CEB Enterprise Architecture Leadership Council

Business Architecture
in Practice

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TABLE OF CONTENTS
KEY FINDINGS • v

WITH SINCERE APPRECIATION • vi

Introduction • 1

Building the Platform for Business Integration • 9

Enterprise Business Process Model (Dell Inc.) • 11

Business Operations Modeling (IBM) • 25

Advancing Business Architecture Competencies • 39

Experience-Based Business Architect Development (State Farm Insurance Companies) • 41

Business Architect Qualification Criteria (Blue Cross and Blue Shield of North Carolina) • 63

OPtimizing the Business INvestment Portfolio • 67

Business Capability Investment Model (RBC) • 69

Value-Driven Business Architecture (Sanlam Limited) • 89

Business Architecture Scope and Dimensions • 113

business architecture Organizational Models • 121

Ordering Research • 127

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 iv

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Key Findings
Executive Summary

Business architecture (BA) is architecture applied to the business. It is 3. Anchor your business architecture initiative in a set of business
about giving strategic business objectives greater clarity and structure capabilities needed to achieve a specific objective. The elements included
by describing how they translate into operations. The goal of business within business architecture vary across organizations. The reference
architecture is to operationalize business strategy, thereby helping section of this study, entitled Business Architecture Scope and Dimensions
business leaders avoid a risky leap directly from strategy to specific project (page 113), provides several examples. The successful implementations
investments. we’ve seen have all included business capabilities as a core component of
their business architecture. Capabilities act as the “connective tissue” linking
Despite the promise, many organizations find business architecture strategy to business processes and the underlying IT architecture.
amorphous and are unsure which activities will deliver demonstrable value.
To better understand member challenges and to provide practitioner- 4. Tie business process modeling more tightly to strategic objectives.
based solutions, we surveyed and conducted in-depth interviews with chief Traditional business process maps are often too granular to effectively
architects and business architecture leads across the Council to understand build the business architecture. Rather than capture detailed physical
how they obtain enterprise-level visibility into needed business capabilities process steps, leading organizations model high-level, strategically
and processes, cultivate the right skill sets, and ultimately put business valuable processes, using information flows to guide their work. Avoid
architecture to work to guide business investment decisions. Our findings tying process models to current owners and supporting systems. Such
are presented in this study and summarized below. an approach impedes a future state view and ignites turf battles. Instead,
leading organizations remove process models from their existing physical
1. Business architecture is not the capstone of an EA initiative. Enterprise environment and describe processes in business terminology.
Architecture groups have incorrectly viewed business architecture as an
aspiration to work toward after technical, applications, and information 5. Invest in creating a formal business architect job. Leading practitioners
architectures have been established. Business architecture can have have recognized that the credibility of their business architecture initiative
immediate impact on business problems and is not dependent on maturity depends to a disproportionate degree on the quality of their business
attainment in other architecture disciplines. architects. Yet external business architecture certifications and experienced
senior business architects do not exist in the market. To retain the best
2. Build your business architecture opportunistically. There is no linear, talent, business architecture requires a formal job and an established career
prescriptive path to developing a business architecture. Successful path. Robust change management mechanisms can drive a high degree
organizations have demonstrated value by solving specific pain points and of ownership among the business architect community and ensure real-
using those success stories to build a mandate for the function. world experience informs the creation of both the training curriculum and
business architect role.

Please note that

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v
 vi

With sincere appreciation

As with all of our research, the Enterprise Architecture Executive Council’s inquiry into business
architecture is informed through dialogue with our membership. The information presented here

would not be possible without the willingness of members to generously spend time sharing

and discussing their organizations’ business architecture practices. We deeply appreciate their

participation in our research.

For their valuable contributions of time and feedback on the case studies and artifacts included

here, we wish to extend a special thank you to the following individuals and organizations:

State Farm
Insurance
Companies

Leticia Duran Greg Beneze Jeffery Clayman

Denise Hoos Julie Decker David Furlong
Colin McKay
Tom Pawelkiewicz

Dawie Adlem Jim Downie Adrian Flatgard Mark Griffith

Anil Nigam

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 INtroduction

In the Council’s 2009 poll of member priorities, enterprise architects from a broad spectrum
of organizations indicated that building out business architecture was an urgent priority. In a
related Council survey, nearly all EA groups linked the success of enterprise architecture to
the effectiveness of their business architecture initiatives.

Few organizations, however, have demonstrated value from business architecture. Only 7%
of EA groups report quantifiable returns from their investments in business architecture.
EA groups attribute their lack of success to low business partner engagement, limited EA
credibility, and ambiguity around business architecture roles and responsibilities.

This study unpacks these challenges to understand the root causes of business architecture’s
limited progress and to provide practicioner-based solutions. Our research into current
practice in business architecture points to three key sources: 1) disjointed, IT–centric process
mapping efforts; 2) inadequate training to develop BA skill sets; and 3) insufficient linkages
between project investments and execution.

ENTERPRISE
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Introduction 1
 Business Architecture in Practice 2

Business architecture is
a top priority and critical
A PROMISE UNFULFILLED
to EA, but returns are
proving elusive. Top Three EA Priorities for 2009 Criticality of Business Architecture to Enterprise
Architecture

Urgent
1% 1%
Nice to Have No Role

39% 59%
Important Essential

Low
Priority
Measuring EA’s Laying the Leveraging Data
Business Value Foundation for for Decision
Contribution Effective Business Making
Architecture
n = 74 EA executives. n = 33 EAEC member institutions.

Benefits or Return on Business Architecture Activities

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

We’ve Begun Making
Some Headway, but It’s 43%
Too Early to See Benefits

We Just Started Doing Business

Architecture and/or We Haven’t 30%
Made Much Progress

Business Architecture Is an
Established Part of the
EA Function, but We Have 20%
Trouble Quantifying the Value
Business Architecture
Is Delivering Substantial 7%
Quantifiable Value to Business
and IT Partners
Please note that
ENTERPRISE ARCHITECTURE
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Source: EAEC Membership Survey, December 2008.
 Organizations report
common challenges
ROADBLOCKS SEEMINGLY AT EVERY TURN
in communicating and
implementing business Business Architecture Challenges
architecture.

“I don’t even know what the term

Hard to Define ‘business architecture’ means in reality.”
“What is it?”
CIO
Financial Services Company

“Business architecture sounds like an IT

solution looking for a problem to solve.
Hard to Sell
What do they know about how to run
“Why should I care?”
my business?”
VP of Business Services
Pharmaceutical Company

“We went looking for a business

architecture methodology in the
Hard to Execute
industry, and we came
“How do I do it?”
up dry.”
Chief Architect
Health Care Company

“The benefits of business architecture

aren’t easily seen. We’ve put a lot of
effort into getting hard metrics, but
Hard to Measure how do you measure a better business
“What did I get?”
decision or not making a certain
investment?”
Head of Business Architecture
Insurance Company
ENTERPRISE
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Introduction 3
 Business Architecture in Practice 4

Business architecture
holds the potential to
An Imperfect Planning-Execution Cycle
impact organizations’
progress on strategic
objectives.

One-third of firms fail

to achieve expected
results from annual Business Goals
strategic plans.

Outcome
and
Assessment
Market
Leverage business Awareness
architecture to
mitigate failure points
across the cycle.

Project
More than half of all
business projects fail.
Implementation Strategy
Selection

Forty-six percent of business

failures stem from misguided
strategies.

Please note that

ENTERPRISE ARCHITECTURE
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 Position business
architecture as a
Repositioning Business Architecture
pragmatic tool in service
of the business. Architectural Model Lens Business Problem Solver Lens

■■ Conventional wisdom
often positions business
architecture as the final stage High High
of EA maturity.
Business
Business Architecture
To effectively sell business

Proximity to Business Problem

■■
Architecture
architecture to business

EA Function Maturity
partners, it needs to be Information
positioned as the most Information Architecture
relevant tool to solve their Architecture
problems. Solutions
Solutions Architecture
Architecture

Technical
Technical Architecture
Architecture

Low Low
Low High Broad Narrow
EA Value Demonstration Specificity of Solution

“I started our business

architecture effort by
working mostly at the
framework level. It didn’t resonate
with anybody.”
Chief Architect
Health Care Company

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Introduction 5
 Business Architecture in Practice 6

Definitions and
approaches differ, but
PRINCIPLES TO GUIDE BUSINESS ARCHITECTURE
there are common
principles that
IN PRACTICE
characterize successful
business architecture in
practice.

1. Business architecture is about the business, not the architecture. Business architecture
should be focused on solutions to business problems. Identify common business and IT
pain points that business architecture can solve and use those success stories to establish a
mandate for the function.

2. Start small and build selectively. Don’t insist on building out all dimensions of the business
architecture, but only those elements undergoing significant change. Achieving an
enterprise business architecture is a worthy goal but often unachievable and, depending on
organizational context, not always necessary. More success early on can be had by narrowing
efforts to a single business unit.

3. “Where” is not nearly as important as “who.” There’s no one right place in which to locate
business architecture. Business architecture can flourish in many different organizational
configurations, within both the business and IT. The org chart is far less critical to business
architecture’s success than the credibility of your business architects.

4. Spend more time on the future than the current state. Precious time and effort can be
wasted on documenting what people already know. The bigger bang for the buck is in the
articulation of where the business wants to go, not where it is now.

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BuSINESS ArChITECTurE IN prACTICE

i 2 3
Building the Platform Advancing Business Optimizing the Business
for Business Integration Architecture Competencies Investment Portfolio

KEY QUESTIoN: HoW CAN KEY QUESTIoN: HoW SHoULD KEY QUESTIoN: HoW CAN
WE CAPTURE A BUSINESS-RELEVANT WE DRIVE THE EVoLUTIoN oF THE BUSINESS ARCHITECTURE GUIDE
VIEW oF ENTERPRISE PRoCESSES? BUSINESS ARCHITECT RoLE? US IN MAKING THE RIGHT BETS?

STATE FArm
INSurANCE
COmpANIES

Enterprise Business Process Model Experience-Based Business Business Capability Investment Model
Architect Development

Business operations Modeling Business Architect Value-Driven Business Architecture

Qualification Criteria

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Introduction 71
 Business Architecture in Practice 8

ENTERPRISE
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BuSINESS ArChITECTurE IN prACTICE

i 2 3
Building the Platform Advancing Business Optimizing the Business
for Business Integration Architecture Competencies Investment Portfolio

KEY QUESTIoN: HoW CAN KEY QUESTIoN: HoW SHoULD KEY QUESTIoN: HoW CAN
WE CAPTURE A BUSINESS-RELEVANT WE DRIVE THE EVoLUTIoN oF THE BUSINESS ARCHITECTURE GUIDE
VIEW oF ENTERPRISE PRoCESSES? BUSINESS ARCHITECT RoLE? US IN MAKING THE RIGHT BETS?

STATE FArm
INSurANCE
COmpANIES

Enterprise Business Process Model Experience-Based Business Business Capability Investment Model
Architect Development

Business operations Modeling Business Architect Value-Driven Business Architecture

Qualification Criteria

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Building the Platform for Business Integration 91

 Business Architecture in Practice 10

Process mapping is a
common starting point
Process Mapping “Quicksand”
for many business
architecture initiatives, Benefit of Business Process Mapping
but often becomes a
point of no return.

Marginal Benefit 38%

■■ Dell Inc. avoids common
pitfalls by building a
logical model of enterprise Useful Representation 31%
processes, focusing on an of the Current State
integrated future state.
Identified Target State 17%
Processes
■■ Dell’s process model leads
to simplification plans for
both IT and the business and Evolved Processes
14%
Toward the Target State
serves as the starting point
for Dell’s capability catalog.
n = 58 EAEC member institutions. Enterprise Business
Process Model
Source: EAEC Membership Survey, December 2008.

Common Fail Points with Process Mapping Initiatives

1. Endless task—Mapping all enterprise processes down to all levels of granularity

is very resource intensive.
2. Maps to nowhere—Detailed process maps are not integrated with one another Business
or a larger enterprise model. Operations Modeling
3. Technical jargon—Diagrams are not usable by business decision makers.
4. Current not future—Maps often only capture as-is processes, shedding no light
on the target state or gaps.
5. Rework—Process changes require constant refresh of process maps.
6. Isolation—Process mapping efforts fail to connect to broader elements of
business architecture: business strategy, capabilities, or the project portfolio.

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 Enterprise Business Process Model (Dell INC.)

Company Snapshot

Dell Inc.
Industry: Technology A leading supplier of personal computers, Dell Inc. offers
2008 Revenue: US$61.1 Billion a broad range of technology products for the consumer, education,
Employees: 78,900 enterprise, and government sectors. Dell also markets third-party
software and hardware. The company’s growing services unit provides
infrastructure consulting, systems integration, asset recovery, financing,
support, and training.
Source: http://www.hoovers.com.

ENTERPRISE
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Building the Platform for Business Integration 11

 Business Architecture in Practice 12

Business simplification
efforts require an
Business Silos and Portfolio Complexity
integrated enterprise
process view.

Dell’s processes and applications are built out rapidly in support of the
company’s growth. This results, however, in complex and siloed business areas.
CHALLENGE While detailed process maps exist based on physical systems, there is no
clear way to integrate them into an enterprise view to execute on a business
simplification mandate.

By stripping physical processes of their underlying systems and specific

APPROACH organizational content, Dell creates an integrated, enterprise-wide
view of future state processes to drive simplification efforts.

The enterprise process model becomes the basis for a more consolidated
technology and business footprint. Business partners use the model to
RESULTS
understand how to simplify processes they own, while IT leverages it to
identify application redundancies and technology gaps.

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 Dell connects process
layers by modeling the
Clarifying Process Relationships
top and integrating
existing lower levels. Previous Process View Integrated Logical Process Approach

■■ Dell executives could

articulate top-level processes

ise
Top-Level Enterprise Processes

tio erpr
in broad terms but lacked full

efi Ent
n
visibility into their sequence el
L ev

ni
sD n
or linkage to upstream/ Product s

es ow
Procurement Marketing Service es
oc

oc -D
downstream processes. Design Pr

Pr op
Dell Inc. l1
ve

T
Le

1.
Low-level processes were l2
ve
■■
Le l3
understood in great detail ve
Le
but did not connect to l4
ve
upstream processes because Le
l5
ve
no mid-level processes had Le l6
previously been documented. ve
Mid-Level Le l7
ve

tio p
“Black Box” Le

eg m-U
n
Business Architecture l8
ve
■■
e

s I tto
ra
L
follows a two-step approach

es Bo
nt
to develop an integrated,

oc 2.
enterprise process model:

Pr
1. The BA team works with
Low-Level Processes
the business to model
the top two enterprise
process levels.
2. Lower process maps are
then converted to the
enterprise process model.

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Building the Platform for Business Integration 13

 Business Architecture in Practice 14

Use a lightweight,
facilitated approach
Top-Level process Modeling
to model top-level
processes.

Top-Level Modeling Steps

■■ Modeling sessions consist
of 10–15 business leaders Identify Key ■■ Capture a detailed list of all activities from
from each horizontal Activities business partners.
business area. ■■ Separate out the “what” from the “how.”

■■ Business Architecture
facilitates three sessions, Formalize ■■ Group and consolidate like activities.
each lasting four to Processes ■■ Place activities in order.
five hours. ■■ Guide the business to name the process
using a consistent format.
■■ Sessions use a whiteboard
and a marker only.
Govern ■■ Capture the inputs that trigger each process
■■ The outputs of the modeling and its outputs.
sessions are stored in ■■ Document business rules.
a repository. (For a full
description of Levels 1 and
2 see the Implementation
ss
Guide on page 20.) o ce
Pr vel
Le
Indicates the Processes Are Fully Governed
Dell Inc.
l 1
ve

t
Le

un
t

vice
rke

co
e
ine

DO draw the content for an

c
Ma

ll
Procure

Ser
2

A
Fulfi
l
Eng

enterprise process model ve

Le
Sell

directly from business partners.

DON’T involve IT participants

or technical tools/applications
in modeling sessions with the
business.

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 Transform existing
physical process maps
Physical to Logical Process Conversion
into logical models to
create an integrated Process Conversation
future-state view.

■■ Low-level process maps— Convert to

Place Physical
often documented by IT, Logical Model Govern and
Map onto
and Validate Integrate
outside consultants, or the Enterprise Model
with Business
business—are the starting
point to flesh out the ■■ Physical maps are ■■ Systems and organizational ■■ The process is checked
enterprise model.
fitted to the enterprise information are removed; for data inputs and
process model as supporting conceptual outputs.
■■ Dell’s BA team creates placeholders. data model is added.
“straw models” by removing
■■ Each process is
physical attributes and
■■ Facilitated sessions with connected to other
adding data required by the the business flow and processes in the model.
process. describe in business terms.

■■ Business partners validate

the straw model, and the
BA team fits the now logical
process into the enterprise
model.

DO focus on the connections

between processes, not the
processes in isolation.

DON’T allow detail on current Physical Processes Logical, Nonintegrated Logical, Governed Processes
systems or current location to Processes
obscure your view of the desired
future state.

