The Value of Architecture: Priceless

We’ve assembled a distinguished panel in conjunction with the recent Open Group Conference in Austin, Texas, to explore the impact, role and opportunity for business architecture.

We’ll examine how the definition of “business architect” has matured, and we’ll see why it’s so important for this new role to flourish in today’s dynamic business and IT landscapes. We’ll also see how certification and training are helping to shape the business architecture leaders of tomorrow.

Here to help better understand the essential impact of business architecture on business success is Harry Hendrickx, the chief technology officer, CME Industry Unit, HP Enterprise Services and a certified global enterprise architect; Dave van Gelder, global architect in the Financial Services Strategic Business Unit at Capgemini; Mieke Mahakena, label leader for architecture in the training portfolio at Capgemini Academy and also a certified architect; Peter Haviland, head of architecture services in the Americas for Ernst & Young; and Kevin Daley, chief architect in the Technology and Innovation Group at IBM Global Business Services.

The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Listen to the podcast (38:48 minutes).

Here are some excerpts:

Dana Gardner: We see that CEOs around the world really are seeking fundamental change from IT. They recognize that we’re at an inflection point. Why then is the role of business architect so important now?

Harry Hendrickx: Over the past one or two decades, business-IT alignment has been No. 1 on the CIO agenda, and apparently the organizations have increasing difficulty getting business-IT alignment resolved. There are quite a few people pioneering in business-IT alignment, but apparently there was no urgency yet to recognize this role more specifically.

HP, in the past two years, interviewed CIOs worldwide, and they all indicated that they face quite large and complex transformation processes. They also recognize that business-IT alignment is one of key issues. We think that the business architect really can provide some resolution to get those processes in better shape and more successful.

Kevin Daley: At IBM, we have a CEO study and a CIO study that come out in alternating years. One of the things that started coming out loud and clear in 2010 was that managing complexity and building operating dexterity required a better understanding across the entire company.

We’ve started seeing a trend to move not just from business IT alignment, but to business and IT convergence. There’s an understanding more and more that information technology, and technology in general, is a core part of the business model now. There’s an understanding that now we have a situation where business and IT aren’t so much aligned, because of the fact that IT is part of business.

Where we did interviews and surveys and then compiled them for thousands of CEOs, we came up with three key elements. Amongst those was managing and taking advantage of complexity while building operating dexterity. That’s the key theme.

One of the problems that we’re seeing from the CEOs is having for decades separated IT as if it was its own business unit, instead of part of the true sense of the business. It’s been an interpretive science. To manage that complexity they needed a means by which to start with the design of where they’re going and have have a business strategy.

How do they take that strategy and transform it into technology and into information management? They needed an ability to have a framework in which to have that substantive discussion between the people who were responsible, such as the CIO who is responsible for technology and the operations and the COOs, who are really about the execution of the overall picture.

What we’ve seen from our CEOs is a need to start being more integrated. There have been market pressures that they having to respond to. The big economic downturn was a big change for everyone, and they are trying to address it.

They’re looking at means that they can start integrating more globally. They can start to increase their cost variability and start becoming more agile in how they operate their business. To do that they need a means by which they can more effectively communicate.

So far, we’ve been seeing that business architecture is a perfect way to start driving an understanding. It’s a place where both people who are used to seeing standard business models like revenue and capability are able to associate that to the different types of architectures and designs that we see coming out of the technology group.

It’s giving them a commonplace to meet and jointly move forward with what they’re trying to do in terms of managing the complexity, so they can be more agile and dexterous.

Gardner: What are the stakes here for business architecture and for organizations that can master this? How important is this now?

Peter Haviland: It’s extremely important. What I see is that this is a discipline that’s just crying out for more people and more maturity. You almost need it to become pervasive throughout organizations now.

The most common story I encounter is simply that organizations spent a lot of time in the past creating their processes and then they spent a lot of time feeding technology solutions to those processes. In recent times, the pace of technology change has moved faster than that previous paradigm.

What you’re looking at is at people saying, well, I am the business, there are all of these technology options out there. I cannot find a way forward and so how do I exploit those? That is where the business architecture profession is really being pushed to the front.

