Tom Graves / Tetradian

More on translating Business Model Canvas to Archimate etc. (Yes, it’s another of those long, interminable technical posts – my apologies, though they are necessary…)

This one picks up on a couple of sort-of-mistakes that I’ve made in the previous post, ‘Questions on business-model to enterprise-architecture‘, and which need a bit more clarity in explanation. In particular, it’s about specific points in relation to two of Stuart Boardman’s questions:

• an Asset as a type of a Resource – specifically as a Resource for which “the respective service is responsible”;
• a Capability also as a type of Resource.

A key part of this relates to what goes into the Key Resources section in Business Model Canvas, and how we translate and model the respective items in Archimate.

This will no doubt be another long one – sorry… – hence more after the ‘Read more…’ break.

Read more…

You advocate starting (“for now”) with one Business Service. How are we to determine what this business service represents? If the typical enterprise had one single, tightly defined core business, it would be easy but as that’s not usual, I’m unclear how one would define this.

In the adaptation from Business Model Canvas to Archimate, if we start with one Business Service entity, that entity would then represent either the business-model as a whole, or else one of the subsidiary models in a multi-part business-model. If the latter, we would come back later and build equivalent cross-maps for the other subsidiary models. We ‘define’ the service only in the sense that we choose that as the place to start modelling: the content for that ‘service’ is defined already from what we’ve developed on the Business Model Canvas.

The reason for starting just with one Business Service entity is that, when we first start doing this kind of cross-map, it’s often complicated enough already just with the one. As we gain more experience with the cross-map process, we can go straight to a model that looks more like a real-world structure right from the beginning, but that level of detail can often seem overwhelming at first – especially to others when they see the model for the first time. We’ll almost certainly need to decompose it into multiple Business Service entities later, but it’s best to keep it simple at the start!

Why did you pick Activity as the genericization of Application? I see an activity as a much more fine grained thing. (IT) Applications typically perform many activities (and I’m only talking about externally visible activities here). That’s actually one of the reasons I am uncomfortable about the IT focus on applications rather than services. But that’s another discussion. This point might just be semantics, in which case don’t worry.

To use the famous phrase, “it seemed like a good idea at the time”… to me there’s nothing special about that choice of ‘Activity’ versus any other equivalent term. The main point was that I wanted a term that could describe the same something-being-done, as done by any combination of real-people, machine and/or IT – not just the strongly IT-oriented term ‘Application’.

You say a Capability is “the ability to work on specific types of asset”. Can you give an example? I’m not following what you mean by “working on” an Asset.

This relates to part of the rework I did some time back on making the Zachman columns fit more closely to what happens in the real-world, and specifically relates to what Zachman describes as the ‘Who’ column. To me Zachman’s column-structure has never made sense, because it kind of randomly conflates different things into the same spaces, and the ‘Who’ column is particularly problematic. Business-folks also tend to use terms such as ‘process’, ‘service’, ‘function’, ‘capability’ and even ‘unit’ as almost random sort-of-synonyms for each other but at different levels of abstraction or decomposition – a further muddying of the waters that really doesn’t help when trying to disentangle the resultant mess!

There are several fundamentally different things going on in that context:

1. What is being changed or used or referenced or otherwise worked on or worked with;
2. The rules that govern what changes are to take place, and how those changes should take place;
3. The ability to work on (create changes to) whatever-it-is;
4. The ability to make appropriate decisions about how those changes are taking place (the skill-level or decision-level).

Item 1 is what I term an Asset – more about that in a moment, when we look at Stuart’s next question.

Item 2 is what I term a Function, because it’s essentially as in a mathematical function – a=resultofdosomethingwith(x,y). It defines the parameters that will be used (i.e. providing labels for Asset-types), but in essence everything else is encapsulated inside the function (i.e. black-box).

The specific combination of item 3 and 4 is what I term a Capability, because it’s the ability to do something at a specific level of skill and decision-making. (This is similar to the way that Stuart defines it below – “the ability to perform some activity/task/service” – but with a bit more specificity and taxonomic precision.) In the human context, capabilities are often clustered or bundled into Roles and/or Responsibilities – the latter of which are, literally, ‘response-abilities’. That’s the human side of skill and ability, which is why it fits as more consistent meaning at the detail-layer than Zachman’s ‘Who’.

We bring a Function and a Capability together to form a Service. On its own, a Function is always abstract: it needs a Capability to make it actually do something. And on its own, a Capability literally has no function: the Function provides a context in which the Capability can be put to work. A Service may present the same Function interface but with different underlying Capabilities – hence, for example, a Service that can handle any level of insurance-claim, with low-value claims processed entirely by IT-based Capability but higher-value claims requiring human intervention with a different Capability implementing a higher skill-level and decision-making authority.