ENTERPRISE
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Building the Platform for Business Integration 15

 Business Architecture in Practice 16

Dell’s enterprise model

becomes a multifaceted
Integrated Model Outcomes
tool to clarify process
and technology Dell’s Enterprise Process Model
interrelationships and el
derive new capabilities. Lev
ss
o ce
Pr

l 1
Dell Inc. ve
Le

t
Capabilities Clarified

un
t

vice
er
rke

co
ine
Business partners name 2

Ac
Ma

Procure
ll
l

Ser
Fulfi
ve

Eng
capabilities that consist of
Le

Sell
sequences of logical processes.
Application Alignment
l 3
ve Tier 1 and Tier 2 applications
3 Le can be mapped to the
5 4 processes they enable.
l
ve
Le
1 l 5
ve
2 4 Le
6
1 2 4 ve
l
Le
3

“It was often

End-to-End Visibility into
assumed that sales Pain Points
compensation was
Business partners can see
only tied to certain sales all processes that play a New Capability Identification
processes. But with the enterprise role in a pain point.
Business leaders can develop
process model, it became evident new process sequences to
that sales compensation touched enable new business capabilities.
many different processes across
the enterprise.”
Leticia Duran
Senior Manager
Enterprise Business Architecture

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 The Capability Catalog
captures both process
Capability Catalog
and application health
to inform capability Capability Catalog1
improvement needs. Illustrative

■■ Dell is building out CAPABILITIES

its capability catalog Online Solution Selling Partner Relationship Quote Generation
opportunistically with Management
each process engagement. Capability Current State Current State Future State
Status
Process and Solution Execution L2 Sourcing Management L2, Offer Management L2
Sequence Selling Execution L2 Supplier Performance
Management L2
Process Active Active Incomplete
“This single repository Assessment
State
can support Factors
collaboration between Process ■■ Number
IT and the business by clearly Assessment of steps
identifying whether a process Supporting App21, App34, App12 Apps12, App52, App21, App91, App93 ■■ Process time
or an application is the roadblock Applications App91, App2 ■■ Customer
to a business capability.” Application Active Active Active satisfaction
Leticia Duran with process
Status
Senior Manager
Enterprise Business Architecture Application
Assessment Assessment
Factors
DO score capabilities as ■■ Number of
a function of process and applications
application performance. Capability Improve Process Consolidate Fill Process Gaps ■■ Performance
Improvements Efficiency Applications metrics (e.g.,
Address a gap in
Strengthen this Strengthen this processes to enable timeliness)
DON’T limit requirements
capability by eliminating capability by eliminating this capability. ■■ Data
to technology; instead, enable
unnecessary process redundant applications. accuracy
business partners to identify steps.
quick-win improvements
that don’t depend on new or
Failing to Support Needs Improvement Fully Supporting
enhanced systems. Capabilities or Enhancement Capability

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Building the Platform for Business Integration 17

 Business Architecture in Practice 18

The enterprise model

is driving simplification
Simplification and Integration
and integration efforts
in the business and in IT Quote Management Process Steps
delivery. Estimated Future State

(55%)

Benefits of Quote Management Redesign

■■ Establish a more efficient process.

■■ Drive higher volumes of customers online.
■■ Provide nearly all SKUs online.

Current Process Future Process

BEFORE AFTER

Capabilities IT Centric Business Centric

Applications Siloed Integrated View

Processes Physical Logical

Development Speed Fit and Simplicity

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IMPLEMENTATION GUIDE OVERVIEW

Top-Level Physical to Logical Integrated Model

Process Modeling, Process Conversion, Outcomes,
p. 14 p. 15 p. 16

■■ Top-Level Enterprise ■■ Logical Modeling ■■ EA Framework

Processes, p. 20 Overview, p. 22 Repository View, p. 23
■■ Process Governance
Validation, p. 21

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Building the Platform for Business Integration 19

 Business Architecture in Practice 20

TOP-LEVEL ENTERPRISE PROCESSES

LEVEL 1 MARKET
Marketing
LEVEL 2 Product Planning Segment Planning Marketing Operations Sales Support Partner Management
Communications

LEVEL 1 ENGINEER
Product Planning Define Product Development Product Launch Product Sustain Product
LEVEL 2 Plan Product Offering Service After EOP
Aggregation Offering Offering Offering Offering

LEVEL 1 SELL
Sales Plan Relationship Relationship Escalation
LEVEL 2 Selling Management Solution Execution CSA Management
Management Development Management Management

LEVEL 1 PROCURE
Reconciliation, Supplier
Supplier Sourcing Contract Authoring Procurement
LEVEL 2 Order Execution Payments, and Spend Analysis Performance
Identification Management and Management Buy Sell
Receivables Management

LEVEL 1 FULFILL
BOM Offer Item Build Delivery Warranty Returns
LEVEL 2 Global Planning Factory Planning
Management Management Management Transformation Fulfillment Services Management

LEVEL 1 SERVICE
Market Analysis Service Sales Service Delivery Service Financial
LEVEL 2 Service Sales Planning Service Development
and Planning Management Management Management

LEVEL 1 ACCOUNT

LEVEL 2 Financial Controls Financial Planning Cash Flow Management Sales Governance Financial Management Compliance Management

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 Use this checklist to
ensure processes can be
Process Governance Validation
fully integrated into a
logical enterprise model. Checklist

1. Process has data inputs.

2. Process has data outputs.

3. Process is described in business terminology.

4. Business rules have been documented.

5. Process output flows to another process.

6. Process lives in only one place.

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Building the Platform for Business Integration 21

 Business Architecture in Practice 22

“Deep dives” are

conducted in two phases,
logical Modeling Overview
leading to requirements
that can drive solutions
and process improvement
efforts.
CONVERT TO
PLACE PHYSICAL LOGICAL MODEL GOVERN
MAP ONTO AND VALIDATE AND INTEGRATE
ENTERPRISE MODEL WITH BUSINESS

DISCOVERY PHASE ANALYSIS PHASE

Duration: 15 days Duration: 45 days

SOLUTIONS
What: A brief review What: In-depth analysis consisting of facilitation
ARCHITECTURE
of the model via sessions with the business and logical data modeling
lightweight scoping
■■ Context Diagrams
Output: Modeled Requirements—Detailed requirements
session with business for both the process and systems, including data and
■■ SOA Services
partners work precedence diagrams
Output: Modeled
Scope—Delineates the
plan for completing
the logical modeling;
calls out any quick-
win process changes
needed up front

BUSINESS IMPROVEMENTS
■■ Value stream/LEAN sessions
■■ Change management

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 This repository model
serves as a requirements
EA FRAMEWORK REPOSITORY VIEW
document for Dell’s EA/
BA repository. EAF V.3 Repository Model
Conceptual

■■ This diagram depicts

the data relationships
across domains of Dell’s
architecture.

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Building the Platform for Business Integration 23

 Business Architecture in Practice 24

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 Business Operations Modeling (IBM)

Company Snapshot

IBM
Industry: Technology International Business Machines (IBM) is a top provider of computer
2008 Revenue: US$103.6 Billion products and services. The company focuses primarily on its growing
Employees: 398,000 services business. Its IT and business services units are among the largest
in the world and serve customers across most industries. IBM is also one
of the largest providers of both business software and semiconductors.
The company’s computing hardware legacy lives on in the form of its
industry-leading enterprise server and storage products lines.

Source: http://www.hoovers.com.

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Building the Platform for Business Integration 25

 Business Architecture in Practice 26

Lack of standardization
in global processes leads
PROCESS VARIATION ACROSS BUSINESS UNITS
to higher costs. AND GEOGRAPHIES

IBM’s global processes for finance, supply chain, and R&D were informal
and varied across geographies, which frequently led to frustrating customer
CHALLENGE experiences. Activity-based process modeling had proved slow and granular, and
it limited executives’ role in design. IBM sought more effective governance and
the metrics to measure performance.

Instead of activities, IBM maps processes as business entities.1 Information

APPROACH models and KPIs are tied to a business entity’s lifecycle to drive the setting of
business rules and benchmark progress.2

The business entity approach has accelerated process standardization and

reduced cost. In IBM Supply Chain, process modeling to standardize global
RESULTS labor sourcing was completed in 30% fewer hours. At IBM Global Finance, the
total cost of modeling to standardize across geographies was 25% less than
an activity-based approach.

1
“Business entities” are also known as “business artifacts.”
2
Chao, Tian, et al, 2009, “Artifact-Based Transformation of IBM Global Financing,” SpringerLink
http://www.springerlink.com/content/6376g27wn7398452/ (14 Dec. 2009).

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 The business entity—not
the activity—is the unit of
Business entity APPROACH
currency in IBM’s process
modeling approach.

■■ Business entities flow

through and are processed
Business Rules
by a business unit.

■■ IBM views the results

produced by the business as
distinct from the activities
involved in the process.
Business Entity Tasks Tasks
The set of business entities State 1 State 2 State 3
■■
Lifecycle
and the information within
them represents the
progress toward a business
operational goal.
KPIs

Definitions

Business The “product” of a business, described in terms of information that is created,

Entity updated, or deleted as it travels through the process lifecycle

State The information contained within a business entity at one specific time in the
process lifecycle

Tasks Business actions that change the state of a business entity

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Building the Platform for Business Integration 27

 Business Architecture in Practice 28

Surface a limited set

of key business entities
Business entity IDENTIFICATION
to model.

Build Executive Surface a Limited Set Map the

Buy-In of Business Entities Lifecycle

Activities Business entity approach Business entity Business entity modeling

validation workshop identification sessions
(~25 in total)

Roles Business entity design Business entity design Business entity design
experts and senior experts, senior executives, experts and subject
“I dreaded the
executives and process owners matter experts
workshop because
I thought I’d be
subjected to conference room
Time Frame Two three-hour meetings ~Two weeks ~Six weeks
walls filled with flow charts that
over two days
I would be expected to
understand and engage in
meaningful design discussions.
The [business entity approach]
was infinitely more productive.” Deliverables Project scope document Primary and secondary Information model,
business entities KPIs, and business
Executive
IBM Global Finance entity lifecycle map with
business rules

Do begin by mapping a primary Key Success Using concrete examples, Identify business entities Focusing on the critical
business entity and surface
Factors illustrate the benefits whose lifecycles represent transactions for the
related business entities where
of the business entity the essential product of business entity, uncover
gaps are evident.
approach over the the business. the four to six key
activity-based approach: milestones (“states”) they
Don’t attempt to uncover all less process step detail produce.
business entities up front. and the inclusion of rules
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 Take a minimalist
approach when
BUSINESS RULES Capture
identifying business rules
and use subject matter Rules for the “Deal” Business Entity
experts to account for Illustrative
local variations.
“Deal” Business Entity Lifecycle

■■ Unlike rules that are Created Draft Offered Signed Active Completed
hard-coded into legacy
applications, the content
of rules based on the Tasks:
business entity lifecycle can Define Terms and Who: Key Activity: Guiding Principle:
be managed and modified Conditions of Deal Process owners Narrow the set of rules Determine which
more easily when the needed to those that corporate conditions
business changes. Information Model either enable or prevent must be met to comply
Customer Information a business entity from with the law (e.g., Federal
proceeding to the next regulations, GAAP).
state.

Global Rules
Must include address, Who: Key Activity: Guiding Principle:
account number, contact Local subject Uncover local variations Determine which local
phone and e-mail matter experts that are not captured at rules apply to provide
the corporate level. a complete set of rules
(e.g., state regulations).
Local Rules
U.S. orders must
contain two valid
Do audit your existing business
e-mail addresses.
rules against key business
entities’ lifecycles to eliminate Who: Key Activity: Guiding Principle:
unnecessary rules. General manager Grant exceptions to rules Allow exceptions only
Exceptions
when approved at a senior
No e-mail address is level to limit variation from
Don’t debate rules until overall
required for orders in established standard.
business entity states and tasks
Australia placed by phone.
are established.

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Building the Platform for Business Integration 29

 Business Architecture in Practice 30

Embed KPIs into business

entity lifecycles to
KPI Alignment and Triggers
ensure alignment with
organizational strategy. KPIs in the Deal Business Entity Lifecycle
Illustrative

■■ Leverage a KPI template to

consistently define each KPI Strategy and Vision Critical Questions
(see page 37).
Top-Level Organizational Goals and Metrics
KPI Screening Criteria
What business entities does our
–– Accurate, clear, organization need to produce to
well defined Business Entity Lifecycle achieve these objectives?
–– Simple to understand
–– Limited in number Terms and Credit
–– Defined accountability/ Conditions Evaluation
Created Draft Offered
stakeholders
–– Source data properly
identified
Trigger: Trigger:
■■ Trigger events are linked to Incomplete Credit
tasks between the states of Customer Approaching
an entity’s lifecycle and act Profile Overdue
as an early-warning system
for transactions in danger of
missing targeted outcomes. KPIs KPIs What information, recorded in the
Total number Turnaround states, are indicators that the state’s
goals are met?
of drafts time for
credit
Do identify KPIs that will
provide end-to-end visibility into
process performance. Alert to Alert to As you conduct tasks to transfer
process process between states in the lifecycle, what
stakeholders events related to KPIs should be set to
Don’t build KPIs as an add- stakeholders
trigger alerts?
on or afterthought to process
maps.

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 The business entity
approach delivers time
Results
and cost savings.
IBM Global Finance Estimated Cost Savings IBM Supply Chain Estimated Time Savings
Indexed Cost for Modeling and Analysis Hours Spent on Modeling and Implementation1
■■ The business entity is a
new common vocabulary
that enhances stakeholder
communication and
consensus building. 100
55,000

75
39,000

Activity-Based Business Entity– Activity-Based Business Entity–

Approach Based Approach Approach Based Approach

“Our global process

owners have a clearer
view of the end-to-end 1
Includes IT development.
process and better ability to
assess changes to standards by
using [the business entity
approach].”
Beth Gollogly
Vice President
IBM Global Finance

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Building the Platform for Business Integration 31

 Business Architecture in Practice 32

IMPLEMENTATION GUIDE OVERVIEW

Business Entity Business Entity KPI Alignment

Approach, p. 27 Identification, p. 28 and Triggers, p. 30

■■ Business Entity– ■■ Roles and ■■ KPI Template, p. 37

Centric Versus Responsibilities
Activity-Centric for Business Entity
Process Model, p. 33 Modeling, p. 34
■■ Business Entity
Identification
Questionnaire, p. 35
■■ Business Entity
Lifecycle Models, p. 36

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 The business entity
approach focuses on
Business entity–CENTRIC VERSUS
business outputs, rather
than actions.
ACTIVITY-CENTRIC PROCESS MODELING

Activity Centric Business Entity Centric

Business View Granular Results oriented

Duration ~Four to six months ~Two months

Scope All process steps Key process steps

Terminology Technical Business

Separate models for data,

Approach activity flows, rules, and Single, integrated model
policies

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Building the Platform for Business Integration 33

 Business Architecture in Practice 34

A modeling team helps

to define business
ROLES AND RESPONSIBILITIES FOR
entities early on in IBM’s
approach.
Business entity MODELING

Role Description

Business Acts as the leader of the workshop discussion and helps

Entity Lead identify business entities

Modeler Serves in a secretary role capturing the results of workshop

discussions

Rules Expert Identifies the business rules from the discussion and maps
them to the business entity–based process model

Metrics Expert Determines how and where KPIs and metrics fit into the
process model

Organizer Focuses the group on core activities, manages logistics, and

keeps the workshop and teams on track

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 Key questions for
business partners to
Business entity IDENTIFICATION
surface business entities. QUESTIONNAIRE

■ What is your business producing?

■ How do you know when it is produced?

■ What are the key goals?

■ How do you measure them?

■ How do you measure progress toward the goals?

■ Are there different stages of your activity that work on the same
underlying entity (even if different “documents” are used to describe it)?

■ What must your business have to survive?

■ What are the distinct pieces of your business?

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Building the Platform for Business Integration 35

 Business Architecture in Practice 36

IBM Global Finance can

summarize its business
Business entity LIFECYCLE MODELS
operations model in
terms of three different
business entities: the
deal, the supplier invoice,
and the asset.

Deal Lifecycle

Created Draft Offered Signed Active Completed

Early End

Failed Expired Lost

Creates

Supplier Invoice Lifecycle Asset Lifecycle

Concluded

Received Payable Accounting Active Returned Inactive

Creates Sold

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 Capture the precise
definition of each KPI by
KPI TEMPLATE
using a template with
standard attributes.

KPI Name [Indicate name.]

Description [Indicate simple description.]

Scope [Specify business entity(s) to which KPI applies.]

Source [Indicate data sources identified.]

Users [List stakeholders responsible.]

Usage Example [Provide brief illustration of how to collect and use KPI.]

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Building the Platform for Business Integration 37

 Business Architecture in Practice 38

KEY TAKEAWAYS
Dell Inc.

1. Convert physical process maps to logical models to create future-state views. Focus on the data required
to enable processes, not the systems or organizations involved in processes.

2. Link business capabilities to underlying process sequences and supporting applications to pinpoint
improvement needs. Don’t limit business requirements to system specifications, but include actions that
business partners can take as well.

