Strategic Business Architecture is the product and a process of contextualising, designing and implementing optimal enterprise Target Operating Models to maximise business value.
What does this mean?
As the product, Strategic Business Architecture unites form and function of the enterprise. It depicts Target Operating Model blueprints, key processes and associated governance structures – optimally developed to address business environment and objectives. Getting companies there is assisted by using the Strategic Business Architecture Helix™ framework, a continuous three-step process of Target Operating Model contextualisation, design and organisational transformation.
THE STRATEGIC BUSINESS ARCHITECTURE HELIX™ FRAMEWORK
Why a helix?
The reason for a helix – spiral – framework is simple. While the steps performed are the same, their content and outputs will differ as business environment and/or company strategy change. Therefore every iteration of the Strategic Business Architecture process will result in a Target Operating Model progressively more attuned to external and internal environment of each company. This allows the Target Operating Model to stay dynamic and in sync with business value drivers, and to better manage its adoption through implementation planning and change management actions.
STEP 1. CONTEXTUALISATION
Why contextualise the Target Operating Model?
Contextualisation means accurately grounding any future Target Operating Model within the organisation’s contexts, making it optimal for that company. This involves external and internal environmental analyses to ascertain organisation’s strategic objectives, its growth and productivity strategies, and its stakeholder landscape, for example. There are 5 key areas to consider in Target Operating Model contextualisation:
- Political and/or economic – to give the model its scalability and resilience;
- Consumer dynamics – to ensure responsiveness and relevance;
- Industry outlook – to embed flexibility and agility;
- Organisational realities – to address ‘the way things are done around here’;
- Company’s specific business model – after all, Target Operating Model follows strategy.
What comes out of the Contextualisation phase?
As result of the contextualisation excercise, optimal concept and core principles of the future Target Operating Model are defined as prerequisites for moving into the design phase.
STEP 2. DESIGN
What things and how do they happen in the Design phase?
During the design phase, architecture components of the optimal Target Operating Model are planned and built to fulfil identified strategies and meet objectives. This may happen in a variety of ways, ranging from a small design team responsible for all elements of the model to organising extensive work streams involving external and internal participants. Similarly, one or a combination of several frameworks can be used to structure Target Operating Model’s design – TOGAF’s ADM, Strategy Mapping or Business Model Canvas methods all may have their use depending on architectural requirements. Common sense is also a framework which is often underused. What important, however, is to make sure that the proposed Target Operating Model is supported with a robust business case while addressing stakeholder needs and concerns.
What comes out of the Design phase?
The design phase produces a set of architectural deliverables for the Target Operating Model which have been agreed with the key stakeholders as ready for implementation. The extent and scope of these deliverables will vary from project to project but some key amongst them will be:
- Target organisational, information system and/or technology blueprints and structures of operational and support units, including their governance;
- Roles and responsibilities of key positions;
- Key integrated cross-company processes defining who does what and when for activities that are shared across reporting and/or organisational lines;
- Delegations of Authority summarising who can make key decisions and to what (usually financial) extent;
- Shared objectives and KPIs to focus on ‘people’ side of the design.
The architectural design can never be fully complete prior to moving to implementation. In most instances, 70-80% top-down completion of the Target Operating Model’s design will be sufficient to begin its roll-out and let the teams who live daily with the model do the rest.
STEP 3. TRANSFORMATION
What is done in the Transformation phase?
Transformation phase is all about managing transition to the Target Operating Model. At the beginning, the model’s rollout is planned and criteria for implementation is set. Sometimes organisations will be able to move all at once, and sometimes a staged rollout by region or by activity may be preferred. It is also unlikely that a move to the Target Operating Model can be achieved in one jump, so a set of intermediary operating models is envisaged on the way. Minimum ‘Day 1’ as well as intermediary requirements for implementation are determined and gap analyses performed to identify sets of necessary actions to move forward.
Project planning becomes increasingly important in this phase. Greater numbers of people and units become involved, so the speed of adaptation, its costs (both explicit and opportunity) and compliance with the original design must be monitored and governed.
Easily the most important of all activities in the transformation phase is Change Management. Architectural additions (remember those missing 20-30% of the model design?) and adaptations will need to be captured and communicated. Yet to succeed with the model, people will need to be placed at the heart of the change management aspect. Appropriate broad and targeted communication, training, explanation and facilitation of adaptation will speed up successful implementation immeasurably.
Does the work end here?
Most likely not. In today’s highly dynamic environment no operating model can remain static forever. The Strategic Business Architecture Helix™ Framework has been especially conceived to make further Target Operating Model’s adaptation and fine-tuning as straightforward as possible.
FINALLY, WHO DOES IT?
The process described above is planned and orchestrated by a Strategic Business Architect, who is responsible for organisation and management of the Target Operating Model project from its inception to successful implementation and subsequent adaptation. (Note, however, that the project as a whole is not a one-person job but a collaborative undertaking involving people from different levels and parts of the organisation for which the model is being designed and applied).
In addition to facilitating sequential steps of contextualisation, design and transformation process, the Strategic Business Architect would also build, agree and maintain at least the following:
- Governance structure for the whole project from the beginning to end covering collaborative, steering and decision making bodies. It will also include, for example, rules on issue escalation and how design ‘intersections’ (overlaps between architecture components) are arbitrated;
- Document repository containing architectural deliverables and project documentation. There is only ‘one version of the truth’ as far as Target Operating Model is concerned, and the Strategic Business Architect is the guardian of this version;
- Shared analytical tools and frameworks to ensure that analyses (e.g. gap analysis) conducted in various parts of the company are cross compatible and meaningful for the purposes of Target Operating Model design and implementation.