Introduction to BASE Enterprise Architecture Framework for

Holistic Strategic Alignment of the Complex Enterprise

Ivka Ivas

Faculty of Electrical Engineering and Computing, University of Zagreb, Croatia

Keywords: Enterprise Architecture, Business Architecture, Business Strategy, Cynefin Framework, Business Capability

Model, Value Streams, Strategic Alignment, Complex Enterprise.

Abstract: There are many enterprise architecture frameworks on the market, but despite being heavily promoted with

promises of their expected benefits, in practice they have not proved to deliver expected value. The main

reason for this is IT-oriented controlled reductionist approach inapplicable for a complex enterprise. In

parallel with IT-oriented enterprise architecture business architecture was developed to support business

strategy. But, as a pure business discipline, business architecture also did not prove to deliver expected value

because, in a complex enterprise with business, which is highly dependent on IT, it is impossible to decouple

business from IT because your business is your IT. This paper will, therefore, introduce the new Business

Architecture-based Strategy-driven Enterprise architecture framework (BASE) for improving holistic

strategic alignment of the complex enterprise by supporting both formulation and implementation of the

enterprise strategy. As foundation of the BASE framework, which will be further explored in future work,

this paper will present a business architecture-based enterprise architecture model for managing the complex

enterprise, based on business architecture also providing business-adjusted IT insights, and holistic initiative

footprinting methodology which will illustrate how to leverage business architecture and proposed EA model

to properly scope strategic initiatives already early in the process.

1 INTRODUCTION

According to Conant-Ashby Theorem, "every good

regulator of a system must contain a model of that

system" (Conant et al., 1970), meaning that our

ability to manage situation or organisation depends

directly on how good our model of that situation or

organisation is. We are, therefore, not able to manage

what we do not understand, except by luck

(Hoverstadt et al., 2013). For small companies, this

has never been an issue because it was possible for an

individual, usually the owner or head of organisation,

to be confident enough to say that he really

understands how his business works. For many

organisations this has changed. Over the years they

grew and merged, becoming more and more complex,

increasing complexity in people, processes, and IT.

So, it became extremely problematic for business

leaders to have a proper understandable model of

their business on top of all underlying business and

IT complexity. And, as mentioned before, without a

proper model we can rely only on luck. In big

organisations nowadays this often means making

business and strategic decisions based just on gut

feeling without properly understanding the scope and

the impact.

The hypothesis of this paper is that only enterprise

architecture (EA) can provide the proper model of the

complex enterprise to support the enterprise both in

formulation and implementation of the new strategies

and that EA with that model can help better estimate

and execute strategic initiatives.

Accordingly, and in follow-up to the findings and

recommendations for the future work of EA research

from the 2018 study "Business strategy modelling

based on enterprise architecture: A state of the art

review" (Kitsios and Kamariotou) the objective of

this paper is to answer the following research

questions:

RQ1. "What support can EA provide within business

strategy, and on what conception of business

architecture is this based?" (Kitsios and

Kamariotou, 2018).

RQ2. What kind of model should enterprise

architecture provide to support business strategy

in the complex enterprise?

RQ3. In the complex enterprise, how can enterprise

architecture provide decision makers with better

Ivas, I.

Introduction to BASE Enterprise Architecture Framework for Holistic Strategic Alignment of the Complex Enterprise.

DOI: 10.5220/0011853200003467

In Proceedings of the 25th International Conference on Enterprise Information Systems (ICEIS 2023) - Volume 2, pages 575-588

ISBN: 978-989-758-648-4; ISSN: 2184-4992

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

575

early scoping of strategic initiatives to know what

to expect later in the implementation, get better

estimates, and help avoid failed initiatives by

validating strategic direction already early in the

process?

This paper will be used to give introduction to

Business Architecture-based Strategy-driven

Enterprise architecture framework (BASE) with first

two chapters explaining the concept and the

background for the framework. As a foundation of the

BASE framework, which will be further explored in

future work, the paper will present a business

architecture-based EA model for dealing with the

complex enterprise. The paper will than propose

holistic initiative footprinting methodology for early

scoping of strategic initiatives. Strategic initiatives

are initiatives through which an organisation

translates into action its strategic direction (plans

which need to be executed to progress towards

companies’ vision). The proposed methodology will

illustrate how to leverage business architecture and

the proposed EA model to enable early discovery of

E2E dependencies of strategic initiatives and show

how a proper early scoping can provide better

estimates on effort, timeline, and money, and help to

know what we can expect later in the implementation.

And help validate strategic direction already early in

the process to avoid failed initiatives.

2 ENTERPRISE ARCHITECTURE

Enterprise architecture with enterprise architecture

frameworks (EAF) aroused in 80s and 90s to remedy

chaotic situation caused by unplanned approach to

information technology (IT) implementations on

enterprise level (Kotusev, 2016). Although being

upgraded in the later versions with gradually

introducing "start with the business" approach, the

foundation of the most EAFs are still systems and

technology with focus on control of the enterprise IT.

