Business Architecture 101: What Is It and Why Does It Matter?
Are you looking for a way to improve your business? Do you feel like you and your team are stuck in the same old routine doing the same old things?
Well, have you considered looking at your business architecture?
The complete makeup of your business could be the thing that's holding you back. And, it goes beyond the leadership structure of your business.
To learn more about business architecture and why it's important for your company, keep reading.
What Is Business Architecture?
There are several business architecture definitions. But, the most complete definition tells us that business architecture looks at businesses holistically and multidimensionally. With this definition, we're considering the following:
- The business' capabilities
- The business' value delivery from end to end
- The business' information
- The business' organizational structure
- The business' views
- The business' strategies
- The business' products
- The business' policies
- The business' initiatives
With this, we're also looking at the relationship between business stakeholders and the company.
The term business architecture gives us an understanding of the organization as a whole. This includes its objectives, demands, and performance. With this information, we can construct a blueprint of the organization itself.
By doing so, we can look at the business from several angles.
For instance, we can determine perspectives about the company from the inside and outside. This includes the stakeholders that may lie in the middle.
We can also establish common terminology regarding the business and its inner workings. Lastly, we can look at whether the business is giving the value that it should be.
What Are the Elements of Business Architecture?
There are four main elements of business architecture: information, capability, organization, and value stream.
A business' information tells us how it communicates, while the business' capability tells us what the business does. The organization describes the structure of the company. And, the value stream indicates the value the company delivers to its stakeholders.
By looking at all of these elements, we can see the big picture of the organization that we're analyzing. Each of these important aspects tells us a lot about the company and its critical components.
Even further, looking at how these pieces fit together gives us the bigger picture of how the company operates.
Why Does Business Architecture Matter?
The importance of business architecture has to do with change.
When a company is considering making a change, it has to look at the elements that are most relevant to the change that it's wanting to implement. Usually, people look at the end result that they want from the change to figure out what they actually need to adjust.
Once the team figures out where they can make a shift in business architecture, they can prioritize and allocate as needed.
Teams can also tell how the transformation will impact other areas of the business by looking at how certain architectural matters are connected. So, teams can make an impact analysis ahead of time.
Even if you haven't considered making changes to your business yet, a business architecture plan can help you identify areas of weakness that may need your attention. By monitoring and assessing various performance metrics across your business architecture, you can determine which elements are underperforming.
Thus, you can decide where you need to invest time and money.
Overall, business architecture can help us coordinate actionable plans across companies while considering company goals, visions, and strategies.
Business Architecture Strategy
In order to apply business architecture strategy to your organization, you need to consider these four key components:
- Business architecture - business goals and strategies
- Data architecture - the information that each action needs
- Application architecture - creation and connection of each data point to an action
- Technology and infrastructure architecture - tools that help business applications run effectively
The first is business architecture. In this first step, you're going to think about and list the business outcomes that you're hoping to get from your organization.
You could use the OGTM framework, which looks at the objectives, goals, tactics, and metrics for your business goals, missions, and visions.
Then, you can meet with functional leaders to develop a plan for how each person can help the company meet its goals.
Next, you can look at data architecture to help you find data to influence processes and decisions. Having data evidence can help you and your team decide how to move forward with business plans.
Application architecture helps you choose the right applications and tools to use when you're trying to meet those goals that you set.
Lastly, technology and infrastructure architecture involves assessing whether the company has the technology necessary to support the changes that you want to make. From cloud storage to security, you should make sure that your business is covered from end to end.
Business Architecture for Business Transformation
Each element of business architecture is important to an overall business transformation goal. If your business is looking to make some changes soon, you need to understand the underlying architecture of your business.
Otherwise, you won't have an underlying structure to consider. Then, it's going to be more difficult to turn your goals into plans.
With business architecture on your side, you can determine how your current business can go from point A to point B. And, you'll consider individuals, departments, and all other moving parts along the way.
This way, you'll be able to plan much more thoroughly and you won't have to worry about coming into contact with unplanned unknowns.
Improve Your Business Architecture
Business architecture is a must for any company. If your business hasn't taken the time to map out its business architecture yet, now is the time.
Even if you aren't planning a big change any time soon, your architecture layout can still give great information about your current business setup. Then, you can use the plan when you need to make changes or allocate funds in the future.
If you need help with your next change project look no further than Ignite Consulting. Our change management service can help you conquer business architecture and make the most of your business architecture strategy.