A Process is just a sequence of changes provided by Services, that are regarded as related in some way (hence ‘choreographed’ etc). It may be a predefined sequence (as in most IT-driven processes); or it may be almost entirely freeform, requiring high skill-levels; or anywhere between those two extremes, using any appropriate combination of human, machine and/or IT capabilities.

This is yet another example where IT-centrism has scrambled people’s understanding of what’s actually going on here. The problem arises because Function and Capability and, often, Process, are all blurred together within a software-application, whereas in a human or even a machine context the distinctions are much more necessary and explicit. We need to be able to distinguish between them for key architectural concerns such as trade-off analysis for implementations or load-balancing, and business-continuity/disaster-recovery.

When you say an Asset is a Resource for which “the respective service is responsible”, how do we determine which service that is and what does responsible mean?

A Resource is simply something that can be used in some way: anything that exists in some form or other is a potential Resource for some kind of business-model. A resource becomes an Asset within some type of ownership-model: in the crudest possible sense, it’s an Asset if we own it. Some things – air, for example, or time – can be resources but can’t be Assets because we can’t own them as such.

We then hit up against the complexities of contrasting different ownership-models, particularly possession-based (i.e. what we’d usually think of as ‘property-rights’) versus responsibility-based. I won’t go into those distinctions in detail, but in essence all of this actually revolves around roles and responsibilities. The whole point of the business-model is we say that we will deliver the Value Proposition via the Channels to the Customer Segments. If we expand that statement into more precise taxonomic detail, what it means is that we declare responsibility (‘response-ability’) to deliver value to the shared-enterprise, by doing something (Key Activities) with Assets (i.e. resources for which we also have responsibility), and then, via some defined mechanism (i.e. Channels), passing the responsibility for those value-added Assets to the enterprise-stakeholders referred to as ‘Customer Segments’. That second definition probably seems horribly long-winded and pompous, but that’s the level of detail that we actually need when we’re going to design a real-world implementation.

I’m uncomfortable with Capability as a Resource. A Capability seems like an abstract concept, the ability to perform some activity/task/service. A resource is something that gets used – whether consumable or not. I realize that, if I’m right, we may have a gap in the Business Model Canvas, which doesn’t seem to have a place for Capabilities.

Perhaps the best way to explain this is that well-meant phrase “Our people are our greatest asset”. (In reality, it’s the relationship with the person that is the asset, but that’s another story.) The point here is that the skills and abilities of the person, the machine, the IT-application or whatever – the set of available “ability to perform some activity/task/service” – is definitely “something that gets used” in the organisation, and hence ‘resources’ from the organisation’s perspective. So it’s not a gap in the Business Model Canvas – it’s what we would include under the Key Resources banner.

In fact in general one of the things you’ve done (deliberately or otherwise) is to highlight a weakness in the Canvas, when it comes to dealing with extended enterprise. I mentioned this in another comment. Of course it’s possible but it requires one to think outside of the boxes (boundaries) in the Canvas. In particular the relationship with Partners seems to be unidirectional and rather more resource than service based. By doing the mapping this becomes clearer. So either we say that it’s OK just to work with the Canvas’s implicit support for extended enterprise or we need to address that (or rather ask Alex Osterwalder to do so). The first option means from my perspective that we then need to find a way to handle it explicit in the Archimate (or any similar) mapping. You were dealing with some of these issues in your post on non-profit enterprises and the Canvas.

There’s a real danger of being unfair here, so I ought to reiterate that Business Model Canvas works very well indeed for the task that it was designed to do. That task is about getting people to think and innovate about how their business-model operates, in a kind of integrated, big-picture way, all with the simplicity needed for rapid brainstorming and pre-prototyping and the like in a free-form workshop or cafe context. To me it’s a business-architecture tool, with a very specific purpose: we really have no right to complain that it isn’t a good fit for whole-scope enterprise-architecture, or for detail-layer implementation, because it was never designed for those kinds of uses.

If we need to link it into methods and tools and the like for those other uses, it’s our responsibility to get those cross-mappings to work – not Alex’s. That’s what this bunch of posts has been about: going downward to Archimate and suchlike, and upward to Business Motivation Model and beyond.

The same applies to using Business Model Canvas for business-models for government or non-profits. The fundamental structure of the Canvas is geared towards commercial organisations, and there’s nothing wrong with that. If we want to use the Canvas outside of a commercial context, it’s our responsibility – not Alex’s – to make the appropriate amendments. (Alex did set up a website a couple of years back to explore ‘business-models beyond profit‘ – and although it doesn’t seem to have gone any further in the last eighteen months or so, I know he does have a deep personal interest in that space.) So again, we do need to be fair here.