This implies a reductionist approach to the enterprise,

treating it as a static enterprise-level IT system,

whereas EAFs tend to break the enterprise down into

its component parts, applying the theory that the parts

must be understood to improve the whole (Bloomberg,

2014). According to McDowall (2019) this approach

is not well-suited for the enterprise architecture in

modern, agile organizations and the main reason why

traditional EAFs do not deliver practical value

(Kotusev,2021). Instead, McDowall (2019) proposes

approaching an enterprise as a complex adaptive

system (CAS). CAS is a system without a central

management that consists of multiple interconnected

agents whose mutual interaction causes emergent

system behaviour as adjustments to its environment.

Examples of such systems are flock of birds or ant

colony. Behaviour of CAS cannot be explained by

understanding its components, but only by

understanding system as a whole, i.e., holistically.

Unlike centralised, controlled and reductionist system

approach of traditional EAFs, McDowall´s EA, with

enterprise treated as a CAS, better fits to complex,

modern, agile organizations because it focuses on

business needs and supporting system development

by setting clear goals and leaving implementation

details to the team. Kotusev (2018) proposes a similar

approach comparing EA practice to city planning.

Both organisations and cities cannot be perfectly

planned in every detail, both are evolving without

definite final state and are limited by their current

structures.

However, a CAS system is defined as a system

without central management which is the premise that

cannot apply to a modern enterprise. This is because

success or failure of a modern enterprise cannot

depend solely on how well it fits or not to its

environment because it also highly depends on its

central strategic management. Therefore, along with

the premise of the need for adaptability, holistic

optimization, and goal-oriented management that fits

to the CAS approach, this paper also aims to

emphasize the importance of the centralized strategic

management as the main anchor of the complex

enterprise execution. Next chapter will elaborate on

the notion complex enterprise which fits to this

concept.

2.1 Complex Enterprise

In 1999 Dave Snowden created Cynefin framework

for aiding leaders in decision making. Framework

was initially developed in the context of knowledge

management and organisational strategy. Cynefin

offers decision makers "sense of place" from which

they can assess their perceptions, understand the

behaviour, and properly respond applying techniques

applicable for the situational decision-making

domain they are in. Cynefin is based on the notion

that "humans use patterns to establish order in the

world and make sense of things in complex situations"

(O'Connorand and Lepmets, 2015). Framework

therefore offers five situational domains defined by

cause-and-effect relationships (as shown in figure 1).

Clear and complicated domains are ordered, meaning

that there exists a relationship between cause and

effect which makes it applicable for the reductionist

approach. Clear (simple, obvious in the previous

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versions) domain is domain of best practices with

clear and obvious cause-and-effect relationships.

Complicated domain is domain of experts where

those relationships exist but not obvious and require

analysis. Left part of the framework includes

unordered complex and chaotic domains where a

reductionist approach is not applicable. Complex

domain is the realm of "unknown unknowns" where

right answers do not exist, and cause-and-effect

relationship can only be deducted in retrospect.

Decision model for this domain is probe, sense,

respond, meaning that leaders must act to discover

and gradually develop stable emergent patterns that

can emerge by conducting easy-to-fail experiments.

This is the domain of agile practices.

Figure 1: Cynefin framework (Snowden and Boone, 2007).

In a chaotic domain, without a cause-and-effect

relationship whatsoever, the first task of leaders is to

act urgently to stabilise the situation and then find a

way to move the situation to the complex domain.

The domain in the centre is confusion (called

disorder in the earlier versions). In confusion it is not

clear which domains apply so the situation needs to

be broken down into previous domains and then apply

appropriate decision model for each domain

(Snowden and Boone, 2007).

This paper is written for a complex enterprise,

which is what most big organizations nowadays are.

Enterprise complexity is caused by a variety of

factors. Only in IT increasing complexity is a natural

consequence of the software evolution. By Lehman´s

"Increasing Complexity" law, as software evolves its

complexity naturally increases unless work is done to

prevent and reduce it (Lehman, 1980). And

undertaking any actions to prevent this has rarely

been a case, neither in the past or today. Other reasons

for IT complexity are non-planned approach to IT

implementation (no architecture) or unsuccessful

consolidation projects motivated by complexity

reduction, but often ending-up with more complexity

(e.g., adding the new target system together with a

integration system for syncing its data flows with old

unsuccessfully phased-out systems). And this is just

IT. Big source of complexity is also on business side

with its complex, non-standardized processes,

complex product portfolio, people turnover with

"silent knowledge" loss and business-IT

misalignment. And with mergers and acquisitions

(M&A) this all gets multiplied with proper

consolidations never happening.

