Designing Business Architecture for IT Projects: A Business Architect’s Basic Guide — Pt.1
Introduction
Most business organizations are driven by the vision and direction. At a high level, these are defined using quantifiable business objectives as applicable to the entire organization, such as overall revenue targets, corporate brand value and more. However, when it comes to achieving these objectives, they are converted into a business strategy and then into specific initiatives important to the organization and/or further subdivided into actionable projects. At this point, the objectives are cascaded through these projects, and specific functions, multiple teams or cross-functional teams become responsible for achieving and contributing to the overall objectives.
Information Technology (IT) projects often result from such overall organizational initiatives. Each project has their own objectives and outcomes and business architecture. In this piece of writing, I discuss the process of determining the business architecture for individual information technology projects with a simple application from the manufacturing industry. Let’s build and illustrate the business architecture through means of a story of an IT project.
The story
Here’s the story. FoodieBee is a multinational fast-moving consumer goods (FMCG) manufacturing organization (manufactures packaged food, beverages, snacks and candies, and other consumables) with worldwide operations. In a given country, their customers are diverse and include (1) large and medium supermarket chains, and (2) wholesale distributors that deliver goods to smaller stores (i.e., mom-and-pop stores, boutique shops) in a regional area. These two customer types send in purchase orders every week to replenish their stocks.
Recently, FoodLever put in place a new Enterprise Resource Planning (ERP) system to streamline internal business operations. However, this ERP system does not capture customer orders directly for several reasons:
1) Large and medium supermarket chains send in orders through their central procurement hubs which had electronic B2B systems in place for suppliers like FoodLever,
2) The orders from small stores are captured by distributors on their Salesforce Automation (SFA) mobile apps and come in as bundles of files classified by region (distributors are regional),
3) The ERP recognizes only large and medium supermarkets and distributors as it records only the primary sale (i.e., distributor to small stores) and not secondary sales (i.e., small stores to consumer),
4) Orders have inconsistencies, and they need to be compliant with business rules of order processing.
5) Overall, orders are manually processed by the sales order team before it can be fed into the ERP. For instance, orders must be converted to one format and consolidated in certain instances before it can be consumed by the ERP.
Note: We define this scenario under perfect conditions so that there are only those issues given above.
These activities and concerns have resulted in an inefficient and time-consuming process requiring extra effort that increases costs of operations. Hence, they need to be processed manually, verified and approved prior to entering the ERP. FoodLever is specifically concerned about improving this order process in the organization and initiated an IT project to introduce an efficient solution that eliminates all the issues.
The IT project has a number of objectives and Key Performance Indicators (KPIs) that contribute to the overall company objectives:
Company objectives:
#1 Improve revenue generation through business agility
#2 Improve customer satisfaction through convenience
#3 Reduce internal cost of operations
Project objectives and Key Performance Indicators
#1 Reduce time spent on end-to-end process — Time taken for each sub activity
#2 Eliminate human error — Number of human errors per day
#3 Improve business rule validation — Accuracy rate of orders
#4 Reduce cost of operations — Cost of labor/ technology/ operations
#5 Improve communication among stakeholders — Consistent flow of events to all actors
At this point, the discussion is still in the planning stages of the solution. Let me summarize what I’ve discussed up to here. So, what exactly am I doing here, and why do we need the above information for this IT project?
- These mappings help to establish strategic alignment of the project which is at the core of the business architecture.
- It helps all stakeholders understand the expected outcome of the project and how it contributes to overall company objectives.
- There is common understanding that the solution proposed to solve the issues in the process must also achieve these specific project objectives, through means of the KPIs.
Here is how the process looks like at a high-level with the business issues.
So how does the strategy map into execution? Let me visualize what the IT project plans to achieve as a solution here. I do not discuss how the solution was designed or decisions made in the process, but the following revamped process diagram shows which system components are introduced to facilitate the process, their functions (green) and how they contribute to project’s objectives (red).
In my next blog, I will explain how I designed the business architecture for this process. Stay tuned!