The only ‘weakness’ in the Business Model Canvas as such is its implicit asymmetry on the Key Partners side of the model: in my opinion those relationships need to be understood as exactly symmetrical with the Customer Segments side, not least because we can make or break a business on supply-side as easily as on customer-side. That asymmetry also makes it more difficult to visualise a full supply-chain, or the role of the business-model within an overall value-network. Much the same applies to its orientation towards resources rather than services, and (especially in the Canvas’ implementation in the BMTBox iPad app) the low priority given to modelling of flows and transactions.

But I do acknowledge both of those as trade-offs to preserve simplicity: that kind of structure does make it easier to focus on this organisation’s business-model, without getting too distracted by anyone else. For the Enterprise Canvas, I made different trade-offs: it’s explicitly symmetrical, and it’s explicitly designed around services, but it is also more complex – especially once we use it to go into recursive service-decomposition or inter/intra-service coordination or flows-modelling or role-mapping or values-dependencies and the like. It’s designed for those uses, and Business Model Canvas isn’t – but that doesn’t make Business Model Canvas ‘wrong’ as such. Using Enterprise Canvas for multi-layered enterprise-modelling also requires a different mindset and skillset, than those needed for roughing out business-models on Business Model Canvas – the difference between whole-enterprise architecture and domain-specific business-architecture, in fact. Sure, we can use Enterprise Canvas to develop business-models, and it actually fits that need very well: but it’s not specifically designed for that purpose – whereas Business Model Canvas is. ‘Horses for courses’, really.

I hope that makes some degree of sense, anyway, and that it answers those questions well enough for now?

The past few posts in this series have focussed on moving ‘downward’ from the business-model, towards implementation, such as might be modelled in Archimate notation. That’s an aspect of the business-architecture / enterprise-architecture interface that makes immediate and practical sense to most people.

Yet to complete and verify the business-model and its proposed implementation, we also need to look upward into the extended-enterprise, and sideways into other aspects of the business-architecture space – otherwise the business-model could well fail in ‘unexpected’ ways. This post explores how to do that exploration, using the Enterprise Canvas frame as a checklist and guide.

(This is an adaptation of material that’s explained in more detail in my books The Service-Oriented Enterprise and Mapping the Enterprise, but there should be enough here to use straight away without needing to refer to either of those books.)

This’ll be another long one, so continue after the ‘Read more…’ break.

Read more…

Yes, I admit it: I’ve been kinda pouring out the posts lately. Sorry…

But why all this fuss about business-models and enterprise-architecture? What’s the point about the bottom-line not being the baseline to work from? If everyone’s selling something to someone, is there really any difference between a for-profit and a non-profit business-model? And who would want to go from Business Model Canvas to Archimate, anyway? Is anyone interested in any of this technical stuff?

I suppose it all comes down to this quote from Chris Potts:

The devil is in the detail, but the angel is in the architecture.

People like building business-models. It’s wonderfully abstract, and it’s fun – like playing with model-trains, where the passengers are only imaginary and the trains really can run on time. Unfortunately (or fortunately?) the real world is a bit different from that…

Real-world detail can break the best-looking business-model without even breaking out a sweat. We need to know that detail – or at least have a better sense of that detail – before committing ourselves and others to a lot of hard work and ultimate heartache.

Yet we also need to avoid drowning in the detail – otherwise we’ll never get started. Analysis-paralysis, and all that.

Which is where architecture comes into the picture. Formal discipline, yet without overt formality. Patterns help us break through the problems. We simplify, without being simplistic. And we model to reduce the muddle, to cut through the chaos and complexity of all that devilish detail.

Perhaps even more, it’s about the story: the story of each action, and the story of the enterprise itself. If we get clear on the story, the sensemaking becomes a lot simpler.

As I understand it, architecture comes down to a single idea: everything works better when they work together, in pursuit of purpose, a clear aim in mind. Everything connects with everything else. It’s the detail of how everything connects with everything else, of how we get everything to work with everything else, that I’ve been focussed on here.

A lot of detail, I know: but sometimes that is the nature of the beast. Fact is that architecture isn’t all nice pretty abstracts and nice pretty pictures – sometimes there is a lot of petty picky detail, and sometimes we just gotta face that fact… sorry…

Hope it’s been useful to someone, anyway?

The previous post, ‘From business model to enterprise-architecture‘, turned out to be another of my monster essays. Sorry…

The detail’s there if you need it, but if you just want to do the translation from Business Model Canvas to Archimate, without worrying too much about the ‘Why’ behind it, here’s the short version.

Step 1: Start with a business-model on Business Model Canvas

That part’s straightforward enough for most folks here, I imagine?

