IT-EA Business Model Canvas
The Business Model Canvas applied to EA itself
Let’s start with some motivation for this blog.
Last year, digitalisation at Ingka (the biggest IKEA franchisee) also led to changes in the organizational setup. Surprisingly for me the (IT-)Enterprise Architects team was closed.
Surprisingly according at least two points:
- I thought that any organisational change on a company level is an area where the Enterprise Architects should be an active part of the change but have at least been consulted
- Why the (IT-)Enterprise Architects team was seen as an organizational unit with no existence in the future setup?
Management decisions are not always explainable without some deeper insights and knowing the context I don’t have in this specific case. Could be that the (IT-)EA-team wasn’t seen as effective and efficient enough, could be that one of the famous consultancy companies has driven the management into a direction to support other ways of working. Or whatever.
All that isn’t my biggest concern as I cannot and want not change this decision.
But there is an important point:
I work as an (IT-)Enterprise Architect. I like the thinking in big structures, in strategies, in capabilities, in roadmaps, in modern technologies. Could it be the case that I have missed some development on the market that the (IT-)Enterprise Architecture is redundant meanwhile? As a discipline? As a job? Or just the ways how to organize their work?
It’s time to reflect. And isn’t there a better way than to apply the Enterprise Architecture methods to the EA as a discipline itself and derive some understanding?
Let’s start with the answering of some formal questions:
- What is the Business model of EA?
- What are the Value Propositions of EA?
In a second step the Enterprise Architects relevance according the Business Model and Value Proposition could be discussed.
As proven methods let’s select the Business Model Canvas and the Value Proposition Canvas (coming in an extra blog)
The Business Model Canvas
The Business Model Canvas is essentially a template to describe business models based on nine building blocks:
See Wikipedia - Business Model Canvas for further reading and explainations.
Normally the BMC is applied to firms and companies but there are some different attempts to use it for other organisational units so as I do now.
(1) What are the typical Customer Segments of Enterprise Architecture?
One of the characteristics of Architecture in general and in EA is the fact that all value from it isn’t seen directly. In the companies selling services and products the EA is mostly invisible.
This means that the ‘customers’ are the decision makers in the company itself.
So a quick answer could be: All stakeholders, having a responsibility or even accountability in business- and process development in medium to large size companies with a complex IT landscape.
But let’s have a closer look. There are two aspects to discuss:
What is the target group of EA? Who will pay for EA?
That’s not the same. Even the service of EA could be well defined, in the real world the ‘customer’ is selecting the service and service provider and not vice versa.
In my experiences the target groups are coming from mainly three areas:
- The ‘business’ (process developers and sponsors from business capability areas/domains)
- The Digital- and IT-management inclusive steering commitees
- The IT Supply Organisations inclusive Product and Platform Owners
The sponsoring is coming from the IT organization as a default pattern in my experience.
There are many speaking partners daily e.g. Business Controlling, Software Architects etc, but I see them more as partners (see (8))
(2) What is the Value Proposition of Enterprise Architecture?
There is a lot of research about the benefits of Enterprise Architecture
see e.g. The need for Enterprise Architecture
|Document knowledge on the enterprise||Improve resource quality|
|Identify resource dependencies||Improve return on investments|
|Identify resource synergies||Improve situational awareness|
|Identify suboptimal resource use||Improve solution development|
|Improve alignment with partners||Improve stability|
|Improve change management||Increase agility|
|Improve compliance||Increase economies of scale|
|Improve customer satisfaction||Increase efficiency|
|Improve decision-making||Increase growth|
|Improve employee satisfaction||Increase innovation|
|Improve enterprise-wide goal attainment||Increase market share|
|Improve information quality||Increase resource flexibility|
|Improve investment management||Increase resource reuse|
|Improve measurement||Increase resource standardization|
|Improve organizational alignment||Increase revenue|
|Improve organizational collaboration||Provide a high-level overview|
|Improve organizational communication||Provide directions for improvement|
|Improve resource alignment||Provide standards|
|Improve resource consolidation||Reduce costs|
|Improve resource integration||Reduce complexity|
It’s seen there is a lot of expectations in such a long collection. It has to be noted that all these are valid points but the Enterprise Architects aren’t realizing it directly, it’s more an enabling function. It’s the management and decision makers take the decisions.
