Selling the Value of a Horizontal Discipline in a Vertical Business World
As with most new business disciplines, discussing business architecture with executives typically requires clarifying the value proposition. With business architecture in particular, clearly articulating and communicating its value is a prerequisite to launching a substantive and sustainable deployment effort. Without the right level of cross-functional sponsorship, the value of business architecture is dramatically reduced. The challenge of explaining business architecture extends well beyond the fact it is a new and unfamiliar discipline. Understanding and leveraging business architecture requires that business executives who are used to addressing business challenges and sponsoring projects within a single business unit must now confront a strange new concept: a business discipline that provides holistic, stakeholder, value-oriented perspectives that span individual business units, product lines, and partner boundaries.
Consider the fact that business-wide planning perspectives are often limited to the executive suite, but even then, analysis and planning activities are often limited to a profit and loss perspective. As a rule, most businesses do not engage in cross-functional issue analysis, planning, and budgeting that extends across multiple business units. Ironically, this is the very value proposition business architecture offers.
The bottom line is that business architecture's real value comes in dealing with systemic issues that cross business unit boundaries; challenges that businesses have historically found difficult to visualize and easy to ignore. For this very reason, business architecture's value proposition is not something that immediately resonates with many business executives. A given executive may, for example, have a vested interest in maintaining complete control over the plans and budgets of a given business unit silo -– regardless of the broader implications. And this is the hardest battle to fight.
Scope and Permanence –- Widely Misunderstood Business Architecture Concepts
One fundamental business architecture principle is that the scope of a business architecture is defined by the scope of the business. For example, the scope of the business and the business architecture for a full-service financial company would cover all divisions, product lines, and business partners that deliver products and services to your customers. Why do you need to visualize cross-functional issues and challenges? The reason stems from the inherent lessons learned from Michael Porter and his Five Forces Model and David Norton and Robert Kaplan and their Strategy Map; assessing and addressing competitive threats, related challenges, and resulting strategy should be performed on an aggregate, holistic level. And this requires a fundamental understanding of the business that must move beyond the disjointed collection of fragmented business units, projects, and budgetary line items found in most business environments.
A large financial services company has significant shared business impacts and challenges. Multiple business units share common customers, markets, and marketing teams, work under a common strategic plan, and are beholden to the same regulatory requirements and policy considerations. These same business units also share supporting capabilities that include employee management, procurement, and financial reporting. These horizontal perspectives are blurred behind a series of fragmented, redundant business units, plans, budgets, and projects and most executives in these scenarios have the ability to see beyond the pieces to envision the whole. The result is that dealing with critical regulations, shared customer demands, overlapping portfolios and investment strategies creates a series of hodgepodge solutions that often do not fit together and in many cases result in millions of dollars in wasted funding on misplace business initiatives. Business architecture is uniquely positioned to deliver the transparency needed to address these challenges.
Facing Down the Value Proposition Challenge
So what can you do when facing a daunting scenario of explaining business architecture to senior business executives? First, explain that one rule of thumb for business architecture is that "the narrower the scope of the business architecture the more limited the value being delivered." Consider the most extreme example. If one person mapped out the business architecture for a small business unit or even a project, the value of the business architecture is limited to this narrow perspective, rendering it essentially useless on any scale.
The reverse is also true. Business architecture, when given the chance to represent the complete business ecosystem, offers significant insights into issue analysis, portfolio planning, and associated budgeting. This is particularly true for major IT transformation efforts where narrow perspectives invariably result in failed projects.
The second step is to explain what business architecture does deliver in terms of a value proposition. While there is no magic formula, there are a number of areas to examine. Consider examining the challenges your organization may face and providing examples of how business architecture can help. Look at areas where the business is struggling, such as:
- Customer losses that are spanning business units and product lines
- Alignment of portfolio investments across business units
- Greater clarity of cross-functional business requirements
- An inability to sustain major business investments in IT solutions that span business units.
When looking at each of these areas, consider establishing a common stakeholder value delivery perspective and assessing gaps in business capabilities needed to deliver this value. These perspectives offer fundamental business views that assist with cross-functional root cause analysis and the crafting of appropriate solutions.
But why fight a marginal investment in business architecture if that investment has a chance of helping interpret and deploy business strategy on a more consistent basis? One theory is that deconstructing a highly fragmented business ecosystem creates a predicament for some executives who live in a siloed world they fully control -– even if that control introduces business risks, redundancies, and other challenges for the business as a whole.
You will definitely receive pushback from some executives. If you can launch a cross-functional business architecture initiative with business support from a core set of executives, then that is enough to get moving. Skeptics tend to fall in line when they see how business architecture provides a level of clarity to a wide variety of planning and deployment efforts. But if you work in a given business unit, consider that starting a business architecture effort in a narrowly defined ecosystem will deliver equally narrowly defined value and results. At that point, it is best to bide your time while you seek alternative business sponsorship. Business architecture does not thrive in a silo, and selling it that way will not bode well for anyone.
I welcome your comments about this Advisor and encourage you to send your insights to me at email@example.com.
-- William Ulrich, Senior Consultant, Cutter Consortium