With an understanding of how general business structures are organized, along with how those structures can be optimized through the principles of Business Architecture alignment, it

PART 1: INTRODUCTION

Purpose of the BIZBOK® Guide

A Guide to the Business Architecture Body of Knowledge® (BIZBOK® Guide) provides an industry standard framework for business architecture practitioners and individuals who wish to use business architecture to address business challenges. This practical guide comes in the form of best practices, gleaned from numerous companies and business architecture leaders. Practitioners of business architecture understand the importance of having a comprehensive yet user-friendly handbook for the growing number of organizations embracing this important discipline.

The BIZBOK® Guide benefits organizations at every stage of the business architecture practice. The focus on practitioners is geared at advancing organizations that have already committed at least some resources toward business architecture. Organizations just getting started can use it as a means to establish a foundation for a solid business architecture practice. For those organizations with an established business architecture practice, it enables deployment teams to solidify best practices while incorporating aspects of business architecture that may have been underemphasized in the past.

The BIZBOK® Guide also provides a complete picture of business architecture, tying together various concepts, disciplines, principles, and best practices into an overall framework. In addition, it has the capacity to incorporate and leverage a wide range of business practices and emerging disciplines. As a result, it establishes the standard for building, deploying, and leveraging business architecture within an organization. The BIZBOK® Guide is practitioner-driven, representing a collective and growing body of contributions from business architecture practitioners across a variety of industries worldwide.

What is Business Architecture? Dating back to 2008 through 2016, business architecture was defined as “a blueprint of the enterprise that provides a common understanding of the organization and is used to align strategic objectives and tactical demands”.1 This definition was vetted repeatedly by multiple standards committees and practitioners and stood the test of time, incorporating several important elements that established both the foundation and the justification for business architecture and related best practices.

As the discipline of business architecture matured, its role expanded across business and related architecture domains. This increased visibility led to a cross-disciplinary desire for a common,

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revised definition that more accurately reflects the essence of business architecture and its applicability to a business. In January 2017, the Business Architecture Guild® and a number of related professional associations and industry standards organizations ratified new definitions for business and related architecture disciplines. As a result of this holistic industry collaboration, a new business architecture definition emerged as follows.

“Business architecture represents holistic, multidimensional business views of: capabilities, end- to-end value delivery, information, and organizational structure; and the relationships among these business views and strategies, products, policies, initiatives, and stakeholders”.2

This definition provides a more succinct articulation of foundational business architecture as well as its ability to align and synchronize aspects of the business that range from strategic planning through initiative deployment. While the definition has been updated to more accurately reflect the practice, the value proposition remains consistent. The business architecture value proposition is summarized as:

The value of business architecture is to provide an abstract representation of an enterprise and the business ecosystem in which it operates. By doing so, business architecture delivers value as an effective communication and analytical framework for translating strategy into actionable initiatives. The framework also enhances the enterprise’s capacity to enact transformational change, navigate complexity, reduce risk, make more informed decisions, align diverse stakeholders to a shared vision of the future, and leverage technology more effectively.

A fundamental aspect of business architecture is that it represents a business ecosystem, signifying that a business does not begin or end at the boundaries of the enterprise. A business ecosystem is defined as “one or more legal entities, in whole or in part, that exist as an integrated community of individuals and assets, or aggregations thereof, interacting as a cohesive whole toward a common mission or purpose.”

The holistic, ecosystem focus ensures that business architecture can and should represent customer, partner, and related external stakeholders; value stream perspectives that, in some cases, exist in part outside of internal stakeholder’s line of sight; outsourced capabilities; and value delivery from a multidimensional viewpoint. In effect, business architecture reflects multidimensional aspects of a real-world business in an abstract format. Figure 1.1 depicts these “abstractions” as high-level business domains within the business architecture.

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Figure 1.1: Aspects of the Business Represented by Business Architecture

Business architecture domains are business focal points used to establish formal abstractions needed to represent a business. Business architecture domains form the basic building blocks of business architecture and provide the basis for establishing a wide variety of business abstractions, enabling business transparency.

Domains represented in figure 1.1 are related to each other in various ways. For example, a business is broken down into business units, each of which has certain capabilities. Capabilities enable stages within various value streams and require certain information. Organization, capability, value streams, and information comprise the foundation of the business architecture. These four “core” domains, represented by the inner circle in figure 1.1, are considered foundational because they are relatively stable compared to other aspects of the business.

For example, a 100-year-old insurance company would have had similar capabilities as it does today: Customer Management, Insurance Policy Management, and Claims Management. While these capabilities would not have had automation 100 years ago, they still existed, along with certain business units and value streams such as Settle Claim. The company would have also used similar information such as Customer, Insurance Policy, or Claim, and the instances of these domain categories tend to be relatively static.

