Business meets Architecture - Mind the Gap

> Detecon Executive Briefing Frank Lorbacher Dr. Verena Schmidtmann Frank.Lorbacher@detecon.com Verena.Schmidtmann@detecon.com The Lever for Integration of Processes and IT Business meets Architecture - Mind the Gap Quick and alert action, increased flexibility, cost reduction: how is that all supposed to work while the IT is too sluggish and the processes too complex? The use of business process management (BPM) for the business aspects and service-oriented architecture (SOA) for the IT aspects has started the ball rolling in the direction of optimization, more flexibility, and standardized processes and IT. But the link between these two areas and their integration is missing. In this paper the use of a logical business architecture to bridge the gap between processes and IT is described. Concrete examples from Detecon projects are drawn on to sketch the design of such an architecture. The use of the integration of processes and IT as a contribution to quick and alert action and increased flexibility is demonstrated. In addition some insight is given into how a logical business architecture can make an extraordinary contribution to improving joint understanding and interaction between the various business and IT units. www.detecon.com Business meets Architecture > Detecon Executive Briefing Mind the Gap: How business and IT improve collaboration Have you ever wondered why some companies are faster on the market with new products than others, why they respond earlier to changed customer behavior and are able to consistently improve their MIND THE GAP services - leading to a higher degree of customer satisfaction? The difference may be that these companies mind the gap. A Detecon study from 2009 revealed that only 14% of the surveyed companies are willing to certify that their IT is well-aligned with the company’s business strategy and demands. But are the IT departments the only ones at fault here? Many companies are spending lots of money on enhancing their strategic alignment and process quality by introducing Business Process Management (BPM) within the business departments. At the same time they are investing in the introduction of a Service Oriented Architecture (SOA), a more flexible architecture style which aims to overcome existing barriers in the historically developed IT landscape and to reduce the time needed to adapt to new or changed business demands. But the exchange of information and deliverables between departments is often hampered by a lack of mutually agreed deliverables based on a commonly agreed language. Business Strategy & Strategic Requirements Business Process IT Strategy Strategy Business Process Logical Service Oriented Managem ent Business Architecture (BPM) Architecture (SOA) Business Capabilities Enterprise Architecture Management Figure 1: Implementation of a logical business architecture to bridge business and IT To bridge this gap business and IT senior management need a joint approach. Within such an overarching approach, experts from both sides define the bridging framework, which comprises a common taxonomy and artifacts for the handover of deliverables based on a commonly agreed language. This is what we call the Logical Business Architecture. Typically, the initial project to develop the company-specific framework is initiated by the corporate CIO or CTO and is led by an enterprise architect. It is important that this initial work is executed in a short timeframe - two months at the most. After this short phase, the framework with its components must be optimized as a result of its use within projects and negotiations between business units or between business units and IT. Detecon International GmbH 11/2009 2 www.detecon.com Business meets Architecture > Detecon Executive Briefing How to bridge the gap The logical business architecture is the link between the world of processes and IT. This is where the entire business of an enterprise is broken down into manageable, understandable units which can be easily handled and which are modeled according to a business logic. How are these units structured in terms of content? Enterprise Architecture Management Business Process Logical Service Oriented Management Business Architecture (BPM) Architecture (SOA) Business Capabilities Illustrative Excerpt Logical Business Architecture Domain: Customer Relationship Management Business Capability: Customer Scoring & Credit Rating ... ... Business Object: KPI Risk Profile Figure 2: Exemplary excerpt of a Logical Business Architecture with Domains, Business Capabilities, Business Objects and KPIs Figure 2 provides an illustrative excerpt of how the units are structured into high-level domains like CRM and detailed business capabilities. Because they are identified top-down and independently of the concrete process context, stability is emphasized. Business capabilities can be realized either by means of IT services or human resources. This frees them from the ballast of a process structure determined by the present organization, as well as from the restrictions imposed by the IT applications presently in use. In addition to the clear assignment of business capabilities to domains, business objects are allocated to each business capability. Performance indicators (KPI) for measuring target achievement and performance are a further important characteristic which should be designed for each specific business capability. Detecon International GmbH 11/2009 3 www.detecon.com Business meets Architecture > Detecon Executive Briefing How to increase flexibility and reduce costs at the same time What are the design principles which must be considered in addition to the content criteria of a business capability so that the logical business architecture, as the link between process and IT architecture, can contribute to increasing the business flexibility and to reducing costs in processes and IT? The business capabilities should be designed so that they can exist autonomously without being isolated. Fundamental design principles should enable the independent development of the business capabilities, while at the same time ensuring that they share enough common features to achieve the highest possible degree of standardization for their interaction. They can then be used as a toolbox of building blocks which can be assembled in flexible compositions for the execution of processes. If a high degree of implementation standardization is achieved, then there will be savings in the set-up costs for additional and changed processes and in the integration costs for new IT components. What are the most important design principles for business capabilities so that on the one hand greater flexibility and, on the other hand, cost efficiency through standardization can be achieved? Besides reusability and abstraction for increasing the usage of a single capability in different business processes free from organizational straitjackets, further important design principles for business capabilities include independence from specific status, modularity, and granularity. If business capabilities are specified on the strict basis of structural logic, liberated from any concrete context of processes and organization and without the ballast of the currently implemented IT applications, a mapping from business processes via capabilities to IT services and applications becomes possible. This mapping creates an integrated view of process and IT architecture and a standard language between business and IT. The joint language can also contribute to the simplification of agreements in communications with partners and suppliers. The resulting transparency can be used to realize cost effects by advancing standardization efforts from the technological to the business process area. Also investments into IT can be steered more purposefully in line with how critical the supported processes are to business.