Business Architecture:Upwards, Downwards, Sideways, BackTom Graves, Tetradian Consulting
Business architecture:What’s this about?
What is business-architecture?
Where do we start?
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What isBusiness Architecture?
Business-architecture isthe architecture
– the structure and the story –of the business of the
business.
What is Business Architecture?
Domains typically include business-models, operating-models and
capability-models.Domains in the business-architecture may also
include process-architectures, organisation-architectures, financial-
architectures and more.
Each organisation’s Business Architecture is its own choice of
architecture-domains.
Warning…
It’s a distinct architecture in its own right– we need to understand it as such,and then how it intersects with IT.
Business-architecture is more than“anything not-IT that might affect
IT”!
Where to start: Business-model…
Business Model Canvas and Value Proposition
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Where to start: Business-model…
Business Model Canvas populated, crosslinked
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Where to start: Business-model…
Business-model as descriptive story20/01/2016CC-BY-NC Strategyzr
Where to start: Capability-maps…
Capability-map: Functional Business Model
Accept Orders
Contact Customer
Manage the Business
Deliver Orders
Support the Business
Process Orders
Consolidate Orders
Manage Production
Management
Manage Licensee Outbound Operations
Manage Materials
Receipt and Verification
Manage Facility
Pre-Production Processing
Manage Container & Label StrategiesManage VehiclesManage Equipment and
Equipment-StrategiesManage Facility
Property
Manage Relationship
with Licensees
Manage Asset
Service Providers
Manage Transport Sub-Contracts for
Delivery
Manage NCR-Code Configurations
Define Processing Strategies
Define Performance Management
Manage Production Systems Strategies
Design and Develop Facility I nfrastructure
Manage Production-Planning Strategies
Manage Facility
I nformationManage Core
Business
Manage Post-Production Operations
Setup for Contractor Delivery
Manage Equipment
Maintenance
Manage Production Operations
Accept from
Agency
Accept from
Contractor
Accept at Facility
Accept at Customer Location
Manage FinanceManage Human Resources Manage Facility Administration
Manage Materials Strategies
Prepare Customer Transfer
Support Customer
Bulk Orders
Handle Customer
Complaints & Inquiries
Process Service
Requests
Fulfil Order
Prepare Fulfillment Transfer
Support Bulk Fulfillment
Orders
Handle Fulfillment Complaints & Inquiries
Process Fulfillment Requests
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Where to start: Capability-maps…
Three-tier Functional Business Model
Customer
OutboundInbound
Support
Transport
Process
Check and prepare vehicle
Road Transport Operations
Drop Off Orders & empty containers
Handle vehicle incidents (breakdowns,
re-fuel, etc.)
Capture transport run events
Drive transport vehicle between locations
Pick Up Orders & empty containers
Complete preparation of orders into consignments
Commence carrier service
Carrier staff verify consignment details & hand
over consignment to contractor
Lodge consignments with carrier
Verify / accept consignment Visit "trans-ship" port
Complete carrier service
Receive & verify consignments
Handle consignment exceptions
Separate and store containers etc. in preparation
for transport to facility
Domestic Carrier Transport Operations
Planning & Monitoring of Carrier Services
Determine required lodgement &
handover times
Receive new/ updated schedules
from carriers
Develop & maintain carrier lodgement
schedules
Monitor carrier services & provide corrective action
Assess disputed/late consignments
Transport Facility Management
Time and Attendance
Monitoring & Control
Review Facility Performance & implement
improvements
Planning & Scheduling
Staffing & Rostering
Manage
Stream orders into production
batches
Manage batch containers prior
to pick up
Consolidate Orders
Create & Maintain Facility NCR-Code
Plans
Estimate Production Volumes
Plan & Schedule Production Operations
Staffing & Rostering
Time and Attendance
Monitor Order Processing
Review Facility Performance & imp.
