Defining an Enterprise Business Process Architecture

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By Chandra Sekhar Ramaraju

Before your organization can fully succeed with business process management (BPM), it needs to design a foundation that shows the major components of the company operations, encompassing architectures, workflows and events. This enterprise business process architecture (EBPA) acts as a compass for CxOs and strategists by helping them devise their strategic initiatives and achieve their business objectives. This article provides a checklist that will help you evaluate the need for EBPA within specific areas of your company as well as its value. I also suggest some approaches for undertaking an EBPA initiative.

The Problem

As enterprises grow in size and complexity, the people managing them encounter common challenges on a regular basis:

• Difficulty in implementing major transformation initiatives such as M&As; change management becomes more complex and unmanageable.
• Difficulty in introducing even small changes.
• The impact of business changes on IT systems isn't easy to assess. The company experiences cost and schedule overruns while implementing IT system changes.
• Hazy process boundaries, which leads to duplication of activities and waste.
• Due to lack of visibility of clear roles and responsibilities, productivity is lost while searching for "real owners." Also, accountability problems due to a lack of clear ownership.
• Difficulty in measuring performance against SLAs, plus the company has quality and customer satisfaction issues.

How effectively the organization addresses these challenges depends on whether it's "process oriented" or "functionally siloed."

Process-oriented organizations are agile and efficient and are often characterized by their:

• Well defined enterprise-wide business processes and traceability.
• Clearly defined process hand-offs (roles and responsibilities).
• Effective change management procedures.
• BPM solutions or aspirations to implement them.

Non-process oriented or silo-heavy organizations are often characterized by poor business agility and less organizational efficiency. They fail to respond fast enough to business and market needs.

One of the first steps towards becoming a process-oriented organization is to define an EBPA, which links the business strategy and goals to the enterprise value chains. Paul Harmon, in his book Business Process Change: A Manager's Guide to Improving, Redesigning and Automating Processes, emphasizes the importance of developing and maintaining process architecture prior to developing computer-based support for particular organization processes.

What is EBPA?

In Enterprise Business Architecture: The Formal Link between Strategy and Results, Ralph Whittle and Conrad Myrick, offer this definition of enterprise business architecture:

"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 do to satisfy its customers, compete in a market, deal with its suppliers and sustain operations and employees. It is composed of architectures, work-flows and events."

I use the terms "enterprise business architecture" or "enterprise business process architecture" interchangeably in this article. Both refer to the high-level architecture of all of the processes within an organization.

Some people mistakenly refer to "process diagrams/models" as business process architecture. But, the terms "process diagrams" or "process models" are used to represent individual processes and contain lower level details. It's important to keep in mind this distinction between the two. One is detailed; the other is high-level.

EBPA provides a common top-level view of major components within the organization. Taking the organization's business goals and value streams as its foundation, EBPA provides key inputs to many other architecture initiatives across the enterprise, such as technology, infrastructure and security architectures.

Typical documentation for an EBPA consists of a BPA framework, cross-functional value chain maps and select cross-functional process maps. The following figure shows the key components of EBPA. EBPA ties together various strategic components of the organization.

Figure 1: Components of enterprise business process architecture.

The Benefits of EBPA

Here are the primary benefits of formally defining an EBPA:

• It gives a big picture of the organization and its context.
• It provides a common vocabulary to communicate between stakeholders at various levels.
• It provides a critical single stop business landscape along with its associated dependencies, such as business roles, rules and controls, related applications, data, infrastructure and security aspects.
• A well-defined and maintained business architecture enables cost-effective technology upgrades or major IT-enabled transformation initiatives typically resulting in cost savings.
• It provides a direct reusable baseline for service oriented architecture (SOA) and a long-term agile, flexible and easily maintainable IT landscape.
• It helps in identifying gaps within the organization to achieve its business goals.
• It helps in prioritizing the processes/activities for achieving business goals.

Here are a couple of examples that illustrate the benefits enjoyed by some of the Fortune 100 companies that have an EBPA:

• A large global high-tech manufacturing company has reduced the end-to-end carton shipment costs by 15 percent. The top down and business friendly approach of EBPA has facilitated prioritization and selection of processes for improvement. EBPA has also paved the way to the creation of "as-is" process models and scrutiny of them to arrive at the optimized "to-be" processes.
• A large energy and utility distribution company has reduced the on-boarding and training costs and improved productivity of new employees by 20 percent. EBPA has led to the creation of a centralized enterprise business process repository. This repository shows the roles and responsibilities of various functions and SLAs within the organization and has greatly helped the new "joiners" during their training.