3. Use an enterprise process model to identify opportunities for new capabilities, application alignment,
and solutions to business pain points. A fully integrated future state provides a view into process
interdependencies and serves as the foundation for understanding business capabilities.

IBM

1. Focus on business results, not the comprehensive set of activities that produce them. To streamline
and simplify process modeling, IBM uses business entities to fundamentally shift how business units
conceptualize, design, and implement operations.

2. Identify a limited set of critical entities produced by the business. Rather than detail all activities
exhaustively, identify the key output of your major operations and trace that entity’s lifecycle through key
milestones.

3. Build a more holistic view of business operations. Integrate business rules, KPIs, and information flows into
a single model rather than documenting them in separate silos.

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BuSINESS ArChITECTurE IN prACTICE

i 2 3
Building the Platform Advancing Business Optimizing the Business
for Business Integration Architecture Competencies Investment Portfolio

KEY QUESTIoN: HoW CAN KEY QUESTIoN: HoW SHoULD KEY QUESTIoN: HoW CAN
WE CAPTURE A BUSINESS-RELEVANT WE DRIVE THE EVoLUTIoN oF THE BUSINESS ARCHITECTURE GUIDE
VIEW oF ENTERPRISE PRoCESSES? BUSINESS ARCHITECT RoLE? US IN MAKING THE RIGHT BETS?

STATE FArm
INSurANCE
COmpANIES

Enterprise Business Process Model Experience-Based Business Business Capability Investment Model
Architect Development

Business operations Modeling Business Architect Value-Driven Business Architecture

Qualification Criteria

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Advancing Business Architecture Competencies 391

 Business Architecture in Practice 40

Successful business
architecture teams
Advancing Business Architecture Competencies
ground training and role
formation in the day-to- Key Challenges
day experiences of their
business architects.

■■ State Farm takes a

grassroots approach to ROADBLOCKS MISSING ELEMENTS TARGET OUTCOMES
developing the BA role
and uses the experience of
Poor Business case and
the BA community when
understanding success stories
creating training for core Buy-in to grow
of business
skills. the role
architecture by
business and IT Stakeholder
partners education
State Farm
GOAL Insurance
Companies
Formalize the Unclear scope Training curriculum
business architect of business
role. architecture Skills assessment
activities
Practitioner
feedback loop Toolkit to evolve
the function

Not perceived as Career path

a long-term career
opportunity Formal job
description

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 Experience-Based Business Architect
Development (State Farm Insurance Companies)

State Farm
Insurance
Companies

Company Snapshot

State Farm Insurance Companies

Industry: Insurance State Farm Insurance Companies insures more cars and homes than
2008 Revenue: US$61.3 Billion any other insurer in the United States. State Farm Mutual Automobile
Employees: 68,600 Insurance Company is the parent of the State Farm family of companies.
With 17,000 agents, State Farm has 78 million auto, fire, life, and health
policies in the United States and Canada.

Source: http://www.hoovers.com; State Farm Insurance Companies.

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Advancing Business Architecture Competencies 41

 Business Architecture in Practice 42

Informal business
architect (BA) roles
BUSINESS ARCHITECTURE Success REQUIRES State Farm
Insurance
Companies
and inadequate training
inhibit business
SKILLS INVESTMENT
architecture development.

Retention: Difficulty retaining the best business architects without formal

roles and a compelling career path

Training: Difficulty identifying necessary skills and developing training

CHALLENGES
that adequately prepares individuals for BA roles

Communication: Difficulty communicating business architecture practices to

business and IT partners

State Farm takes a grassroots approach to developing the BA role, taking advantage
APPROACH of the experience of the BA community to create training that develops core skills
and builds understanding of BA with business and IT partners.

“In IT you hire people

who have very specific
hard skills; business
Since it formalized the business architecture job and developed BA training,
people hire for marketing
RESULTS State Farm now has 73% of business architects in formal jobs and has seen an
knowledge or insurance
order of magnitude increase in the number of business and systems partners
knowledge. I’m not hiring people
trained.
because they know how to
architect the business.”
Julie Decker
Director of Business Architecture
State Farm Insurance

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 Opportunistically build
buy-in for formal BA
OPPORTUNISTIC ROLE FORMATION State Farm
Insurance
Companies
jobs by identifying and
demonstrating progress
on commonly felt pain
points.

■■ State Farm’s Business and ■■ Interview informal business architects to

Technology Integration office create formal job descriptions.
(BTIO) identifies a lack of Formal BA Job Creation ■■ Establish analyst-level business architects
business engagement in and use success stories to build case for
IT investments as a pain senior-level jobs as strategic work increases.
point on which to establish
business architecture.
(For State Farm’s BA
Business Case to Human Resources
organizational structure, see
page 123.)
■■ Nominate individuals to take on business architecture work.
■■ BTIO incentivizes business ■■ Use solutions to common pain points as an incentive to create
areas to nominate individuals Informal BA Role Creation informal roles.
for BA roles by explicitly ■■ Document success stories to support the business case for
focusing on improved formal jobs.
requirements capture as an
objective.

Business Case to Executive Leadership

DO ground business ■■ Identify tangible pain point on which to establish business

architecture work in challenges architecture practices.
that resonate with business and Grassroots Effort
■■ Document success stories to build buy-in from executive
IT partners. leadership.

DON’T try to establish senior-

level jobs immediately; first,
build credibility through analyst-
level roles.

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Advancing Business Architecture Competencies 43

 Business Architecture in Practice 44

Focus formal classroom

training on the “hard
TRAIN FOR HARD SKILLS, COACH FOR State Farm
Insurance
Companies
skills” and techniques
that are not typically
SOFT SKILLS
found within the business.
Business Architecture Skills Maturity Curve
■■ BTIO employs a combination Illustrative
of coaching mechanisms:
–– Case studies on internal
best practices “Success Differentiators”
–– BA–led sharing meetings ■■ Application of Techniques
to discuss common
■■ Soft Business Architecture Skills:
challenges
Coach for –– Craft and Implement Strategy
–– BTIO “in-box” for sending Soft Skills
challenges and questions –– Drive Collaborative Behavior
–– Leadership
–– Drive Innovation and Optimization

“Our new philosophy

going forward is
to focus on Baseline Skills
Value to
mentorship and coaching. As Business ■■ Modeling Business Context
architects gain experience, it’s
becoming more about the art of ■■ Modeling Business Process
applying the architecture in lots ■■ Modeling Business Requirements Train for
of different settings, and you just ■■ Modeling Business Information Hard Skills
can’t train for that.” ■■ Using a Business Capability
Julie Decker Model
Director of Business Architecture
State Farm Insurance
■■ Using Case Modeling

DO use a combination of
coaching techniques to develop
BA soft skills.
DON’T rely on formal classroom
training alone to develop BA skills.
Skills Maturity
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 Establish a feedback loop
to manage change and
COMMUNITY-DRIVEN Business Architecture State Farm
Insurance
Companies
develop new BA skills. DEVELOPMENT
■■ BTIO establishes three
channels to provide on- Change Management Process
the-ground perspective on
changes to the business
architecture.
BA Change
■■ Feedback from the BA Management Channels
community helps develop best
practices and identify needed BTIO ■■ BA Managers
skills that drive changes to the Who: Managers of BA teams in
training curriculum. the business
What: Provide feedback on team
maturity, changes to BA
role, and BA skills
“The change
management approach When: Meet quarterly
has been very helpful
■■ BA Best Practices BA Skills Training
■■ Business Architecture Team
for us. The architects feel a great ■■

■■ New Skill Needs New BA Roles Who: Broad BA community

deal of ownership for creating their ■■

own environment and that keeps

■■ Framework Evolution What: Provides a forum to
people engaged. If we just forced a communicate change and
change and said ‘this is the way share common challenges
you do it,’ it would fall flat on its When: Meet monthly
face.”
■■ BA Advisory Team
Julie Decker
Director of Business Architecture Who: Subset of BA community
State Farm Insurance What: Provides input into and
BA Community feedback on proposed
DO rely on practical experiences business architecture
on the ground as the primary
changes
basis for developing the
When: Meet biweekly
curriculum.

DON’T roll out any changes

without first vetting it through
the community.
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Advancing Business Architecture Competencies 45

 Business Architecture in Practice 46

Broaden business
architecture training
Engagement THROUGH TRAINING State Farm
Insurance
Companies
beyond the BA
community to engage Business Architecture External Training Programs
key stakeholder groups.

■■ BTIO makes the training

courses available to all Example Roles Recommended Courses Communication Channels
business and IT stakeholders
who consistently interact Consumer Business Partners ■■ Introduction to BA1 “Mass Marketing”:
with business architects. Individuals who Lead SAs/Developers ■■ Requirements Process ■■ Internal BA Web site

will use the BA System and Data Designers Overview1 ■■ BA Community

deliverables Interface Design Specialists ■■ Transitioning BA to Systems1 ■■ Forums in IT

Service Analysts ■■ Requirements Process1 ■■ Mass Mailings of Training

PDMs/Service Managers ■■ Using a Business Capability Changes

Model ■■ IT Newsletters

Impacted Party Business Architect Directors ■■ Introduction to BA1 Development and Training:
Individuals who are Department Heads ■■ Requirements Process ■■ Can Be Part of IT Architect
curious about BA but Business Sponsors Overview1 Development Conversations
■■ Incorporated into Non–BA
only at a high level Program Managers ■■ Using a Business Capability
Technical Leads Model Training Sessions
Architecture Sector Leads

“I’m trying to
Interested Party Business Architect Managers ■■ Introduction to BA
institutionalize a
Individuals who are Project Managers ■■ Requirements Process
discipline that most
curious about BA Planners Overview
people don’t know anything
and require greater Project Coordinators ■■ Transitioning BA to
about. We have some of the
breadth Implementation Coordinators Systems1
brightest and best business ■■ Requirements Process1
people out there, but practicing ■■ Using a Business Capability
business architecture is just not
Model
how business people normally
work.”
Julie Decker
Director of Business Architecture
State Farm Insurance
1
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 State Farm has seen an
increase in formal BA
RESULTS State Farm
Insurance
Companies
jobs and promotions
as well as stronger
engagement with Percentage of Business Architects in Number of Business Architects Promoted
business and IT partners. Formal BA Job to Senior Role

73%
73%

33

0%
0% 0
0

2004 2009 2007 2009

Cumulative Number of Trained Business

and Systems Partners

7,959
7,959

393
393

2004 2009

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Advancing Business Architecture Competencies 47

 Business Architecture in Practice 48

IMPLEMENTATION GUIDE OVERVIEW

Business Architecture Training Versus Community-Driven Engagement Through

Role Formation, p. 43 Coaching, p. 44 Development, p. 45 Training, p. 46

■■ Senior Business ■■ Critical BA Skills, p. 54 ■■ BA Change Management ■■ Training by Roles, p. 62

Architect Role Channels, p. 61
■■ Business Architecture
Descriptions, p. 49
Training Curriculum
■■ Business Architect Role Overview, p. 55
Descriptions, p. 51 ■■ Training Curriculum, p. 56
■■ Business Architecture
Skills Evaluation, p. 57

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 State Farm defines two
levels of senior business
SENIOR BUSINESS ARCHITECT State Farm
Insurance
Companies
architects. ROLE DESCRIPTIONS
Key Job Family Responsibilities
■■ Provides department leadership toward creating, maintaining, and marketing the architectural vision and direction
■■ Sets architecture direction and defines the overall architecture structure
■■ Responsible for the overall integrity of the architecture
■■ Advises and educates on architectural issues to ensure each area is aligned with the future architecture
■■ Maintains a strategic view of the architecture to meet the needs of the organization
■■ Utilizes architecture expertise and experience to resolve key business and business process issues within the
department
■■ Consults on the implementation of business solutions based on the architecture development
■■ Demonstrates maturity in the use of business architecture tools, techniques, and processes

Level 2 Senior Business Architect

■■ Ensures appropriate resources are allocated with key horizontal and/or highly strategic business architectural efforts
■■ Approves horizontal architectural policies, standards, and/or procedures
■■ Provides business architectural leadership to senior management and subject matter experts, including other senior
business architects
■■ Identifies and/or leads efforts to advance the strategic horizontal business architectural vision
■■ Develops repeatable methods for creating and integrating strategic and tactical implementation plans from a
complex business architectural vision involving many business strategies
■■ Uses an architectural approach to influence the alignment of business goals and decisions with company goals
■■ Focuses on increasing breadth of knowledge of the business architecture across the enterprise
■■ Influences and communicates effectively with all levels of the organization on topics from architecture to enterprise
strategy
■■ Excels at executing strategic business architecture and highly skilled in business architecture practice
■■ Coaches and mentors level 1 senior business architects
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Advancing Business Architecture Competencies 49

 Business Architecture in Practice 50

SENIOR BUSINESS ARCHITECT State Farm

Insurance
Companies
ROLE DESCRIPTIONS (CONTINUED)
Level 1 Senior Business Architect
■■ Approves key proposed business architecture changes/designs to ensure they are aligned with the architectural
vision for department and the enterprise
■■ Communicates effectively with business and technical executive leadership on various issues related to business
architecture and technology
■■ Ensures appropriate resources are allocated with key business architectural efforts
■■ Approves architectural policies, standards, and/or procedures
■■ Provides business architectural leadership to management and subject matter experts, including other business
architects; this includes developing, providing education for, and implementing future architectural goals
■■ Identifies and/or leads efforts to advance the business architectural vision
■■ Develops strategic and tactical implementation plans from a complex business architectural vision involving many
business strategies
■■ Understands business and company goals and integrates them with business architectural options
■■ Demonstrates and maintains a broad knowledge of the business architecture across the enterprise
■■ Serves as the liaison and partner to IT architects
■■ Able to execute strategic business architecture and proven skill in business architecture practice

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 State Farm defines
three levels of business
BUSINESS ARCHITECT ROLE DESCRIPTIONS State Farm
Insurance
Companies
architects.
Key Job Family Responsibilities
■■ Facilitates the rigorous identification and documentation of business architecture by participating in a variety
of activities to meet the department’s and the organization’s needs, including:
–– Gathering information;
–– Analyzing business needs; and
–– Coordinating and executing the transition and ongoing management of business architecture.
■■ Takes ownership/stewardship of department business architecture vision and direction, providing communication
and education
■■ Serves as a liaison between the department and Business and Technology Integration Office
■■ Develops and communicates business needs within department and with systems
■■ Assists in the development of training and support materials for business architecture, modeling, and requirements
development
■■ Assists the department in defining and developing business cases
■■ Effectively utilizes business architecture tools
■■ Understands and complies with business processes and procedures

Level 4 Business Architect

■■ Assumes a leadership role on business architecture, modeling, and requirements projects
■■ Demonstrates expertise in most company modeling techniques and is aware of industry techniques
■■ May provide written or verbal counsel, prepare correspondence, or develop presentations for executive levels
■■ Demonstrates depth of knowledge of department’s business practices and workflows
■■ Applies thorough knowledge and understanding of company operations and department’s business practices
and workflows
■■ Supports strategic planning of business direction based on an understanding and analysis of business needs
■■ Leads interdepartmental project groups and committees

(Continues on next page)

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Advancing Business Architecture Competencies 51

 Business Architecture in Practice 52

BUSINESS ARCHITECT ROLE DESCRIPTIONS State Farm

Insurance
Companies
(CONTINUED)

(Level 4 Business Architect Continued)

■■ Generates new ideas and processes to increase efficiency and determines the impact of new initiatives on
existing techniques
■■ Functions with autonomy and demonstrates influence
■■ Champions department and enterprise change
■■ Clarifies, defines, coordinates, and directs the work of others

Level 3 Business Architect

■■ May assume a leadership role on business architecture, modeling, and requirements definition projects
■■ Demonstrates proficiency in most company modeling techniques and tools
■■ Demonstrates working knowledge of department’s business practices and workflows
■■ Effectively navigates the organization to complete assignments
■■ May assume a leadership role on interdepartmental project groups and committees
■■ Determines communication needs, gathers appropriate information, and develops communications that are
understandable to the target audience which may include executive
■■ Develops materials and may train business users and unit members on strategies, processes, and procedures
■■ Works primarily autonomously with limited direction required
■■ Demonstrates project coordination skills and ability to prioritize and handle multiple work assignments

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 BUSINESS ARCHITECT ROLE DESCRIPTIONS State Farm
Insurance
Companies
(CONTINUED)
Level 2 Business Architect
■■ Completes the business architecture training curriculum
■■ Develops knowledge of other business departments and systems department structures and processes
as necessary
■■ Develops proficiency in more than one company modeling technique
■■ Develops a basic understanding of all company modeling tools
■■ Develops a foundational understanding of business architecture elements
■■ Supports department and enterprise change
■■ Develops and delivers presentations
■■ Works under general direction and establishes business relationships
■■ Possesses a strong working knowledge of business area practices and workflow
■■ Demonstrates a basic understanding of all company modeling tools
■■ Facilitates some level of business analysis discussion using architecture technique
■■ Creates procedures, training, and other communication
■■ Participates in the development of a variety of business analysis activities through business architecture,
including but not limited to:
–– Gathering information;
–– Conducting research;
–– Analyzing business needs;
–– Developing requirements; and
–– Validating analysis deliverable with business subject matter experts or systems partners.

