Last week I attended the Business Architecture Innovation Summit sponsored by the Business Architecture Guild. One of the most common hallway topics was how to demonstrate value. I had a number of interesting conversations that led me to the following four business architecture value propositions:
Return on investment. An ROI approach may be necessary to capture operational mangers’ interest in business architecture but this model will not lead to long-term success. ROI approaches are most often tied to efficiency gains through technology, application, or process standardization. This work establishes business architects as operational technicians, not strategic players. Efficiency programs also provide diminishing returns creating a vicious cycle of chasing smaller and smaller gains. Business architects who take this approach should have a solid plan to move to a stronger value proposition within a year.
Business outcome contribution. Most business architects I talk with want to create a direct line of sight between the work they do and business outcomes. This can be difficult to pull off, but if you can, it will provide a long runway to establish a business architecture practice. At Accelare, we most often help establish business architecture teams as the designers and managers of the strategy-to-execution process that connects strategic intent to focused and targeted action. Another method is to develop a list of products and services the company offers and work backwards to create a value chain for each that demonstrates business architecture’s role in value creation.
Fee for service. I have used this model in the past with great success and I spoke with a business architecture leader for a leading global company who is also successfully applying it. In a fee for service model, business architecture has no budget (or a relatively small one) and works as an internal consulting organization, selling its services to business organizations. This creates a strong value proposition that business managers understand. When P&L owners are willing to put your cost against their bottom line, it is clear to everyone you are valued. This of course is exactly how your company demonstrates value – your customers want to buy your products. A potential challenge with this approach is that as business architecture becomes successful, some business organizations will want to create their own business architecture practice. Not a totally bad outcome but it can lead to a shrinking business architecture practice.
Part of the organizational fabric. For me, this is the ultimate goal for business architecture – to become so ingrained in the fabric of the organization that value is no longer questioned. Very few professionals are asked to prove their value on a year- to-year basis. Why? Because their role has become embedded in the everyday processes used to manage and run the organization. Think about project managers. They deliver over half of their projects over budget and/or late, yet no one challenges the value of the role. Project managers are part of the fabric.
The bottom line:_______________________________________________________________________________________________
Business architects face a long road to establishing the value of business architecture as a discipline but I am confident we can do it. The first step is to think out of the box to create more innovative approaches that resonate with today’s business leaders. We need to work more like a startup – think big, start small, move fast, innovate continuously.