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The extended set of business architecture domains, shown in the outer rim of the circle in figure 1.1, depicts aspects of the business that, in some cases, change more frequently than core domain perspectives. These outer rim domain categories extend the business architecture in a variety of ways. For example, stakeholders (such as customers, business partners, and various internal stakeholders) are used to communicate who receives business value and participates in the delivery of that value. These stakeholder categories may have existed long ago, but it is likely that the specific stakeholders in each category have evolved. Similarly, the instances of products being delivered may change frequently along with other domains such as strategy and policy. As a result, updates to the instances of these business architecture domains would be more dynamic than updates to instances of capabilities, information, or value streams.

In all cases, however, business architecture domain categories, once established for a given business, have the capacity to absorb and represent a wide variety of business perspectives. BIZBOK® Guide sections 2.2 through 2.5 outline how to build out business architecture core domains while the remaining sections in part 2 discuss building out the extended domain categories. Relationships among business architecture domains, represented through various blueprints, provide the foundation for a robust, highly flexible business architecture that delivers business transparency to address a wide variety of business needs.

Business architecture represents real-world aspects of a business, along with how they interact, to help executives and other stakeholders answer commonly asked questions: who, what, where, when, why, and how. Answers to these questions, derived from the business architecture, are used to develop plans and make and implement business decisions. This understanding is the essence of business architecture and a foundation for the material presented within the BIZBOK® Guide. Of course, representing this information is one facet; making it useful to individuals who need only a portion of this information at a given time and have little time or patience to sort through the details introduces another aspect of business architecture: blueprints.

Blueprints are abstract representations of reality that represent a wide variety of viewpoints. There are building blueprints, ship blueprints, and, within this discussion, business blueprints. A given blueprint represents one view of the business. There are many types of business blueprints, as shown in the examples in figure 1.2. These blueprints, along with numerous others, enable organizations to visualize their business from a variety of perspectives, providing management with information about a given aspect of the business within a specific context. For example, the Balanced Scorecard, shown in figure 1.2, provides management with measures against certain business goals and objectives.

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Figure 1.2: Business Architecture Represented Through Business Blueprints

One important difference between business architecture derived balanced scorecards, dashboards, and related blueprints and traditional financial reporting is that business architecture focuses on the essence, structure, and overall transparency of the business, not on financial performance. Just as a blueprint of a ship would not provide statistics on top speed attained on an Atlantic Ocean crossing or average speed per crossing, business architecture does not provide financial analytics. Financial reporting systems will continue to produce financial performance results for business teams. Business architecture, however, identifies how effective the organization is in building financial analytics and where the organization can improve this capability from a holistic perspective.

Business architecture opens up an entirely new level of business transparency that allows management teams to streamline planning, evaluate the value of funded initiatives against strategies, and craft more effective transformation roadmaps. This transparency is possible because business architecture blueprints stem from a common vocabulary, standardized framework, and shared knowledgebase. As such, dashboard results align in practice with value streams, capabilities, information views, business objectives, key performance indicators, initiatives, and related business viewpoints. As a result, executives, managers, planning teams, analysts, and other stakeholders can view the business through a common lens — eliminating much of the confusion found across business units, strategy sessions, and initiatives.

Initiatives

Stakeholders

Products

Strategies

Metrics

Policies Capabilities

Information

Value Streams

Organization

Business Architecture

Business Architecture “Knowledgebase”

Balanced Scorecard

Organization Models

Supply Chain Models

Value Chain Models

Information Map

Process / Value Stream Aggregation &

Decomposition

Business / IT Domain Mappings

Blueprints Built on Common Foundation

Capability Map

Value Streams

Dashboards

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Business architecture is typically used alongside other business and operating models to enable businesses to drive investments based on a shared view of the business. Too often, organizations establish priorities and investments on a fragmented business perspective based on the needs of individual business unit siloes. As shown in figure 1.3, the well-defined, ecosystem-wide perspective provided by business architecture allows an organization to continually align its operating model to a holistic business strategy, which, in turn, provides an organization holistic views of operations, marketplace, and business activities that are often incomplete without business architecture.

Figure 1.3: Business Architecture’s Alignment with the Operating Model

One misunderstanding that individuals new to business architecture often experience involves confusion between business architecture and the operating model. As shown in figure 1.3, the operating model is process, people, and technology focused. While useful for improving efficiencies and costs as well as implementing detailed changes to the business and IT environments, the operating model lacks the value-driven, capability-based, ecosystem-wide perspective needed to deploy actionable strategies, ensure consistent policy compliance, and optimize initiative investments.

The BIZBOK® Guide walks practitioners through the creation and application of business architecture across various scenarios as well as the deployment and governance of the practices. It also provides insights into how to use business architecture to achieve business goals through an overall framework that integrates with business process, case management, business analysis, and information technology disciplines.

