by Daniel Lambert
Business architects and enterprise architects are often asked to prioritize initiatives and projects. To complete this task, they need their organization’s strategies, goals, tactics, and objectives. Too often, these can be very difficult to gather either because architects have never been aware that they existed or sometimes because they simply and plainly don’t exist. To extrapolate these strategies and objectives, there are numerous business models that are being used for business design. In this section, we’ll examine briefly eight common business design methodologies and examine how each one of them can relate to business architecture and enterprise architecture. As shown in the Figure below, the Balanced Scorecards, Value Chain, Hoshin Kanri, Business Model Canvas, and the Business Motivation Model are very useful to describe and understand an organization at the corporate and business levels. The Business Model Canvas, and the Business Motivation Model as well as the Design Thinking, Customer Journey Map and simple SWOT Analysis can be very useful at the product and marketing level. As for the Design Thinking framework, the Customer Journey Map approach and SWOT Analysis, they are ordinarily used at the initiative or project level.
1. Balanced Scorecards
The Balanced Scorecard is a strategy performance management tool popularized in the 1990s with a semi-standard structured report, that can be used by managers to keep track of the execution of activities of their organization within their control and to monitor the consequences arising from these actions. These actions can either be financial, customer-oriented, geared toward internal business processes or about learning and growth as described in Figure 1 below.
This methodology is frequently used within more traditional organizations. The benefits of using this methodology are among others better alignment of projects and initiatives, improved performance reporting, and better organizational alignment. If in place, this methodology facilitates initiative and project management for architects since initiatives are elaborated for each mentioned objective. Enterprise architects can rapidly identify related value streams, capabilities and their supporting applications that need to be enhanced for each one of these initiatives.
2. Hoshin Kanri
The origin of the Hoshin Kanri business design methodology dates back a few centuries ago to 1645. It originates from Japan and was popularized worldwide in the 1980s and not just for the manufacturing industry. Hoshin Kanri is a 7-step process used in strategic planning in which strategic goals are communicated throughout the organization and then put into action at three levels of the organization, as shown in Figure 2 below. The 7 steps of Hoshin Kanri are 1- establish the vision and assess the current state, 2- develop breakthrough objectives, 3- define annual objectives, 4- cascade goals throughout the organization, 5- execute annual objectives, 6- have monthly reviews, and step 7- perform an annual review.
The main advantages of using this methodology include providing focus and drive towards specific and important goals of the organization; and creating a shared vision of a precise strategic plan. If in place, this methodology facilitates initiative and project management for architects by linking them to actions derived from the 3 levels of the Hoshin Kanri methodology. Again, enterprise architects can identify related value streams, capabilities and supporting applications that need to be improved for each one of these initiatives or projects.
3. Business Model Canvas
A much more recent business design methodology has become extremely popular among start-ups, small and medium-sized companies. It’s called the Business Model Canvas approach. It is a lean strategic management template for developing new or documenting existing business models. The Business Model Canvas is a visual chart with 9 elements describing a firm's or product's value propositions, customer segments, customer relationships, channels, key activities, key resources and assets, key partners, cost structure and revenue streams. It assists organizations in aligning their activities by illustrating potential trade-offs.
The Business Model Canvas is designed to guide thinking through each of the key components or building blocks for devising a business model, speed and agility, a common language and is centered toward the value proposition of a product or an organization or one of its business unit. Figure 3 above and the article entitled “Bridging Business Model Canvas and Business Architecture” demonstrates how to bridge your Business Model Canvas to your Business Architecture to optimize with agility the marketing and operating modeling of an organization. This bridge opens-up new customer-driven modeling.
4. Business Motivation Model
Many enterprise architects that execute any business architecture will usually include in their practice the business motivation model. Adopted by the Object Management Group (OMG), the Business Motivation Model (BMM) provides a scheme and structure for developing, communicating, and managing business plans in an organized manner. The core of this methodology resides in Figure 4 below.
