The Enterprise Business Architecture, Part 3
So what will the Architecture of the Future look like? As much as it would be fun to explore futuristic architectural designs of buildings, that’s not what we are talking about. We know that over the last 10 years, the make-up of Enterprise Architecture has changed from process-oriented to business-outcome driven. This week’s topic has been specifically about the Enterprise Business Architecture, so what is the anticipation of change coming to this specific view of EA?
Gordon Barnett of Forrester wrote an article entitled “Business Architecture 2020 – Extending Beyond Organizational Boundaries” back in 2013. In 2016, he updated this article and it was renamed “Business Architecture 2020 – Evolving to Influence Business Strategy”. In this updated report, Barnett briefly summarizes a perspective of the future of Business Architecture, based on current trends in business and EA. The report includes 2 main takeaways (Barnett, 2016):
- Business Architecture will expand beyond Organizational Boundaries
- By 2020, Organizations will need different types of Business Architects
Let’s dig a little deeper into each of those topics.
Business Architecture will expand beyond Organizational Boundaries
As organizations have changed to be more global in nature, Business Architecture will need to reflect this shift as well. It is more common for organizations to have more dealings with external contractors, third-party vendors, partners, etc. Today’s Business Architect is focused on the internal organizational environment. However, tomorrows Business Architect will need need to shift their focus to the external environment which incorporates a much larger business ecosystem (Barnett, 2016). Barnett points out 2 key changes in this shift of focus:
External influence on strategic decisions will increase.
“Today, business strategy determines the market in which to compete and how the organization will win. External influence on business strategy is very limited. By 2020, as consumer and partner behaviors shift, organizations will need to extend their focus to the complete value-creation networks. External influence, particularly from customers, employees, and partners, will increase, and executive committees will need to react accordingly. BA focus will extend beyond the existing organization boundaries to include collaborating third parties, i.e., partners and customers. Organizations and BA leaders must understand the impact of these third parties on the agility of an organization’s strategy and on the delivery of value and experience to customers.”Partner influence on the strength of an organizations capabilities will grow.
For an organization to realize its mission requires a set of business capabilities: what an organization needs to satisfy its mission. Unless the organization undertakes a diversification strategy, the organization’s business capability needs will remain static. However, over time, the how, where, and who (the processes, information, technology, and people) will change to reflect the economic requirements and strategy of the organization.
In the future, the advancement of technology and innovation in business practices will broaden the ways in which partners influence the structure of an organization. Many organizations will focus only on their core business capabilities, with the noncore business capabilities provided by third parties; for example, an entity like ADP may provide payroll. This restructuring of the operating model will force BA to understand the maturity of these externally provided business capabilities and how they hinder or support the organization’s strategic intent.
Organizations will need Different Types of Business Architects
As the scope of Business Architecture widens, the individual skills of business architects will also need to grow. As more and more business architects become part of the normal business environment, there will be a need for business architects with varying skills, including many specializations. This may include focuses in specific business domains, corporate strategy or even analysis of industry trends. According to Barnett, this new breed of business analyst will have skills focused on (Barnett, 2016):
Strategic management. Many BA leaders state that their primary focus is strategic alignment or strategic direction/choice. However, very few BA leaders are actually at the table when firms are making strategic decisions. As 2020 approaches, the need for a deep understanding of an organization’s industry or market ecosystem will grow. Firms will need to answer a variety of questions, including determining the types of strategic relations needed to support business objectives. Ecosystem business architects will have opportunities to move into this space and join the strategic management group reporting directly to the CEO.
Analysis techniques and methods. Today, business architects have developed a core set of competencies to build internal blueprints of the organization. By 2020, as the scope of business architecture extends from a purely internal view of the organization to one that includes the organization’s operating environment, BA leaders will need to develop additional strategic and ecosystem analysis skills. This will involve mastering techniques such as political, economic, social, and technological (PEST) and customer-centric PEST (cPEST) analysis; Porter’s five forces; scenario analysis; persona analysis; journey maps; and other ecosystem analysis techniques.
Also, because the performance of an organization’s partners will help determine its performance, BA leaders will need to acquire skills to assess performance and dependency analysis, a form of systems thinking. In particular, business architects will need to answer questions such as these: What areas of the business performed outside of expectations? Why did this happen? Was this a one-off, or is it a trend?External relationship management. Today’s BA practices are recruiting business architects that have demonstrated mastery in soft skills, including communication, negotiation, facilitation, and diplomacy skills. In a world where business architecture extends beyond the boundaries of the organization, some stakeholders of business architecture will be external to the organization. Thus, business architects will need not only these soft skills but also external relationship management skills to address the different motivations and cultures of the external stakeholders.
Business model transformation and innovation. In the age of the customer and the world of digital business, executives will need the assistance of subject matter experts (SMEs) in the fields of customer life cycles and digital businesses. In particular, SME business architects will guide and influence strategy decisions that focus on delivering digitally enhanced experiences that add value in the context of their customers’ needs rather than purely on channel strategies. Firms will then be in a better position to combine digitally connected products and services to meet customer needs and deliver more value than the sum of their parts.
Barnett concludes his article with a few recommendations, of which they all primarily can be summarized as “start preparing your business architects now for the future.” If his predictions are accurate, then the investment now of additional training, organizational change, and the general extending of the business architecture practice will clearly pay off down the road.
References:
Barnett, Gordon. (2016). Business Architecture 2020 – Evolving to Influence Business Strategy. Forrester. Retrieved November 5, 2017 from https://www.forrester.com/report/Business+Architecture+2020+Evolving+To+Influence+Business+Strategy/-/E-RES95381