Though the importance and value of having a well defined EBPA is known, many organizations tend to start the initiative of formally defining the EBPA in a reactive way, rather than doing it proactively. Some of the reasons for this are:

Lack of Ownership

The EBPA represents an area that is common to both business and IT. Though leadership exists for both business and IT areas, the common area is normally not owned by any. Many organizations lack people who want to take up and champion this common area.

Obsolescence

An EBPA isn't static; it keeps changing. It requires funding and the constant presence of a dedicated support team to keep it up to date. Many organizations think that such spending is just not worthy.

Needs Assessment for EBPA

While several factors influence the decision to start a formal EBPA initiative, here's a checklist to determine the need for such an initiative. This list is just a starting point; it's generic and high level. It needs to be customized by each organization to suit its specific requirements/characteristics. The needs assessment will help in building a good business case for starting EBPA initiatives formally.

Table 1: Needs Assessment Checklist for EBPA
Organization Size and Complexity	Yes	No
Roles, responsibilities and process touch points (handoffs) are clearly defined and are well understood by one and all.
Easy traceability of process/activities within the organization to the corresponding business objectives/targets.
Ability to monitor the performance of key activities and measure them against the business objectives.
Gaps between Business and IT
Clear traceability exists between the key business processes/activities and the corresponding IT systems.
Organization has a mechanism/framework to easily review and bridge the gaps between business needs and the corresponding IT systems from time to time.
Mechanisms are in place to easily do an impact study to the relevant IT systems, before introducing changes to any business processes.
Business Process Changes
Organization's business strategy contains some possible M&As in near/medium term.
Frequent changes to the business processes are needed due to the nature of the business itself.
Confidence level to clearly understand the implications before introducing business process changes.
Interactions with Customers, Suppliers and Partners
Mechanism to effectively address the voice of customer issues and trace them back to the corresponding business processes.
Hand-offs with all third parties (suppliers, business partners) are clearly understood across the organization.
SLAs with customers and third parties are clearly defined. Performance monitoring mechanism is in place.
Standards and Compliance Requirements
All applicable controls and measures are identified and documented for key processes from compliance standpoint.
Process documentation is fully leveraged during the compliance audits.
Other Parameters (specific to each organization)
Add any influencing parameters specific to the organization.

After completing the needs assessment, you can summarize the findings as shown in the figure below. A quick glance at the diagram reveals that the main drivers for EBPA in this specific case are 1) the organization's size and complexity, and 2) standards and compliance requirements.

Figure 2: EBPA needs assessment results sample.

As the overarching business drivers for starting an EBPA initiative will be different for each organization, performing such systematic needs assessment prior to the start of the definition helps in prioritizing and focusing specific areas of the EBPA.

EBPA Impact Assessment

While the influence of an EBPA can be felt across all functions of an organization, the specific impact is going to be different from one company to another. Primarily, an EBPA influences business agility, organizational efficiency and organizational economy and performance. The following table shows the various components that primarily get influenced from the EBPA.

Table 2: EBPA impact assessment
Business Agility Change management Adaptive IT systems and infrastructure Organization redesign Full support to business needs	Organizational efficiency Process integrity assurance Functional transparency Process optimization Governance and effective checks and controls Standards and compliance	Economy and performance Bottom-line/profit realization Positive customer impact Performance monitoring Reliable operations

Business Agility

An EBPA improves an organization's ability to quickly change to meet its business demands. It provides valuable linkage information that connects the enterprise business objectives to its value chains and processes. The following table shows various elements of business agility that are touched by an EBPA initiative.

Table 3: EBPA influence on business agility
Impact area	Remarks
Change management	Quick and accurate analysis of process dependencies. Helps in prioritization and strategy formulation initiatives. Effective change management through better process knowledge.
Adaptive IT systems and infrastructure	IT Systems are ready to adapt necessary changes as required by business. Easy to assess the impact before introducing any change.
Organization redesign	Optimum human capital management. Helps organization redesign efforts during major business transformation initiatives.
Full support of business needs	Support common business initiatives such as "New product introduction." Helps in "Time to Market" and other business strategies.

Organizational Efficiency

An EBPA positively impacts an organization's efficiency. It can be thought as a guiding system (such as a map/GPS) in an automobile that lets drivers reach their destination safely. The top-down and strategic view of business process architecture brings in functional transparency and aids in improving the efficiency as a whole. The following table shows the elements of an organization's efficiency affected by an EBPA initiative.