improvements
Corrective Action for Processing
Quality Control
Dock Management
Production Management
Corrective Action for Transport &
Delivery
Materials Receipt and Verification
Inspection of inbound materials
Process “Under Bond” Materials
Process Hazardous Materials
Handover Materials to Warehouse
Licensee Outbound Operations
Inspection of outbound product
Prepare licensee consignment for
despatch
Capture outbound volumes and
events
Despatch outbound product via licensee
carrier
Receive Transfers at Facility
Transfers Damage Check
Slotting / Sequencing
Interleaving
Pre-Mould Verify
Slippage Adjustment
Batch Alignment for Moulding
Pre-Production Processing at
Facility
Capture Processing Events
Prepare Customer Transfer
Plan Transfer Production
Prepare Transfer Data
Prepare Transfer Production
Prepare Transfer Documentation
Support Customer Bulk Orders
Advise customer of bulk-order
issues
Manage Customer Order
Quality
Support customer bulk orders
Handle Customer Complaints &
InquiriesReceive & record
notification of problems
Investigate & resolve problems
Report Status of Order
Handle general inquiries
Process Service Requests
Process Requests
Process Other Requests
Process Payment for Service
Consumable Tools
ManagementSpecify Tools requirements
Acquire & Locate Consumable Tools
Maintain inventory of Consumable Tools
Manage & perform maintenance of
Consumable Tools
Container & Label Management
Specify container requirements
Acquire & Supply Containers
Manage & perform maintenance of
containers
Maintain inventory of containers
Label Policy & Design
Manage Label Stock
Specify vehicle requirements
Vehicle Management
Purchase or Lease vehicles (&
accessories)
Dispose of vehicles
Maintain inventory of vehicles
Manage contracts with fuel suppliers
Monitor payments to fuel suppliers
Manage allocation of vehicles to facilities
Manage vehicle registration &
insurance
Prepare claims for diesel & alternative
fuel grant
Manage maintenance of
vehicles
Design, Specify & Evaluate New
Equipment
Purchase/Dispose Equipment &
Spares
Install & Relocate Equipment
Develop Maintenance
Strategies
Monitor & Optimise Performance &
Reliability
Equipment Management
Ensure Logistics & OH&S Compliance
Manage Equipment Configuration
Manage Technical Documents &
Support Systems
Manage Inventory, Repairs & Stores
Infrastructure
Property Management
Specify Property Requirements
Acquire Property
Dispose of Property
Manage Building Administration
Establish & Maintain Relationships with
Licensees
Manage Relationship with
Licensees
Calculate Revenue due from Licensees
Specify materials requirements
Materials Management
Acquire & Locate Materials
Maintain inventory of Materials
Select & Manage Asset Maintenance Service Providers
Evaluate & select Asset Maintenance Service Providers
Establish & maintain Asset Maintenance
Contracts
Monitor Service Provider performance
Terminate Contract
Manage Transport Sub-Contractors
Maintain Contractor Service Information
Evaluate & Select Transport
Contractors
Establish & Maintain Transport Contracts
Monitor Contractor Performance
Manage Payments to Contractors
Terminate Contract
Select & Manage Agencies
Evaluate & Select Agencies
Establish & Maintain Contracts with
Agencies
Monitor Agencies Performance
Manage Payments To/From Agencies
Terminate Contract with Agency
NCR-Code Management
NCR-Data Strategy, Policy &
Procedures
Maintain NCR Information
Maintain Machine Configuration Data
NCR Configuration Improvement
Manage Machine-Specific NCR Configuration
NCR Code-Sharing Management &
Support
Processing Policy, Procedures & Governance
Processing Strategies
Sorting Strategy & Design
Develop Processing Plans
Measurement of Service Quality
Measure Financial Performance
Measurement of Resource Utilisation
Performance Analysis
Performance Management
Production Systems
Initiate Project
Evaluate Solutions
Finalise Project
Systems support & maintenance
Develop / Enhance System
Implement System
Determine business systems
strategies
Systems control & Administration
Specify Facility Requirements
Model Proposed Solutions
Select & Design Preferred Solution
Plan & Schedule Facility
Development
Implement Facility Changes
Construct Facilities & Equipment
Facility / Infrastructure Design & Development
Production Planning
Determine prod’n strategy & direction
Capacity Planning
Investment Planning
Determine prod’n principles &
policies
Legislative Compliance
Develop & maintain Dangerous Goods
policies & procedures
Production Capability Analysis
Manage Facility Information
Define Costing Reference Data
Maintain Prod’n Structure
Information
Define terminology, & codes
Manage barcoding standards, formats & characteristics
Manage central storage of event
information
Manage inventory of
scanners
Manage central storage of production
volumes
I nternational CarrierTransport Operations
Receive inbound containers at origin
port
Handover outbound containers at
destination port
Transport bond containers from origin port to destination port
Manage Core Business
Develop Business Strategies
Manage business performance &
operations
Co-ordinate Projects
Develop Business Plans Manage Projects
Develop business perf. measures
& targets
Receive Container from Contractor
Drop-Off
Setup forContractorDelivery
Receive Misdirected Container from
Contractor
Deliver Container via Contractor
Record errors & notify customer
Store articles
Verify Customer Pick-up
Handle Undeliverables