This all puts most of the typical enterprises in the

complex domain of Cynefin framework where known

reductionist rules do not apply. Meaning that´s

impossible to understand the enterprise by

understanding its parts. It´s also impossible to know

all the details, because enterprise is too big,

interconnectable, too changing and it wouldn´t even

make sense because it´s a complex system. But it´s

possible and mandatory to have a high-level

understanding of the enterprise business to be able to

manage it (because you cannot manage what you

cannot understand, except by luck). How to achieve

this with proposed EA model will be elaborated later

in text.

Furthermore, a way to deal with enterprise

complexity is to approach the enterprise holistically,

i.e., viewing, understanding, and optimising

enterprise, not as a collection of its parts, but as a

whole. This fits to CAS holistic optimisation

approach with accepting adaptability and goal-

oriented management. But, unlike CAS, also with a

central strategic management. Because complex

enterprise doesn´t just evolve, it´s also driven by good

strategy which is essential for the long-term business

success of the company. (Rumelt, 2022) defines

strategy as an exercise of power which presumes the

use of power of company's leaders "to make part of

the systems do things they would not do if left to

themselves".

The definition of the complex enterprise is,

therefore, an enterprise composed of highly

interconnected, interacting, and changing parts that

must be driven by business strategy and managed

holistically with a high-level understanding of the

enterprise business to succeed and excel in the rapidly

changing market.

How to deal with a complex enterprise, including

the role of EA, will be described below.

2.2 Ensuring Holistic Optimisation

The main focus of the lean management is to optimize

value delivery by identifying and eliminating waste in

the process (Womack and Jones, 1996). The value

Introduction to BASE Enterprise Architecture Framework for Holistic Strategic Alignment of the Complex Enterprise

577

which enterprise provides to its customers through its

digital services or products is its primary purpose. To

effectively optimize enterprise value delivery, there

should be a shared consciousness of this sense of

purpose and a common understanding of holistic

value delivery (McChrystal et al., 2015). This

includes all the steps a company must undertake to

deliver a product or service starting from sales to

billing. Figure 11 from the case study below shows

example of the holistic delivery of a company from

the payment industry which holistic value delivery

consists of the following steps: sell card acceptance,

onboard customer, enable transaction acceptance,

process payment transactions, settle merchant,

provide reports, bill merchant and support merchant.

In a complex enterprise, it is extremely important

to holistically optimize enterprise delivery and avoid

local optimization, as waste at one level can be

important at another (Alahyari et al., 2019). This is

not obvious in the large organizations because they

are often organized in organizational silos.

Organizational silos refer to business departments

which operate undependably pursuing department

goals instead of company goals. This often leads to

local optimizations that optimise only part of the

organization ignoring upstream and downstream

effects, which doesn’t necessarily improve the overall

delivery of the customer value (Skelton and Pais,

2019). To change this, it is important to build team-

like collaboration across silos, and to achieve this,

someone must raise awareness of the purpose of the

business and try to ensure that things are always

covered holistically, both from business and IT world.

2.3 Business Architecture

In parallel with enterprise architecture, business

architecture (BA) was developed to support strategic

and business planning of the enterprise. Business

architecture represents a holistic business blueprint of

the enterprise that provides a common understanding

of the enterprise, with the goal to holistically optimize

enterprise value delivery and support business

strategy (Simon and Schmidt, 2015). However,

business architecture is only about business

architecting of the enterprise, meaning that it ignores

IT insights in supporting strategy and managing the

enterprise. But, in a complex enterprise, with business

which is highly dependent on IT, it´s impossible to

decouple business decisions and strategy from IT

because your business is your IT, and your business

highly depends on what´s possible in your IT.

Therefore, business architecture also did not prove to

deliver the expected value.

The purpose of this paper is therefore to propose a

business architecture-based enterprise architecture

framework which is capable of effectively supporting

strategy both with business and IT insights.

How this can be achieved will be explained below.

3 BASE FRAMEWORK FOR

STRATEGIC ALIGNMENT OF

THE ENTERPRISE

Figure 2: The role of EA in strategic alignment.

Rumelt (Rumelt, 2012) defines good strategy as "a

coherent mix of policies and actions to address

significant challenges". Kernel of every good strategy

consists of three elements: diagnosis (diagnosing

current situation and formulating the challenges),

guiding policy (defining overarching approach for

solving the challenges), and coherent action (defining

a comprehensive cohesive plan to reach the goal). In

other words, a good strategy must be formulated with

a proper diagnosis and implemented first by setting

guiding policy and then by executing coherent action.

Enterprise ability to successfully formulate and

implement good strategy is called strategic

alignment. According to Aldea et al. (2018), strategic

alignment is achieved when enterprise strategy is

formulated taking into account the supporting

structure of the company and when the operational

objectives and actions are implemented in accordance

with the overall strategy. The latter includes

appropriate design that supports that implementation.

