Strategic Use of Business Models: Implementation


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Henry Franken
Posted by Henry Franken on Feb 13, 2014

Business Model Management

In my previous blog posts, I discussed the way I see strategy work and the types of models that can be used, and how the business model canvas should be the focal point for architecture work. In this blog post, I will show that enterprise architecture is the tool to go from strategy and business model to execution.

The nature of Enterprise Architecture work

Various definitions and frameworks have been proposed in the field of Enterprise Architecture. While some definitions are somewhat abstract and focus on such things as structure with a vision, or normative restriction of design freedom, we have a pragmatic view on what EA really is:

EA is a conceptual tool that helps organizations gain a deeper understanding of their own structure and of the way they work. It provides a map of the enterprise and it is a "route planner" for business and technology change. Important uses of it are in systematic IT planning/architecting and in enhanced analysis and support for decision-making.

- Handbook Enterprise Architecture, BiZZdesign, 2012

The prime goal for enterprise architecture is to answer a fundamental question: how do we organize ourselves in order to be effective? It should be noted, though, that “route planner” implies two things: on the one hand the “dot on the horizon”, the point that we wish to reach (which can be expressed using e.g. ArchiMate) and on the other hand the “journey from reality to dream”, the way to get there (which can be achieved using e.g. TOGAF’s ADM).

Linking the canvas to Enterprise Architecture

From the perspective of this blog series, both TOGAF (process) and ArchiMate (modeling) are relevant.

Let’s start with the moment after several strategic analyses have been completed, strategic options have been prioritized and tested out on the canvas after which a new business model was agreed upon. The question that arises at this point is: how do we move forward? How do we organize ourselves in order to become who we want to be? This is where enterprise architecture kicks in. In my opinion, the new business model is an ideal starting point to kick off a new ADM cycle. In a sense, the new business model is an aspirational view of what we want the enterprise to be. By spinning off an architecture cycle, we can find out what we have to do in order to get where we want to be.

From canvas to ArchiMate

Translating the canvas to ArchiMate will help in order to analyze the impact of the newly developed business model on the current state of affairs. This can be seen as part of phase A – vision, and should kick off more detailed analysis in subsequent phases. This is not as hard as it may seem initially. For example:

  • Partners and Customer segments from the canvas are typically translated to the business actor concept of ArchiMate
  • Customer relations are translated using the business collaboration concept
  • Key activities are translated into behavioral elements, such as business processes, business functions, or even application functions
  • The value proposition is translated to ArchiMate using the Value concept, or to a set of services

Translating the canvas to an ArchiMate model is, of course, only the first step. TOGAF’s usual phases and techniques including roadmapping, risk management etc. can help in assuring successful implementation.

Closing the loop

The TOGAF standard has an excellent tool in place to catch such risks. The Enterprise Transformation Readiness Assessment, keep enterprise transformation projects on track, especially when combined with risk management approaches, making sure that new strategies and business models are implemented, if and only if the organization is ready to execute.

If it turns out that the organization is not ready for change on a large scale, or if the proposed change turns out to be too risky to implement then TOGAF’s iterative and incremental nature comes into play: in this case it would be wise for organizations to go back to the drawing board and have another hard look at their business model.

If it turns out that the organization is not ready for change on a large scale, or if the proposed change turns out to be too risky to implement then TOGAF’s iterative and incremental nature comes into play: in this case it would be wise for organizations to go back to the drawing board and have another hard look at their business model!

In the next and final post of the series, we will present a short case study that illustrates the concepts and techniques introduced in this series so far.

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