Business Architecture: Because Business Models Aren’t Enough
Jan 26, 2014
Business models are a helpful way to define a business strategy and steer an organization in the “right” direction. Furthermore, business models foster discussions on the way organizations want to deliver value to their customers. Building business models is fun! Thinking about your organization and its future in an abstract manner is addictive, since there is no chance of failure…
However, delivering value to your customers as described in your business model is a different story!
Why Business Models?
Organizations must be able to respond quickly to developments in their environment. Business models help businesses to adapt to changing environments and to design them for success in future environments. As described in our previous blogs, analyzing strategy with regards to business models helps to determine whether a venture is, or will be, viable and valuable. Customers, partners and competition demand that flexibility is the standard. What are we good at today and what are the trends in the market? Organizations describe their current Business Model, create new models and apply elements from other models. How does the future model affect the old/existing model? Typical stakeholders for business model management are Strategic Managers, Business Developers and Innovation Managers.
A step towards implementation
An organization’s buziness strategy is not always clear. The company strategy as depicted in business models is therefore not always the final destination. It provides a direction instead of a destination. In practice, this direction is difficult to describe in layman’s terms or, more importantly, in concrete activities. For instance, what ‘business’ should IT align with? The first answer is with the ‘strategy’. But what does a strategy say about the work of the employees on the shop floor? According to the strategy, what investments should our organization make? What does ‘the business’ expect from our client administration? To answer these questions, an organization should make a step towards implementation. This requires insight in the elements of the business model, attributes of the elements and the relations between different elements. By analyzing these elements, attributes and relations become the foundation for business model change and innovation in an organization. Thus, a construction of ‘the business’ in terms of capabilities, actors, processes, is needed. Enter Business Architecture! Typically your first step in designing your future state is Enterprise Architecture.
Business Architecture
To make the direction specific that is set out in the strategy and the business model, we need Business Architecture. Business Architecture is about managing coherence in your organization. It provides structure and helps to make decisions about investments in business and IT. Business architects communicate with decision makers on different levels of the organization and advise on how to achieve a proper balance of interests. They stimulate entrepreneurship (or intrapreneurship) at all levels of the organization.
Business Architecture provides a powerful solution to complex business design issues. Stakeholders of architecture (e.g. as a manager/director or project manager) will benefit from having basic knowledge of Business Architecture.
Techniques that make a difference
BiZZdesign has extensive knowledge in the field of Business Model Management and Enterprise Architecture. Here are 10 techniques that make a difference in your Business Architecture practice.