Authors propose the use of EA to improve strategic

alignment of the enterprise by support in both

formulation and implementation of the new

strategies. Accordingly, the purpose of proposed

BASE enterprise architecture framework is to

improve holistic strategic alignment of the complex

enterprise by supporting both strategy formulation

and strategy implementation through implementation

of composable architecture (figure 2).

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3.1 Supporting Strategy Formulation

In many organizations EA still shares the fate of many

other businesses that aspire to be taken seriously and

listened to by those leading the enterprise. However,

in reality, a legitimate role that EA might or should

have in strategic decision process (or strategy

formulation) is limited to advising on opportunities

and limitations of new technologies. Since only this

fits the traditional EA, to the discipline perceived as

IT-specific. Which again is a type of support which

can easily be avoided. And, in reality, often is. It´s

therefore not surprising that EA rarely has any role in

strategy formulation, but typically only in its

implementation. A different picture emerges when

looked from the management science perspective

which calls for an apprehensible model of the

complex enterprise. According to Hoverstadt et al.

(2013), a complex enterprise calls for a core "big

picture" model of the organization and its operating

environment, which should both help business

leaders to understand how their business works and

provide them relevant information for decision

making. A need for a tool to deal with enterprise

complexity had already been recognized as a serious

business problem by a survey of 1,400 Global CEOs

in 2005 where 77% assessed complexity as a high

priority, 91% said they need special tools for it where

only 5% claimed they have such a tool. According to

Hoverstadt et al., only EA discipline can solve this

problem by providing a proper EA model to support

decision makers both in strategy formulation and

strategy implementation. This paper will, therefore,

present an EA model which can provide needed

inputs about enterprise business for senior

management to help them ensure that "strategy is

developed while considering supporting structure"

(Aldea et al., 2018) of the company, including both

business and IT. Proposed EA model will provide a

common language and enterprise-unified reference

for all enterprise discussions and relevant inputs to

decide where in enterprise makes sense to invest

financial resources and validate strategic direction.

This paper will demonstrate how EA, with use of

proposed EA model and business architecture, can

support strategy by early scoping of strategic

initiatives which can help validate strategic direction

already early in the process and help avoid failed

initiatives. How to further leverage the proposed EA

model and BASE framework for strategy formulation

will be explored in future work.

3.2 Strategy Implementation with

Composable Enterprise

Service composability design principle of service-

oriented architecture (SOA) encourages the design of

services that can be reused in multiple solutions

where services themselves consist of composable

services (Magedanz et al., 2008). Composable

enterprise is an approach to enterprise design that

embraces API economy and service composability

embedding adaptability into design to help enterprise

adapt to rapidly changing market demands and plan

for uncertain futures. A composable enterprise is

expected to deliver its products and services through

assembly and combination of pluggable, scalable, and

replaceable components. Business capabilities

(packaged business capabilities in composable

enterprise terminology) represent abilities that an

enterprise possess or plans to build embedded in

people, processes, and technology. Business

capability model represents set of all enterprise

capabilities (figure 5). Following service

composability principle, packaged business

capabilities (PBC) themselves consist of composable

reusable PBCs or services on lower system levels.

According to Bhatnagar (2022) composable

enterprise is the latest generation of service-oriented

architecture which leverages the latest technology

(cloud, microservices and REST) in combination with

such a service design which includes business

architecture, technologies, and thinking. This means

that service composability should also be applied by

the business and applied on both enterprise and

system design level. This presumes design of all

enterprise components with joint holistic

understanding of the enterprise business and its

strategy direction. This approach is different from

widely applied domain-driven design (DDD)

approach which encourages splitting problem and

solution domain and thus separating business and IT

perspectives (Evans, 2003). By DDD, problem

domain belongs to business which is in charge of

business domains and subdomains (business

capabilities in DDD terminology). IT is expected to

separately deal with problem solution in its IT

solution domain. Which means that IT has

responsibility to design modular solutions applying

service composability solely from the IT perspective

(often with composability and reusability considered

just inside a specific IT ecosystem). In contrast to this

approach, the purpose of the BASE framework is to

bring business and IT together with service

composability applied on the whole enterprise level,

starting with business capabilities. To achieve this,

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there should be a shared consciousness of the purpose

of the enterprise and a joint understanding of the

enterprise's business.

Future work will elaborate on this idea by

providing a methodology for building composable

enterprise.

4 EA MODEL FOR DEALING

WITH ENTERPRISE

COMPLEXITY

Proposed EA model should support strategic

alignment of the enterprise by providing abstraction

and simplification of the enterprise complexity

understandable by both strategic decision makers,

business, and IT (figure 3). This chapter will

elaborate on how this can be achieved.

Figure 3: Dealing with enterprise complexity.

