release, the next marketing campaign, etc. At points where the senior management has come to the conclusion that a major business transformation is required they will put in place an business design function but this will be disbanded once the change has been delivered (sometimes earlier). Taking the short termist view, business architecture is not seen to deliver value.

Within IT, business architecture has clear value. It allows synergies between projects to be identified that save money, lower risk and deliver earlier. It allows IT impacts to be identified earlier and avoids expensive analysis errors. It allows business impacts to be identified so that systems changes roll out smoothly. The absence of business architecture means that TCO for IT will be higher.

This leads me to the conclusion that, business architecture as business design is unlikely to be viable as a business function. Business architecture as business design clarification and formalisation is a necessary IT function.

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Reader Comments (5)

At 10/18/2006 06:45:00 PM, Anonymous said...

Alan, agree, great thoughts.

The same topic was brought up by James Tarbell, Business Architecture Anyone?, and has several comments on the topic.

Also, the book Enterprise Architecture as Strategy, also makes note that the analysis of the operating model is critical to what is referred to in the book as a "Foundation for Execution."

Tom

(from the original blog site)

February 15, 2007 | Unregistered CommenterAlan Inglis

At 12/21/2006 04:01:00 AM, Anonymous said...

Alan - I've essentially copied a comment I left to one of Tom Rose's posts (http://tomrose.blogspot.com/2006/11/elusive-businessit-alignment-everyone.html#links) since I think it also applies here if I am understanding what you mean by Business Architect.

Another useful way to look at this is to structure IT around its 2 main support functions.

The first is the "run the business" function. These are the folks in application development and operations that do all the day-to-day functions needed by the business to continue to operate. This role is tactical in nature and the focus is on helping the company achieve monthly, quarterly, annual business goals.

The second is to "grow or change the business". These are the business analysis folks that work closely with the business units (BU) to help them achieve the strategic vision. (This is essentially the Business Architecture function you are talking about if I understand it correctly.) By working closely I mean participating in the BU teams meetings etc. to the point it almost it appears that they work for the BU rather than for IT. This is a more strategic role and is focused towards the "vision" rather than the next period plan objectives and goals.

IT has always done the first function but the second function is just now becoming more common. It is this second, strategic function that I think you are starting to hear about in the investor calls and in the annual reports.

The challenge for CIO's is how to develop this new second function while maintaining the first. Very often the BU and even more often the IT group are not used to seeing IT in this mode and struggle with how to utilize IT for this.

Mike Schaffner
http://www.mwschaffner.com

(from the original blog site)

February 15, 2007 | Unregistered CommenterAlan Inglis

The fact that IT is now taking on the role of "grow(ing) or change(ing) the business". reflects the maturation of it from a computer oriented business unit to one that manages the business' information technology which includes business processes, knowledge and more.

One of the challnges businesses face as this maturity happens is that senior management may delegate more and more of this org design and strategy work to IT and as they do the IT folk may veer off the stategic course due to their focus on the short to mdium term rather than the long term objectives.

August 25, 2007 | Unregistered CommenterCraig Brown

The points for business architecture (BA) aligned within IT are well made, but the conclusion is wrong. I am not surprised to hear IT managers advocate for BA to be aligned within their organizations because it is essential to the execution of their mission and value to the organization. However, in my experience BA is managed within IT only when the business abdicates the role and IT is forced to fill the gap in order to develop effective business systems. BA should be managed by the business as a critical component of strategy development and execution. Business managers should be the primary drivers/ owners of business architecture relative to operational systems and collaborate with IT to determine both the opportunities and priorities for process and business systems improvement. Unfortunately, most business managers do not see the connection, or see it as too complex to be managed within the business and end up with IT driving business architecture by default based on what they see as possible versus what the business requires to execute the business vision and strategies. IT is also at fault at times because it makes the process so complex and cumbersome, that it almost ensures that business managers will abdicate the responsibility, thus causing the business to fall into an endless series of releases that generate less than optimal business value. Ironically, the end result of this dynamic is that IT expenses grow faster than the benefits generated by each subsequent release and are therefore targeted for reduction. A good IT manager will not allow the business to abdicate the BA role and will help the business manager understand not only the complexities of the business systems but the opportunities to reduce costs (or increase value) by having the business drive BA via the execution of the business vision and strategies.

May 13, 2009 | Unregistered CommenterDan Bettenburg

Thank you Dan for your comment with which I agree on almost all points. I think that the points you make about IT processes are very important. Sometimes we impose process for process sake. Other times we fail to explain the value that the process brings. And sometimes we fail to be flexible in our approach.

My point was that over the long run, in many organizations, business architecture goes through periods where it is not valued. In order to retain business architecture as a long term viable business function, the activities of business design clarification and formalization should be within IT. The drive behind business architecture must come from the business. Business Design itself must be a business activity. The key is placing the different activities where they are most likely to succeed and effective collaboration.

There is a pattern that I have seen being effective is where the business appears to have abdicated business architecture. Rapid and rigorous clarification of business architecture by IT based business architects has shown the implications of "IT driving business architecture". The results can be large numbers of change requests or wholesale re-evaluation of the project pipeline which is uncomfortable. However, the end result is that the business and IT are better aligned.

Incidentally, the Business Architecture Manager had moved from the business into IT and felt that her function was more secure within IT.

May 17, 2009 | Registered CommenterAlan Inglis

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