What does business architecture mean?
It is a discipline that represents comprehensive, multidimensional business views of capabilities, end-to-end value delivery, information, and organizational structure, and the relationships among these business views and strategies, products, policies, initiatives, and stakeholders.
Business architecture is a part of an enterprise architecture related to a corporate business or an organization. Business architecture bridges the gap between a company’s strategy and its successful execution. It helps you describe your business capabilities and connects them to your company’s objectives.
How artificial intelligence is transforming the business
Let’s review first some examples of artificial intelligence applications, so we can get a more precise picture of the order of magnitude of artificial intelligence transformation to the business:
- In the banking industry, algorithm trading driven by artificial intelligence will enable banks to perform millions of trades in a day when humans are unable to process this amount of data. In personal finance, individualized optimization of spending and savings can be performed based on personal goals and habits. AI chatbots can also provide automated recommendations and approvals for personal wealth management or loans.
- In healthcare, artificial intelligence can be used for medical diagnosis or interpretation of medical images.
- In the automotive industry, self-driving cars are emerging while it is already very common to have assisted features such as self-parking and advanced cruise control.
- In various industries, facial recognition is another artificial intelligence application with its many related security applications.
Even though artificial intelligence technology is promising, it represents a real challenge for companies to develop, customize or implement. Additionally, budget and resources are often limited, and organizations are reluctant to spend some of their budgets for a hypothetical return on investment into a technology that has not yet proved its profitability.
The implementation of artificial intelligence requires a broad understanding of the business context because lots of customizations can be needed to implement an effective AI solution that brings concrete business results. Also, there are many areas of the business that can benefit from artificial intelligence and it is often very difficult for company leaders to prioritize artificial intelligence initiatives.
Business architecture helps implement artificial intelligence within organizations
Based on these aforementioned challenges, company leaders need help gaining clarity to improve their decision-making when it relates to AI. This is where business architecture comes into play with its holistic approach.
Four elements to define business architecture
In the Bizbok, a guide published by The Business Architecture Guild, there are four core elements that serve to define the business architecture including value streams, business capabilities, information, and organization.
Value Streams
Value streams are depicted as an end-to-end flow of activities from a stakeholder perspective. They define the required stages necessary to satisfy customers.
Let’s suppose a bank wants to understand how it can improve its loans with artificial intelligence. A business architect will define the value stream for a customer who wants to subscribe to a loan as such:
Review all loan offers -> get advice -> select the loan -> check credit score -> get approved -> pay desired item with the loan
By describing value streams, business architects ensure to get a true customer-centric approach integrated into the business architecture. Value streams are also easy and quick-to-use and they clearly show how value is delivered to the customer. In the previous example, the value obtained by the customer is to pay a desired item with the best loan.
Business capabilities
A business capability map is a set of business capabilities that can be viewed as the building blocks defining the business. Business capabilities can also be tied to value streams because each stage of a value stream is enabled by business capabilities. With this tie, business architects can fully understand how business capabilities provide value to customers and work with a truly customer-centric approach.
Then, by assessing business capabilities, business architects are able to identify and prioritize the business capabilities that can be improved.
Going back to our last example, business architects can assess the capabilities supporting the loan approval stage in the value stream and find out how they can be optimized with artificial intelligence.
Information
In AI, information is of course an important aspect because artificial intelligence is all about data, structured or not structured. In business architecture, this element is about making a glossary of business concepts used in an organization and depicting how they relate to each other in information maps. Concepts can be created through a bottoms-up approach which consists of analyzing databases and extracting metadata out of them. A top-down approach can also be performed. In such a case, business architects can identify the different concepts based on the business capability map objects.
In our example, the approval piece can be optimized by, for example, analyzing vast amounts of consumer data and utilizing machine learning algorithms to develop credit risk models that predict a consumer’s likelihood of default.
Organization
Representing the organization is key to understanding the business context. In this element, business architects describe the company organization (business units, departments, functions, people, etc.) in organizational maps. Organizational items can also be tied to business capabilities to get visibility into the business units involved for each capability.
When analyzing how artificial intelligence will impact an organization, it becomes clear and easy to identify the business units impacted by a change in a business capability due to artificial intelligence.
Other elements of business architecture and enterprise architecture need to be studied to fully understand the impact of artificial intelligence on an organization. Namely, the business processes that need to be redesigned because artificial intelligence will change many current processes, as well as the applications supporting business capabilities that should be redeveloped to integrate artificial intelligence.
Based on this analysis, business architects can identify various transformation initiatives or projects, and simulate different transformation scenarios of AI implementation, such as building or buying a new AI application or adding a new AI feature to an existing application.
Read another business architecture example : How Airbus leverages data for growth
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