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Advancing Business Architecture Competencies 53

 Business Architecture in Practice 54

State Farm identifies six

business architecture
CRITICAL BA SKILLS State Farm
Insurance
Companies
skills critical for success.
Critical Business Architecture Skills

■■ Creativity/Innovation—
Approaches work with new
ideas, creative thinking, and
innovative approaches
Creativity/ “Big Picture” Grasp of
Innovation Persuasion Thinker Strategic Communication Technology
■■ Persuasion—Develops
approaches and the
techniques to drive L2 BA1
consensus

■■ “Big Picture” Thinker— L3 BA

Understands and
communicates the broad
enterprise implications of
line-of-business decisions L4 BA

■■ Strategic—The “lead” senior

business architect must be L1 Sr. BA
able to develop the vision
and strategy for business
architecture.
L2 Sr. BA
■■ Communication—Excellent
written, verbal, and
“graphical” communication
skills High Importance Medium Importance Low Importance

■■ Grasp of Technology—
Strong knowledge of
technology and other
architectures
1
L2 business architect role emphasizes “hard skills” training.

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 State Farm creates a
training curriculum
BUSINESS ARCHITECTURE TRAINING State Farm
Insurance
Companies
focused on “hard skills.” CURRICULUM overview

OVERVIEWS TOOLS EXECUTION/PROCEDURE

Executing
Introduction
Modeling in a Business
to Business
BA Tool Architecture
Architecture
Effort

MODELING/TECHNIQUES Transitioning
Business
Architecture
Modeling to Systems
Modeling
Business Modeling Modeling
Business
Context and Business Business
Requirements—
Business Rules Information
Overview
Process Requirements
Process
Overview

Modeling Using a
Modeling Non-
Business Business Use Case
Functional
Requirements— Capability Modeling
Requirements
Advanced Model Requirements
Process

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Advancing Business Architecture Competencies 55

 Business Architecture in Practice 56

Training Curriculum State Farm

Insurance
Companies

NAME DESCRIPTION

Introduction to Business Architecture This course provides a basic introduction to Business Architecture.

Requirements Process Overview The presentation offers a high-level overview of the requirements process.

Modeling Business
This course provides an introduction to modeling business architecture deliverables.
Context and Business Process

Modeling Business Requirements—Overview This course emphasizes the fundamental concepts of modeling business requirements.

Modeling Business Rules This course outlines the fundamental concepts of modeling business rules.

This course focuses on two elements of Business Architecture: business terms and business
Modeling Business Information
data elements.
This course provides a detailed description of how to model requirements based on various business
Modeling Business Requirements—Advanced
scenarios.
This course describes how the business should provide input into the non-functional requirements
Modeling Non-Functional Requirements
definition process.

Use Case Modeling This course provides practical application of business use cases.

Using a Business Capability Model This course describes business capability modeling fundamentals.

Executing a Business Architecture Effort This course covers topics related to conducting an effort to develop Business Architecture.

This course covers how Business Architecture is prepared, transitioned to systems, and transformed for
Transitioning Business Architecture to Systems
use in solution development.

Requirements Process The purpose of this course is to provide a broader understanding of the requirements process.

Modeling in BA Tool This course provides an overview of the organization’s BA tool.

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 State Farm identifies core
criteria to evaluate the
Business Architecture Skills Evaluation State Farm
Insurance
Companies
BA role.

Craft and Implement Strategy

Business architects help to craft corporate strategy and implement it at every level of the organization.

■■ Vision and Positioning

–– Understands organization’s competitive positioning in relation to the industry

–– Demonstrates daily that he or she is driven by the organization’s vision

–– Understands and articulates how the business strategy gets executed at the tactical level

■■ Capabilities
–– Understands the business capability model (BCM) and how it is used to perform various analytics

–– Understands which capabilities differentiate from competitors

■■ Customer and Market

–– Seeks out and makes use of customer perspectives and research to gain valuable insights for strategy

and solution modeling

–– Understands the competitive forces and market dynamics that influence the insurance industry and broader

financial services marketplace

–– Possesses knowledge of laws and regulations that impact the customer, the market, and the internal

business environment

■■ Competitors
–– Understands competitor’s strategy and value proposition and how the organization is similar and/or different

–– Understands which products each competitor competes against and how it affects the organization

■■ Business Case Development

–– Clearly articulates objectives, scope, and the anticipated benefits to be received from the project

–– Identifies metrics and plan for measuring them through the project lifecycle

–– Estimates the effort of a project by leveraging appropriate experience and skill set (including technology, project

management, and business subject matter expertise)

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Advancing Business Architecture Competencies 57

 Business Architecture in Practice 58

Business Architecture Skills Evaluation State Farm

Insurance
Companies
(Continued)

Model Solutions
Business architects model business processes and structures, allowing departments to assess impacts and make
adjustments prior to implementation.

■■ Organization Assessment and Analysis

–– Develops effective operational models to identify and analyze current state “root causes” and “pain points”

–– Develops comprehensive architectural models that provide perspective and context for future state planning, design,

and development

■■ Requirements and Process Modeling

–– Understands standards and guidelines for developing requirements and process modeling

–– Understands and articulates how the business strategy gets executed at the tactical level

■■ Technology Proficiency
–– Understands the basic components, concepts and lifecycle stages of solution development

–– Can identify and describe the components of a complete enterprise architecture

–– Can articulate and demonstrate the impacts and benefits of business architecture in support of solution

development
–– Understands the responsibilities, processes, and deliverables of data architecture, security architecture, and

application architecture

■■ Documentation
–– Prepares and manages business architecture deliverables according to standards and guidelines, with emphasis on

consistency and reusability

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 Business Architecture Skills Evaluation State Farm
Insurance
Companies
(Continued)
Drive Collaborative Behavior
Business architects communicate to cross-organizational stakeholders, obtaining buy-in and commitment.

■■ Communication
–– Makes complex ideas more manageable and understandable, helping to build cross-organizational consensus

and commitment
–– Supports communication with visual representations of key messages

■■ Facilitation
–– Prepares objectives and agendas for all meetings

–– Manages meetings to ensure proper focus on objectives and efficient, effective use of time

■■ Political Awareness
–– Understands the political landscape of the organization and is able to navigate it successfully to drive consensus

Leadership
Business architects are trained to succeed in leadership roles throughout the organization.

■■ Reputation
–– Establishes and maintains “trusted advisor” relationships with one or more areas of the organization

–– Frames and brokers large or complex initiatives to senior management

–– Has a track record of delivering high-value results

■■ Mentoring
–– Works with other architects to develop skill development plan

–– Provides insight and advice to junior or beginning business architects

■■ Project Management
–– Understands key activities in business architecture methodology and organizational constraints to develop

accurate plans
–– Effectively translates future goals, plans, and designs into actionable initiatives, programs, and projects

–– Can drive a project and resources from initial planning and scoping through development, delivery, and deployment

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Advancing Business Architecture Competencies 59

 Business Architecture in Practice 60

Business Architecture Skills Evaluation State Farm

Insurance
Companies
(Continued)

Drive Innovation and Optimization

Business architects are constantly working to improve the organization’s ability to innovate, optimize the system,
drive continuous improvement, and adjust to market changes.

■■ Innovation
–– Pursues new ways of doing things, supported by solid business logic

–– Provides fresh perspectives and “out of the box” thinking on issues and challenges, and encourages the organization

to consider new ideas

■■ Optimize
–– Identifies opportunities for consolidation and efficiencies across business units, functional areas, or product lines

–– Identifies and tracks key performance metrics in business cases to ensure progress is made and objectives are met

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 State Farm establishes
three groups to provide
BA CHANGE MANAGEMENT Channels State Farm
Insurance
Companies
feedback on its business
architecture.

Change Management Relationship

Objective Composition Meeting Frequency
Channel with BTIO
Business ■■ Provide a broad ■■ Broad business Monthly meetings ■■ Forum for mass
Architecture Team forum for architecture communication
(BAT) communication community from of business
of business across business architecture
architecture units changes
change.
BA Advisory Team ■■ Provide a forum for ■■ Representative Biweekly meetings ■■ Advisory forum
collaboration and subset of business providing “on-the-
communication architects from ground” perspective
to ensure all the business on changes to
business areas architecture the business
and best practices community architecture
are represented function, including
and help validate the training
the direction curriculum,
of business techniques and
architecture. standards, and new
roles.
BA Managers ■■ Develop business ■■ Business area Quarterly meetings ■■ Serve as advisors
architecture managers for changes
teams and provide of business to business
feedback on BA architecture teams architecture roles,
team maturity, training, and
readiness for standards; first-
change, and training informed for major
needs. changes.

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Advancing Business Architecture Competencies 61

 Business Architecture in Practice 62

Training by roles State Farm

Insurance
Companies

REQUIRED TRAINING COURSES

KEY

TRANSITIONING BUSINESS
BUSINESS ARCHITECTURE

REQUIREMENTS PROCESS
CONTEXT AND BUSINESS

ARCHITECTURE EFFORT
EXECUTING A BUSINESS
R Required O Optional

MODELING IN BA TOOL
USE CASE MODELING
MODELING BUSINESS

MODELING BUSINESS

MODELING BUSINESS

MODELING BUSINESS

MODELING BUSINESS
PROCESS OVERVIEW
REQUIREMENTS FOR

CAPABILITY MODEL
SR Strongly N/A Not Applicable

INTRODUCTION TO

ARCHITECTURE TO
USING A BUSINESS
REQUIREMENTS—

REQUIREMENTS—
Recommended

MODELING NON-

REQUIREMENTS

INFORMATION
FUNCTIONAL
ADVANCED
OVERVIEW
PROCESS

SYSTEMS
RULES
TRAINING
PROGRAM EXAMPLE ROLES

Business Roles: New Business Architects R O R R R R R R O R R R O SR

Practitioner Systems Roles: Lead BAs–Business

Strategic Projects, BAs–Requirements R R R R SR SR R R R O O O SR O
Modeler

Basic Modeler (With

Non-Lead BAs–Business Strategic
Business Architecture R R SR SR SR SR SR SR SR O O O SR O
Projects, BAs–Service with Project
in Area)

Basic Modeler (Without

Nonlead BAs–Business Strategic Projects,
Business Architecture SR SR O O O O O O O O O O SR O
BAs–Service with Project
in Area)

Business Partners, Lead SAs/Developers,

System and Data Designers, Interface
Consumer SR SR O O O O O O O O O SR SR O
Design Specialists, PDMs/Service
Managers

Business Architect Directors, Department

Heads, Business Sponsors, Program
SR SR O O O O O O O O O O O O
Managers, Technical Leads, Architecture
Impacted/Interested Sector Leads
Party
Business Architect Managers, Project
Managers, Planners, Project Coordinators, R R O O O O O O O O O SR SR O
Implementation Coordinators

Existing Business Architects, Business

Continuing Education N/A O O N/A N/A R N/A R N/A N/A N/A R SR N/A
Analysts

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 BUSINESS ARCHITECT QUALIFICATION CRITERIA
(BLUE CROSS and BLUE SHIELD OF NORTH CAROLINA)

Company Snapshot

BCBSNC
Industry: Health Insurance Blue Cross and Blue Shield of North Carolina (BCBSNC) provides health
2008 Revenue: US$5.2 Billion care insurance products and related services to about 3.5 million members
Employees: 4,900 in North Carolina. The company’s health plans include Blue Care (HMO)
and Blue Options (PPO), as well as consumer-directed plans that couple
a high-deductible policy with a health savings account. BCBSNC also
provides dental, life, disability, long-term care, Medicare supplemental
insurance, and prescription drug coverage.

Source: http://www.hoovers.com

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Advancing Business Architecture Competencies 63

 Business Architecture in Practice 64

The business architect

lacks a common role
HIGH VARIATION IN THE BUSINESS
description across the
enterprise.
ARCHITECT ROLE

Throughout Blue Cross and Blue Shield of North Carolina, “business architects”
emerged in various areas of the company with no common definition of or clarity
CHALLENGE around their responsibilities. Often, managers assigned the title as a reward for
performance. Such practices prevented meaningful coordination across business
architects.

To bring business architects into a community and drive toward common

APPROACH goals, BCBSNC defines the required skills mix and the levels of achievement
based on the TOGAF framework.

By assessing employees against the criteria, BCBSNC now understands

who is currently qualified to provide services as a business architect and
RESULTS where the gaps are. In addition, BCBSNC can now see who is approaching the
qualification levels and can upskill these individuals quickly into the business
architect role.

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 BCBSNC identifies the
skill set and maturity
SKILLS MATURITY FOR BUSINESS ARCHITECTS
levels for business
architects. Business Architect Skills Criteria1
Business Business
Business Business Skills Architect Skills Architect
Skills Architect Skills Architect
IT Appl. Develop. Software Engineering 3
■■ Employees are surveyed Leadership 3 Business Modeling 4 Methodologies and 2
on their individual maturity Teamwork 4 Business Process Design 4 Tools
Security 3

levels for different skills. Interpersonal Skills 4 Programming

Systems and Network
3
Role Design 4 3 Management
Languages

Generic Skills
Oral Communications 4
Organization Design 4
Transaction Processing 3
■■ Based on fit with the skills Written 4 Brokering Applications 3
Data Design 3
criteria, employees are Communications Information Consumer Location and Directory 3
Systems Integration 3 3

Technical Skills
Logical Analysis 4
matched to the business Applications User Interface 3

Enterprise Architecture Skills

Stakeholder 3 IT Industry Standards 3
architect role. Information Provider International Operations 2
Management Services Design 3 3
Applications Data Interchange 2
Risk Management 3
Architecture Principles 4

IT Knowledge Skills
■■ EA coordinates with HR as Business Case 4 Design
Storage Management 2 Data Management 2

these criteria are developed Business Scenario 4 Architecture Views and 4

Networks 2 Graphics and Image 2
and applied to employees.
Business Skills and Methods

Organization 4 Viewpoints Design Web-Based Services 2 Operating Systems

2
Services
Business Process 4 IT Infrastructure 2
Building Block Design 4
Strategic Planning 4 Network Services 2
Asset Management 3
Solutions Modeling 4
Budget Management 3 Communications
Service-Level 2
Benefits Analysis 4 3 Infrastructure
Visioning 4 Agreements
Business Inter-Working 4 Contract Law 2
Business Metrics 4 Systems 2

Legal Environ.
Business Culture 3 Systems Behavior 3 Data Protection Laws 3
COTS 2
Legacy Investments 2 Project Management 3 Procurement Law 2
Enterprise Continuums 4
Business Functions 4 Program Management 3 Fraud 3
Migration Planning 3
Project Management 3 Commercial Law 3
Mgmt. Skills

Management Utilities 2
Pgm./Proj.

Managing Business 4
Infrastructure
Change 2
Applications
Change Management 4

Value Management 4

Level Achievement Skill

1 Background Not a required skill though should be able to define and manage skill if required

2 Awareness Understands the background, issues, and implications sufficiently to be able to understand how to proceed further and advise client accordingly

3 Knowledge Detailed knowledge of subject area and capable of providing professional advice and guidance; ability to integrate capability into architecture design

4 Expert Extensive and substantial practical experience and applied knowledge on the subject

1
In development.

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Advancing Business Architecture Competencies 65

 Business Architecture in Practice 66

KEY TAKEAWAYS
State Farm

1. Build the business case for business architecture on solutions to commonly shared problems. Identify
business and IT pain points that business architecture can solve and use those successes to establish
a mandate for the function.

2. Train for foundational skills but coach for differentiating skills. While formal training is best for hard BA
skills and techniques, such as modeling, it is coaching in soft skills, such as leadership, that differentiates
your best talent.

3. Base the business architecture on practical experience. Establish robust change management mechanisms
to ensure “on-the-ground” experience informs the evolution of the business architecture itself as well as
training and roles.

4. Don’t just train business architects but key stakeholders as well. Leverage the BA training curriculum
to educate and build support among the broader community for business architecture.

Blue Cross and Blue Shield of North Carolina

1. Take advantage of existing EA frameworks to triage initial efforts to identify and upskill employees
for the business architect role.

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BuSINESS ArChITECTurE IN prACTICE

i 2 3
Building the Platform Advancing Business Optimizing the Business
for Business Integration Architecture Competencies Investment Portfolio

KEY QUESTIoN: HoW CAN KEY QUESTIoN: HoW SHoULD KEY QUESTIoN: HoW CAN
WE CAPTURE A BUSINESS-RELEVANT WE DRIVE THE EVoLUTIoN oF THE BUSINESS ARCHITECTURE GUIDE
VIEW oF ENTERPRISE PRoCESSES? BUSINESS ARCHITECT RoLE? US IN MAKING THE RIGHT BETS?