Business Architecture Framework Basic business architecture concepts and the ability to visualize this information in a variety of ways is only part of the business architecture story. Organizing this information in useful ways and being able to relate and combine these concepts require a foundational framework, shown

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in figure 1.3. The framework concept does not impose prescriptive or restrictive concepts into the practice of business architecture. Rather, the framework provides a foundation that organizations can build upon and customize based on unique business architecture requirements, driven by real-world challenges.

Figure 1.4: The Business Architecture Framework

There are three important components within the business architecture framework: business blueprints, business architecture scenarios, and the business architecture knowledgebase.

As previously noted, business blueprints deliver business transparency that enables and streamlines business transformation across business units, capabilities, and stakeholders. The degree of transparency delivered by these blueprints rarely exists in many organizations. As a result, the participants in strategy planning sessions often miss the essential understanding of how to maximize solution-related investments while ensuring that one business unit’s success does not create problems for the enterprise as a whole.

For example, consider the company that was creating multiple, competing enrollment solutions for the same customer base across multiple product lines. The projects could have succeeded in principle, yet they created more complexity and dissatisfaction across the customer base. Business architecture provides the transparency necessary to discover these issues in advance — before money and goods are squandered. Essential business architecture blueprint building and usage are outlined in detail in part 2 of the BIZBOK® Guide.

The framework also incorporates the concept of business architecture scenarios, which provide

Business Architecture Blueprints

Business Architecture

Scenarios

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business transparency on specific business initiatives. Business architecture is applied differently based on the type of scenario at hand. For example, a business team involved in a merger and acquisition would require different information than another team considering how to stem customer attrition. Applying business architecture through various business scenarios, thereby leveraging blueprint views derived from the business architecture knowledgebase, enables business teams to create and deploy a wide variety of transformation roadmaps. Because this approach is based on a common view of the business across business units, it enables improved executive sponsorship and more sustainable funding structures.

Sample scenario topics, a good many of which are covered in the BIZBOK® Guide, include:

• Investment Analysis • Shift to Customer Centric Business Model • Digital Transformation • Merger and Acquisition Analysis • New Product / Service Rollout • Globalization • Business Capability Outsourcing • Supply Chain Streamlining • Divestiture • Regulatory Compliance • Change Management • Operational Cost Reduction • Joint Venture Deployment • Customer Experience Improvement • IT Portfolio Investment Analysis

These business architecture scenarios define the collective set of initiatives, programs, and projects that leverage business architecture. Of particular importance for each scenario is the creation of a roadmap necessary to advance that particular scenario. Business architecture scenario approaches are discussed in detail in part 4 of the BIZBOK® Guide and further augmented by business architecture case studies in part 7.

The business architecture knowledgebase is used to store the information about the business and is organized in concise ways that are customized to a given organization’s environment. For example, corporations have divisions and departments while governments may use different terminology. There are generic approaches to knowledgebase structure as well as organization- specific approaches. For example, a government agency would have unique organizational structures in comparison to a hospital or shipping company. Knowledgebase management is

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discussed in part 5 of the BIZBOK® Guide and is also incorporated into various blueprint discussions.

Business Architecture Principles Business architecture is principle driven. A principle is an agreed upon truth that can guide one’s reasoning. This approach offers practitioners a wide degree of latitude in the practice of establishing and leveraging business architecture. Each major section has a set of principles that guide actions associated with individual blueprints and related practice areas.

Core principles that apply to business architecture as a whole are listed below:

1. Business architecture is about the business. 2. Business architecture’s scope is the scope of the business. 3. Business architecture is not prescriptive. 4. Business architecture is iterative. 5. Business architecture is reusable. 6. Business architecture is not about the deliverables.

These statements emphasize a principle-based approach to business architecture that provides practitioners the option to employ a variety of methods, visualization techniques, tools, and governance concepts. The common thread is that each approach adheres to a foundational set of principles that aligns the practice of business architecture without dictating how the work is done or restricting the creativity of the practitioner. While using various portions of the BIZBOK® Guide, particularly parts 2 and 3, look for the principles section that serves as a foundation for best practices in that particular topic area.