Table 4: EBPA influence on an organization's efficiency
Impact area	Remarks
Process integrity assurance	Clearly documented enterprise value streams and their relationships. Clearly documented traceability between the business objectives and corresponding core business processes.
Functional transparency	Clearly defined roles and responsibilities. Documented service level agreements (SLAs), which are understood across the enterprise.
Optimization	Process inputs and outputs (hand-offs) clearly established between all internal and external processes. Framework facilitates detection and prevention of process bottlenecks and there by optimizing the process.
Governance and effective checks and controls	Clearly documented process checks and controls. Effective governance mechanisms in place to address organization's efficiency issues.
Standards and compliance	Framework to easily enforce enterprise standards. Adequate process documentation to satisfy the compliance and audit requirements.

An Organization's Economy and Performance

A well-defined EBPA provides an opportunity to improve an organization's performance. The following table lays out what can be affected by an EBPA initiative.

Table 5: The EBPA influence on organization's performance
Impact area	Remarks
Bottom-line/Profit realization	Top level view of business architecture and the traceability information helps in profit realization
Positive customer impact	Voice of customer taken into account while strategizing business changes.
Performance monitoring	EBPA framework provides the ability to constantly monitor the organization's performance against the business goals.
Reliable operations	The operational processes can be streamlined using EBPA and there by making them reliable

How to Achieve a Successful EBPA Initiative

By now you're probably wondering, how do I achieve an EBPA for my organization? Here are some suggested approaches.

Before starting your EBPA initiative:

• Build a business case for EBPA and secure adequate funding.
• Evangelize and communicate the business benefits early on in the organization to get greater buy in. Success of EBPA initiative to a large extent depends on the support of top executives and their support.
• Prior to the start of an EBPA initiative, set up an EBPA governing council. Leverage any existing powerful, business influencing governance council, if already present.
• Start small and develop EBPA in an iterative model. Keep the initial scope well defined. Considering the fact that EBPA addresses a vast landscape of the enterprise, keep the initial scope to mission-critical systems and processes. After completion of this, iteratively extend the EBPA project scope to include other enterprise systems.
• Identify, target and work towards demonstrated quick wins that have a significant customer and business impact. Positive economic impact caused by EBPA should be measurable and translated to dollar terms.
• Don't completely outsource the engagement. It's critical to engage internal staff on the project and get important input from them as needed.

During the EBPA initiative:

• Leverage standard frameworks (such as eTOM, SCOR and APQC) and industry reference models to the extent possible. In rare situations, you may want to build from scratch.
• Leverage existing process documentation within the organization. Any available documentation will give a kickstart to EBPA.
• Ensure active participation of stakeholders from other related strategic initiatives. Use practical, business-specific strategic initiative terms. An EBPA initiative can't succeed unless it's aligned with other strategic initiatives.
• Identify metrics and track project progress. There's no end to defining the perfect EBPA. Since business priorities continually change, it's critical to ensure that the project progress is tracked.
• Establish a mechanism to keep the EBPA repository current.

EBPA is Crucial to Successful Enterprise Transformation

With the increasing popularity of BPM and SOA, it's important to ensure that adequate attention is given to the subject of an EBPA. An enterprise business process architecture provides a top-level view of the organization and acts as a dashboard that CxOs can use to devise their strategies. Other stakeholders in the organization can use it during the implementation of the business strategies.

Without an EBPA the success of any large-scale enterprise transformation or strategic initiatives may become doubtful. Prior to undertaking an EBPA initiative, it's important to assess the areas that are going to be affected. By conducting a needs assessment, you can give proper attention to areas that are particularly important to the organization.

Success depends on support of top management and better participation from all stakeholders. I advise you to leverage standard frameworks and industry reference models during your EBPA definition.

I would like to thank Vijayalakshmi P.S., Practice Head for BPM Consulting Group, Wipro Technologies, and Dr. Udaya Bhaskar Vemulapati, General Manager, Wipro Technologies, for giving me encouragement and support in writing this article. I want to thank my colleague Venugopal Juturu for doing a thorough review and providing feedback.

Useful Links

Paul Harmon's Business Process Change: A Manager's Guide to Improving, Redesigning and Automating Processes
http://www.bpmenterprise.com/PT9

Harmon's newest book, Business Process Change, Second Edition: A Guide for Business Managers and BPM and Six Sigma Professionals
http://www.bpmenterprise.com/BFT

Ralph Whittle and Conrad Myrick's book, Enterprise Business Architecture: The Formal Link between Strategy and Results
http://www.bpmenterprise.com/LV9

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