That said, there is a slight risk here that it may be considered too much in isolation. I mean, it is an architecture profession, it is a part of architecture, and the value of architecture is to provide that aligned view across the various domains that are important in terms of business, technology, information, security, and those types of elements.

When it comes back to what’s at stake for businesses that are investing in this particular area and for businesses that are trying to reconsider the way that they can operate themselves to support technology, they are moving ahead and they have competitive advantage. Businesses that aren’t doing that tend to be left behind, because the pace of change of technology is going to get faster.

Gardner: Does a business architect and architecture have to be at a high level to be successful? Where in the org chart do we typically see this role? Is it near the top? Does it matter?

Dave van Gelder: It depends on the maturity of an organization. Within Capgemini nowadays, we talk about business technology. As Kevin said, business and technology are not separate. Technology is part of the total business.

When we started the Business Architecture Working Group in 2006, there was a lot of discussion about two words, business and architecture, and nobody knew exactly what we were talking about. Everybody had a different understanding of those words. In the last years what you have seen is that business architecture is looked at in a different way.

Currently in the Business Architecture Working Group, we see business architecture as something that brings the balance between all the other architectures in the company — that’s IT architecture, financial architecture, money, people architecture, and a lot of other architectures.

If business architecture is bringing the balance between the different aspects of a company, then business architecture is something that should be handled in the top of the organization, because balance should be created between all the different aspects in the organization.

Gardner: What then is the fundamental problem that the business architect needs to solve?

Mieke Mahakena: It’s more like making sure that, whatever transformation you’re going to implement, you align all those different aspects. As Dave told us, there are a number of aspects in an organization that might need to change, and you can have all those different architectures for those aspects. But, if every aspect goes its own way in changing, then they will never be aligned. Business architecture is meant to align all of those aspects to make sure that you have a balanced, consistent, and coherent set of operations at the end.

Gardner: It sounds as if we’re in agreement that this is a high level function, but what is it that people might stumble upon, if they direct this in a wrong direction? What is business architecture not good at?

Haviland: Business architecture is similar to other forms of architecture, in that it tends to try to do many things all at once. The idea of enterprise alignment is definitely the right outcome, but there is enough complexity there to blow steam out of your head for many, many years to come.

Certainly in our experience in implementing these types of functions in organizations, functions that constrain scope very well, also tend to communicate very well around what their status is, what their progress is against milestones, and what outcomes they’ve achieved, and they tend to articulate those outcomes in terms of real business value.

What business architecture is not very good at are broad-reaching types of goals that don’t have measurable outcomes.

Gardner: Anyone could stand up and call themselves a business architect, but what is The Open Group, in particular, doing about actually certifying and moving toward a standardization of some sort?

Hendrickx: The first question we get asked is, what’s the difference between a business consultant and a business architect or a business analyst and a business architect? We also have enterprise architect and technology architects. Is there a reason for being for the business architect?

This is something we did a lot of research on at HP and we delineated the role of the business architect quite clearly from the business consulting and the business analyst aspect.

The business architect’s role is distinct, because he combines the organizational strategy with the operations. He identifies the implications of this strategy, as well as that of the technology for the business operations. This is opposed to the business consultant, who is more outwardly looking to the commercial aspects of the organization and what that means for the structure. The business analyst is looking more at not the structure of the operation, but at the solution level.

When we look at the enterprise architect and the solution architect, the business architect focuses more on the complete implications of the strategy and technology trends on the operations, whereas the enterprise architect is more interested in the IT and the implications for the IT strategy and how IT should be deployed. The business architect is much more focused on the complete performance of the business operations.

So, the bottom line of these delineations of the past one-and-a-half years is that there is a reason for being for a business architect. It is a distinct role and it has a real solution for a problem.

Mahakena: What we’ve been doing in the Business Forum, after we decided that business architecture has its own reason for existence, we described the business architecture profession — what’s the scope and what should be the outcome of business architecture. Now, we’re working on the practice of business architecture by defining a framework, looking at methods, and defining approaches you can use to do business architecture.