STATE FArm
INSurANCE
COmpANIES

Enterprise Business Process Model Experience-Based Business Business Capability Investment Model
Architect Development

Business operations Modeling Business Architect Value-Driven Business Architecture

Qualification Criteria

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Optimizing the Business Investment Portfolio 671

 Business Architecture in Practice 68

RBC and Sanlam both

address typical failure
THE MINEFIELD BETWEEN Strategy AND Projects
points that lie between
strategy and projects.

■■ RBC focuses on clearly

linking strategy to operations
through business capabilities.

■■ Sanlam establishes target

values that are tied to the
project portfolio and ensures
business architects provide
Strategy Strategy not Needed Planners not Benefits aren’t Projects
project oversight.
sufficiently tied capabilities accountable quantified or
to operations not properly for delivery traced back to
understood original goals
or measured

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 Business Capability Investment Model (RBC)

Company Snapshot

RBC
Industry: Financial Services RBC provides personal and commercial banking, wealth management
2008 Revenue: US$20.5 Billion services, insurance, corporate, investment banking and transaction
Employees: ~80,000 processing services on a global basis. It serves more than 18 million
personal, business, public sector, and institutional clients through offices
in Canada, the United States, and 53 other countries. Canada’s largest
bank, RBC has five segments: Canadian banking, wealth management,
insurance, international banking, and capital markets.
Source: http://www.hoovers.com; RBC.

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Optimizing the Business Investment Portfolio 69

 Business Architecture in Practice 70

Business Architecture
was created to facilitate
HOW TO STRENGTHEN THE CONNECTION BETWEEN
strategic alignment and
execution.
STRATEGY AND EXECUTION

There was a need for a better mechanism to provide

Strategy
traceability of strategic intent and to better balance portfolio
Execution:
spend on strategic and tactical initiatives.
Transformation To increase spend on transformational change, a portfolio
CHALLENGES
Initiatives: approach to investments was needed.
Change In moving from a product-centric to a client-centric
Management: organization, RBC needed to ensure all dimensions of
transformation were addressed (people, process, technology).

Business Architecture incorporates the use of a target operating model,

supported by business capabilities, to better connect strategic vision to the
APPROACH
underlying changes to people, process, and technology needed to realize
that strategy.

As its coverage has expanded to 15 lines of business, Business Architecture

RESULTS has helped to extend planning horizons, rationalize project portfolios, lower
infrastructure costs, and reduce cycle times.

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 The target operating
model is the “glue”
Business Architecture Approach
connecting strategy to
the program portfolio.

■■ Business Architecture plays

TARGET OPERATING ENTERPRISE
a role at each stage in the STRATEGY KPIs
MODEL PORTFOLIO
process, with particular focus
on the target operating BA Role: BA Role: BA Role: BA Role:
model (TOM). ■■ Help create a simple ■■ Work with business ■■ Provide the framework ■■ Create the appropriate
interpretation of the to structure KPIs for solicit and structure the portfolio using outputs
strategy. completeness. content. of the TOM.
■■ Identify clusters that ■■ Conduct gap analysis ■■ Create structure for

inform the target Prioritize with sponsors. on/off boarding.

operating model.
■■ Provide feedback

throughout.

PROGRAM

BA Role:
Provide governance and
■■

project design.

Program A Program B Program C

Foundational
Program Program Foundational Program Foundational
Infrastructure Infrastructure Infrastructure

Tactical
Strategic Tactical Strategic Tactical Strategic

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Optimizing the Business Investment Portfolio 71

 Business Architecture in Practice 72

The target operating

model defines all
THE TARGET OPERATING MODEL
components of future
state business design for Operating Model Layers
a given organization.

■■ Business scenarios are MACRO

used to help elicit relevant
information from the
business unit, identify areas
for further refinement, and ■■ The strategic layer articulates the
Strategic
connect the theoretical direction and vision.
model to the business unit’s
practical environment.

■■ The conceptual layer translates the strategic

vision into how value is delivered to the client
Conceptual
along various dimensions, including the value
chain, products, and channel.
Business Scenarios

■■ The capability layer expands the conceptual model

Capability into detailed business capabilities and describes
their interrelationships and target maturity levels.

■■ The physical layer decomposes the capabilities

into specific processes, policies/procedures,
Physical
organizations, roles, and technologies required
to enable the business capabilities.
MICRO

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 Capabilities are defined
at four different levels
DEFINING DEGREES OF CHANGE
to establish current and
future states.

■■ The business must not only Definition Knowledge to Implement

define what the different
levels of transformation Current State Business as Usual ■■ Evaluation of current process ■■ Identifying pain points and
mean but also where the ■■ Evaluation of current customer irritants
knowledge required to benchmarks ■■ Documenting current state
implement exists. ■■ Evaluation of current competitor –– People

practices and product/service –– Process

■■ Future state options offerings –– Technology

are generated through

extensive internal and Future State Incremental ■■ Matching current competitor ■■ Process improvements
external analysis. This Improvements product/service offering –– Lean Six Sigma

analysis can later be How do we ■■ Median performance against ■■ System changes

used to prioritize improve a little? peers ■■ Outside vendors/outsourcing
implementation.
Significant ■■ Market leading product/service ■■ E2E changes involving the entire
■■ BA helps the business select Improvements offering value chain
the transformation path and How do we ■■ Top quartile performance relative ■■ New systems
put the key components in improve a lot? to peers ■■ Peer best practices
place for its execution. ■■ Industry best practices

Truly ■■ Market leading product/service ■■ Outside specialty consulting

Transformational offering—“blue water”—strong companies
How do we source of lasting competitive ■■ Best practices outside the
DO force business partners to change the game? advantage financial service industry
think through multiple future
■■ Top decile performance relative
states. to peers
■■ World-class best practices (using
non-financial industry practices)
DON’T let business partners
scope transformational change
down to something more
incremental.

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Optimizing the Business Investment Portfolio 73

 Business Architecture in Practice 74

Business scenarios help

surface the capabilities
SCENARIO-Based Capability Identification
needed to solve
particular pain points. Scenario: Individual Meets a Mortgage Specialist and Applies for a Mortgage
Pain Point: The Individual Must Often Wait Several Days Before Receiving an Answer (Illustrative)

■■ Business scenarios Current 1 Application is

Appicant contacts MS meets with Application Application Results are Applicant gets
describe current and State RBC to request the applicant is completed. submitted for is adjudicated. communicated conditional
future states using real mortgage. adjudication. to MS. approval.

life events, processes, Applicant submits Documents Client executes Mortgage Mortgage is set up Funds are
and functionalities. required docs. are verified. documentation. is approved. on RBC systems. advanced.

■■ Scenarios guide the Pain Points—Inefficiencies

development and evaluation 1 The application submitted by the MS is often incomplete. The application is reviewed for completeness and adjudicated. The
conditional approval, along with a list of required documents are then sent back to the MS, who will communicate the results, a
of the capabilities necessary conditional approval, back to the applicant. This process can take several days and requires a significant time and effort from RBC
to carry out a business resources.

activity.
Future Applicant contacts MS meets with Application 1 Application is Applicant gets

Improvement
Incremental
State RBC to request the applicant. is completed. adjudicated conditional
mortgage. on the spot. approval.

Applicant submits Documents Client executes Mortgage Mortgage is set up Funds are
required docs. are verified. documentation. is approved. on RBC systems. advanced.
“Capabilities can be
a pretty abstract Applicant contacts MS meets with Application 1 Application’s adjudicated
Improvement

concept for many of

Significant

RBC to request the applicant. is completed. and docs are verified.

mortgage.
our business partners. Scenarios
help them come to life.”
2 Client executes
documentation.
Mortgage
is approved.
3 Funds are
advanced.
David Furlong
Managing Director, Business
Architecture
the Game
Change

What would a truly transformational scenario look like?

DO facilitate scenario creation
to avoid results that focus on
fixing immediate problems. New Capabilities Required Changes
1. Portable credit scoring How are pain points addressed?
DON’T let the number of system and rules engine
1 Credit scoring engine must be available to the mortgage specialist, permitting an on-the-spot
identified capabilities exceed a 2. Document verification at POS adjudication.

reasonable upper limit (12–15). 3. Automated disbursement 2 Document verification enabled at the point of sale by the MS.

3 Highly automated process advances funds without the need for human intervention.
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 Option analysis
determines the optimal
OPTIMIZING THE CAPABILITY MIX
mix of capability
maturities to achieve the Option Analysis
business case in the time Illustrative
frame allotted.

Scenario 1 Scenario 2 Scenario 3 Recommended

■■ Scenario 1 does not deliver
the required level of savings. Capabilities Leads and Contact Incremental Incremental Transform Incremental
Management
■■ Scenario 2 exceeds the
savings target but requires Product Catalogue Incremental Transform Incremental Incremental
eight years to implement.
Documents at Point of Sale Incremental Transform Incremental Significant
■■ Scenario 3 is the same
as Scenario 1, but with a Auto-Adjudication Significant Transform Significant Transform
transformational Leads
and Contact Management
Fulfillment Incremental Significant Incremental Incremental
system, and fails to deliver
the business case.
… Significant Significant Significant Incremental

Servicing Incremental Transform Incremental Significant

Results Time Frame 2.5 Years 8 Years 5 Years 2.5 Years

Five-Year Net Benefit 75 150 78 112

(in Millions)
“The key is to identify
which capabilities will
differentiate us in the
Requirements: Program “x” requires a $100 M five-year net benefit and must be implemented in fewer than three years.
market, and then to invest and
deploy to the maturity level
required.”
David Furlong,
Managing Director, Business
Architecture

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Optimizing the Business Investment Portfolio 75

 Business Architecture in Practice 76

Capabilities are
prioritized at the portfolio
PORTFOLIO-LEVEL PRIORITIZATION
level to compare their
enterprise value. Capability Prioritization Matrix
Illustrative
High
■■ Leverage is determined by
examining how broadly a
capability can be used across DISCRETIONARY HIGH PRIORITY
the company.

■■ Effort is calculated by
analyzing how hard it will be
to implement the capability. Capability 3
Capability 1

Capability 7

Capability 6
Leverage Low High

Capability 4
Capability 8

Capability 2 Capability 5

DO focus disproportionate SECONDARY PRIORITY LOW-HANGING FRUIT

attention on high-priority
capabilities.
Low
DON’T evaluate capabilities
Effort
based on their importance to
any one strategy in isolation.

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 Capability maturity and
criticality are assessed
CAPABILITY MATURITY ASSESSMENT1
to clarify priorities.

■■ Maturities are evaluated

at the program level
to obtain a detailed
understanding of what it Level of
will take to move from the Level of Maturity
Importance
current to future state.
Capability Qualitative
Customer and Process Organization Technology
■■ For full assessment details, Assessment
Service Line
see the Implementation
Perspective
Guide on pages 84–86. CS FS CS FS CS FS CS FS

■ Process, organization
Example Capability Med 2 3 3 3 2 N/A
(people), and technology
maturity are formally
assessed. RBC also considers Example Sub-Capability ABC Low 3 3 2 3 3 4
five other capability
dimensions: product, policy,
information, capital, and Example Sub-Capability DEF High 2 3 2 3 2 3
location, depending on
business need.
Example Sub-Capability XYZ Med 2 3 2 4 2 3

CS = Current State
DO assess capability maturity
relative to process, organization, FS = Future State
and technology.

DON’T use quantitative or

qualitative assessments but 1
Illustrative.

both in combination to remove

gaming from the process.

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Optimizing the Business Investment Portfolio 77

 Business Architecture in Practice 78

Business Architecture has

had wide-ranging impact
RESULTS
across strategic, structural,
and operational areas of Lines of Business Covered Size of Business Architecture Team
the bank. Includes Full and Partial Coverage Number of FTEs

20

15

3
1

2004 2009 2004 2009

Select Success Measures

Strategic
■■Business Architecture contributed to the toolset used to support the expansion of initiative planning
cycles from 12–24 months to four to five years across multiple horizons.
■■ More than 250 duplications have been identified over the next three to five years, which has led to
more than 20 common infrastructure builds.
“With a business
Structural
architecture, I didn’t
■■ Business Architecture has recommended creating more than 15 Centers of Excellence, ~50% of which
have to do any second-
have been implemented, reducing infrastructure costs through shared deployment by 50% in some
guessing. I had a clear target
cases.
operating model and an
understanding of the required ■■ The Enterprise Content Management CoE has created a common infrastructure for more 106 projects.
capabilities. Business architecture Operational
became my high-speed electronic ■■ Business Architecture’s work with COEs has led to more than $50 million in annual savings.

highway to get me where I

wanted to go.”
■■ The creation of program portfolios has significantly reduced the number of active projects running in
the enterprise.
Scott Burrows
SVP, Retail Shared Services

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 Sponsorship, the team,
methods, and tools are
LESSONS LEARNED
the key success factors
for Business Architecture
at RBC.
Guiding Principles Key Characteristics Potential Hazards
Sponsorship and Align to a influential executive ■■ Fearless (has been bold, ■■ Focusing on 100% attainment
Executive Leadership who possesses many (ideally all) maybe even failed) of the goal
of the following key dimensions. ■■ Publicly supportive ■■ Requiring immediate results
■■ A builder ■■ Not including process metrics
■■ Can see and convey a vision among key performance
■■ Comfortable with ambiguity indicators
and uncertainty
Team Structure A federated model with clear Federated model benefit ■■ Taking a solution-driven
and Competencies lines of sight into relevant lines of ■■ Accountable rather than a business-driven
business is desired. ■■ Scalable approach
■■ Consistent ■■ Not investing in establishing
Comprised of individuals who Desirable competencies credibility
possess many (ideally all) of the ■■ Mental agility ■■ Possessing or perceiving
following competencies. ■■ Comfort with ambiguity to possess subject matter
■■ Inner confidence expertise limits creativity
■■ Ability and willingness to learn ■■ Embedding in IT
Methods Achieve the client’s strategy by ■■ Engaging in thorough research ■■ Searching for a panacea
identifying the gaps between the to accurately articulate current ■■ Rigidly holding on to models
current and required capability and desired future states ■■ Difficulty in defining where the
sets, being sure to articulate the ■■ Informing investment priorities industry is likely headed, where
extent to which the capabilities through gap analysis opportunities exist, and where
meet minimum competitive ■■ Leveraging experience (since the organization wants to be
standards, up the ante, or are originality is a product of
transformational. mastery)
■■ Building skills through
engagements
Tools Establish a target operating ■■ Building tools organically ■■ Viewing modeling tools as
model to allow the goals of ■■ Reuse, reuse, reuse complete depictions of reality
the engagement to either 1) be ■■ Demonstrating flexibility
validated by rolling up to the to create views that are
higher strategic vision or 2) be comfortable to the client
passed on to the supporting
projects.

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Optimizing the Business Investment Portfolio 79

 Business Architecture in Practice 80

IMPLEMENTATION GUIDE OVERVIEW

Business Architecture Scenario-Based Capability Maturity

Approach, Capability Identification, Assessment,
p. 71 p. 74 p. 77

■■ Business Architecture ■■ Business Architecture ■■ The Capability

Methodology, p. 81 Base Capability Model, Maturity Scoresheet,
p. 82 p. 84
■■ Capability Maturity
■■ Sample Capability
Model, p. 85
Definitions, p. 83
■■ Gap Analysis, p. 87

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 BUSINESS ARCHITECTURE METHODOLOGY
Functional Business Architecture Workflow
4 5 6
Define Assess Maturity Define Future
Value Chain of Value Chain State Value Chain
Components Components Structure

Identify value chain Research best Research best

segments, channels, practices and practices and
offerings, and clients. competitors with competitors with
respect to value chain respect to value chain
components and components and
structures. structures.

Assign KPIs to value Access maturity Identify target

chain components. of value chain maturity level for
Work Streams

1 2 3 components. capabilities to achieve

target KPIs. 10 11 12
Identify Define Strategies
Prioritize Allocation of
Measurable and Translate Obtain current values Identify target Blueprinting Idea Creation
Strategies Transformations
Objectives Strategies of KPIs. structure of value
chain to achieve
Obtain information on Identify strategic Rank importance target KPIs. Catalogue Prioritize the full list Define program
objectives (derive
if required).
themes. of strategies to
achievement of
7 8 Assess
9 Define Future
required changes
to the capability
of transformation
initiatives.
scope.

objectives. Define components.

