business architecture

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Business architecture described --
Business design and strategy are inextricably linked, with strategy inferring a business design and business design requiring a strategy. The term business architecture to brings attention to the design side of strategy. Business design and building design are analogous in some respects. Building architecture is the art and science of designing buildings to suit a purpose within an environment. Business architecture is the art and science of designing businesses to suit a purpose in their environment. Architecture refers to the art and practice of design and construction as well as the style, principles, and rules incorporated into the design.

A business organization design is implicit in every strategy. Explicit recognition of business design stimulates the ideas and constructs needed to develop a formal body of knowledge on the subject. The ideas and constructs produced through the exploration of the architecture of a business organization stimulates strategic thinking, innovation, and improves upon the strategies produced.

The object of strategy is the business organization. The objective of business architecture is to develop design constructs, principles, and guidance to produce better strategy and improving the odds of successful strategy deployment.

Systems and architecture --
Both building and business architecture deals with the design and management of systems. As such, they are both multidisciplinary fields. Building architecture integrates mathematics, science, art, technology, social science, politics, history, philosophy and so on. Business architecture integrates management science, economics, systems science, social science, politics, history, philosophy, strategy, quality, and so forth. Architecture is a discipline that rises out of many other sciences.

Business and building architecture differences --
As the saying goes, no analogy is perfect. The end result of building architecture is a relatively static monument. The end result of business architecture is a flexible adaptable evolving dynamic system able to transform itself as need be to achieve and sustain a competitive advantage. Well designed business organizations have a flexibility that is unheard of with buildings.

Business and building architecture similarities --
Both architectures seek to provide stability and durability as well as suitability to meeting a purpose in an environment. Building stability and durability come from such elements as the foundation, the structural design, and materials. Business stability and durability comes from finding the right stable elements such purpose, mission, vision, and strategic focus complemented by the organization's learning capability and flexibility to reconfigure its resources to adapt to an ever changing environment.

Principles of ""business architecture"" --

Design factors --

  • Architecture requires a design theme consistent with the nature of the environment and the culture of the organization as it needs to be to thrive in that environment
  • Though economic systems and the businesses within them evolve, the business organization does not evolve randomly. It evolves with design guidance that generates, selects, and replicates new technologies that capitalize on current competencies and resources while identifying new competency opportunities which make sense for the organization. As the organization evolves, the congruency of the organization's elements and their interrelationships are maintained or redeveloped as necessary to keep the organization aligned to its purpose. A design direction with a theme, some element of consistency, builds stronger competencies faster than random actions. There is a respect for both path dependence and the evolutionary algorithm to drive business innovation to develop and sustain advantage.
  • Consideration is given to design modularity -- explicitly determining where the stability, performance, redundancy, and flexibility will be in the ""system"" of the organization. A business organization is an information processor. Much like following principles of object oriented software development, establishing the right pattern of design for the modules of the organization will enhance its adaptability, flexibility, and transformability. Modularity is explicitly addressed in designing the overall architecture and sub-architectures of the business model
  • Executes a process which explicitly addresses key elements of the design, their integration, and validation of the expected outcome of the design
  • Architecture is an ongoing process to keep the current business design competitive while observing and updating the design principles and patterns of the business
  • The design recognizes the socio-cultural nature of the business organization as a multi-minded purposive system
  • The design explicitly addresses the learning and transformational needs of the business organization
  • Views a business organization as a system which processes information, develops knowledge, creates understanding, and generates wisdom. See intelligence hierarchy.

Making business organization design explicit --
Architecture, as a style, refers to themes and harmonious configuration of the parts of the system being designed. The objective of business design, and strategy, is to produce a competitive advantage. The objective of business architecture is to produce a harmonious business design that enables that advantage to be achieved and sustained. It seeks harmony between the mission, competencies, market demands, offerings, processes, organization structure, and so forth.

Architecture thus speaks to the explicit design of the business, begs the question as to what the elements of the design might be, asks how those elements fit together, guides the expression of the design, and demonstrates how the design ties to the business's objectives.

Seeking harmony in design --
A business organization design is made up of many 'architectures', the architectures of the subsystems. These architectures include organization architecture, value system architecture, processes architecture, information architecture, etc. Collectively, these architectures form the overall business architecture. The rationale for the explicit pursuit of harmonious design is that the harmonious and thematic design is more efficient or effective than one where there are incongruities in the design. Viewed from an architectural perspective, the incongruities between strategy and business design becomes evident in a quick and meaningful manner. More importantly for the sustained advantage of the business organization, business innovation is energized in an organization when given an inspiring purpose and bounded by a direction where the efforts to innovate and the reward for innovation are harmoniously linked.