(including missorts)
Calculate Priority Delivery Charge
Capture Contractor Delivery Events
Despatch Container for Contractor
Pick-Up
Handle delivery vehicle incidents
Check & Prepare Delivery Vehicles
Document Handover to Transport
Driver
CaptureNon-Contractor Delivery Events
Setup forNon-Contractor
Delivery
Handle Customer Returns
Deliver Container to Customer
Operate Vehicle for Transport Runs
Drop Off / Pick Up at Facility Depot
Establish Production Volumes
Time and Attendance
Monitor Post-Production Operations
Corrective Action
Review Facility Performance &
Implement Improvements
Manage Post-Production Operations
Staffing & Rostering
Plan & Schedule Operations
NCR-Code Updates
Capture Machine Configuration
Changes
Capture Tool Changes
Capture Machine Changes
Capture and Notify NCR-Code Changes
Equipment Maintenance
Plan & Schedule Equipment
Maintenance
Perform & Reord Equipment
Maintenance
Correct & Record Equipment Faults &
Parts Usage
Monitor & Report Maintenance Compliance
Modify Equipment
Optimise Equipment
Performance & Reliability
Handle Non-Valid Orders
Machine Preparation
Moulding
Capture volumes & machine statistics
Prepare agency consignments
Prepare product for road transport
Production Operations
Capture production events
Inward Dock Operations
Initial Preparation
Move Product between
processing steps
Order Configuration
Machine Production
Manual Preparation
Capture Order
Assemble Order
Prepare order documentation
Accept from Contractor
Accept Agency Order
Capture inbound order events
Receive inbound order from agency
Print & apply agency identifier
labels
Reconciliation of agency bills &
orders
Record agency order violations
Handover order documentation to transport driver
Receive Order Lodgement
Accept at Facility
Receive electronic order via internet
Process electronic order via email
Verify Order
Preparation & Streaming
Handle Rejected Orders
Capture Order information
Process Payment for Order
Handover Order to Transport
Driver
Capture actual acceptance
events
Verify Order
Accept at Customer Location
Finance
Provide Financial Analysis & Direction
Support Business Cases
Produce budgets & forecasts
Manage Financial Policy & Procedures
Record & monitor expenditure
Human Resources
Succession Planning Recruitment Maintain employee
recordsOccupational Health
& Safety Operational Training Leave AdministrationStaff Development Industrial Relations
Facility Administration
General Administration
Perform & Manage Stores Function
Manage Technical Documents
Maintain Technical Help Desk
Capture Consolidation
Events
Accept Inbound Requests
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A cautionary tale…
Foiled by financial-architecture?CC-BY-SA foam via Flickr
• Look upward to connect with big-picture
• Look downward to connect with real world
• Look sideways to connect all together• Beware of the pressures to go
backward
Four themes…
Business architecture:Looking upward
What is the broader context for this business-model?
How will the business-model make sense to all of its stakeholders?
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Why anything happens…
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The vision describes the desired-ends for action;values guide action, describing how success would feel.
A tension exists between what is, and what we want
The nature of service…
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A service represents a means toward an end – ultimately, the desired-ends of the enterprise-vision.
Relations between services…
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Services exchange value with each other, to help each service reach toward the respective vision and outcome.
Values and value…
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Each service sits at an intersection of values (vertical) and exchanges of value (horizontal)
Organisation and enterprise…
Organisation“a structure and means to achieve
ends”(bounded by rules, roles and responsibilities)
Organisation and enterprise are not the same!
Enterprise “a shared purpose, a bold endeavour”
(bounded by vision, values and commitments)
Organisation as ‘the enterprise’
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This is almost entirely internal – no-one else involved.
Supply-chain as ‘the enterprise’
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This is about transactions with others, but usually from the organisation’s view first, or only.
Market as ‘the enterprise’
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We start to address the complexity of the market-place – which often includes a more customer-centric view.
Shared-story as ‘the enterprise’
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We engage with all of the complexities of the entire shared-enterprise – the enterprise-as-itself.
A stakeholder in the storyis anyonewho can wielda sharp-pointed stakein our direction…
CC-BY-NC-SA evilpeacock via Flickr
Stakeholders in the enterprise
(Hint: there are a lot more of them than we might at first think…)
Beware of anticlients…
Anticlients arise through deeply-held beliefs, or from perceived betrayal by the
organisation.Do not ignore anticlient-risks!
– anticlients do not transact, but interact in the story in ways that can destroy the
organisation.
Anticlients share the same enterprise, but deeply disagree with how the organisation
operates within that story.