Here are the basic definitions. A mission is a short statement of why an organization exists and often specified more precisely with a vision statement to be achieved within a finite time frame and made of a series of long-term goals and short-term objectives. Strategies consist of high–level plan items that also include short-term tactics to achieve an organization’s major goals under conditions of uncertainty. A goal is the desired result that an organization envisions, plans and commits to achieve within a finite time frame. As for objectives, they are essentially short-term goals whose achievement brings an organization closer to its long-term goals. Objectives are derived from tactics, which are conceptual short-term actions to deliver and execute a strategy.
Should its organization have either the Balanced Scorecards, the Hoshin Kanri business design methodologies or another type of business design methodologies in place, an enterprise architecture team should easily be able to extract the goals and objectives necessary to design the architecture of initiatives and/or projects. Understanding the strategies, goals, and objectives of its organization makes it possible for an enterprise architect to select and build the relevant value streams to be examined, the most adequate business capability measurements, and design precise business outcomes for its initiatives and projects. If goals and objectives are nowhere to be found in the organization, the enterprise architecture team will need to extract them from management. Obtaining goals and objectives would be ideal. Many enterprise architects often have to fall back on less precise strategies and tactics because of the reluctance of some managers to commit to precise goals and objectives.
5. Design Thinking
As for the Design Thinking methodology, it relates more to products and services that are offered by an organization and it is not strictly speaking a business design methodology. It refers to the cognitive, strategic and practical 5-step process by which design concepts for new products and services are developed by designers and/or design teams as shown in Figure 5 below. Many of the key concepts of design thinking are identified through studies, across different design domains, design cognition, and design activity either in laboratories or in natural contexts.
Design Thinking has several advantages. It provides to its users the opportunity to view a problem from different perspectives. Design Thinking also encourages innovative thinking and creative problem-solving. It also ensures that the outcome meets the organization’s objectives and the client’s requirements.
6. Customer Journey Maps
Examining customer journey maps is becoming the norm within many organizations. A customer journey map is a visual representation of every experience your customers may have with your organization. It helps to tell the story of a customer's experience with your products, services, and brand from their original engagement and into possibly a long-term relationship. Customer journey map can easily be associated with value stream and its value stages as shown in Figure 6 below. The whitepaper entitled “Architecting and Delivering Optimal Customer Journeys” describes in detail how enterprise architects can plan ahead to optimize customer journey maps.
The benefits of using customer journey maps are numerous. They bridge the communication gap between sales, marketing, and operations. They provide a better understanding of the customers by building a higher emotional connection with them. Finally, customer journey maps also enable the identification of holes, where initiatives need to be planned to fill them with effective touchpoints. Journey maps do not need to be limited to customers. They can also apply to partners, vendors, regulators, internal stakeholders, etc.
7. SWOT Analysis
SWOT Analysis can be used everywhere by enterprise architects for business units, products, services, initiatives and projects. It was invented in the 1960s by Albert Humphrey at the Stanford Research Institute. SWOT Analysis, as shown in Figure 7, is a strategic planning technique used to help an organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning.
In this whitepaper, seven common business design methodologies were described. Each one of them can enhance the work of an enterprise architecture team. Enterprise architects should use whatever business or product model methodologies that are or have been in use in their organization to model their architecture artifacts. If none are in place, they should fallback at minimum to the business motivation model and extract at minimum strategies and tactics from their business managers. At the business unit, initiative or project levels, at minimum, the SWOT Analysis is also indispensable to get sensible feedback from business stakeholders.
 Based on the definition of the Balanced Scorecards methodology on Wikipedia.
 Based on the definition of the Hoshin Kanri methodology on Wikipedia.
 Based on the definition of the Business Model Canvas on Wikipedia.
 Article entitled ‘Bridging Business Model Canvas and Business Architecture’ written by Daniel Lambert in Modern Analyst in 2016.
 Based on the definition of the Business Motivation Model on Wikipedia.
 Based on the definition of Design Thinking on Wikipedia.
 Whitepaper entitled ‘Architecting and Delivering Optimal Customer Journeys’ written by Daniel Lambert in February 2019.
 Based on the definition of SWOT Analysis on Wikipedia.