5 contexts of Strategic Business Architecture

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In my earlier post, I wrote that Strategic Business Architecture takes into account a number of key environmental contexts (in addition to the enterprise business model and its organisational background) to build a robust Target Operating Model that captures pragmatic choices and solutions to a successful transformation of the enterprise.

I see five most important contexts that every Strategic Business Architect must consider when working on a Target Operating Model. 

The enterprise business model, which is a capture of its revenue and cost strategies. This would be a main departure point for a Business Architect. For a Strategic Business Architect, however, an existing business model would still require validation through appropriate analysis.  Things move really fast today, and constructive fact-based challenge of accepted wisdom is imperative for successful outcome of any enterprise. Importantly, working on a Target Operating Model design would be an excellent opportunity for senior management to review the way things are done currently and voice their contributions and concerns directly to the Strategic Business Architect.

While the standard management theory suggests that external and industry contexts are examined when formulating the business model, I would urge all Business Architects to master them first hand. Political and/or economic context in which the company operates may have been taken into account when building its business model – by no means a given assumption – yet understanding wider present and likely future political and economic realities will help building the Target Operating Model that is up-/down-scalable and more resilient in downturn, for example.

Similarly, understanding the dynamics of the immediate industry context will produce the Target Operating Model which is more flexible and agile. Shifting currents of industry trends  require robust innovation focus, which in turn leads expansion or narrowing of service/offer propositions and portfolios. A robust Target Operating Model must necessarily be able to accommodate delivery and support of these services and offers to their final consumers.

The need to understand enterprise intended consumer context probably requires least explanation. Companies which are not giving consumers enough consideration in their business architecture are not going to be around for long. If some of them think they are in the B2B space – Strategic Business Architect must make them think again. Given the nascent digitalisation drive, consumers’ access to information will increase their power manyfold over everyone along the supply chain. At the same time, understanding and addressing customer behaviours and expectations will benefit proactive players by building trust. Any Target Operating Model must therefore have a consumer interface built-in, and it must be honest.

Finally, existing organisational context must be considered carefully. It is tempting to think that Strategic Business Architecture is only concerned with an all-new ‘ideal’ Target Operating Model design. In reality, any Strategic Business Architect must understand enterprise culture, values and behaviours in order to minimise resistance and maximise buy-in at all levels. There is no need to throw away the baby with the water. Naturally, there is usually a need for change in corporate culture as the result of a new operating model. These changes must be planned and happen gradually – quick enough to be effective but not hasty as to be disruptive.

This post is intended as  an overview of five most important Strategic Business Architecture contexts; Due to their importance in Target Operating Model design I will look at each separately in subsequent posts. Keep reading!

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