Last day of blogging from Building Business Capability and the first topic is modern business architecture with Gagan Saxena, VP of consulting at Decision Management Solutions, and Andrew Ray of Goldman Sachs. The presentation is focused on a new approach to business architecture to address problems in the legacy approaches – one that connects business at rest to business in motion in a model-driven way.
A perfect architecture would provide an organizing framework that synchronizes
- Business Strategy
- Business Operations
- Business Organization
- Business Systems
- Business Performance
At rest (design) and in motion (operations). And it’s essential that over-complex technical solutions are not developed for problems that could perhaps have been avoided.
Yet business architecture has added more and more techniques and areas of focus, making it more complex, and yet failing to address new areas. They call out two particular areas – knowledge management and performance management – that are both long standing and yet still not well addressed. Nothing is ever removed from the list, overwhelming anyone trying to stay in touch.
Business is changing. In particular, margins and time to respond have shrunk and put real pressure on point to point, static solutions. Each regulation has an impact too, often on many systems. But how to demonstrate compliance?
Instead of coding rules into each system, compliant decision-making can be defined in DMN (Decision Model and Notation) and shared between the systems. But there are many such regulations that overlap so a decision architecture had to be developed to manage this. Yet most business architecture approaches don’t include a decision architecture.
Historically business architecture used was focused on “business at rest”. Documents are developed and published but they are not model-based, making it hard to keep a business architecture “alive” as systems are developed and evolved. Performance monitoring and learning is often dumped as deadlines loom and what is learned is often not fed back well enough.
Instead you want a model-based approach to support business in motion. These models tie directly to implementation, allowing the data captured in motion to be linked to the models and used to improve them. Decision models (DMN), process models (BPMN), data models and models of metrics or performance as a minimum.
To develop this set of models the team used
- Business Model Canvas to define stakeholders and value chains
- Capability map
- Strategy Map
- These led to a Balanced Scorecard to track progress
- And a set of strategic initiatives and projects
- Capabilities were defined and executed to drive
- Business service performance which is fed back into the scorecard
The capabilities defined – around process, data, decisions or events – can be composed into higher level capabilities or patterns. Performance management is built in and the knowledge embodied in these capabilities can trace back to the real-world source. The embodied models can be automated and optimized while supporting agility and rapid, safe change.
The example they used is client onboarding. This SOUNDS simple but it’s really not thanks to regulations (45 KYC regulations for instance), a network of legacy systems, many manual processes and a continual effort to reduce costs. “A house of cards” resulting in excessive time and cost to onboard as customer (thanks in large part to legal negotiation).
Normally the focus would have been on one specific item but the team instead has focused on a more holistic approach designed to address the whole front to back process. Yet an agile approach was essential to show progress while a coherent overall architecture had to be the result. The approach involved:
- Business Model Canvas gave a big picture context of key elements and relationships without a lot of documentation.
- Capability Map identified the capabilities needed across perspectives of strategic monitoring, customer management, process management and infrastructure management.
- Strategy Map showed the dependencies between strategy themes and objectives.
- Balanced Scorecard showed the objectives and metrics for each perspective with targets and deadlines.
- Strategic Initiatives were defined to hit the targets defined for each of these objectives – many initiatives supported several objectives.
- Capabilities are defined that are reused across processes. These are defined using one or more of
- User Stories
- Process Models
- Data Models
- Event Models
- Decision Models
- Showing progress against an agreed strategy has kept leaders engaged and sustained funding. A complete front to back design exists even though it is being delivered incrementally with agile methods.
- The Business Capability model has helped ensure reusable assets are created and has helped focus a large agile program.
- Model driven development has put business people in the driving seat, increasing agility and transparency while reducing time to value.
- BPMN and DMN have been key both in engaging the client/business and in freeing up technology to focus on engineering problems.
- DMN’s ability to trace from executable logic to a logical design to the original regulation allowed for compliance and allowed regulatory/policy knowledge to be automated in decisions.
By the way, my new book on DMN – Real-World Decision Modeling with DMN – is available