Whitepaper written by Daniel Lambert

Business architecture is not just about business capabilities and business processes. It's foremost about optimizing value for your customers as an agile organization.

The Importance of Value in Architecture

Traditionally, business processes have been the principal mean of interaction between business stakeholders in enterprise architecture. As for the notion of business capability, it is a more recent concept also often used in enterprise architecture. Business capabilities allow a better understanding of how software applications are supporting the business. Often, some new business capabilities have no supporting applications, while others have too many. Both of these concepts alone fail to capture the value that an agile customer-driven organization must undertake to keep and grow its market share with more and more rapid and continuous innovative changes and more informed customers that are forcing them to have more fluid business strategies.

The concept of value needs to be mastered and used by enterprise architects in a customer-driven enterprise, as shown in figure 1 above extracted from my book entitled “Practical Guide to Agile Strategy Execution: Design, Architect, Prioritize, and Deliver your Corporate Future Successfully[1]”. An organization usually provides several value propositions to its different customer segments (or persona) and partners that are delivered by value streams made of several value stages. Value stages have internal stakeholders, external stakeholders, and the customer as participants. Value stages enable customer journey steps, are enabled by capabilities and operationalized by processes (level 2 or 3 usually). The “TOGAF® Business Architecture: Value Stream Guide[2]” 27-minute long video Alec Blair, Steve Marshall, and Brian Lail provides a very clear and simple explanation, should you want to know more.

These value streams/stages cannot be realized out of thin air. An organization must have the ability to achieve a specific purpose, which is to provide value to the triggering stakeholder, in occurrence the customers. This ability is an enabling business capability. Without this capability, the organization cannot provide value to triggering stakeholders (customers). a capability enables a value stage and is operationalized by a business process. It is also owned by one business unit or a division within an organization and used by one or more business units or a division. A capability ordinarily needs to be supported by at least one application.

Practically, value propositions, value streams, and value stages are the 'Why' an initiative or a project needs to be done. A Stakeholder is the 'Whom" that needs to participate to create value. The business process is the "How" an organization can create value. Finally, the business capability is the "What" the organization needs to manage or must do to create value.

Important Definitions

Mostly extracted from Wikipedia and/or my book, each element mentioned in Figure 1 above can be defined as followed:

  • Business Process. A business process is a group of related, structured activities or tasks by people or equipment, which in a specific sequence produces a service or product (or serves a business goal). “Business processes occur at all organizational levels and may or may not be visible to the customers. A business process may often be visualized (modeled) as a flowchart of a sequence of activities with interleaving decision points or as a process matrix of a sequence of activities with relevance rules based on data in the process.[3]” Processes can be unstructured and variable or preferably structured and repeatable.
  • Capability. A capability or a business capability is an ability that an organization may have or exchange to achieve a specific purpose or outcome[4].
  • Customer. “A customer or a client (sometimes also known as a buyer, or purchaser) is the recipient of a good, service, product, or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration[5].”
  • Customer Journey. The customer journey describes the complete sum of experiences that customers go through when interacting in a path of sequential steps with an organization before and after purchasing a product or service. Instead of looking at just a portion of a transaction or experience, the customer journey will document the complete experience of being a customer.
  • Product. A product offered by an organization is a good, an idea, a method, information, an object, or service conceived as a result of a process and serves a need or satisfies a want of a customer. A product is part of a value proposition[6].
  • Stakeholder. A stakeholder is a member of a group, without whom an organization would have significant difficulties. The stakeholder concept is widely used in strategic management, corporate governance, and corporate social responsibility. In this book, business stakeholders are distinguished from IT stakeholders. The reality is more complex, where many types of stakeholders exist, as shown here: creditors, customers, distributors, employees, financiers, government, investors, labor unions, managers, owners, partners, shareholders, suppliers, etc.[7]
  • Service. A service is a valuable action, deed, or effort performed to satisfy a need or to fulfill a demand from a customer. A service is also an intangible product offered by an organization like an idea, a method, information, a human, or computer activity created as a result of a process and serves a need or satisfies a want of a customer. A service is part of a value proposition. For example, accounting, banking, cleaning, consultancy, education, insurance, expertise, legal advice, medical treatment, and transportation are all services[8].
  • Value Proposition. “A value proposition is a promise of value to be delivered, communicated, and acknowledged. It is also a belief from the customer about how value (benefit) will be delivered, experienced, and acquired.[9]” A value proposition is made of one or several products or services.
  • Value Stage. A value stage is a specific phase within a value stream that has a unique name with a verb, exit criteria, entry criteria, value items, and identifiable participating stakeholders.
  • Value Stream. “Value streams are artifacts within business architecture that allow a business to specify the value proposition for a customer or internal stakeholder of an organization[10].” The value stream is described as an end-to-end collection of value-adding activities that create an overall result for a customer or a stakeholder. A value stream illustrates the stakeholders triggering the value stream or involved in each stage of the value stream. The value stages composing a value stream create specific value items. A value proposition is derived from a value stream.