Capabilities State Capabilities
Rank relative Align strategically. Capabilities
Use strategy ranking Maturity Maturity
importance of Catalogue required Analyze business Define program
objectives. to identify required changes in the value dependencies. objectives.
changes in values of Identify capabilities to Define capabilities Set target values for chain structure
KPIs to achieve target enable achievement components. KPIs. and value chain
Assign high-level KPIs Decompose existing of objectives.
values. components.
Activities

to objectives. strategies and refine

if required. Group capabilities Research best Identify target
Catalogue in- Sequence Define program
into value chain practices and maturity level for
Gather current values Decompose high-level flight/planned transformation strategy/rationale.
segments. competitors for capabilities to achieve
for the high-level KPIs based on the transformation initiatives
each capability. target KPIs.
KPIs. strategies. initiatives.
Align transformational
Decompose high-level Assess current Identify dependencies
Map in-flight/planned plan with other RBC Define key drivers
Obtain target values Map KPIs to KPIs to match the maturity of RBC between capabilities
initiatives to required programs. of the program.
for the high-level KPIs. strategies. capabilities. capabilities. based on their
components. transformations.
Obtain current values Assign KPIs to Obtain current values
List transformations Assess future values
capabilities. for KPIs. Identify changes
for decomposed KPIs. required to address of high-level KPIs. LPgMF Idea
in the capabilities
the remaining gaps. Creation Input
components to
achieve the target
Objectives KPIs Strategies KPIs Business Relative Current KPIs Best Current Planned/ Coverage Sequencing Prioritized Key drivers of the
maturity level.
mapped to mapped to perspective ranking of value of mapped to practices maturity in-flight of existing criterions transform- program
objectives objectives on strategies KPIs operating levels Define future state transform- transform- ation
importance model capabilities maturity ations ations initiatives
Current Current of components Competitors
Information

levels. Program strategy/

value of value of strategies analysis
KPIs Target Target Current Sequence rationale
KPIs Business Future Required
values values and target of trans-
Operating recomme- maturity transform-
of KPIs of KPIs values formation
Industry model ndations levels ations
of KPIs initiatives Program
standards/ components on the objectives
best future state
practices design
Future
for KPIs Future
value chain Program
Cost/bene- structure values scope
fits of KPIs

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Optimizing the Business Investment Portfolio 81

 Business Architecture in Practice 82

BUSINESS ARCHITECTURE BASE CAPABILITY MODEL

Plan Change Run
Analytics Accessibility Management Adjudication (Underwriting) Origination Servicing
Business Intelligence Execution Management Credit Assessment Account Renewal Account Servicing
Campaign Reporting Analytics Change Management Credit Decisioning Application Data Capture Assisted Servicing
Client Analysis Management Delivery Management Credit Scoring Deal Shaping Claims Processing
Competitive Intelligence Program Management Aggregation Pricing Optimization Client Portfolio Management
Measures and Metrics Analytics Project Management Aggregation, Building, and Deal Management Product and Service Fit/Next Best Fit Client Servicing
Performance Analytics Strategy Execution Customer Pricing Product Optimization Fees Management
Profitability Analytics Product/Service Configuration Quote Generation Funds Transfer Management
Root-Cause Analysis and Trending Fulfillment Payments Funds Transfer Scheduling
Assess and Design Account Fulfillment Billing Services Overdraft Management
Process Disbursement Payee Management Pooling
Technology Product Fulfillment Payment Management Product Accounting
Benchmarking Service Fulfillment Pre-Sales (Distribution) Product Servicing
Standards Management Transaction Fulfillment Client Education Sweeping
Strategy Development Marketing Tax Management
Opportunity Management Transaction and Balance Management

Information Technology Capabilities

Product/Service Management Transaction Servicing
Sales Planning
Sales
Needs Assessment
Sales Effectiveness Management
Selling/Merchandising

Common
Business Rules Management Client Experience Management Enterprise Portfolio Management Finance Management Knowledge Management
Reconciliation Rules Management Client Preferences Management Approval Conditions Management Expense Control Outsourcing
Rule Composition Client Profile Management Collateral Assessment FA Management Performance Management
Rule Execution Customer Loyalty/Retention Management Collections Financial Analysis Management HR Performance Management
Rule Orchestration Communication Management Corporate Treasury Management Financial Data Modeling Analytics Problem Management
Rule Traceability External Communication Demarking Financial Data Transaction Management Exception Management
Business Process Management Internal Communication Float Management Financial Data Validation Procurement
Modelling and Simulation Notification Internal Audit Management GL Management Quality Assurance
Process Configuration Management Enterprise Content Management Monitoring HR Management Relationship Management
Process Engineering Document Presentment Policy Management Benefits and Compensation Management Advice
Process Governance Indexing Portfolio Quality Management Recruiting and Talent Management Client Relationship Management
Process Methodology Information/Document Management Profitability Roles Management Negotiation
Process Repository Process Management Reconciliation Management Skills Assessment and Training Partner Relationship Management
Workflow Analytics Workflow Management Reinsurance Train, Mentor, and Development Management Service-Level Management
Reporting Workforce Management
Risk Management Integration Management
Securitization Third-Party, Govt., and Reg. Data Integration
Special Assets Management Business Data Integration
Syndication and Participation Channel Integration Management
Client Data Integration
Operational Data Integration

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 Each capability in the
reference model has a
Sample CAPABILITY DEFINITIONS
standard definition to
ensure consistency across
the enterprise. Group Level 1 Level 2 Description

Change Accessibility The management of the process of making the online

■■ Capability definitions are Management channel accessible to people with disabilities or functional
universal, and any changes gaps. Accessibility refers to the possibility for everyone,
regardless of physical or technological readiness, to access
are carefully vetted to ensure
and use technology and information products.
integrity as they underpin
the integrated approach.
Change Execution Management Change Management Change management enables a planned approach of a
change in an organization. Includes the ability to control
■■ BUs will almost certainly use
and manage changes to any aspect of how the firm offers/
language that is dissimilar, secures/fulfills and services products, or controlling change
requiring capabilities from to any aspect of the firm regardless of area.
service lines to be cross-
checked to the universal Change Execution Management Program This refers to the program management office ability to
capability set in advance Management manage independent projects or portfolio of multiple
of any integration efforts. ongoing interdependent projects. Program management
provides a layer above project management focusing
on selecting the best group of programs, defining them
in terms of their constituent projects and providing an
infrastructure where projects can be run successfully but
leaving project management to the project management
community. Program management also reflects the emphasis
on coordinating and prioritizing resources across projects,
departments, and entities to insure that resource contention
is managed from a global focus.

Change Execution Management Project Management The discipline of organizing and managing resources in such
a way that these resources deliver all the work required to
complete a project within defined scope, time, and cost
constraints

Change Execution Management Delivery Management The processes, technology, and organizations used to
retrieve, route, and present unstructured data to the
appropriate user at the required stage of a process
dependent on said data

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Optimizing the Business Investment Portfolio 83

 Business Architecture in Practice 84

The scoresheet is used

to evaluate a capability’s
The Capability Maturity Scoresheet
importance and maturity.
Consider the overall importance of the capability from the customer and service line perspective:

How important is the capability in delivering on “world-class client experience” and “world-class efficiency?”
Is the capability part of, or related to, RBC’s strategic goals and objectives?
Is your business unit currently investing to create or enhance this capability?

1 2 3 4

N/A (Capability Low Importance Medium High Importance

not applicable Importance (i.e., a “Table Stake”
to Service Line) Capability)

Assess the maturity of the capability along each dimension:

How mature is the capability today?

How mature do you want the capability to become by the end of the program?

1 2 3 4

Low Maturity Medium Maturity Medium-High High Maturity

(Ad Hoc) (Repeatable) Maturity (Defined/ (Optimized)
Managed)

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CAPABILITY Maturity MODEL
Maturity Level
1 2 3 4
Key Guiding Questions Medium–High
Low (Ad Hoc) Medium (Repeatable) High (Optimized)
(Defined/Managed)
Are processes defined and ■■ Little process documentation exists ■■ Some process discipline is in place. ■■ Most processes are defined and ■■ Processes are documented and
documented? Is the documentation and is scattered throughout the ■■ Processes are partially documented documented but not regularly maintained, standardized, and
readily accessible (or is it scattered)? organization. to allow earlier successes to be maintained. regularly reviewed.
Are processes controlled (i.e., ■■ Processes are driven reactively repeated. ■■ Processes are generally controlled ■■ Processes are fully controlled,
Degree of repeatable and provides management by users and events. ■■ Processes are partially controlled (repeatable but do not allow full repeatable, predictable, and
Documentation, with visibility? ■■ Execution is dependent on “tribal” (somewhat repeatable and allow management visibility) provide management with full
Reusability, and Have Key Performance Metrics (KPIs) knowledge. some management visibility ■■ Key performance metrics are known visibility.
Repeatability been identified and built into processes? ■■ Processes are not controlled (not although the data may be scattered). and built into processes. ■■ Key performance metrics are
repeatable and allow no management ■■ Some key performance metrics are ■■ Standardization allows some degree continuously monitored and
visibility). identified and tracked. of process improvement over time. effects of implemented process
Process ■■ Little or no key performance metrics improvements are measured and
Dimension
exist. evaluated against objectives.
Are processes regularly reviewed to ■■ Processes are run solely in “basic ■■ Some degree of processes ■■ Most processes are regularly reviewed ■■ Processes are fully optimized
identify opportunities to automate operations” mode without attention optimization activities conducted to and optimized to identify opportunities and continuously reviewed for
or eliminate inefficiencies and to optimization opportunities. identify opportunities to automate to consolidate, lean, and/or rationalize improvement opportunities.
redundancies? ■■ Optimal performance levels/ and eliminate redundancies resources. ■■ Straight through processing
Degree of ■■ Optimal performance levels/ ■■ Some rudimentary automation of
Are processes achieving optimal metrics have been defined for some (STP) is in place and processes
Optimization
performance levels/metrics processes (e.g., for input into SLAs). metrics have been defined for some processes (where appropriate). are meeting optimal performance
(e.g., meeting customer service processes (e.g., for input into SLAs) ■■ Optimal performance levels/metrics levels/metrics.
commitments)? have been defined for most processes
(e.g., for input into SLAs).
Is there reliance on “tribal” knowledge? ■■ Reliance on “tribal” knowledge that ■■ Reliance on “tribal” knowledge that ■■ Reliance on cross-trained staff whose ■■ Reliance on trained experts
Skills and If so, is it documented? is documented and irreplaceable. is documented and irreplaceable. knowledge is documented and (e.g., formal regulated licences/
Knowledge Are staff cross-trained? replaceable. certification or internally
Dependency Are there trained experts to perform developed certifications)
specialized tasks? to perform specialized tasks.

Do staff understand the importance and ■■ Belief is limited that the capability ■■ Belief that the capability is ■■ Staff understand the impact of ■■ Strong sense of “craftsmanship”
Organization benefits of the capability? is important. Benefits are unclear important, but there is limited their work/contribution in executing embedded in executing the
(People) Is there a high level of performance or have not been defined. appreciation of what that means. the capability, to the overall client capability, resulting in high
Management Degree of accountability/craftsmanship in ■ ■ Little performance accountability ■■ No or little link between behavior experience. performance teams and a
Integration executing the capability? exists staff do not understand the to performance management or ■■ Behaviors are aligned to performance high level of performance
in Workplace Are behaviors linked to competency impact of their work/contribution competency development plans. management or competency accountability.
Culture development plans? on the overall client experience. development plans. ■■ The organization is cognizant
of its maturity level and
continually seeks opportunities
to strengthen it.
Is the technology meeting operational ■■ Technology in place to execute the ■■ Technology in place to execute the ■■ Technology in place to execute the ■■ Technology in place to execute
requirements? capability is basic (not meeting day capability meets immediate needs capability is robust and supported, but the capability is real time, robust,
Is the technology real time? Robust? to dat operational requirements), and is supported, but is localized, not integrated with a broader platform supported, and integrated with
Degree of
Supported? localized, stand-alone, or not stand-alone or not integrated with view. a broader platform view.
Integration, ■■ Scalability and enhancements are ■■ Scalability and enhancement are
Is the technology integrated with a integrated with a broader platform a broader platform view
Robustness, ■■ Scalability and enhancement are
broader platform view (or is it localized, view, and/or not supported. possible. not an issue as the solution lends
Technology and Scalability ■■ Scalability/enhancements are not
stand-alone)? difficult to execute. itself to technical upgrades.
Dimension
Are technical upgrades/enhancements possible.
possible (i.e., is it scalable)?
Are business rules built into the system ■■ There are little to no business rules ■■ Some degree of business rules ■■ Moderate degree of business rules ■■ Straight through processing
Degree of (or is there heavy reliance on manual/ built into the system, resulting in are built into the system with are built into the system with minimal (STP) exists and operates
Automation paper intervention)? heavy reliance on manual intervention. some reliance on manual/paper reliance on manual/paper intervention. seamlessly as a “single line
intervention. of processing.”

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Optimizing the Business Investment Portfolio 85
 Business Architecture in Practice 86

CAPABILITY Maturity MODEL (Continued)

Weights Within Dimensions

Process
Degree of Documentation, Reusability, and Repeatability 50%
Degree of Optimization 50%
Organization
Skills and Knowledge Dependency 50%
Degree of Integration in Workplace Culture 50%
Technology
Degree of Integration, Robustness, and Scalability 50%
Degree of Automation 50%

Order of Importance and Weights Across Dimensions

Where 1 = Most Important, 2 = Somewhat Important, 3 = Least Important

Capability Process Organization Technology

Performance Management 1 50% 3 15% 2 35%
Execution Management 1 50% 2 35% 3 15%
Credit Adjudication 1 50% 2 35% 3 15%
Fulfillment 1 50% 3 15% 2 35%
Servicing 1 50% 3 15% 2 35%
Communication Management 2 35% 1 50% 3 15%
Process Management 1 50% 3 15% 2 35%
Knowledge Management 3 15% 1 50% 2 35%
Information Management 2 35% 3 15% 1 50%
Data Management 1 50% 3 15% 2 35%
Operational Risk Management 1 50% 2 35% 3 15%
Human Resources Management 1 50% 3 15% 2 35%
Relationship Management 2 35% 1 50% 3 15%

Order of Importance Weight Order of Importance Weight

1 50% 1 60%
2 35% 2 40%
3 15%

Note: Adjustments if one dimension is N/A.

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 The gap analysis
pinpoints and quantifies
GAP ANALYSIS
areas of change needed
to close gaps between
current and future state
capabilities.
Best Practice/Best in Industry

EFO Recommended Future State

■■ Comparing current and
EFO Current State
future state operating
models elucidates needed Core Capabilities Supporting Capabilities
changes to people, process,
technology, product, and
policy.
High
Medium
Low
General Ledger Management

Accounts Payable Management

Financial Accounts Management

Service-Level Management

Control and Monitoring

Transaction Posting

Position Management

Data Management

Data Analytics

Transaction Reconciliation

Reporting Management

Security and Access Management

Interaction and Integration Management

Process Management

Communication Management

Operational Risk Management

Organizational Governance

Enquiry Management

Policy Compliance

Relationship Management

Financial Analysis Management

Program Management

Project Management

Change Management

Knowledge Management

Performance Management

Ongoing Skills Assessment and Training

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Optimizing the Business Investment Portfolio 87

 Business Architecture in Practice 88

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 Value-Driven Business Architecture
(Sanlam Limited)

Company Snapshot

Sanlam Limited
Industry: Financial Services Targeting middle-market and affluent clients, South African–based Sanlam
2008 Revenue: US$6.6 Billion Limited provides insurance and wealth management services. Major
Employees: 9,969 segments are life insurance (including annuities and other investment
products) and short-term insurance (property and casualty coverage sold
through majority-owned Sanlam).

Source: http://www.hoovers.com; Sanlam Limited.

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Optimizing the Business Investment Portfolio 89

 Business Architecture in Practice 90

Sanlam faced
the challenge of
BUSINESS ARCHITECTURE AS BOTTLENECK
repositioning business
architecture from a
hindrance to a facilitator
of organizational change.

Architecture had a history of bottlenecking project work. No one

knew why or when business architecture was needed. As a result,
CHALLENGE
the business didn’t take it seriously. IT’s costs were seen as too
high and the return on investment too low.

Instead of concentrating on business architecture methodology,

Sanlam focuses on business change, specializing in the innovative
APPROACH
aspects of a project. A new business design function is created
that combines business architecture and delivery.

The shift in project emphasis toward “transform” and “grow” projects

and away from “run” projects has contributed to a near doubling
RESULTS in Sanlam’s IRR. By architecting only those areas of the business
undergoing the most change, Business Design’s value, relevance,
and skills are no longer questioned.

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 Business Design develops
and implements the
Business Architecture Dimensions
dimensions of business
architecture needed to
realize changes to the
service offering.

Proposed Changes to the “Service Offering” (Customer, Products and Services, Channels)

Change To

Performance

Products

Performed By Enabled By
Business Processes

Using
Organization Applications
Managed
(Structures, Work Teams, Access Information (Manual Procedures
By
and People) (Manual Records and Automated Systems)
and Electronic Data)
External Relations
(Supply Chain and
Business Partnerships)
Technology
Supported (Infrastructure) Supported
By By

Facilities

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Optimizing the Business Investment Portfolio 91

 Business Architecture in Practice 92

Business Design’s
involvement is heaviest
THE CHANGE project LIFECYCLE
up front, in the Concept
and Scoping and Define
stages of the lifecycle.