Parallel to that, if you know what the profession is and what the practice is, you’re able to create the business architecture certification, because those things help you define the required skills and experience a business architect needs. So, we are working on that in the Business Forum.

Daley: Let’s look at business architecture from the concept that has existed, combining the thoughts of what Mieke and Harry have already talked about. When we work with clients, for those of us that are in consultancies, we see that there is normally something that’s similar to business architecture, but it’s either a shadow organization inside a purely business unit that isn’t technology focused, or it is things like the enterprise architects who are having to learn the business concepts around business architect anecdotally, so that they can be successful in their roles.

I’d suggest that we’re seeing a need to make it more refined and more explicit, so that we’re able to identify the people that fit for this. They have specific things, instead of having general things that we have today. For me, the certification helps provide that certainty as a hiring manager or as somebody who is looking to staff an organization.

It provides that kind of clarity of what they should be doing, giving them specific activities, specific things they do that create value for the company. It takes out of the behind the scenes action and pull something that’s critical to success into the front with people who are specifically aligned and educated to do that.

Gardner: How does the globalization impact the importance of this role?

Haviland: Globalization is creating more and more complexity in the business models that organizations are trying to operate. Over the last couple of decades, with the science and engineering of IT, there has been enormous investment by companies to actually operate, maintain, and improve their IT in their current world.

In many cases, this IT work has outpaced the comparable business efforts inside those organizations, when they actually think about their business, their business models, and their business operating principles.

What we’re actually seeing now is that the rigor, the engineering, and the effort that’s put into technical architecture and IT architecture is now being proposed on the business side, with many business management process improvement activities. These tend to be at quite a low level, however, when you compare them to business architecture initiatives at the enterprise level.

If those architecture initiatives are at the high levels that are needed, you start to consider the scope and challenges that come into play, when you start talking about globalization. So, with the increase in scope and the global way that people are operating across cultures, geographies, and languages, that requires this discipline, which does operate at that high level to start to organize the other areas, but perhaps at a lower level.

Hendrickx: There are two aspects that need to be paid more attention to with globalization and more complexity. First, the business architect is, or should be, equipped to look at the organization, not only within the boundaries of an organization, but also the ecosystem of organizations that will mold together and have to be connected to produce the value.

Since these are more formalized contracts or relationship with different organizations connected to each other, there is a dynamic that is hardly seen anymore, that is not transparent anymore. There clearly needs to be some more detailed insights and transparency for each organization, so that people understand what the impact of certain developments or events will be. This can’t be done just by logic or just by watching carefully. This really needs some in-depth analysis for which the business architecture is built.

The second part of it is that the due to the complexity, the decision making process has become more complex and there will be more stakeholders involved in the different areas of decision making. The business architect has a clear task and challenge as well. By absorbing the strategy, technology trends, and the different developments and focusing on the applications for operations, he has the opportunity to discuss with the different stakeholders. He has the opportunity to get those stakeholders either mobilized or focused on specific decisions: the deliverables you will provide.

Gardner: We certainly see a lot of important characteristics in this role: global, strategic high level, encompassing business understanding, as well as technology. Where do you go to find these kinds of people? Who tends to make a good business architect or is there no real pattern yet established as to who steps up to the plate to be able to manage this type of a job?

van Gelder: To all the complexity already mentioned, I’d want to add something else that we found in the Business Architecture Working Group, which is more research in the whole field. That’s the problem of communication. How do people communicate with each other?

If you look in the IT world, most people come from an engineering background. It’s hard enough to talk to each other and to be clear to each other about what’s possible and how you should go or what you should go for. If you start talking to all those other areas in the business, then suddenly people have a completely other way of thinking. Sometimes they use the same words and don’t understand each other.

It’s not easy to have these kinds of people that need very good communication skills next to all the complexity that you have to handle. On the other hand, you need an architect when it’s complex. You don’t need an architect when it’s simple, because everybody can do it. But an architect is just a person. I say if I am a simple person, I can only handle simple things.

What you need are people who can structure. I can only work with things when I can structure it, when the complexity is fairly well-structured. I then have overview of all those complexities, and then I can start communicating with all the parties I have to communicate with.