Step 2: Separate out the players on the business-model

Start an Archimate diagram at the Business layer (the ‘Why’ layer).

Represent each Key Partner from the Business Model Canvas by a Business Actor entity on the Archimate diagram.

Likewise, represent each Customer Segment by a Business Actor entity.

(We will also need Business Role and Business Interface link-entities for each of these business-actors, but we’ll come back to that in a moment.)

The remaining cells of the Business Model Canvas – this organisation – can for now be represented by a single Business Service entity.

Step 3: Expand the detail for the interfaces of the business-model

Represent each Value-Proposition offer by a Product entity, optionally with an associated Value entity to describe why this offer would be of value to a customer-segment. Link these Product entities to the organisation’s Business Service.

Represent each Customer Relations item and Channel with the following:

• Business Interface entity, linked on one side to the organisation’s Business Service, and on the other side to a Business Role assigned to the respective customer-segment Actor
• Business Interaction entity, also linked to the Business Service and to a customer-segment’s Business Role
• Business Object entity – indicating the content of the flow between the organisation and the customer-segment, optionally associated with a Meaning entity and/or Contract entity – linked to the respective Business Interaction

Represent each Revenue Stream in a similar way, as a ‘back-channel’ through which value is returned to the organisation. Each back-channel will include its own Business Interface, Business Interaction, and Business Object, with the latter probably linked to the same Contract as for the respective Business Object in the main transaction channel.

Repeat the same process on the supplier-side, with matching Business Interface and Business Role entities for each Key Partner, and Business Interface, Business Interaction, Business Object and Contract entities for each external Cost Structure item. The respective channels and supplier-relations services are only implicit in Business Model Canvas, but you’ll need to add the respective Business Interaction and Business Object entities on that side, together with any needed Contract entities.

Step 4: Expand the Key Activities

Extend the Archimate diagram down to the Applications layer (the ‘How’ layer). In particular, we’ll use this layer to model the Key Activities in the Business Model Canvas.

We have a problem at this point: Archimate’s ‘Applications’ layer only knows about IT, and we need it to cover a much broader range of types of ‘How’. This is because an activity in a business-model could be done by any combination of people, IT and ordinary machines, and to understand the trade-offs between different ways of doing things – different types of ‘How’ – we need to model them in much the same way in each case.

To do this, we need to change the Archimate entities for this layer from the IT-specific ones in the standard, to more generic ones that will work with any type of implementation. In most cases, all we need to do is change the prefix of the name from ‘Application’ to the generic ‘Activity’. This gives us the following entities to model our Key Activities:

• Activity Object (generic of Data Object): represents an object (or subject) to be created, accessed, changed, deleted or otherwise worked on in a business-activity – may be physical, virtual, relational or any combination of those as required
• Activity Service (generic of Application Service): the ‘exposed’ part of an activity that connects with a Business Function in the Business layer
• Activity Function (generic of Application Function): a ‘chunk’ of activity that is visible only within this layer
• Activity Interaction (generic of Application Interaction): a unit of behaviour where two or more components or modules come together to act on an Activity Object
• Activity Interface (generic of Application Interface): a point where an activity can connect with its environment – particular to access or exchange Activity Objects
• Activity Module (generic of Application Component): a defined unit of activity in a structural sense, such as specified in an ISO9000-style Work Instruction
• Activity Collaboration (generic of Application Collaboration): a temporary configuration of two or more modules to perform collaborations

Link these entities as appropriate, using the respective standard Archimate relationship-links.

Step 5: Expand the Key Resources

Extend the Archimate diagram down to the Infrastructure layer (the ‘With-What’ layer). In particular, we’ll use this layer to model the Key Resources in the Business Model Canvas.

One of the frames we use extensively in our own enterprise-architecture is an extended and adapted version of Zachman, which uses the categories Asset, Function, Location, Capability, Event and Decision. In general, the Key Resources section in Business Model Canvas relates to Assets, Locations (physical, virtual, relational, and various combinations), and Capabilities (the abilities or facilities used to the work or within which or through the work takes place).

Again, the Archimate standard only knows about Assets, Locations and Capabilities that relate to IT: we need to extend this to include any other types we may need in the business-model – including buildings, machines, and individual people’s skills.

An Asset can be defined simply as a resource for which the respective service is responsible and can put to use as required.

A Capability is the ability to work on specific types of Asset using a specific level of competence and skill.

A Location is a node within some type of location-schema. Locations may be of any asset-type or resource-type, or any combination of these.

A network is a schema that describes a set of Location nodes, specific relationships between those nodes, and, often, the types of Assets than can be transferred on pathways of connection between those nodes.