■■ The business design team

has formal involvement
across the lifecycle of change Concept
Define Design Develop Implement
projects created. and Scoping
Stage Stage Stage Stage
Stage
■■ At the Concept and Scoping
stage, a “Methodology
Agreement Plan” determines
Primary Change Management
which dimensions of the Business Consultant Business Consultant Business Analyst Business Consultant
Role Specialist
business architecture
to develop.
Degree
of Business
■■ To ensure that the business Heavy Heavy Heavy to Moderate Moderate to Light Light
Design
architecture work has real
Involvement
impact, Business Design
takes on both project and ■■ Define of business ■■ Consider ■■ Design the change ■■ Finalize the ■■ Monitor and control
change management roles. concept/service alternative business to the service integrated design. implementation.
offering. architectures that offering and ■■ Develop ■■ Initiate
■■ Determine will deliver the the business communication performance
dimensions of service offering. architecture. material. and benefits
business that need ■■ Define the ■■ Establish training ■■ Develop measurement and
to change. dimensions of the plan. implementation tracking.
Business ■■ Create Stage 0 preferred business and transition ■■ Confirm solution
Architecture business case. architecture. plans. implemented
Deliverables ■■ Establish ■■ Create Stage 1 ■■ Mobilize according to
DO get involved early in the Methodology business case. implementation specifications
lifecycle and remain involved Agreement Plan. resources. and operating
throughout. ■■ Develop training. to performance
standards.
DON’T build out an end-to-end ■■ Close project and
business architecture if not all conduct training.
dimensions are changing.
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 Sanlam uses value levers
to balance and focus the
Target-Based PORTFOLIO balancing
project portfolio.
Portfolio Value Heat Map
Illustrative
■■ Business value levers are
derived from the drivers
of premiums and cost
Value Levers
reductions (see p. 109).
Five-year target values for Products Acquisition
Maintenance Number
each lever are established. per Month Cost Fund
Cost Reduction Persistency of Advisors Premium Size
(Brokers Reduction Retention
($ Millions) and Brokers
■■ Levers are color-coded and Advisors) ($ Millions)
based on how they are
2009 Value 300 8.3 275 1230 65%
tracking against the target Remain at 5%
values. 2014 Target 590 8.6 900 1400 70%
2009 Levels per Year
Change Required 290 0.3 625 170 5%
■■ Project investments are
“Transform” Projects 10 0.1 0 300 30 0 1%
reallocated by the Project
Portfolio Investment “Grow” Projects 80 0 0 0 0 0 1%
Committee (see p. 111) to “Run” Projects 50 0.4 0 200 0 0 1%
ensure that all levers achieve
Total Project Portfolio
their targets. 140 0.5 0 500 30 0 3%
Contribution
■■ Using an Impact Matrix (see Percent Contribution
p. 111), business consultants of Current Projects 48% 167% 100% 80% 18% 0% 60%
determine which dimensions to Target Values
of the business architecture Relevant Business ■■ Business ■■ Products ■■ Products
need to be analyzed. Architecture Process ■■ Business ■■ Information
Dimensions ■■ Applications Process ■■ Organization
■■ Facilities ■■ Organization and People
■■ Organization and People
and People

0–49% of Target 50–74% of Target 75% of Target and Above

“Change Required” = The difference between the 2009 Value of each lever and the 2014 Target value of each lever
“Total Project Portfolio Contribution” = The impact of all projects on each lever
“Percentage Contribution” = The extent to which projects are fulfilling the Change Required to reach each lever’s five-year targeted value

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Optimizing the Business Investment Portfolio 93

 Business Architecture in Practice 94

Project reviews focus on

identifying overlapping
Optimizing to Portfolio Objectives
changes and coordinating
more efficient delivery.

■■ Business consultants
CONCEPT/DEFINE STAGE
meet monthly in project
alignment forums to review Project
projects and understand Project W Project X
Alignment
interdependencies and Forums
overlaps.

DESIGN AND
■■ To consolidate efforts
DEVELOP STAGE
and promote reuse, one
project may take on Reuse of
related functionality from Project W Project X Functionality
other projects (Project W
in this illustration). Once
implemented, those other IMPLEMENT STAGE
projects “harvest” this Project Y Project Z
functionality for their own use.
Project W Project X

Project Y Project Z

Project Y Project Z

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 IT designs are matched to
the business architecture
Aligning Business and IT Architectures
at the Define stage of the
change lifecycle. Interaction at the Define Stage of the Lifecycle

■■ The solutions architect

serves as a single point Business Architecture IT Decisions Point of Contact
of contact for the Inputs
business design team.
Methodology Identify Specifications
■■ The solutions architect is Agreement Plan to Be Produced
responsible for developing all
the relevant IT architecture
dimensions
in collaboration with other
IT architects. Processes

Estimate Workload
Business
Components Solutions Architect
Business Model
Determine Whether New or
Architecture
Existing Applications Required
Blueprint Use Case
Model
Create Software
Architecture Document
Context
Diagram

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Optimizing the Business Investment Portfolio 95

 Business Architecture in Practice 96

Business Design
is delivering value
Results
on multiple levels.
Estimated Internal Rate of Return on Projects
Sanlam Personal Finance
■■ With a greater percentage
of spend now going to
transform and grow projects, 47%
and a greater emphasis on
benefits realization, Sanlam’s
IRR has nearly doubled since
the business change and
business design functions
were created. ~25%

2007 2009

1. High Demand for Services—Sanlam’s Business Change team is able to

cover its costs through chargebacks, and its services are oversubscribed.

2. Engagements Outside Personal Finance—Approximately 25% of Business

Change’s work now comes from outside Sanlam Personal Finance.
“There’s no question
anymore about the 3. Strategy Involvement—Business Change is now regularly invited to
value we bring, our business strategy sessions because it is viewed as a value-added partner.
relevance, and the skills of our
people.”
Dawie Adlem
Head of Business Design
Sanlam Personal Finance
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IMPLEMENTATION GUIDE OVERVIEW

The Change Target-Based Optimizing to Portfolio

Project Lifecycle, p. 92 Portfolio Balancing, p. 93 Objectives. p. 94

■■ Business Change ■■ Business Architecture ■■ Generating a Portfolio of Change

Structure, p. 98 Model, pp. 103–106 Projects, p. 107
■■ Business Design Role ■■ Benefit Realization Plan, p. 108
Profiles, pp. 99–102 ■■ Business Value Lever Tree, p. 109
■■ Project Portfolio Investment
Committee, p. 110
■■ Connecting Value Levers
to Business Architecture
Dimensions, p. 111

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Optimizing the Business Investment Portfolio 97

 Business Architecture in Practice 98

Business Change Structure

Head of Business Change

Functional Project Business Product BU Change

Heads Portfolio Management Design Design Portfolio Management

Accountabilities 1. Supports the PPIC in managing 1. Provides governance 1. Establishes and owns 1. Facilitates the translation of
and Responsibilities and optimizing the “portfolio for the development the product architecture strategy into change initiatives
of change” of business architectures 2. Provides governance 2. Identifies, prioritizes, and
2. Provides consolidated portfolio ensuring conformance to for the development initiates change projects
performance scorecard methodologies and standards of product architectures and enhancements
3. Tracks and accounts for 2. Designs business change, 3. Assists with development 3. Develops business cases on
business benefits realized including the definition of new of business requirements behalf of business owners

Work in Progress
4. Provides formal business service offerings and the design definition for all products 4. Manages the BU “portfolio of
processes from concept and delivery of supporting 4. Performs product design in change” and ensures delivery
to operations “to be” operating models alignment with established against strategic objectives
5. Ensures program/project 3. Assists with the development product architecture 5. Produces requirements for
conformance to the BCL of business cases and business 5. Provides business enhancements and projects
methodology requirements definition change support 6. Designs and optimizes business
6. Develops the capabilities 4. Manages programs and projects for CS and actuarial processes to deliver operational
and competencies of from concept to operations 6. Assists IT in translation of improves
resources in BC along the BCL to ensure product requirements and
7. Provides operational delivery of all “strands implementation of products
and administrative support of change”
including recruiting, 5. Establishes and maintains
contracting, budgeting, etc. methodologies and standards
ensuring integrity and
reusability of business and
process models

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Business design Role Profiles

Business Design Responsibilities

Head: ■■ Manage, mentor, and support the business design team.

Business Design ■■ Assist with investigations, propose and evaluate solutions, provide insights into strategy, and inform strategic thinking from
a business architectural perspective.
■■ Define and design business architecture in support of business strategy (e.g., provide the architectural framework and
models for the implementation of BPM; identify services for the design and delivery of SOA).
■■ Define new service offerings and update supporting business architectures (business models and process architectures)

Work in Progress
in the define stage of programs.
■■ Provide analytical and conceptual direction to business consultants throughout the business change lifecycle, ensuring
alignment and integrity of deliverables with the program and strategic objectives.
■■ Assist business and technical designers in understanding design choices. Provide recommendations to preserve integrity
across the various strands of change and to ensure the delivery of a holistic integrated solution.
Roles

■■ Act as custodian of the business architecture standards and methods and the conceptual and logical designs by
doing the following:
–– Provide the architectural framework for business designs.

–– Ensure integrity and cohesion of business models across projects and programs.

–– Provide storage and version control.

–– Ensure maintenance of the blueprints.

–– Ensure reusability of models, patterns, and designs.

■■ Work with IT strategy and planning.

–– Participate in the development of IT strategy and the identification and design of IT architectures to support

the business architecture and the business strategic intent (e.g., SOA).
■■ Develop and implement common standards and methods for developing, integrating, and aggregating the business
architecture (operating model).

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Optimizing the Business Investment Portfolio 99

 Business Architecture in Practice 100

Business design Role Profiles (Continued)

Business Design Responsibilities

Business ■■ Assist with investigations, propose and evaluate solutions, and provide insights into strategy.
Consultants ■■ Develop ideas into concepts to realize the strategic objectives.
■■ Initiate, design, and deliver change through the management of projects along the BCLG:
–– Ensure that the case for change is made and decided, outcomes are agreed on and costs and benefits are quantified,

and included in projects business cases.

Work in Progress
■■ Define the new service offering (in terms of customer, products, service, and channels) to realize the strategic intent.
■■ Design, integrate, and deliver changes to the operating model (business processes, organization structures, interfaces,
locations, external relations, information, technology) to enable the service offering and deliver strategic intent.
Roles

■■ Manage the business analysts and any other resources assigned to the project including those resources leading
the IT change sub-projects.
■■ Assist business and technical designers in understanding design choices and business consequences of those choices.
Provide recommendations to preserve integrity of the overall solution.
■■ Ensure that project milestones, deliverables, and outcomes are achieved.
■■ Act as custodian of 1) the business architecture standards and methods and 2) the conceptual and logical designs
by doing the following:
–– Provide storage and version control.

–– Ensure maintenance of the blueprints.

–– Ensure reusability of models, patterns, and designs.

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Business design Role Profiles (Continued)

Business Design Responsibilities

Business Analysts ■■ Identify and define business requirements for new business models or changes to existing models (including definition
of application requirements and any graphical user information (GUI) requirements):
–– Produce the business requirements definition (BRD) and business requirements specification (BRS).

–– Prepare business use case diagrams and test cases.

■■ Analyze and design new business processes and organizational structures to support business requirements.
Create business process models, analyze models, and identify variances from operational and performance requirements.

Work in Progress
■■

■■ Define and design changes to existing processes as required and ensure integration of changes into process environment.
■■ Work with the project manager, architects, and other team members to define nonfunctional requirements (including
metrics and performance goals) for the application.
Roles

■■ Participate in transitioning the requirements and use cases to systems analysts and designers. Ensure a clear
and complete understanding of the requirements.
■■ Participate in quality management reviews throughout the BCL and SDLC to ensure requirements are fulfilled.
■■ Review test approach and test cases to ensure coverage of relevant business scenarios; use cases and
functionality defined.
■■ Participate in testing to ensure that business requirements have been met.
■■ Act as subject matter expert by assisting with investigations, business impact and benefits analysis, and updates of the
business case.
■■ Assist with benefit realization review.

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Optimizing the Business Investment Portfolio 101

 Business Architecture in Practice 102

Business design Role Profiles (Continued)

Business Design Responsibilities

Change ■■ Develop and manage the change management work plan throughout all phases of the program.
Management ■■ Develop and facilitate the implementation of a change management strategy.

Work in Progress
Specialists
■■ Develop and manage the stakeholder management strategy and communication plan.
Continuously monitor change readiness in business and develop relevant interventions.
Roles

■■

■■ Define as-is and to-be people and organizational impacts, provide feedback, and synchronize efforts across projects and
business units.
■■ Manage the design, development, and implementation of capacity building and knowledge transfer (training), based on
the redesigned processes and systems.
■■ Ensure that change management issues arising are adequately addressed and resolved.

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BUSINESS ARCHITECTURE MODEL

2.1 B1: Organization and People 2.2 B2: Product

Include in this section a summary of the following: Include the following in this section:
■■ Overall comments 2.2.1 Overall comments
■■ Organization and people vision and strategy 2.2.2 Product vision and strategy
■■ High-level to-be organization structure 2.2.3 High-level to-be product details
■■ Strategy for migration from as-is model to the to-be model 2.2.4 Reference to supporting documents
■■ Reference to supporting documents 2.2.5 •Reference to the product specifications document which should contain
■■ Reference training material the following:
■■ Reference to the organization and people specifications document
■■ Product purpose/client need it addresses
■■ Legislative considerations
This is a separate document and should contain the following: ■■ Pricing strategy and fee structure
■■ Organization vision and objectives ■■ Product cost structure
■■ Outline organizational design ■■ Product benefit structure
■■ Management structure ■■ Product characteristics (commission payable, alterations allowed, etc.)
■■ Capacity requirements ■■ Product rules
■■ Performance measurement ■■ Product calculations
■■ Organizational design testing plan/scenarios ■■ Process considerations (underwriting, quotations, alterations, etc.)
■■ Organizational design implementation plans
■■ Job gap assessment and capability development strategy
■■ Training detail design
■■ Organizational design detail roles, responsibilities, job descriptions, reporting lines,
new ways of working
■■ Detailed plans for transitional staff

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Optimizing the Business Investment Portfolio 103

 Business Architecture in Practice 104

BUSINESS ARCHITECTURE MODEL (continued)

2.2 B3: Processes 2.4 B4: Applications

■■ Overall comments
Include in this section a summary of the following:
■■ Overall comments
■■ Applications vision and strategy

■■ Business process and operating vision and strategy (align with design principles)
■■ High-level to-be applications details (reuse of current or new applications required)
■■ High-level initial business model (value chain–level process)
■■ Reference to supporting documents (RFI, RFP, use case documentation)
■■ Reference to supporting documents IT–related deliverables should expand on the application workstream deliverables
■■ Reference service-level agreements 2.4 B5: Information
Reference to Process Specifications Document, which should contain the following:
Include the following in this section:
■■ Process design testing strategy
2.5.1 Overall comments
■■ Process implementation plan
2.5.2 Information management vision and strategy
■■ Process migration strategy
2.5.3 High-level to-be information details
■■ Lean Six Sigma analysis (xy chart, fishbone, etc.) if applicable
■■ High-level data requirements (entities, business objects, packages)
■■ Detailed process design, procedures, activities, tasks, forms, etc.
■■ Data migration approach (if required)
■■ Links to business use cases
■■ Interfaces to other processes 2.5.4 Reference to supporting documents and the business requirements
specifications
■■ Mapping to organization structures, job roles, channels applicable
to particular process
■■ Use case specifications (with use case realizations)

■■ Process metrics
■■ UI requirements
■■ Client communication material specifications
■■ Business rules specifications
2.5.5 Reference to external interface requirement specification
■■ Nature of interface and associated SLAs
■■ Data requirements
■■ Processing requirements

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BUSINESS ARCHITECTURE MODEL (continued)

2.5.6 Reference to reporting requirements 2.6 B6: Technology

■■ General reports ■■ Overall comments
■■ Archive reports ■■ Project alignment with IT vision and strategy
■■ MIS Reports associated with business KPIs or process metrics ■■ High-level technology details
2.5.7 Non-functional requirements ■■ Guidelines around sourcing of solutions
■■ Usability—user-friendliness of system; ease to use, learn, interact, train; ■■ Primary hosting platform
address human factors and consistency in the user interface, user ■■ High-level network requirements
documentation, and training materials
■■ End–user technology requirement (desktop, handheld devices, etc.)
■■ Reliability—operate under normal and abnormal conditions; service
levels; portability; address frequency and severity of failure, recoverability, ■■ Any other considerations impacting technology choices
predictability, and accuracy
■■ Reference to facilities design, external relations
■■ Performance—scalability and concurrency; impose conditions on
functional requirements; e.g., process business events/transactions within
■■ Reference to supporting documents
a certain time frame; volumes of data to be processed; speed; availability; 2.7 B7: External Relations
accuracy; response time; recovery time; memory usage with which a given
action must be performed Include the following in this section:
■■ Supportability—maintenance and design constraints; address testability; ■■ Overall comments
maintainability; and other qualities required to keep the system up-to-date
after its release
■■ External relations vision and strategy

IT–related deliverables should expand on the information workstream deliverables

■■ External relations as-is assessment
■■ External relations change readiness assessment
■■ External relations relationships design
■■ External relations communications strategy
■■ Detailed design on supplier/business partner processes and agreements
■■ Detail plans for transition from current/no supplier or business partner
■■ Detail evaluation criteria to measure success of partnership
■■ Reference to supporting documents
■■ Reference contracts and/or service-level agreements