But there is no doubt, that the EA has his value.
From the Business Model Canvas perspective the different deliveries and use cases of EA implies three Value Propositions:
- Enable Change, Growth and Speed
- Ensure Compliance
- Reduce Complexity
Let’s discuss this later on.
(3) What are the Channels Enterprise Architecture is delivering?
Typical channels Enterprise Architects are using:
- Design and Decision Boards on executive level
- Steering commitees for the bigger initiatives and programs
- Regular Report Publication (Audits, Reviews, Health checks)
- Architecture Repositories access
- Internal and external Publications
- Slack and other Chat Channels
(4) What are the Customer Relationships of Enterprise Architecture?
In an selling organisation all is about to get new customers, hold and let grow them. How to treat them in a best way to achieve the business goals?
For the companies decision makers a stakeholder management is a key for success. Management is inviting EA only if they are beneficial for them. It is on the EA organisation to make themseves relevant.
The target groups in the IT organisation will accept all the EA principles and patterns only if they are aligned as a result of an equal partnership.
Nobody likes know-it-alls.
In conclusion the relevant Customer Relationships are:
- Advisory on Strategy Execution
- Internal High Skilled Consultancy
(5) What Revenue Stream for the Enterprise Architecture is applicable?
Like the Risk mitigations the revenue isn’t directly but indirectly by
- Saving Cost through efficiency
- Saving Costs through changed business model
- Avoiding Compliance Losts and Penalties
In practise I haven’t seen EA as an own profit centre.
(6) What are the Enterprise Architectures Key Resources
The strategic assets make EA valuable for company decision makers are mainly
- Competencies in Architecture Methods and Processes
- Experience in the Enterprise Business
- Problem Solving Skills
- EA Tools and Repositories, inclusive Principles and Patterns
- Portfolio Structuring and Planning tools and skills
(7) What are the Enterprise Architectures Key Activities
The daily life of the Enterprise Architects is mostly around these key activities
- Conceptual work on Deliveries
- Inhouse Consulting
- Participation in Initiatives and Steering Commitees
- Audits, Reviews, Health Checks, Architecture Assessments
- Own Architecture Consulting Initiatives, e.g. Hackathons, Boods etc.
(8) What are the Key partners of Enterprise Architects?
Key partners are normally used if there is a need for services, the organisation (in our case the EA) cannot deliver for different reasons. Could be EA isn’t able to deliver such services or isn’t willing.
To be successful in their own deliveries EA needs to been updated by mostly all inhouse IT Organisations like Developers and Solution Architects, Data Engineers, Product owners etc.
In addition the EA must have a market overview and therefore stable relationships to external competneces like Research Companies is essential.
The most relevant partners are
- Solution - and IT-Architects
- Business Analysts
- Product owners
- External Research and Consultancy Companies
(9) What is the Cost Structure of Enterprise Architects?
As the charakteristics of the Architecture in general and EA in specific, they aren’t delivering direct results, the cost allocation to business initiatives is often done via normal Full Time Employee (FTE) costs.
Nevertheless to work efficient an own cost centre structure with an own budget is common sense in bigger organisations.
This means that the most applicable costs coming from
- FTE salaries
- Architecture Initiatives costs
- Travel, Education and Training
- Licenses for EA tools
The Final Model
The resulting Business Model Canvas applied to Enterprise Architecture could look like finally
Originally there was my question about the relevance of Enterprise Architecture and Enterprise Architects.
Some of my conclusions:
- Enterprise Architecture as a discipline is relevant as there is at any way an Architecture implemented in the Enterprise. It’s just a question of the management to control it or not and with what of effort
- The relevance of having Enterprise Architects is going in the same direction. Important is to steer the Enterprise Architecture. Enterprise Architects should have the competence and the leadership behaviour to fill the job with life.
- To have an Enterprise Architecture Team depends of course on different influencing factors. For bigger companies I believe it is a must to invest in a separate organization to give them a chance to execute Architecture initiatives.
There are some unanswered questions still left if I look in some newer development in IT business like DevOps. Digital Transformation is a signal for a disruption in the whole economy.
I think the Enterprise Architects are excellent capable to been part of the steering of these new processes.