4.1 Metamodel

The proposed EA model is based on the ArchiMate

standard. ArchiMate is an open and independent

enterprise architecture modelling language that

integrates business processes, information flows,

organizational structures, information systems, and

technical infrastructure (The Open Group, 2022).

Figure 4 shows the metamodel of the proposed EA

framework with definitions of the elements provided

in table 1. The proposed EA model has two variants.

Figure 4: Metamodel of the proposed EA model.

Table 1: Definitions of the EA model elements.

Element Definition

ArchiMate

Notation

Business

capability

Enterprise abilities for

delivering value embedded in

people, process, technology, and

information.

Capability

grouping

Business capabilities are

divided into core, supporting,

and generic or enterprise

capabilities (Leonard, 1995).

Value

stream

Collection of E2E activities that

create an overall result for the

customer (stakeholder or end-

use

)

Business

service

Business services are different

implementations of the same

usiness capability.

Business

owner

Person with business ownership

for business application or

usiness service.

Business

application

Application known as a separate

application from the business

perspective, irrelevant of its

implementation structure.

Outcome Represents some expected end

result.

Stakeholder Person, team, or organization

with an interest in the outcome

Value Something customer is willing

to pay for.

In the base version business capability is decomposed

to business services which then decompose to

business applications. In simplified version value

streams and business capabilities are directly

decomposed to underlying business applications

The future work will extend the model to support

implementation of the composable enterprise.

The EA model currently consists only of the static

elements. The proposed EA model might be extended

in the future with the rest of ArchiMate´s strategy and

motivation elements to support modelling strategy.

Next chapter will elaborate on the main building

blocks of the proposed EA model.

4.2 Main Building Blocks

The main building blocks of the proposed EA model

are:

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 Business capability model (BCM) – the centre

of the model providing a common language and

enterprise-unified business reference point for

all enterprise discussions.

 Value streams – simplified and generalized

high-level business processes providing

understanding on how business works or should

work.

 Business-adjusted IT insights - providing high-

level IT insights understandable by business.

These building blocks are described in detail below.

4.2.1 Business Capability Model (BCM)

In many organisations exists the gap between strategy

formulation and its implementation by business

processes and information systems supporting them

(Keller, 2015). The purpose of the proposed EA

model is to support both strategy formulation and

implementation. To achieve this, EA model must

bridge the gap between business and IT providing a

common language and an enterprise-unified

reference point for both decision makers, business,

and IT. This can be achieved with business capability

model (BCM). BCM represents a high-level view of

the enterprise through collection of its business

capabilities and their relationships. A business

capability is a particular ability that a business may

possess or exchange, embedded in people, processes,

technology, and information, serving to achieve a

specific purpose or an outcome (Homann, 2006). A

business capability defines what a business does

without communicating or exposing where, why, or

how (Ulrich and Rosen, 2014). BCM represents a

strategic view of the enterprise, providing a stable,

overarching view of what the enterprise does and

what is important to the business (Swindell, 2014). As

such BCM serves as a central business-oriented

starting point of the proposed EA model. A thorough

methodology for defining BCM together with the rest

of the proposed EA model will be provided in the

future work. Figure 5 shows the real industry example

of an BCM.

4.2.2 Value Streams

In lean management value represents something, the

customer is willing to pay for. While BCM defines

what an enterprise does, value streams depict how

enterprise delivers value to its customers. Value

stream is a collection of end-to-end activities, or steps

that an enterprise must undertake to deliver its value.

Every step in the value stream adds an incremental

value to the overall value delivered to the customer.

Representing a simplified and generalized high-level

metamodel of the underling business processes, value

streams enable common high-level understanding of

the business processes outside technology context or

any "how" details. Due to their simple notation

consisting only of value stream stage and flow

relationship, value streams enforce simplified

thinking. When used together with business

capabilities (figure 13 in the use case below) they are

an excellent technique for brainstorming and design

of enterprise high-level business processes without

Figure 5 Real industry example of business capability model (BCM).

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entangling with unnecessary system, process, or

technology details. This will be demonstrated in the

case study below.

4.2.3 Business-Adjusted IT Insights

As computing has become a core part of every

industry and businesses highly dependent on their IT,

software implementation is often the largest part of

any investment. And also, the main reason why these

investments often fail. A common reason for this is

the fact that decision makers very easily fall into so-

called optimism bias due to a lack of information

about the state of IT. Optimism bias refers to a

tendency of overestimating the likelihood of

experiencing positive events and underestimating the

likelihood of negative events (Kahneman, 2011).

