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Business Architecture and Strategy

The concept of how business architecture relates to corporate strategy is a perennial conundrum.  There are many views and perspectives of how this interrelationship between business architecture and strategy should ideally work and the stark reality.

In an ideal world, which may happen a few companies with rather very well-respected senior/strategic business architects, there is a seat at the table for business architects to participate in the shaping of the corporate strategy. 

However, in most other cases, business architects toil at the edges of IT (this is the reality for most folks) trying to fathom the nuances of corporate strategy and how it shapes and influences business architecture and consequently the IT enablement.  Of course, if the business architecture practice does it a job well, their outputs and observations may (and should) become an input into the formulation of corporate strategy.

The challenge that most business architects find is that corporate strategy (or business unit strategy) is somewhat fleeting – perhaps justifiably so – in light of the external influences and rapidly changing business and technology landscape.   On the other hand, the core of business architecture is business capabilities, which are stable and foundational.  How does one relate an ephemeral with the eternal (perhaps a bit of hyperbole here.)

Another challenge is that while the company strategy is a synthesis of all information available to the corporate strategists and the C-Suite, a business architect worth her/his while would instead try to understand the business ecosystem, as in today’s interconnected world no firm is an island.  So this also makes relying on strategy document alone a less than full perspective.

Instead of dealing with this ambiguity, what we found is it is better to focus on the enterprise operating model.  Moreover, then use corporate strategy to score the relative value/importance of capabilities and for making CAPEX decisions.

Let’s go thru what it all means.

Contextual Underpinnings of Business Architecture and Strategy:  

business architecture and strategy - Context and Components

There are several ways of deciphering the company strategy and applying it to different situations. Now, the cacophony of competing concepts:

Mission:  What is your highest aspiration – the north star.

Vision: When you get there, how will the world look?

Goals and Objectives: What are the specific goals and objectives?

Strategies: How will you achieve your vision and mission?

Business Model: An overview of how a company will make money and thru what resources, which customers, and what products?

Operating Model:  How will the organization orchestrate the various levers to realize the business model and achieve the strategic objectives?

IT Model: How will IT (Information Technology) function to realize the business vision and achieve the strategies and objectives? Today, most companies are looking to evolve the IT Strategy and Operating Model to the digital age

Initiatives and Programs: What initiatives, programs, and projects are necessary to achieve the strategy?

Metrics:  What does success mean and what are the measures and metrics?

Where should business architecture and strategy be related?

It is important to know there is no universal answer.  Sometimes linking capabilities to a Business Model and the Operating Model may be more appropriate. On the other hand, there are times relating to strategy pillars is essential.  Moreover, sometimes a business unit level strategy or a product/program strategy.  So it is different strokes for different folks. Irrespective what specific models or entities you associate with, it is essential to link strategy to execution using business capabilities as the glue. 

 

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