An infrastructure is thus a clustering of Assets, Capabilities and Locations, often in network-relationships.

Given these, we would represent the Key Resources via the following Archimate entities, adapted as appropriate:

• The Artifact entity may represent any type of real-world Asset.
• The Infrastructure Service entity may represent the exposed available behaviour (Capability) of any cluster of related Assets, Capabilities and Locations, linked to any Activity Function in the Application layer.
• The Infrastructure Interface entity can represent the exposed interface for an Infrastructure Service, as linked to any Activity Interface in the Application layer.
• The System Software entity is merely one very specific example of a generic Capability entity, and can be used (preferably retitled) to represent any Capability.
• The Device entity represents a type of Asset that can be used in and for specific activities, as ‘active structure’: a hammer, a power-drill, a fork-lift truck and an ordinary ‘dumb’ telephone are a Device in this sense.
• The Network, Node and Communication Path entities respectively represent a schema for connections between Location nodes, a node within that schema, and a connection-path through which specific types of Asset (Artifact entity) may be transferred between nodes.

As in the Application layer, the types of relationships that Archimate permits between these more generic entities and their derived specialisations should remain essentially unchanged.

Step 6: Apply enterprise-architecture disciplines as required

Use standard enterprise-architecture techniques – such as the methods and tactics outlined in TOGAF Phases B-D – to review the resultant architecture portrayed in the Archimate model(s), and make any recommendations for changes to the business-model itself.

Use standard project/architecture techniques – such as the methods and governance outlined in TOGAF Phases E-G – to define and monitor change-projects to implement the agreed business-model.

Still plodding away on ideas for a systematic process to translate a business-model in Business Model Canvas down into real-world architecture and implementation. (This links up with quite a few previous posts, such as ‘More on business-models‘, ‘Enterprise-architecture – let’s keep it simple‘ and ‘Is Archimate too IT-centric for enterprise-architecture?‘)

[Note: this is a work-in-progress post, not a finished piece - I really do need discussion on this one!]

What’s come up this time is the usual struggle with the so-called ‘architectural layers’ in common EA frameworks such as TOGAF and Archimate:

• Business
• Applications (in Archimate) or Information Systems (in TOGAF)
• Infrastructure

The problem is that, for me, these are ridiculously incomplete, and lead directly to IT-centrism – where IT is deemed to be the sole centre and basis for everything. That IT-centrism what creates most of the much-lamented ‘business/IT-divide’.

The corollary is that, because IT is placed as the centre for everything, and applications only run on IT, everything else has to be lumped into ‘business-architecture’, because it’s the only place it can go. Hence in TOGAF, for example, high-level business-strategy is bundled together with mid-level process and detail-level manual work-instruction, without any kind of distinctions between them, solely because it’s ‘not-IT’. And technology and infrastructure that isn’t computer-based – lorries, fork-lift trucks, assembly-lines, plumbing and wiring and even the buildings within which everything operates – don’t even get a mention anywhere.

This brings serious problems even in IT-specific architectures: for example, how can we usefully describe the overall architecture of a data-centre without mentioning power-supply or cooling or access-pathways? What’s the point of arguing about instant-on virtualization for data-servers if it takes a minimum of six months to construct the building that houses them? How do we describe disaster-recovery processes for when the IT is out of action, when the only metamodels available to us can only describe IT? To anyone doing real enterprise-scope architecture in the real-world, the myopic inanity of IT-centrism gets really frustrating after a while…

Hence why I’ve been ranting and raging so much about the limitations of TOGAF and the like over the past few years. It’s not because I’m ‘anti-IT’ – as some people have dismissed me – but because I’m trying to get things to work in the real world. A messy, chaotic, uncertain world in which IT is often unreliable at best, irrelevant at worst, and which, for the most part, is not centred on IT. Sigh…

So, in short, the conventional concepts of so-called ‘business-architecture’ are an unusable mess, and the ‘application’ and ‘infrastructure’ so-called ‘layers’ are too narrow in scope to make practical sense for anything other than the most IT-centric of IT-architectures. Hence, also in short, not so much useless as probably worse-than-useless for most real-world purposes.

Which means that we need to start again. Properly.

But from where? Using what as the layers?

(Or do we even need layers at all? Is even the idea of ‘layers’ misleading?)

There’s the Zachman layers, of course: Contextual, Conceptual, Physical, Logical, Implementation, Operations. That does make practical sense as a description of the process of change, but perhaps not so much about the architecture itself – the interrelated, interconnected structure of that which is in use.

What about structural-decomposition – from abstract to detail? Well, yes, that’s useful, certainly, but it doesn’t really tell us much more than Zachman does, and doesn’t help us to differentiate between different kinds of ‘thing’ – the distinctions that come up, if somewhat erratically, in Zachman’s columns of What, How, Where, Who, When and Why.