Business Processes, Value Streams, and Business Capabilities

Roger Burlton, Jim Rhyne, Daniel St. George recently wrote a whitepaper entitled “Similar Yet Different - Value Streams and Business Processes: The Business Architecture Perspective[11]”, explain clearly how business processes and value streams and their enabling capabilities differ. “The business architecture value stream and associated capabilities provide a value-based perspective on the capabilities needed to operate any business of a type (e.g., any hotel), without regard for organizational structure, location, product variants, specific procedures, or other operational characteristics that distinguish a particular business or chain of businesses. By contrast, the value-based business process and its decomposition as activities and flows, provides a value-based perspective on the flow of goods, information, and attainment of outcomes through the activities of a (potentially generic) business.” I could not have said it better myself.

Enterprise Architecture and the 5 Phases of Agile Strategy Execution

Let’s now examine each one of the elements mentioned in Figure 1 to figure out in which one of the 5 stages they are the most relevant.

TSG-full

Customers (segments and/or persona), partners are everywhere. Business stakeholders are involved in all phases, except in the fourth one, the agile delivery and execution phase. IT Stakeholders are mostly in initiative planning (phase 3) and agile delivery and execution (phase 4).
Value propositions, products, services are mostly elaborated in business design and strategy (phase 1). Customer journeys, value streams, and value stages are examined while architecting transformation (phase 2). Business capabilities have a role in both architecting transformation and initiative planning (phase 2 and 3). As for business processes, they are essentially taken care of with the agile delivery and execution phase (phase 4) at the operational, tactical level where business process experts and agile experts need to meet clear objectives measuring tactics.

I hope I’ve been able to convince you that business architecture is not just about business capabilities and business processes. As I’ve demonstrated in this whitepaper, architecting and optimizing value for your customers as an agile organization is also crucial. Including all aspects of business architecture to your enterprise architecture practice will make your team much more valuable to IT stakeholders at the agile delivery and execution phase and business stakeholders.

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[1] The book “Practical Guide to Agile Strategy Execution: Design, Architect, Prioritize, and Deliver your Corporate Future Successfully” written by Daniel Lambert in February 2020.
[2] For additional information about value streams, view the “TOGAF® Business Architecture: Value Stream Guide” 27-minute long video on YouTube with Alec Blair, Steve Marshall and Brian Lail.
[3] Source from the Wikipedia webpage about business process.
[4] Definition by Ulrich Homann published in an article entitled “A Business-Oriented Foundation for Service Orientation” in February 2006.
[5] Source from the Wikipedia webpage about a customer.
[6] Source from the BusinessDictionary.com webpage about a product.
[7] Source from the Wikipedia webpage about a stakeholder.
[8] Source from the BusinessDictionary.com webpage about a service.
[9] Source from the Wikipedia webpage about a value proposition.
[10] Source from the Wikipedia webpage about a value stream.
[11] Whitepaper entitled “Similar Yet Different - Value Streams and Business Processes: The Business Architecture Perspective” written by Roger Burlton, Jim Rhyne, Daniel St. George in December 2019.