Optimism bias is about ignoring, underestimating, or

inventing the work needed on something you do not

understand and hoping for the best, even when that

something is the core of your business (as IT is). This

again leads to the Conant-Ashby theorem, which

states that we are unable to cope with something we

do not understand, except by luck. Optimism bias is

nothing unusual, it´s just a pure human nature to deal

with a complex situation. It's not easy to understand

IT because it's cumbersome and complex, IT people

speak a different, incomprehensible language, and

there's simply no understandable IT information

available to support decision-making. To change this,

proposed EA model must provide decision makers IT

insights which are understandable to them. As

elaborated above, the center of proposed EA model is

BCM, which, as collection of enterprise business

capabilities, provides common language and starting

business reference point for both business and IT. In

the proposed model, each business capability from

BCM is then decomposed to high-level business-

adjusted IT perspective providing just enough

accuracy needed. IT entities used in the model for

providing IT insights are business application and

business service (definitions in table 1 above).

Decomposition of business capabilities to business

services is a great tool for identifying IT

harmonization potentials. E.g., figure 6 shows an

example of the base model decomposition where four

different business applications realize the Billing &

Invoicing business capability. Figure 7 shows

simplified model decomposition used by high level

presentation purposes (demonstrated later). Since

managers sometimes also want to drill down and have

details at hand as required, model also supports

simple flow relationships between business

applications (figure 8). The knowledge graph-based

EA tool Ardoq with its component Discover provides

ability for the end-users to dynamically explore the

model and ad-hoc drill down from the selected

business application in figure 6 or 7 to its IT system

landscape in figure 8. This will be further elaborated

in the future work in the paper on methodology for

defining the EA model.

Figure 6: Business capability decomposition (base model).

Figure 7: Business capability decomposition (simplified

model).

Figure 8: IT business application landscape.

5 HOLISTIC INITIATIVE

FOOTPRINTING

METHODOLOGY

Figure 9 Holistic initiative footprinting methodology

This chapter will introduce holistic initiative

footprinting methodology to illustrate how to

leverage the proposed EA model and business

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architecture to properly scope strategic initiatives

already early in the process. The purpose of the

methodology is to enable early discovering of the

E2E dependencies of strategic initiatives to already

early in the process provide proper estimates on the

scope, time and money and reveal what to expect later

in the implementation.

The methodology uses heatmapping and

storytelling techniques. Heatmapping is a technique

for colouring model with using hot and cold colours

to draw attention. Technique is usually used for

capability management to support business leaders to

decide where in the enterprise to best invest financial

resources (Keller, 2015). Storytelling technique is

about using stories to engage the audience. Denning

(2006) recommends applying storytelling as strategic

business narrative technique in huge organisations.

As shown in figure 9 Holistic initiative footprinting

methodology consists of the following steps:

1. Explain the background (the why and the scope):

explain why we want to start the initiative, what

is the background, planned scope and what we

as a company want to gain from this initiative.

2. Explain which customer problem we are

solving:

understand which customer problems we are

solving, illustrate customer value stream (how

does value stream look like from the customer´s

point of view) and mark with red (the hottest

colour) the steps of the customer value stream

affected by this initiative.

3. Explain what we need to do to solve customer

problems:

understand what we need to do to solve customer

problems with applying storytelling technique.

Storytelling to explain holistic impact and the

scope of the initiative should start with

visualising holistic value delivery with building

the narrative by gradually providing more

information and gradually providing IT insights

from the business perspective.

This can be achieved by the following steps:

3.1. Start with the holistic value delivery and

mark affected value stream steps to understand

what´s holistically effected (start with using red

for marking the affected steps).

3.2. Gradually provide information about

business capabilities needed for delivering the

value and then gradually provide information

about underlying systems, i.e., business

applications (mark affected with agreed

heatmapping colouring).

3.3. Gradually drill down to a separate value

stream stage (e.g., onboarding) and visualise its

value stream with business capabilities as

building blocks for delivering the value. To

document this step brainstorming with the

business owner should take place to design and

visualise the target high-level process, or

document the existing.

3.4. Gradually provide information about the

system landscape applying agreed heatmapping

colouring. If needed show system capability

decomposition (which capabilities a system has

or is planned to have in the future).

4. Apply system capability gap analysis (if needed)

following the steps:

4.1. Identify target system capability

decomposition.

4.2. Identify source system capability

decomposition.

4.3. Map target system planned future

capability decomposition.

4.4. Identify capability gaps in the source

system by comparing its capability

decomposition to target system planned

capability decomposition.

5. Summarize and propose recommendations.

Prerequisite of applying this methodology is to have

some high-quality version of the EA model.

Methodology should be executed by conducting

interviews and performing brainstorming with the

relevant business and IT stakeholders. The scoped

initiative should preferably be delivered as a

PowerPoint (or similar) document with animation

capabilities for building the narrative (storytelling).

6 CASE STUDY

This section will demonstrate the usage of the

proposed EA model for applying holistic initiative

footprintig methodology on invented use case.

Figure 10 Customer value stream (step 3.1).