The ‘Why’, though, does lead to another suggestion: Simon Sinek’s principle of ‘start with Why’, and its layering of Why, How and What.

Because if we start with Why, and tweak the ‘What’ slightly to ‘With What’, we end up with an almost exact match to the Archimate / TOGAF layering – but this time a layering that is not IT-centric. And which also lines up with key parts of the Business Model Canvas:

• Why? – about the choices and Value Propositions that drive ‘the business of the business’
• How? – about IT-applications, ‘manual’-processes and any other Key Activities that enact those choices and needs
• With What? – about any machines, equipment, buildings and other infrastructures and Key Resources upon which or through which those activities take place

At first glance this has some parallels to the long-established CapGemini ‘Integrated Architecture Framework‘ [IAF]:

(I have a vague recollection that there’s at least one more EA framework that uses a similar Why / How / With-What structure, but right now I can’t remember whose it is… – my apologies to that person, anyway.)

But if we look more closely at those layers in IAF, it’s clear that they’re just a re-labelling of Zachman layers, with the old TOGAF-style layers sideways-on, and deeper ‘cross-cutting themes’ such as security and governance further behind. (And actually that’s quite a good way to put it – which we’ll come back to in a moment.)

The point here is that if we use that Sinek-style categorisation of Why, How and With-What, we can cover just about anything that’s needed in the architecture: it doesn’t assume that the end-point is only about IT. And it still lines up well to Archimate: hence business-information (linked to Why) is represented in Archimate as a Business Object, its usage in processes (linked to How) is a Data Object, and its physical form (as a With What) is a Representation. Archimate doesn’t as yet have any entity to represent generic ‘physical Thing’ or ‘thing that flows through processes’ – such as we’d need to represent a parcel in a logistics context, for example – but the Why / How / With-What structure makes it easy to understand that Representation, Data Object and Business Object are just IT-oriented specialisations (in the UML sense) of each of the respective generic entities. It works.

But should we use layers at all – especially scope-defining layers such as ‘business’, ‘application’ and ‘infrastructure’? In a sense, the IAF suggests not – any fixed notion of ‘layers’ is misleading. A better way to describe is to say that the ‘layers’ are merely areas of emphasis of attention: we separate those areas in order to ‘black-box’ the internals of an area of scope so as to focus our attention on the interfaces between those areas of attention. The IAF shows a very good way to visualise this, with sets of viewpoints that are in effect orthogonal to each other. The only problem there with the IAF is that, yet again, it constrains the overall scope to IT alone – which renders it too limited for whole-enterprise architecture. If we imagine that, rather than that catch-all column labelled ‘Business’, we could have as many columns as we need – and as many ‘backplanes’ that we might need, equivalent to the existing ‘Security’ and ‘Governance’ but covering all values in context for the enterprise – then something like IAF would make good sense.

I would suggest, though, that that simple categorisation would be a good place to start:

• Why – ‘business’
• How – ‘applications’
• With What - ‘infrastructure’

Use each of these not-quite-layers as a viewpoint for focus into the overall enterprise context, and use an adapted version of Archimate or an equivalent to model both within those ‘areas of interest’ and to explore the connections between them.

Okay, that’s it for now: over to you, if you would?

Back on business-models again, this time with more of an emphasis on the implications for enterprise-architecture, rather than solely for business-architecture.

The initial challenge posed by my colleague was to describe my own business model, by which he meant “how do I make money?”. But there’s a bit more to it than that, which is what I’d like to explore here. It’ll also provide a means to link together some of what’s been covered in other recent posts.

So, to start with, here’s somewhat simplified version of ‘how I make money’, as laid out on Alex Osterwalder‘s BMTBox app implementation of his Business Model Canvas:

I’ve interpreted Value Proposition here as ‘offer’ – the products and services that I offer to the various Customer Segments. As can be seen, there are quite a few distinct offer-types, for quite a few distinct Customer Segments – and this is fairly typical for any independent consultant. (The ‘Online diagnostics’ offer is currently under (re)development, including a rewrite of my SEMPER diagnostic/intervention toolset, for more widespread availability, and a toolset for the Enterprise Canvas model – but the other offer-types I do already deliver in some form or other every day.)

I won’t spell it all out – the typeface in the diagrams is somewhat small, but it’s readable enough. The main point from this diagram is the same as we’ve so often hit with classic Zachman and the like: it’s just a bunch of boxes, each with a bunch of labels inside, and it’s not actually much use for anything. It’s a pretty picture, a nice taxonomy, but we can’t build a story of the business – a story of how it ‘makes money’ and so on – from this alone. The two-letter codes inside [..] and <..> do a give a few hints that some things might be connected in some way with other things, but that’s about it – and the codes are a bit of a kludge anyway, to be honest.

