Wednesday, September 16, 2020

Harness Transformative Changes through Business Architecture Lens

Business architecture becomes a lens through which it is possible to understand multifaceted business transformation.

The business complexity and disruptive changes have increased significantly due to “VUCA” characteristics. Nowadays both the digital world and the physical one are indispensable parts of the business. The purpose of digital transformation is to achieve people-centricity, unlock performance, and improve organizational maturity. 

Thus, business architecture becomes a lens through which it is possible to understand multifaceted business relationships, optimize organizational functions and structures, and harness transformative changes through balancing generalization, specialization, and classification in the right way.

Generalization: Generalization is about abstraction and reusability from an architecture lens. Processes underpin business capability. Usually, the business capability is at a higher level of the architecture and typically is easier to get consensus on. Mapping capabilities to other architectural entities such as components, services, systems, resources, etc, is what mapping is really concerned with. And then, figure out formulas for determining business capability maturity, importance, and performance in order to make a generalization.

The multidimensional digital effects provide impressive advantages in terms of the speed of capability development and products/services deliveries, as well as eliminating wastes, cost reduction, reusability, and developing new business models. etc. Re-usability will bring in required simplicity at a company level. By leveraging enterprise architecture as an effective tool, the sooner the reusability at the enterprise level is leveraged, the sooner the organization will be able to be both global and locally flexible, though it’s important to set certain criteria to reuse without causing too many side effects. Re-usability and simplicity complement each other to certain levels of granularity within the organization.

Specialization: Specialization is about creating business cases for tailoring different circumstances or providing customized solutions to meet customers’specific needs. Because the world is increasingly complex and fast-changing the need for specialization is likely to increase. However, greater specialization shouldn’t lead to silo or create gaps between functions. It’s important to apply architecture as a communication tool to facilitate digital dialogues, enforce cross-functional collaboration, and consequent customization. Customer-intimate organizations offer the “best solution” and are all about customization, retaining customers, and creating business value from the long term perspective.

The digital era upon us is the age of options and customization, building a customer-centric organization is at the top business executives’ agenda in any forward-looking organization. The trick is that some businesses value specialization too much that they don't set up systems to consistently facilitate cross-functional communication and cross-disciplinary management practices, and generate systems with disparate functions. From a management innovation perspective, creating the digital paradigm means how to refocus on substance; from the classic cookie cutting management approach to differentiation and customization; from inside-out operation driven to outside-in people-centric.

Classification: Classification is about categorization and portfolio management to improve effectiveness, transparency, and resource efficiency. Business Architecture is an important tool to bring up a long-term standpoint, clarify the direction of the company, and a high level of consensus which implies that an acceptable, transparent, and credible basis for evaluating, selecting, and resourcing projects exists or can be constructed. The goal is to ensure the strategic initiative is a higher priority, then you need to use that to set policies and governance improvements as well as project portfolio management best or next practices.

If projects are the principal vehicles being used to deliver the strategy, classification helps the management highlight the real value of Project Portfolio Management (PPM) that can support strategic planning and execution. Some elements that may help to identify what factors could result in a short-term revenue-generating project being set aside in favor of another considered more strategic, or vice versa. It's also important to have enough visibility about the project execution layer and how the projects and programs are performing in order to monitor progress in a structural way and make the right decisions to ensure that the strategy potential is achieved solidly.

Many companies may be in business for many years but have not matured their management disciplines. Surviving and thriving in today’s business dynamic requires cross-functional collaboration, inter-relational processes to reduce business friction and deal with conflicts or disruptions that arise, and balance generalization, specialization, and classification effectively to shape a people-centric organization from functioning to delight.


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