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Optimizing the Business Investment Portfolio 105

 Business Architecture in Practice 106

BUSINESS ARCHITECTURE MODEL (continued)

2.8 B8: Facilities 2.9 B9: Change Management and Implementation

Include the following in this section: Include the following in this section:
■■ Overall comments ■■ Overall comments
■■ Facilities and physical infrastructure vision and strategy ■■ Change management strategy
■■ High-level to-be details
■■ Reference to detail documents:
■■ Testing strategy for design
■■ Stakeholder analysis
■■ Change readiness assessment/climate survey
■■ Reference service-level agreements
■■ Change management approach
■■ Reference to the facilities specifications document, which should include
the following: ■■ Communication plan
■■ Physical locations required ■■ Health checks
■■ Size of office space required
■■ Layout guidelines and ergonomic features
■■ Office equipment requirements
■■ Connectivity requirements
■■ IT infrastructure requirements (desktops, servers, etc.)
■■ Telephony requirements
■■ Branding/corporate image requirements

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 Sanlam moves from
strategy to a portfolio of
GENERATING A PORTFOLIO OF
projects that deliver on
that strategy.
CHANGE PROJECTS
Change Project Development Process
■■ The executive committee
owns the process, but
Business Design facilitates
1.1.1 1.1.2 1.1.3 1.2.1 1.2.2 1.2.3
it on their behalf. Develop Review
Develop and Screen Annual Portfolio
Strategy and Develop Business Objectives
High-Level BU Concepts and Allocation
■■ Projects are classified into Target Setting Unit Strategy and Financial
Business Plan Scope for New Process
Requirements for
one of three categories Initiatives Current Projects
(transform, grow, or run)
and are reviewed on a Activities
monthly basis. 1. Sanlam Personal 1. Structured 1. Identify “Gap to 1. Develop Concepts 1. Confirm Strategy 1. Consolidate and
Finance Strategy Workshop Be Closed” by 2. Screen and Select Alignment and Prioritize Initiatives
and Business Plan 2. Document BU Business Change Concepts Financials of 2. Scoring Business
■■ Business Design is only
2. Target Setting for Strategy Initiatives 3. Scope Selected Running Projects Cases
focused on “transform” Change Initiatives 2. Structured Concepts from Latest 3. Recommend
and “grow” projects—roughly Portfolio and Workshops to 4. Develop Stage 0 Business Case Portfolio
Budget Identify Concepts Business Case 4. Appeals Process
15 at any one time.
to “Close the Gap” 5. Final Portfolio
3. Draft BU Change Approval by Project
■■ An intense focus on the Initiative Plan Portfolio Investment
Committee
impact of change on the 6. Budget Provisioning
company scorecard ensures
executive buy-in and keeps
Outputs
the number and scope
of projects limited. 1. Change Initiatives 1. Agreed Stage 0 1. Confirmed Funding 1. Funding
Portfolio Budget Business Cases Requirements for Requirements
and Targets 2. Sanlam Personal Rollover Projects 2. Finalized Sanlam
2. Change Initiative Finance Change 2. Updated Sanlam Personal Finance
Prioritization Initiatives List Personal Finance Change Initiatives
and Desirability 3. Scoping Document Change Initiatives Plan
Selection Criteria List

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Optimizing the Business Investment Portfolio 107

 Business Architecture in Practice 108

The Benefit Realization

Plan is included in the
Benefit Realization Plan1
Stage 0 and 1 business
cases.

Stage 0 Business Case Stage 1 Business Case

Project X Project Y

What is the planned financial result? $5 M VNB in 2009 Growing to $2 M Saving

$25 M in 2013

Which benefit lever/driver will be influenced? Adviser Productivity Total Cost

How will the benefit be achieved (i.e., what are the By selling new product A By automating the benefit
hypotheses/major assumptions)? into the “Responsible Parent” claims financial administration,
sub-segment of the middle to only x people will be required
lower income market segment, to administer claim volumes of
x percent of the market of y up to $x.
units will be achievable.

Which Key Performance Indicator will be measured Unit sales volume of X for new Headcount reduction
to confirm the planned result? product A of Y in department

How will it be measured? Current MI Cost center BB; will be tracked.

Which processes/systems need to be built or Current MIS structure will be e.g., None
changed to enable measurement of the KPIs? used—no changes needed.

Are these changes and costs included in the Yes/No Yes/No

project?

1
Responses are illustrative.

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 Derive a set of
measurable levers of
Business VALUE LEVER TREE
business value and
growth by cascading
down the drivers of Number of Advisers
income in your business.

Number of Brokers
■■ Sanlam’s approach to the Premium
structure and valuation of its
lever tree is adapted from New
measurement methodologies Business Premium per Policy (PPP) (Premium Size)
like Dupont Analysis. The
levers are intended to be
durable even as business Productivity (Products per Month—PPM)
strategy shifts.

Persistency
Business Net
Value Income Cost

Fund Retention

Acquisition Cost

Persistency
Premium
Existing
Business
Fund Retention

Note: “Persistency” is related to the length of time recurring

premium products remain on the books. “Fund retention” Cost Maintenance Cost
describes the activities aimed at retaining funds on
maturity of products.

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Optimizing the Business Investment Portfolio 109

 Business Architecture in Practice 110

The Project Portfolio

Investment Committee
PROJECT PORTFOLIO Investment
(PPIC) was established
to govern Sanlam
COMMITTEE
Personal Finance’s
“Portfolio of Change.”
Key Roles Key Activities

1. Recommend required size of the project pool.

■■ The PPIC is mandated to
ensure alignment between 2. Set the return on investment aspiration for the project pool.
the business unit’s project –– Determine the required portfolio hurdle rates (i.e., NPV, IRR) and payback periods.

spend and strategic Target Setting

imperatives. 3. Set the strategic focus of the project portfolio.
–– Determine the categories and definitions of the project portfolio.

–– Determine the allocation of the project pool to each category of the portfolio.

1. Approve the project prioritization and budget provisioning mechanisms.

–– Scoring methodology and criteria

Budget 2. Approve the allocation of funds to various projects based on recommendation of business
Provisioning case review panel and/or review of business cases.

3. Lobby for additional funds for the project pool if available funds are insufficient and thus
critical or high-value projects can’t be done.

1. Optimize the value of the project portfolio against strategic imperatives.

Portfolio –– Approve release of funds to projects that meet criteria of gated reviews.

Management –– Review priority projects and reallocate unused funds to other projects.

–– Terminate and defer projects.

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 Value levers indicate
which business
Connecting value levers to Business
dimensions need
to be analyzed for
Architecture Dimensions
change projects.
Business Architecture Impact Matrix
Illustrative
■■ Business consultants use
the matrix to understand VALUE LEVERS
which business architecture

(Brokers and Advisors)

dimensions have the greatest Very High 0–49% of

Number of Advisors
Products per Month
Target Value
impact on each lever,

Maintenance Cost
High

Acquisition Cost
50–74% of
focusing attention on those

Fund Retention
Target Value

Premium Size
Medium
dimensions most relevant to

and Brokers
Persistency
75% of

Reduction

Reduction
the levers Low/Minimal Target Value
in focus. None

Percent Contribution of Current Projects

48% 167% 100% 80% 18% 0% 60%
to Target Values

Products
BUSINESS ARCHITECTURE DIMENSIONS

Business Process

Information

Technology (Infrastructure)

Applications

Facilities

External Relations (Supply Chain

and Partnerships)

Organization and People

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Optimizing the Business Investment Portfolio 111

 Business Architecture in Practice 112

KEY TAKEAWAYS
RBC

1. Involve Business Architecture in transformation initiatives. Business architecture delivers unique value by
helping business partners articulate how much change is needed to achieve business objectives.

2. Use real-life scenarios to make capabilities real for business partners. Business scenarios help surface the
mix of upgraded and new capabilities required to solve business pain points.

3. Prioritize capabilities first at the portfolio level. Business architecture should encourage the business
to invest first in capabilities that have enterprise benefit rather than making decisions on a project-by-
project basis.

4. Determine capability investments based on the business case. Be specific about the mix of capabilities
needed and how mature a capability should be to deliver against a business case.

Sanlam Limited

1. Build the business architecture according to business need. Don’t build the business architecture
end-to-end; only document those elements of the business undergoing the most change.

2. Make sure the business architect’s role extends to execution. To ensure the business architecture has real
impact, include both project and change management responsibilities in the business architect’s role.

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 Business Architecture
Scope and Dimensions

Enterprise
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113
 Business Architecture in Practice 114

Business architecture
forms part of the overall
BUSINESS ARCHITECTURE As a Subset
enterprise architecture at
BCBSNC.
of Enterprise Architecture

■■ A framework for structuring

and understanding business,
information, and technology Enterprise Architecture
patterns and how they work
together to achieve strategic
and tactical goals.

Business Information
Architecture Architecture
■■ Business Drivers ■■ Metadata Management
Business
■■ Business Delivery ■■ Knowledge Management
Processes
■■ Business Boundaries ■■ Integrity Management

■■ Usage

Strategy

Business Data
Capabilities

Technology Architecture
■■ Applications and Services
■■ Infrastructure
■■ Integration
■■ Client

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 Business architecture
must connect up to
A Cross-Stack View of
strategy and down to IT
and related projects.
Business Architecture
Vision and Objectives
BUSINESS
DRIVERS Business Strategy

Business Model

Business Capabilities
BUSINESS
ARCHITECTURE
Business Process

Information Architecture

DATA
Information Management Reference Architecture
ARCHITECTURE

APPLICATIONS
Applications Reference Architecture
ARCHITECTURE

INFRASTRUCTURE
Infrastructure Reference Architecture
ARCHITECTURE

Business Case/Initiation

Requirements
PROJECT-
LEVEL Design
ACTIVITIES
Develop/Test QA

Implementation/Support

Source: Dols, Jeff, “Business Ownership of Business Architecture,”Cutter IT Journal, March 2008;
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Business Architecture Scope and Dimensions 115

 Business Architecture in Practice 116

State Farm’s business

architecture model
State Farm’s Business Architecture Model State Farm
Insurance
Companies
consists of four
components.

Business ■■ Business Context

Context ■■ Business Roles

Structure—Relationships

■■ Business Terms ■■ Business Events/

Business Business
■■ Business Data Outcomes
Information Process
Elements ■■ Business Process
Technology—Business Data Tasks—Timing— ■■ Business Rules
Dependencies

Business
Capability

Capabilities—Requirements

BCM Level 1
BCM Level 2
■■ Business Capability Model (BCM) BCM Level 3
■■ Business-Owned Requirements Requirement
–– Business
Requirement

–– Functional

–– Support Functions

–– Non-Functional

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 Business processes
are just one of several
DWP’s Scope for Business
business architecture
dimensions.
Architecture

Customer The customers or customer needs groups who will access the specified service

The channels provided to deliver and/or access the specified service; may be inbound
Channels
or outbound

Products
The products and/or services offered as part of the specified service
and Services

Processes The underpinning process used to deliver each service

Information Information accessed, gathered, recorded within the service or process

The details of the technology required to deliver the specified services is described within the
Technology
IT architecture, which is driven by the Business Architecture Model

The organization(s) required to deliver the specified service

Organization
The units required within each organization to deliver the specified service(s)

The job functions that must be undertaken by our people to deliver the specified service and
People the competencies, i.e., skills, knowledge, attitude, and behaviors, that must be displayed to
deliver the specified functions

Physical Sites The physical or logical location where the service will be handled

ENTERPRISE
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Business Architecture Scope and Dimensions 117

 Business Architecture in Practice 118

Business Architecture Dimensions at Sanlam

Workstream Area of Focus

Strategic Direction And To define the case for change, develop the vision, obtain buy-in and commitment from leadership, obtain
Outcomes agreement of outcomes, and monitor benefits
Service Offering And To define the detailed enhancements to the “what,” in terms of changes to customer experience Definition of “WHAT”
Customer Change per segment, products and services, and channel configuration while integrating the design across
workstreams delivering the “how”
Products To define the product requirements and specifications that will be used by the concepts to enable
the service offering
Process To define the business requirements and implement associated processes and procedures to support
the changed service offering
Information To define the information required to support the business and implement the changes to data types,
data structures, data capturing, storage, and exploitation mechanisms to support the changed service
offering
Design, Develop, and
Technology To design the technological architectures, build applications, and implement the technological
Implement of “HOW”
infrastructures required to support the changed service offering
Facilities To identify and implement the changes required to the physical non–IT facilities and delivery channels
necessary to support the changed service offering
Organization To define and implement the changes to the roles, responsibilities, organizational structures, and culture
and People necessary to support the changed service offering
External Relations To define the changes to the supply chain and business partnerships and institute commercial
arrangements necessary to better support the service offering
Change Management To manage the migration of various elements of the current business model to the desired state while
and Implementation maintaining business continuity
Managed by Means of
Project Management To provide a framework for project leadership, management, and control to ensure successful delivery
and Change Control of business outcomes while managing project progress, risks, issues, contingency, and changes

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 Without aligning to IT,
Business and IT Architecture INterface
1

business architecture is
more at risk of failing to
deliver against strategic
objectives.
Business Architecture

Information Technology Architecture

Customer

Applications

Product

Data

Capability

Information

Process

Technology

People

1
Pseudonym.

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Business Architecture Scope and Dimensions 119

 Business Architecture in Practice 120

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 Business Architecture
Organizational Models

Enterprise
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121
 Business Architecture in Practice 122

Business architecture
sits within the EA and IT
IT–Aligned Business Architecture
organizations.

■■ Recognizing that content

for the business architecture
should come from the CIO
business, Dell shifts the
makeup of its BA group
away from business SMEs.
Instead, Dell builds a team Enterprise Architecture
with expertise in facilitation
and process modeling.

Integration Strategic
Architecture Solutions
and Information and
Compliance Architecture
Messaging Architecture Management

Process Business Architecture

Information Portfolio Workforce
and Training Tools ■■ Five core integration staff Architecture Management Management
Governance and a scalable outsourced
team for facilitation and
“Business architects
modeling
are not intended to be
the subject matter
■■ Oversees and integrates
content into the BA model
experts of our business areas. Our
team’s skill set has shifted to ■■ Interfaces with IT for
engagement, facilitation, and solutions and requirements
modeling to capture what the
business is really trying to do.”
Leticia Duran
Senior Manager, Enterprise Business
Architecture

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 The Business and
Technology Integration
DECENTRALIZED BUSINESS ARCHITECTURE State Farm
Insurance
Companies
Office (BTIO) sits
between IT and the
ORGANIZATIONAL MODEL
business and creates the
business architecture
methodology.

■■ BTIO is responsible for:

–– Enterprise training,
EVP/CIO
–– Managing business Business
(Oversees IT, BTIO, and other business groups)
architecture engagement
through coaching and
Business Area 21
mentoring,
…
–– BA communications and BTIO Information Technology
Business Area 2
change management, (6–8 FTEs) (64 Architects)
Business Area 1
–– Stewarding governance
for enterprise BA BAManager
BA Manager ■■ Enterprise-level
BA Manager
frameworks, and senior business
architects Technical Architecture
–– Developing strategic- BA
Sr. BA
BA Enterprise-
■■
SrBA
BA
level target business level business
architecture. architects
Application Data
■■ Within IT, application and Architecture Architecture
60 Business Architects in Total
data architects act as the
main points of contact for
business architects.

■■ Business units sponsor their

own business architects
across 21 business areas.

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Business Architecture Organizational Models 123

 Business Architecture in Practice 124

Business Design sits

outside IT, reporting
Business-Aligned BUSINESS ARCHITECTURE
to the business, and
uses a chargeback model.

■■ Business consultants
develop the business
architecture deliverables
and take responsibility Sanlam Personal Finance Business Units
for their implementation.

■■ Change canagement specialists

are focused
solely on organizational change Affluent Market Middle Market Professional/SME Sanlam Personal
management issues. Business Business Market Business Finance IT

■■ Business analysts
do the more detailed
process and design work. Head of
Business IT Architects
Change

Project BU Change
Business Product
Portfolio Portfolio
Design Design
Management Management

“We had to get the

team thinking in purely
business terms. Their Change
job was no longer designing Business Business
Management
something to put into an IT spec.” Consultants Analysts
Specialists
(10) (28)
Dawie Adlem (2)
Head of Business Design
Sanlam Personal Finance
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 Business Architecture at
RBC is a shared service
FEDERATED BUSINESS ARCHITECTURE
reporting to the business
and operates via a
Organization
chargeback model.

■■ The team consists of 20

business architects, split CANADIAN BANKING
between lead architects
and supporting architects.
Head—Retail Operations

■■ Each business unit has a lead

architect. Depending on the
size of the engagement, the
Head—Retail Shared Services
lead architect may manage
alone or involve supporting
architects from the resource
pool.
Head—Business Architecture

Lead Supporting
Architects Architects

BU 1 BU 2 BU 3 BU 15

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Business Architecture Organizational Models 125

 Business Architecture in Practice 126

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