Vision, purpose, promise
This is also about howwe keep to our purpose,and keep our promise……in a viable business, we don’t make promises that we can’t or won’t keep! Proximus, Belgium
A three-part ‘story’ that makes sense to all enterprise-stakeholders
Elements of a vision-statement
Action (‘How’): what is being done toor with or about the concern
Example: “Ideas worth spreading”
Qualifier (‘Why’): the emotive driverfor action on the concern
Example: “Ideas worth spreading”
Concern (‘What’): the focus of interestto everyone in the shared-enterprise
Example: “Ideas worth spreading”
Vision outlines the shared-story…
Principles devolve from values…
Value-propositions must align to vision, values, principles…Vision, role, mission, goal…
Values devolve from the vision…
Connect to the story
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A cautionary tale…
Organisation as enterprise?
Business architecture:Looking downward
How will the business-model be implemented?
What are some of the hidden ‘gotchas’ that could break the business-model?
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Realising the business-model
Use SCORE to identify:- capabilities needed for the business-
model- which can be bought-in or outsourced
- which capabilities must remain in-house- the reasoning behind those decisions
Assemble from capabilities(‘capability’ as ‘the ability to do work’)
Introducing SCORE
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Start with an assertion:Everything in the enterpriseis or represents a service.
(If so, we can describe everythingin the same consistent, fractal way.)
(Business Model Canvas isn’t fractal– it’s linked only to a single high-level
view– so we need to adapt that business-
modelto a more fractal frame.)
Fractality is our friend…allows us to use the same
patternseverywhere, at every level
Business-model to Enterprise Canvas
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From an IT-centric view…
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…but it’s much more than just IT
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Service-content…
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We can view in various ways what services consist of – but eventually we’ll need the full detail.
Service-content…
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At higher levels of abstraction (lists and relations only), we can get away with simple Zachman-interrogatives…
Service-content…
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…as we move towards detail, we must become more specific – yet still fully fractal.
Asset (‘What’)- a resource for which
the enterprise acknowledges responsibility
Composition:any combination of asset-dimensions.
Function (external of ‘How’)- external-facing interface,
responsible for service-contracts, protocols, SLAs, etc;
accepts and returns assetsComposition:
any combination of asset-dimensions.
Location (‘Where’)- a position within the terms of
a specific schemaComposition:
any combination of asset-dimensions,plus time-as-location.
Capability (‘Who’ / ‘How’ / ‘What’)- the ability to do something:
- agent enacts the capability- action asset-type acted upon
- skill-level competence of the agentComposition:
agent / action: asset-dimensions;skill-level: skills/decision dimensions;
also recursively consists of other services
Event (‘When’)- trigger for a function and
underlying capabilityComposition:
any combination of asset-dimensions.
Decision / Reason (‘Why’)- sensemaking / decision-
makingfor the service, and/or its type
of guidance or governanceComposition:
any combination of decision/skills dimensions.
Asset-dimensions…
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Most entities will consist of any appropriate combination– e.g. book is physical ‘thing’, has information, is valued.
Decision/skills dimensions…
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Most contexts will need to include combinations of these.
Working with complexity
Some complexities must be removed, others acknowledged and embraced
Use SCAN to identify:- where complexity exists, in what form- which complexities can be eliminated
- which complexities are inherent (‘wild’)- what techniques to use for each
SCAN for complexity-mapping
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Order and unorder
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“Insanityis doing
the same thingand expecting
the same results”(not Albert Einstein)
ORDER(IT-type rules do work here)
UNORDER(IT-type rules don’t work here)
“Insanityis doing
the same thingand expecting
different results”(Albert Einstein)
certain
uncertain
edge of uncertainty
Same and different
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A quest for certainty: analysis, algorithms, identicality, efficiency, business-rule engines, executable models, Six Sigma...
SAMENESS(IT-systems do work well
here)
UNIQUENESS(IT-systems don’t work
well here)
An acceptance of uncertainty: experiment, patterns, probabilities, ‘design-thinking’, unstructured process...
certain
uncertain
A surgical example…
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patient identity
surgery plan
emergency action
theatrebooking
consumables
pre-op complications
family behaviour
surgical-staff availability
change oftheatre-availability
action-records
equipmentplan
patientcondition
verify identity
NOW!
certain
uncertain
before
SCAN framework summary
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order unorder
SIMPLE(enact)
regulationrotation(rules)
NOT-KNOWN(explore)reframe
rich-randomness(principles)
COMPLICATED(evaluate)
reciprocationresonance(algorithms)
AMBIGUOUS(experiment)
recursionreflexion
(patterns, guidelines)
NOW!
certain
uncertain
plan
actual
before
A spectrum of servicesalso implies
a spectrum of governance:governance of governance
itself.
