Business models are helpful tools for setting out a strategy and steering an organization in the right direction. Furthermore, business models foster discussions on the way organizations want to deliver value to their customers. Building business models is fun! Thinking about your organization and its future in an abstract manner is addictive, since there is no chance of failure..
However, delivering value to your customers as described in your business model is a different story!
Why Business Models?
An organization must be responsive to developments in its environment. Business models can be a first step in adapting businesses to these changing environments and design them for success in future environments. As described in our previous blogs, analysis of strategy in terms of business models answers questions concerning why and how a venture is, or will be, viable and valuable. Customers, partners and competition demand that flexibility is the standard. What are we good at today and what are the trends in the market? Organizations describe their current Business Model, create new models and apply elements from other models. How does the future model effect the old / existing model? Typical stakeholders for business model management are Strategic Managers, Business Developers and Innovation Managers.
A step towards implementation
However, business strategy is not often a clear target in practice. The company strategy as depicted in business models is therefore not a destiny that is ever reached. It provides a direction instead of a destiny. In practice, this direction is difficult to describe in laymans terms or, more important(?), into concrete activities. For instance, with what business should IT align? A first answer could be with the strategy. But what does a strategy say about the work of the employees on the shop floor? According to the strategy, what investments should our organization make? What does the business expect from our client administration? To answer these questions, an organization should make a step towards implementation. This requires insight in the elements of the business model, attributes of the elements and the relations between different elements. Results from analyzing these elements, attributes and relations become the foundation for business model change and innovation in an organization. Thus, a construction of the business in terms of capabilities, actors, processes, is needed: Business Architecture! Typically your first step in designing your future state Enterprise Architecture.
Business Architecture
To concretize the direction that is set out in the strategy and the business model, we need Business Architecture. Business Architecture is about managing coherence in your organization. It provides structure and helps to make decisions about investments in business and IT. Business architects communicate with decision makers at different levels and advice on how to achieve a proper balance of interests. They stimulate entrepreneurship (or intrapreneurship) at all levels of the organization.
Business Architecture provides a powerful solution to complex business design issues. Stakeholders of architecture (e.g. as a manager/director or project manager) will benefit from having basic knowledge of Business Architecture.
TOGAF 9.1 on Business Architecture:
TheBusiness Architecturedefines the business strategy, governance, organization, and key business processes. A knowledge of the Business Architecture is a prerequisite for architecture work in any other domain. In practical terms, the Business Architecture is also often necessary as a means of demonstrating the business value of subsequent architecture work to key stakeholders, and the return on investment to those stakeholders from supporting and participating in the subsequent work.
Techniques that make a difference
BiZZdesign has extensive knowledge in the field of Business Model Management and Enterprise Architecture. In our Quick Reference on Business Architecture, we present 10 techniques that make a difference. It is free to download in the section on the right side of this page. We briefly describe the techniques and how to apply these in your Business Architecture practice.
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Business Model Canvas
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Customer Journey Mapping
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Multi Channel Matrix
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Four types of operating models
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Capability Mapping
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Business Model Roapmapping
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Investment portfolios
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ArchiMate
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BPMN
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Listening and pitching
More information about our Business Architecture training coursescan be found here.
