The term "Business Architecture" is, first of all, an architecture and used to refer to an architectural organization of an enterprise or a business unit, architectural model or profession. A formal definition of the first meaning is defined by the Object Management Group's Business Architecture Working Group
as follows:
"A blueprint of the enterprise that provides a common understanding of the organization and is used to align strategic objectives and tactical demands."
Business Architecture articulates the structure of an enterprise in terms of its capabilities, governance structure, business processes, and business information. The business capability is "what" the organization does, the business processes, are "how" the organization executes its capabilities. In articulating the governance and information, the business architecture considers all external actors to an enterprise (including its customers, suppliers, and regulators), to ensure that flow in and out of the enterprise are captured.
Business architecture topics
Different views of an organization
In order to develop an integrated view of an enterprise, many different views of an organization are typically developed. The key views of the enterprise within the business architecture are:
- Business Strategy view : captures the strategic goals that drive an organization forward. The goals may be decomposed into various tactical approaches for achieving these goals and for providing traceability through the organization. These strategic goals are mapped to metrics that provide ongoing evaluation of how successfully the organization is achieving its goals.
- Business Capabilities view : describes the primary business functionality or business services of an enterprise and the sections of the organization that perform those functions. This view further distinguishes between customer-facing functions, supplier-related functions, core business execution functions, and business management functions.
- Business Knowledge view : establishes the shared semantics (e.g., customer, order, and supplier) within an organization and relationships between those semantics (e.g., customer name, order date, supplier name). These semantics form the vocabulary that the organization relies upon to communicate and structure the understanding of the areas they operate within.
- Business Process view : defines the set of strategic, core and support processes that transcend functional and organizational boundaries. It sets the context of the enterprise by identifying and describing external entities such as customers, suppliers, and external systems that interact with the business. The processes also describe which people, resources and controls are involved in the process. The lowest process level describes the manual and automated tasks that make up workflow.
- Organizational view : captures the relationships among roles, capabilities and business units, the decomposition of those business units into subunits, and the internal or external management of those units.
In addition to the above views of the enterprise, the relationships connecting the aforementioned views form the foundation of the business architecture. This foundation provides the framework that supports the achievement of key goals; planning and execution of various business scenarios; and delivery of bottom line business value.
Disciplined approach
Business Architecture is a disciplined approach to realize business models and to serve as a business foundation of the enterprise to enhance accountability and improve decision-making.
Business Architecture's value proposition, unlike other disciplines is to increase functional effectiveness by mapping and modeling the business to the organization's business vision and strategic goals.
- Mapping identifies gaps between the current and target business capabilities (underlying services, processes, people, and tools).
- Modeling discovers business requirements in the area of interest including stakeholders, business entities and their relationships, and business integration points.
Business Strategy
Business Architecture is directly based on business strategy. It is the foundation for subsequent architectures (strategy embedding), where it is detailed into various aspects and disciplines. The business strategy can consist of elements like strategy statements, organizational goals and objectives, generic and/or applied business models, etc. The strategic statements are analyzed and arranged hierarchically, through techniques like qualitative hierarchical cluster analysis. Based on this hierarchy the initial business architecture is further developed, using general organizational structuring methods and business administration theory, like theories on assets and resources and theories on structuring economic activity. Based on the business architecture the construction of the organization takes shape (figure 1: strategy embedding). During the strategy formulation phase and as a result of the design of the business architecture, the business strategy gets better formulated and understood as well as made more internally consistent.
The business architecture forms a significantly better basis for subsequent architectures than the separate statements themselves. The business architecture gives direction to organizational aspects, such as the organizational structuring (in which the responsibilities of the business domains are assigned to individuals/business units in the organization chart or where a new organization chart is drawn) and the administrative organization (describing for instance the financial reconciliation mechanisms between business domains).
Assigning the various business domains to their owners (managers) also helps the further development of other architectures, because now the managers of these domains can be involved with a specific assigned responsibility. This led to increased involvement of top-level management, being domain-owners and well aware of their role. Detailed portions of business domains can be developed based on the effort and support of the domain-owners involved. Business architecture therefore is a very helpful pre-structuring device for the development, acceptance and implementation of subsequent architectures.
The perspectives for subsequent design next to organization are more common: information architecture, technical architecture, functional architecture. The various parts (functions, features and concepts) of the business architecture act as a compulsory starting point for the different subsequent architectures. It pre-structures other architectures. Business architecture models shed light on the scantly elaborated relationships between business strategy and business design.