As most architects would agree, the ‘boxes’ alone are not enough. To make sense of the story, we need to see the connections between the items. This is a set of connections for the ‘Book’ offer (i.e. write and sell books), with connection-lines patched in on top of the BMTBox image of the Canvas via a simple graphics-program:

And the same kind of connection-set for the ‘Consult’ offer:

Two more points that we can see from this. One is the different layerings of ‘business model’: although this all fits under the general heading of ‘what I do and how I make money’, there are also six distinct ‘business models’ here – one for each offer-type – that have different impacts on all the other parts of the Canvas. They’re related, obviously – which is why they also link together under the same overall umbrella – yet they call on different activities, resources and partnerships, and so on. So a ‘business model’ can also be quite dynamic, with different components emphasised at different times and in different contexts: for this kind of business at least, there is no ‘the business-model’.

The other point is that we need to know a lot more about what’s in the ‘boxes’ and the ‘lines’, because that deeper information about the activities, the flows, and so on will have a lot of impact on decisions as to whether any specific part of this overall ‘business model’ is viable. The current version of the BMTBox app does allow us to record some basic numbers for Customer Segments, Revenue Streams and Cost Structure, and make some rudimentary financial-type calculations for each – but that’s nowhere near enough information to describe the full story of what would need to happen to make it work in real-world practice. ‘The numbers’ may indeed be enough for the core business-architecture – but that’s precisely why and where we see the limitations of business-architecture on its own, and why we need an enterprise-architecture that would link it to structural aspects of all the other domains. In other words, all the other ‘architectures’ within the business context.

The Business Model Canvas is very useful for what it does, within a business-architecture: no doubt about that at all. Yet on its own, it is not enough to describe a functioning business-model – how it would actually work in practice. Sometimes – perhaps quite often – it’s the detail that kills the viability of an otherwise good-looking business-model: and we can’t know that detail unless we are able to do a deep-dive into selected areas of the model’s implementation. That’s where Archimate, UML, BPMN and all those other modelling-techniques come into the picture; and also where Enterprise Canvas fits in, too, as a structured intermediate between the coarse-grained abstractions of the Business Model Canvas and the fine-grained detail of BPMN and the like. More on that in another post that’s coming soon, anyway.

The final point here, and perhaps the most important, is that in terms of enterprise-architecture, ‘how I make money’ is not a business-model in any meaningful sense of the term. It confuses means with ends: ‘making money’ is a ‘How’, not a Why’. (Even within a possession-economy, ‘making money’ is always an intermediate step towards something else, and in most cases trying to use it as a ‘Why’ makes no sense other than as a form of addiction – 12-Step Programme for Money-Obsessives Anonymous, anyone? ) To find the the ‘Why’ that we need for this, we have to move to a level ‘above’ the Business Model Canvas and business-architecture – which, again, is where enterprise-architecture comes into the picture.

If we look back at the immediately-previous post, ‘Do enterprise-architects design the enterprise?‘, the ‘Why’ that we need as the real driver for the business-model – and to which everything in the business-model must demonstrably align – is the ‘vision’ and concomitant values of the broader shared-enterprise. That vision – whatever it might be – is, in a very literal sense, the motive power behind the entire shared-enterprise. It’s also the common theme through which each player connects with all the others in that shared-enterprise. In my own case, as I described in the earlier post on this, what excites me – what I’m passionate about – is finding ways in which things can work together more effectively, in ways that work well for everyone. A business-related term for that shared-enterprise is ‘enterprise-architecture’ – hence that’s what I do, the label (or one of the labels) that I use for my work and my business. That’s the enterprise to which I personally am committed – and hence to which everything in my business would align.

As in the earlier post, it’s true that I need to ‘make money’ in order to work within that business space. But ‘making money’ is not the reason that I do the work – and in fact if ever I allow it to become ‘the reason why I work’, that’s the moment at which I would have allowed myself to disconnect from the shared-enterprise that underpins everything here, and hence also the moment at which my own business would start to fail. And that’s what we see so often around us: businesses that forget their ‘Why’, the deeper reason why they’re in business, will often shoot upward for a while as they grasp for the short-term gains of ‘grab the money and run’ – but it’s only a shining, delusory prelude to an inevitable, painful crash-and-burn.

Making sure that enterprises can fly, and continue to fly, is to me what enterprise-architecture is all about. That’s my ‘business-model’. What’s yours?