Backbone and edge
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order(rules do work here)
unorder(rules don’t work here)
fail-safe(high-dependability)
safe-fail(low-dependability)
analysis(knowable result)
experiment(unknowable result)
BACKBONE EDGE
Waterfall(‘controlled’ change)
Agile(iterative change)
Backbone and edge
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Backbone, domain and edge
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order unorder
fail-safe(high-dependency)
BACKBONEsafe-fail
(low-dependency)
EDGE
plan
actual
Waterfall(‘controlled’ change)
Agile(iterative change)
Mixed(guided change)
analysis(knowable result)
DOMAIN experiment(unknowable result)
Pace-layering (and more)Different elements change at different rates – from days to
decades.Different elements have different lifetimes – from nanoseconds to
centuries.Different elements reference other
elements that have different rates of change, and different lifetimes.
It gets kinda complicated…
A cautionary tale…
Do the small details matter?
Business architecture:Looking sidewaysHow do we ensure compliance in the business-model?
How do we guide connection and change?
How do connect to and support the values of the broader enterprise?
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Link services to broader enterprise
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Horizontal value-flow is easier to model, but we need also to support vertical links to enterprise-values
Interrelations between services
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Direction – strategy and tactics
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Direction – management-functions
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Staff-management includes policy, strategy, tactics
Staff-management, line-management
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Staff-managemen
t(looks to future)
Line-managemen
t(looks to past)
Coordination – action and change
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Coordination end-to-end
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Coordination over time
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Coordination – projects and change
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Modes for coordination link to modes for direction
Validation – connecting to values
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Enterprise-values areeveryone’s responsibility.
(Enterprise-values typically include:health-and-safety, security, reliability,
efficiency, effectiveness, financial-probity,environment, ethics and many more.)
Supporting the values
- build awareness of the business-importance of that value
- build capability to enact supportfor that value in real-world action
- assess compliance on and support continual-improvement on that value
For each enterprise-value,we need support-services that:
Investors and beneficiaries
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We need to considerinvestments and returnsof every applicable type,
to and fromevery type of stakeholder.
(‘Applicable type’ is determinedby the shared-enterprise values.)
Always start from the values.
(Not the money.)
Hidden risks of outsourcing
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Boundary-of-control is a legal constraint;boundary-of-identity is where enterprise thinks it is…
Connect values across boundaries
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A cautionary tale…
Playing ‘Pass The Grenade’?
Business architecture:Not going backwards
What anti-patterns do we need to avoid in the business-model and business-architecture?
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Upwards, downwards, sideways…
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the organisation within the shared-enterprise…
…built from services like this…
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…but there are all manner of conceptual-errors that can cause an organisation and its business-model to become
disastrously inefficient and ineffective.
These include…
Business-Design Error #1:“It’s all about us”
Leads to inability to engagewith customers and others,and creates anticlient risks.
Business-Design Error #2:“It’s all about
efficiency”Often leads to local-efficiencies
at the expense ofoverall effectiveness.
Business-Design Error #3:“It’s all about control”
Often leads to attempts to control that which cannot be
controlled– inherently causing frustration
and failure.
Business-Design Error #4:“It’s all about the silos”
Beware of Conway’s Law – it leads to end-to-end fragmentation and
incomprehensible systems.
Business-Design Error #5:“It’s all about the
owners”Over-focus on a single group of stakeholders will increase risks
from anticlients and (many) others.
Business-Design Error #6:“It’s all about the
money”Over-focus on money will distort
all forms of decision-making, and will cause longer-term
failure.
If we focus too much on money, we lose track of the ‘why’ of values.
If we lose track of the ‘why’ of values,
we disconnect from the enterprise.If we disconnect from the enterprise,
there’s no business…Always start from the values.
(Not the money.)
Values-first architecture…
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Money-first architecture…
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The supposed ‘normal’ architecture for businessembeds all of those design-errors, and more…
A cautionary tale…
“Our strategy is last year +10%”
SummaryIn business-architecture:• Look upward
to connect with big-picture• Look downward
to connect with the real world• Look sideways
to connect everything together• Beware of the pressures
to go backward to what doesn’t work
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Contact: Tom Graves
Company: Tetradian Consulting
Twitter: @tetradian ( http://twitter.com/tetradian )
Website: http://tetradian.com
Weblog: http://weblog.tetradian.com
Slidedecks: http://www.slideshare.net/tetradian
Print-books: http://tetradianbooks.com
E-Books: http://leanpub.com/u/tetradian
Example titles:
• Mapping the enterprise: modelling the enterprise as services with the Enterprise Canvas (2010)
• The service-oriented enterprise: enterprise architecture and viable services (2009)
• Doing enterprise-architecture: process and practice in the real enterprise (2009)
Further information: