Business Architecture

What is Business Architecture and why is it important?

Business Architecture is defined in the following ways in the Dragon1 open EA Method:

  1. Business architecture is the set of business concepts of an enterprise, structure, system, or organization.
  2. Business architecture is a total concept of a business structure or business system containing constructive, operative, and decorative concepts.
  3. A business structure is a business system with construction (like departments), operations (like processes), and decoration (like image, ethics code, and transparency).
  4. A business (structure) is an organization or economic system that exchanges goods, services, or products for value.
  5. The current state (As-Is) Business Architecture is the current set of implemented concepts. The future state (To-Be) Business Architecture is the set of concepts that will or need to be implemented in the future.

An architecture is only a real architecture when it contains a coherent set of constructive, operative, and decorative concepts.

A concept is another word for an approach, way of working, or idea abstracted from its implementation. Every concept has one or more working mechanisms. The working mechanism of a concept is the principle of this concept.

Capabilities vs Concepts

Business Capabilities and Business Concepts are closely related terms.

A business concept is a business approach, business way of thinking, or business idea. It already exists, even if an organization has not implemented it.

A business capability of an organization is an implemented business concept in an organization. A business capability is a performance level you can achieve under certain circumstances.

Business architectures are not a set of capabilities but a set of business concepts leading to a set of business capabilities.

Business Architecture Total Concept

Examples of business architectures are (or total concepts for doing business):

  • The 100% Online & Digital Company - all business is done online & digital
  • The 100% Brick and Mortar Money Collection Business - all money is collected in the real world
  • The Trust-Based Consultancy Company - all that this company advises is believed or accepted by its clients through trust
business architecture

Business Architecture diagram.

What is NOT Business Architecture?

Unfortunately, there are architecture frameworks and approaches that define business architecture in a completely confusing way.

Business architecture is a DESCRIPTION or DOCUMENTATION. But that would mean that, without describing or documenting the business architecture, there is no business architecture. That, of course, is nonsense.

Other definitions of business architecture describe it as the interaction among business strategy, organization, functions, business processes, and information needs. However, this excludes the idea that a business can have architecture without a clear strategy, organization, functions, and business processes.

For example, a child selling cookies door-to-door lacks a strategy, organization, functions, or business processes. But it does have a business architecture, namely: Endearing Charm-Based Business.

The Problem With Business Architecture and Architects

If you are borrowing the word architecture from the field of building architecture and placing it in the world of organization and innovation, there is no reason at all to change the meaning of architecture (unless you do not fully understand or know what architecture is and what an architect is).

In the past decades, this was done by many architects and frameworks: they changed the definition and meaning of architecture from 'total concept' to 'total logical structure.' Just look up all the definitions of enterprise architecture. They often address the logical and physical level, but hardly the conceptual level. Dragon1 undoes all this.

Dragon1 defines business architects as designers of these total business concepts. Developing the conceptual, logical, and physical designs is challenging for everyone. Finally, they supervise the realization of a structure utilizing that total concept.

CRASH COURSE: How To Create Your Business Architecture

Creating your TO-BE business architecture is a step-by-step process. Just follow these simple steps to get started:

  • 1. List all the business concepts you identify and recognize at your company and your competitor's company, together with the innovative business concepts you have heard of.
  • 2. List the mission, vision, goals, and objectives your company has formulated.
  • 3. Link all the concepts you need to realize your mission, vision, business goals, and objectives.
  • 3.1 Optionally create a business functions model and business domains model of your organization and map the concepts onto your business functions and business domains.
  • 4. To do this, look at the principles of the concepts (i.e., the way of working with the concepts and their results). The results of the concepts must align with or support your mission, vision, goals, and objectives.
  • 5. Detail all your concepts into elements (logical functional parts).
  • 6. Convert your elements into components (technical, physical parts).
  • 7. Implement the components as technical products.
  • 8. Done!

List of Business Concepts

Common Business Concepts used in Business Architectures are:

  • Business-oriented Approach
  • Business Domain Orientation
  • Business Function Orientation
  • Customer Intimacy
  • Operational Excellence
  • Digital Product Orientation / Product Management
  • Business Process Orientation / Business Process Management
  • Empowerment
  • Crowd Testing
  • Skilled Service Desk
  • Self-Service Orientation
  • Social Marketing and Selling
  • Guerrilla Product Selling
  • eLearning
  • eProcurement
  • Instant Factory
  • Scalable Plant
  • DevOps

A business architecture MUST mention all the concepts used in the business architecture, including naming the fundamental concepts used.

Note that one can explore many concepts per business function, like procurement, development, sales, and delivery.

Be sure to reference literature and books. Before incorporating a concept into your architecture, ensure you thoroughly understand its underlying principle. The first principle is the enforced way the concept works to produce results.

Every organization will detail the design and implement these concepts, differing in structure. At a logical level, every concept consists of elements; at a physical level, it consists of components. The implementation level consists of technical products (the products you buy from suppliers).

Common Business Architecture Diagrams

Business Architects commonly create the following diagrams:

  • Meta Models
  • Strategy Maps
  • Business Models
  • Value Chains
  • Value Streams
  • Business Functions Models
  • Business Capability Models
  • Organization Models
  • Customer Journey Maps
  • Mind Maps
  • BPMN models

Interesting Things to Discover

Read more about creating business architectures with Enterprise Business Architecture Software