The EA tools chosen for performing case study are

Archi and Ardoq. Archi will be used for static

visualisations to visualise customer´s value delivery

and holistic work needed to execute initiative (steps 2

and 3). Ardoq, as a knowledge graph-based EA tool,

will be used to support interactive visual analysis in

step 4 (system capability gap analysis). Initiative will

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be delivered as PowerPoint document with animation

used for storytelling.

After conducting interviews and performing

brainstorming with stakeholders to collect all the

information needed, EA delivered the following.

6.1 Performing Holistic Initiative

Footprinting

Step 1: Explain the Background (the why and the

scope).

A company is considering launching an initiative to

optimize and digitize its sales, onboarding, and

customer support business processes for

small and medium-sized customers. These processes

are currently covered by two customer relationship

(CRM) systems legacy CRM system and target CRM

system which causes a lot of redundant and manual

paperwork with unacceptable long customer

onboarding lead time. Additionally, total cost of

ownership for both CRM systems is very high (huge

licence and operating cost). Goal of this initiative is

therefore to leverage target CRM system for all

needed sales, onboarding and customer service

capabilities and phase-out legacy CRM system.

Business case was already done on initiative

estimating budget needed and timeline of one year to

complete the whole project.

Step 2: Explain which customer problem we are

solving.

As shown in figure 10, this initiative aims to speed up

process of enabling card acceptance in the merchant´s

store, help customer (merchant) to get better support

for his card acceptance issues, and reporting on his

transactions via customer portal.

Step 3: Explain what we need to do to solve customer

problem.

In step 3.1 enterprise E2E value delivery is visualised

with marking value stream steps affected by this

initiative. As figure 11 shows, this initiative is aiming

to optimise sales, onboarding, and customer service

(support merchant).

In step 3.2 deeper analysis is performed also with

mapped business capabilities (figure 12).

Besides sales, onboarding and customer service,

holistic visualisation also reveals the need to build

integration with payment capture, payment gateway

and core transaction processing business capabilities.

These integration dependencies are marked yellow.

Holistic delivery also reveals dependencies to

business capabilities currently covered by separate

initiatives: data repository and reporting and billing

& invoicing (marked orange). In the near future this

initiative will also need to cover adjustments and

integration with new systems build by these

initiatives. Holistic value delivery process in figure

12 also visualises the need for a new business process

orchestration capability to enable order orchestration

and integration between business capabilities in the

Figure 11 Holistic value stream with affected steps marked (step 3.2).

Figure 12 Holistic value stream with business capabilities realising it with heatmapping (step 3.2).

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figure. In the past company had bad experience with

enterprise service bus (ESB) systems (single point of

failure, high cost of licence and maintenance,

complexity, need for ESB-vendor specific skills,

etc.). EA therefore suggest a lightweight business

orchestration tool also supporting BPMN standard to

improve business-IT alignment and incident

management (BPMN is already heavily used in the

company by business analysts). Business process

orchestration business capability is marked pink.

Gray colour is used to mark not affected capabilities

and value stream steps.

This is not visualised, but step 3.2. also provides

information on which IT systems (business

applications) are realising shown business

capabilities (by applying simplified version of the EA

model). PowerPoint animation capability is used to

gradually provide information on these IT systems

(again to build the narrative by storytelling).

In step 3.3 onboarding value stream is decomposed to

lower value stream level visualising wished to be

onboarding process (figure 13) since some business

processes need to be optimised before undertaking

digitalisation. This step is the result of brainstorming

of enterprise architect with business stakeholders.

Figure 13 should be announced by marking with red

2.Onboard customer in figure 11 (storytelling).

In step 3.4. as is IT system landscape is shown

containing applications announced in step 3.2.

Figure 14 shows two CRM systems (as a result of the

previous unsuccessful consolidation initiative).

Target CRM system is currently supporting sales

capabilities with legacy CRM system supporting both

sales, onboarding, and customer service capabilities.

System landscape also shows legacy portal system

(already announced in step 3.2) which is also high

priority due to the planned enhancement of self-

service and reporting capabilities. There is, as well,

CRM integration system in place used just for

synchronizing data flows between two CRM systems.

This is also the result of the previous initiative with

high licence and operating cost and would need to be

phased out. The same agreed heatmapping is used to

mark systems with which we would need to integrate

now (in yellow) and in the near future (in orange).

Step 4: Appy System Consolidation Capability Gap

Analysis.

Figure 13 Onboarding to-be (step 3.3).

Figure 14 IT system landscape (step 3.4).

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Since the initiative aims to phase out the legacy CRM

system and migrate its functionalities to the target

CRM system, this step includes the analysis of the

capability gaps between the two systems. For this step

the base version of the model is used (figure 4).

Graph-based EA tool Ardoq is used to generate

visualizations in figure 15-18.

Step 4.1: Figure 15 visualises which capabilities

currently realises target CRM system.

Figure 15: Target CRM system as is (step 4.1).

