Align Technology and Business Strategy
In the 1960’s and 70’s information technology was perceived as a support organization that minimized cost by automating labor intensive business functions, especially in areas like finance, accounting, and payroll. Today, not only is IT the digital fabric that connects the enterprise together, it also plays a pivotal role in digital transformation and sustainable innovation and is involved in all facets of the business. The broader goal for information technology organizations today is to successfully leverage technology across the enterprise to achieve strategic business outcomes. It’s a tall order, and to accomplish it business and IT leaders must collaborate to achieve the organization’s business goals. In this article, we’ll explore a largely untapped area where some IT and business leaders are experiencing success in aligning strategy and execution and increasing profitability – business architecture.
Why is Business Architecture Important?
“As long as IT and business continue to have segregated views of the enterprise, there will be constraints on both organizations, resulting in inefficiencies and increased costs without the required improvements in agility, performance, profitability.” Charlie Feld saw that was true fifty years ago, and he believes it even more fervently today. We are living in a time of unprecedented digital disruption and change. Organizations that could once “get by” can no longer afford this costly disconnection. Leaders must find a way to eliminate the blind spots that exist between the enterprise business model (what it does) and it’s business functionality (how it does it). One of the best ways to do that today is through the use of business architecture, essentially the “design” of how a business needs to work. A successful business architecture practice can help today’s leaders to effectively tackle some of the most difficult challenges they face, including digital transformation.
At the highest levels, business architecture is a way to bridge the gap between strategy and execution, between the business model and the business functionality that applications, data, and technology need to deliver to enable that business model. It allows IT and business leaders to collaborate on the creation of a detailed 360 degree view, or blueprint, of the organization. This blueprint illustrates how elements like capabilities (what you need the ability to do), processes (how you accomplish them) and organizations (who needs to be involved) fit together. And there’s nothing “theoretical” about it – business architecture deals with real-world aspects of the business, and how they interact, and helps executives and other stakeholders answer pressing business challenges.
How Can Business Architecture Facilitate Better Decision-Making?
One of the most important aspects of business architecture is the clarity it enables leaders to develop around critical business challenges and decision-making. As many large, legacy-based companies modernize from primarily process to more knowledge-driven, digital and business transformation leaders must have clarity and provide context when discussing complex issues.
Unless leaders take the time to establish clarity and get buy-in, organizations can end up wasting resources by ‘over commonizing’ some areas, potentially making redundant investments in other areas, and dealing with internal struggles created by groups that either don’t share the same vision, or don’t want to collaborate. This can cause stress, inefficiency, and lack of effectiveness in all aspects of a transformation.
The clarity created through the effective use of business architecture assists in resolving these issues by enabling increased alignment on what the business does today (current state), what it will do tomorrow (future state) and what value is delivered, or will be delivered, and when, along the way. This clarity extends context to innovation efforts, investment prioritization, and pressing issues, and provides an effective communication and analytical framework for translating strategy into actionable cross-functional initiatives. Executives should note they play a critical role in this process by effectively guiding the organization, and ensuring investments across the enterprise are consistent with decisions that have been made.
What is the Value of Business Architecture?
Clarity is critical, but what specific benefits can you point to when talking with senior level leadership, including CEOs, CIOs, CMOs and CFOs about the importance of setting up a business architecture practice, or expanding the practice you already have? We believe business architecture creates value for the organization in three important ways:
- Requiring business and IT leaders to work together to accurately describe what the organization does and how it operates, with a common language, creates an understanding of the “big picture”, breaks down siloed thinking, and increases understanding and transparency across functions, and across units and regions.
- Facilitating alignment and consensus on real business value and sequencing between groups and individuals, and clarifies value trade-offs between functional and cross-functional initiatives, and between short-term and long-term strategies.
- Enabling stakeholders, at all levels, to recognize and eliminate blind spots, communicate with a common language, and increase technical leverage across the enterprise, provides necessary data and context for better decision making.
Whether you have one strategy or many, business architecture can enable execution to take place in a cohesive manner and accelerate innovation across the enterprise.
Business Architecture Enables Transformational Change
Ultimately, business architecture empowers leaders to create enterprise-wide innovation and transformational change. As Charlie Feld describes in his very popular executive summary The Time Is NOW, large, legacy-based businesses no longer have the luxury of time. They must be engaged in digital transformation today. They must bust the bureaucracy or, as he so accurately puts it, transform or decline. Business and technology disruptions, supply chain issues, competition, and the threat of another global pandemic all require businesses to be in a state of constant vigilance and continuous transformation. In order to keep pace, bridging the gap between business and technology (at speed) has never been more critical. Business architecture bridges that gap through the coupling of business decisions across functional and technical boundaries.
Author: Kenny Feld, Principal, The Feld Group Institute
Further Learning:
If you’re interested in reading more about business architecture and the importance of alignment between business and IT, please take a moment to read Aligning Business Value: We Need A Common Language, Aligning Strategy To Business Capabilities and Alignment Is Critical In Times Of Uncertainty for additional insights.
If you would like more information about our hands-on accelerated business and technology leadership development programs, or learning more about how to gain a competitive advantage in operationalizing business architecture, take a look at our upcoming class here or contact us for more information.