Business Architecture’s Role in Strategy Execution Business architecture plays a critical role in strategy execution, enabling it to be successful in new ways by providing enterprise context and new levels of transparency from end-to-end for decision-making. With a business architecture in place, it is possible to inform strategies with new insights related to opportunities and impacts, effectively translate them into comprehensive, actionable steps, as well as scope initiatives and ensure their alignment back to the strategy – all in a coordinated way across business units. Figure 1.5 outlines an end-to-end path for how strategies and other business direction are realized. This perspective is particularly important because it places business architecture within a more strategic and holistic context, where it is appropriately positioned between strategy and downstream planning and execution activities. It is important to note that this path is initiated every time a stakeholder triggers the need for business direction to be implemented in different scenarios, such as for a new strategy, a business transformation, a significant regulatory change, or integration of a newly acquired

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organization. Business architecture plays an ongoing role and works in partnership with other teams and disciplines. A series of business architecture-supported actions, shown as boxes below each step, provides additional insights into to each step that identify what may be done to achieve stakeholder value. These steps and actions are defined in appendix B.1.

Figure 1.5: Re-envisioning Strategy Execution to Ensure Successful Initiatives and Investments

The first step in figure 1.5 stresses the importance of establishing clear business motivations and direction. The second step assesses the impact of that direction within a business architecture context. Using business architecture, the third step establishes a clear view of the enterprise as it relates to the current and target states of the business from viewpoints relevant to the scenario at hand. This step additionally covers how related business disciplines help frame business

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solutions based on business priorities and related aspects of the business architecture. The fourth step defines initiatives required to achieve the goals set in step one and implement the solutions crafted in step three. The last step delivers the ultimate degree of stakeholder value — a deployed solution and confirmation of success.

Note that while there is an action for addressing business-driven IT architecture definition under step three, this path is not meant to encompass all aspects of a software development solution. Inclusion of this action is merely meant to demonstrate that business solutions requiring IT architecture planning and definition would do so within this step. Business/IT alignment concepts are incorporated within part 6 of the BIZBOK® Guide.

The path in figure 1.5 is not a one-time event but one that will happen many times over based on business issues that arise. In other words, this is a recurring strategy execution path that organizations will be able to apply for years into the future as new and unique challenges arise. The path leverages the three key aspects of the business architecture framework: blueprints, scenarios, and the knowledgebase. Businesses typically employ customized versions of this path, framing their ability to move from a strategic plan through solution deployment.

The BIZBOK® Guide Content Summary

The BIZBOK® Guide is organized into eight major parts and a series of supporting appendices. A part may be divided into several sections. An overview of the BIZBOK® Guide is shown below.

• Part 1: Introduction – Provides an overview of the BIZBOK® Guide as incorporated herein.

• Part 2: Business Architecture Blueprints – Includes detailed mapping discussion of common business blueprints along with guidelines for how to use these blueprints in practice.

o Section 2.1: Business Strategy Mapping – Discusses how business strategy and objectives play a role within business architecture.

o Section 2.2: Capability Mapping – Details the definition, benefits, development, and use of business capabilities in planning and other business areas. The section also includes information about building the capability map and mapping capabilities to other aspects of the business.

o Section 2.3: Organization Mapping – Discusses mapping organizational structures into the business architecture and covers business unit mapping and inclusion of various stakeholders into the business architecture.

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o Section 2.4: Value Mapping – Outlines the definition, benefits, development, and detailed value stream mapping approaches and their use in context of business planning, transformation, and related initiatives.

o Section 2.5: Information Mapping – Provides a business perspective of information and its role in business architecture and delivering business value.

o Section 2.6: Initiative Mapping – Discusses approaches for visualizing business initiatives within the context of business architecture, including viewing initiatives in light of the impact on capabilities, value streams, and delivering business objectives.

o Section 2.7: Product Mapping – Maps a business’ products and cross-maps them to other aspects of business architecture, including the capabilities they enable or deliver.

o Section 2.8: Stakeholder Mapping – Identifies stakeholder definition, business criticality, role in business planning and value determination, and formal mapping to value streams.

o Section 2.9: Policy Mapping – Outlines approaches to organizing and aligning business policies, a critical business perspective in heavily regulated corporate sectors and government agencies.

• Part 3: Business Architecture Practice Guide – Provides perspectives on a wide variety of business architecture practices, like getting started, governance, business model mapping, mapping to related business disciplines, and tooling options.

o Section 3.1: Common Approaches for Getting Started – Discusses how to get started with business architecture and outlines a typical timeline from business planning through deployment.

o Section 3.2: Business Architecture Governance – Incorporates best practices for governing business architecture within an enterprise. Topics include team alignment, role definition, and collaborative governance across a business.

o Section 3.3: Business Architecture and Business Models – Discusses how to use business architecture to interpret business models to achieve actionable results, where a business model describes the rationale of how an organization creates, delivers, and captures value.

o Section 3.4: Business Architecture and Business Process Modeling and Management – Discusses the relationship between business architecture and business process management.

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o Section 3.5: Business Architecture and Case Management – Outlines the important business design concept and how business architecture provides a framework for delivering case management solutions in practice.

o Section 3.6: Business Architecture and Lean Six Sigma &#

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