Architecture and the strategy formation process --
The create art stage of the strategic management process is where the architecture of the business organization is defined. Architecture happens -- consciously or unconsciously, explicitly or implicitly. All businesses have architecture. The question is does it have the right architecture. Architectural design seeks to produce a synergistic harmony between the aspects, the elements, the environment and purpose, the offerings and the processes, the structure and the transformational needs.

Designing a new architecture is more challenging than just producing a new business design from the existing architecture. The design stakes are higher because of the investment in developing the design principles, the joining rules for the elements of the business, and the validation of the overall architecture. This investment is expected to pay off in a more flexible and responsive organization which transforms itself more quickly and for less cost. A well designed architecture will serve the business through many generations of business models and ease the pain of the inevitable transformations that keep the business competitive.

Knowing ahead of time whether the creative design intends to tackle a full scale architectural design, or not, is important to managing the approach, resources, and expectations of this stage of the process. It may be that the team is not experienced enough to take on a higher-order design. It may be the problems are so pressing that a more immediate response is required. There is also the approach of putting your most experienced people on an architectural design outside of the main strategic management cycle. As the architectural design principles and elements are established, they are fed into the business design process as they come available. A superior architecture can be a significant advantage which is difficult to imitate while it can also be more costly to design and contain greater risks of the design falls short of its objectives.

Architectural view of a business organization --
A business organization has an overall architecture made up of several other architectures.

Primary foundational architecture --
The foundational architecture of the business organization is a comprehensive architecture covering the whole of the business organization. This foundational architecture is made up of four sub-architectures derived from the four primary aspects of the business organization. (See system aspects). These aspects and architectures, structures of the business model elements, are the basis for the business model and business design construct as well.

  • Function -- There is an architecture of the offerings, with their degrees of modularity, integration, and configurability. The information, insight, relationship dynamics, and pricing all have architectural elements which interrelate with the offerings. The architecture of the offerings is related to the effectiveness with which those offerings fulfill the purpose of the business organization. See function architecture.
  • Process -- The process design both integrates with the other architectures, but also has its own architecture. The modularity requirements of the processes will be determined by the configurability needs and definability of the processes. See process architecture.
  • Structure -- From an architectural standpoint, the structure addresses the architecture of decision making, process configuration, application of organizational principles, physical assets, and cultural considerations. See structure architecture.
  • Purpose -- The architecture of the purpose looks for a consistency and harmony of values, mission, vision, and goals. See purpose architecture.

Other views of architecture --
Beyond the foundational holistic architecture are variations used to support specific inquiry. These other architectures draw attention to specific perspectives and configurations of elements that are of significance for the further understanding, defining, and innovation of the business design. The two perspectives listed below pertain to configurations of business model elements of great significance to competitive advantage.

  • Strategic focus -- The strategic focus identifies those key business model elements and their interrelationships which can be defined and configured to form a competitive advantage from the synergy of purpose, competency, and value. A strategic focus inspires and energizes the pursuit of the purpose, competency development, and business model innovation. See strategic focus inquiry.
  • Culture -- Culture is made up of many business model elements and their interrelationship. It defies precise definition. Nevertheless, given that culture is the DNA of the organization, if the architecture of the culture is not addressed, the organization will simply replicate itself, preventing the innovation and development of new business designs. See culture inquiry.

Determinism and architecture --
Above all else, the architecture of the business organization must be consistent with the nature of the organization and its environment. A highly deterministic (see determinism) organization in a predictable environment can benefit from an design process that produces a design much like the blueprint for a building. The less predictable the future, the less helpful, and more harmful, it is to pursue that type of design. On the other extreme, where the future is totally indeterminate, the architecture of the business organization needs to reflect the ability to continually learn and adapt, taking advantage of concepts and principles enabling effective self-organization. A sane approach typically lies between these two extremes.

Business architecture implications --
The architecture of a business organization in an indeterminate world will focus on principles and concepts which complement the self-organization capabilities, providing diversity and removing constraints to the ability of the organization to spontaneously transform itself. If the business organization happens to find that its environment is predictable, its approach to design may benefit from more specificity as to the next state of the business to be put in place, tending more towards business design than strategic competency development.