In the article titled Understanding Enterprise Business Architecture, the basic concepts and purpose of the Enterprise Business Architecture (EBA) were discussed. This second article continues the discussion and provides an overview of how to use the EBA. Just remember, the EBA is a model built with rigor and discipline, the same that is applied in the fields of engineering and construction. It is a formal model representing the business as a manifestation the strategy. An Enterprise Business Architecture defines the enterprise value streams and their relationships to all external entities and other enterprise value streams and the events that trigger instantiation. It is a definition of what the enterprise must produce to satisfy its customers, compete in a market, deal with its suppliers, sustain operations and care for its employees. It is composed of architectures, workflows and events.1 A value stream is an end-to-end collection of activities that creates a result for a “customer,” who may be the ultimate customer or an internal “end user” of the “value stream.” The value stream has a clear goal: to satisfy or to delight the customer.2
First, we will need to define a fictitious company so that we may describe in an oversimplified manner, how to use the EBA. Let us assume that we have a “build to order” manufacturing company. This enterprise produces a modest variety of standard products when ordered by their customers. In this example, the enterprise has sixteen value streams, which are aggregated into four groups. The Customer Centric Aggregate contains four value streams, Prospect-to-Customer, Order-to-Cash, Manufacturing-to-Distribution and Request-to-Service; the Strategic Visioning Aggregate contains five value streams, Insight-to-Strategy, Vision-to-eBusiness Enterprise, Concept-to-Development, Initiative-to-Results and Relationship-to-Partnership; the Business Enabling Aggregate contains five value streams, Forecast-to-Plan, Requisition-to-Payables, Resource Availability-to-Consumption, Acquisition-to-Obsolescence, and Financial Close-to-Reporting; and the People Caring Aggregate contains two value streams, Recruitment-to-Retirement and Awareness-to-Prevention.
One might think that the value streams and aggregations are common to all “build to order” manufactures, but that may not always hold true. This EBA was chosen for its own unique reasons and purposes. Perhaps these value streams fit a pattern for some manufacturing companies, but this pattern is not absolute. It does not imply that all “build to order” companies use the very same model, but it may imply some similarities across this industry segment.
Let us say, you want to better integrate the Order-to-Cash value stream (sometimes called the order fulfillment process), the Manufacturing-to-Distribution value stream (sometimes called the manufacturing process) and the Requisition-to-Payables value stream (sometimes called the procurement process). Your new (or “to be”) strategic objectives may require the replenishment of “hot selling” products to get fulfilled within three days of order placement and that you reduce your raw material inventory to “just in time” levels.
Viewed functionally and separately, the objectives of the ordering, manufacturing and purchasing of raw materials functions may appear to conflict. If these functions are optimized within their respective functional organizations without consideration of the other enterprise organizations and departments, results at the enterprise level may not be predictable! You are at risk for introducing unintentional problems in other functional organizations.
If you implement a new and independent “just in time” functional change, problems may pop up all over the enterprise. Viewing raw material management in functional isolation and keeping the raw material inventory at critically low levels may create scheduling problems on the production line, adversely affecting manufacturing. These scheduling problems may cause extensive delays in shipping completed customer orders. These delays may upset customer relationships and cause customers to buy from competitors, causing a loss of orders. And then these kinds of problems just seem to spread all over the enterprise. You may find yourself jumping from on one crisis to another with no solution in sight.
Viewed through integrated value steams, all business processes appear to coexist and through diligent management and application of statistical data, can co-evolve into a more effective, efficient and predictable enterprise level result or outcome. This is at the heart of “systems thinking”3, viewing the enterprise as a whole, and not as a collection of loosely associated functional parts. An EBA with well understood value streams and accurate metrics and measures from the strategy enables you to do this kind of analysis. The EBA illustrates all of the “touch points” with other processes and activities, providing you with the insight necessary to truly evaluate and predict the impact on the enterprise, and enabling you to improve enterprise performance.
References:
1. Ralph Whittle and Conrad B. Mryick, Enterprise Business Architecture: The Formal Link between Strategy and Results (CRC Press 2004), 31.
2. James Martin, The Great Transition: Using the Seven Disciplines of Enterprise Engineering to Align People, Technology, and Strategy (American Management Association 1995), 104.
3. Peter M. Senge, The Fifth Discipline: The Art & Practice of The Learning Organization (Doubleday 1990).