How do we use Alex Osterwalder‘s Business Model Canvas for the business of a not-for-profit organisation? Or, for that matter, the non-monetary aspects of a commercial organisation?

Over the past while have been asked by quite a few folks – Shawn Callahan, Alan Rodriguez, Robert Phipps and others – about how to use the Business Model Canvas in an NGO, government or other non-profit context. (Shawn’s client was a well-known international charity; I understand that Alan does architecture work for an independent but government-sponsored energy-trading exchange or something similar; Robert does data-architecture and other architecture-work in a government department in the social-services sector.) Hence seems that this might be a useful excuse to do a brief how-to, also linking Business Model Canvas to enterprise-architectures and business-process management via the Enterprise Canvas model.

‘Brief’ will likely be a relative term here, so continue after the break…

Read more…

Who is the customer, in a business model?

That’s perhaps not as simple as it sounds. I’ve been working on a long how-to post on using Business Model Canvas in a non-profit context, and realised that even in a commercial context it can get very messy once we move outside of the relatively simple ‘world’ that the Canvas usually describes.

Business Model Canvas is great for describing a business-architecture. Its structure of Value-Propositions for distinct Customer Segments works very well at the abstract layer. Separation of Customer Segments also allows us to describe a complex multiway business-model, such as in the classic three-way newspaper case: content-providers paid to produce valued content; content-consumers who consume the content, often at no direct cost; and advertisers, who pay to have their messages embedded in the content.

Yet once we move from business-architecture to enterprise-architecture – the overview of the implementation and execution of that business-model – complexities can emerge that could render the business-model non-viable, or at least introduce new ‘gotchas’ that have to be resolved. To make it work, we need to ensure a good balance between business-architecture and enterprise-architecture. One clear example of this is that the meaning of ‘customer’ may be quite simple in a business-architecture, but can suddenly become a great deal more complex within the enterprise-architecture.

In the case typically described on Business Model Canvas, each Customer Segment represents a single type of ‘customer’: such as ‘content-provider’, ‘content-consumer’ and ‘advertiser’, in the newspaper business-model. We assume a single supply-chain for each of those customer-types. And yes, that often is what happens in the simple case of ‘consumer in the marketplace’ (a business-to-consumer or ‘B2C’ model).

But in a typical enterprise-type ‘B2B’ (business-to-business) model, that single ‘customer’ itself splits into multiple sub-customers. The person who buys, the person who deals with the order, the person who receives the item or service, the person who uses it, the person who verifies that it was ‘fit for purpose’, and the person who pays for it – they can all be different people, with different job-titles, all with different roles, responsibilities and authority, and in different parts of the client-organisation. To make our ‘simple’ business-model work, we need to be able to identify and describe all of these sub-models, make sure that each one of them will work properly, and link all of them together into a unified whole.

So whilst it’s valuable to sketch out the business-model on Business Model Canvas, this is where transferring that model onto Enterprise Canvas can help a lot. Enterprise Canvas draws clear distinctions between three types of flows: that which happens before, during and after the ‘main transaction’ of a business-model, such as its delivery of a product or service.

For example, most of the interactions with the buyer and the order-department take place before the main-transaction.

Interactions with the receiver and the user take place during the main-transaction – in effect define the main-transaction.

Interactions with the quality-check and payer (accounts-receivable) take place after the main-transaction.

This applies symmetrically both to ‘customer-side’ (for which we are ‘supplier’) and to ‘supplier-side’ (for which we are ‘customer’).

All of these are ‘customer-segments’ within the one simple Customer Segment on Business Model Canvas. Implementation and execution of the business-model means that all of these need to link together into a unified whole.

To do this, we’re likely to need distinct functions or capabilities within our enterprise-architecture to manage each of these flows and sub-transactions.

This gives us a structure from which to translate from Business Model Canvas.

We can also view that integration in terms of transitions over time. This is where another aspect of Enterprise Canvas – its linkage to the Five Element market-sequence or market-cycle – can help to clarify what needs to happen, when, and in what order, so as to make the business-model work.

The left-hand side on the diagram above is inward-facing, what we do to deliver our own value-proposition; the right-hand side is outward-facing, dealing with those ‘before-’, ‘during-’ and ‘after’-transactions with others. In an enterprise context, each node in the zigzag sequence often reflects a change of sub-customer, and hence a different type of ‘business model’ within the overall business-model. Each ‘customer’ is typically dealing with two or more ‘providers’ within our organisation, in order to keep the overall flow moving; and each ‘provider’ is typically dealing with two or more ‘customer’-types, too. Quite a juggling-act to make all of that link together: but that’s what has to happen, to make that business-model work in the real world.

A few more ideas to play with, anyway.

Over to you: comments/suggestions, anyone?