Step 4.2: Figure 16 visualises which capabilities

currently realises legacy CRM system.

Figure 16: Legacy system as is capabilities (step 4.2).

Step 4.3: Figure 17 shows capabilities planned to be

implemented in the future on target CRM system.

Figure 17: Target CRM system to be (step 4.3).

Step 4.4: Figure 18 visualises which capabilities from

the legacy CRM system are not considered (marked

red). As showed in the figure those are: marketing

campaigns, commission management and bill &

invoice generation. These three capabilities should be

addressed to phase-out legacy CRM system as

planned.

Figure 18: Capability gap (step 4.4).

Step 5: Summarize and propose recommendations.

Besides planned optimisation of sales, customer

service and onboarding business capabilities,

initiative should also cover the following:

 New integrations with business capabilities

payment capture, payment gateway and core

transaction processing.

 There are dependencies to ongoing separate,

stream initiatives covering data repository and

reporting and billing & invoicing business

capabilities which will mean adjustments and

new integrations in near future.

 Onboarding business process needs to be

optimised as visualised in figure 13 before

undertaking digitalisation.

 To phase-out the legacy CRM system, business

capabilities marketing campaigns, commission

management and bill & invoice generation

should be addressed.

 New business process orchestration system

should be set up to orchestrate CRM orders and

provide integrations with other systems. EA

recommendation is to use a lightweight business

process management tool based on BPMN

standard to improve business-IT alignment and

incident management.

6.2 Case Study Conclusion

In the use case above, business case was created

without any IT insights and gave unrealistic timeline

and cost estimation. The case study has revealed that

money, timeline, and scope for realising this initiative

is much bigger than initially estimated. There are new

integrations to be built, dependencies to separate

initiatives that will require work in the near future,

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some business processes have to be optimised before

undertaking digitalisation and three more capabilities

need to be taken into consideration to phase out

legacy CRM system. Taking all presenting into

consideration, business leaders might even decide to

deprioritise this initiative and give priority to some

other less complex and less costly one.

This case study has shown how is possible, by

leveraging EA model and business architecture, to

make early discovery of all E2E dependencies and

ensure that all the steps of the holistic delivery are

taken into consideration during scoping process. This

kind of early holistic scoping can help us better

validate strategic direction early in the process to

avoid failed initiatives. Since the results of this

analysis can help better estimate effort, timeline,

money, and impact of the initiative, it should, ideally,

be used as input for the business case.

The advantages of this methodology are manifold.

It first offers to business leaders holistic business and

IT inputs needed for decision making. Then it enables

business-IT alignment since the document is readable

by both business and IT and can be used both as input

for the business case and as a starting point for the

implementation. The advantage of methodology is

also in enabling visualisations together with

storytelling which gradually conveys information and

provides clarification on the work needed in a way

that demystifies IT world to business. And the last,

but not least important, advantage of methodology is

also that it offers visual technique for brainstorming

on the business process and the work needed using

just business architecture elements (value streams and

business capability model).

7 CONCLUSIONS AND FUTURE

WORK

As an introduction to the BASE enterprise

architecture framework, this paper has proposed the

EA model for dealing with complex enterprise and

holistic initiative footprinting methodology for early

scoping of strategic initiatives that uses the proposed

EA model and business architecture.

Paper has answered research questions as follows:

RQ1. "What support can EA provide within business

strategy, and on what conception of business

architecture is this based?"

Answer: Proposed BASE enterprise architecture

framework can provide support in improving holistic

strategic alignment of the complex enterprise by

supporting both strategy formulation and strategy

implementation. That support should always start

from business architecture with value streams

emphasising importance of holistic value delivery

and BCM providing common language and unified

enterprise-wide reference points for all enterprise

discussions.

RQ2. What kind of model should enterprise

architecture provide to support business strategy in

the complex enterprise?

Answer: The business-architecture EA model

proposed in this paper aims to solve the problem with

managing a complex enterprise by providing a

simplification and abstraction of the enterprise that

encompasses both business and IT insights serving as

a common ground for both high-level understanding

of the enterprise business and business-IT alignment.

RQ3. In the complex enterprise, how can enterprise

architecture provide decision makers with better early

scoping of strategic initiatives to know what to expect

later in the implementation, get better estimates, and

help avoid failed initiatives by validating strategic

direction already early in the process?

The proposed holistic initiative footprinting

methodology has demonstrated how EA, by

leveraging business architecture and the proposed EA

model, can enable early holistic scoping of strategic

initiatives ensuring that all the steps of the holistic

delivery are taken into consideration. This can

already early in the process reveal what to expect later

in the implementation, provide inputs for better

estimates and help decision makers avoid failed

initiatives by early validating strategic direction.

Future work will focus on extending BASE

framework, first with a thorough methodology for

building the proposed EA model and then with a

methodology for implementing the composable

architecture.

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