> Detecon Executive Briefing

Frank Lorbacher Dr. Verena Schmidtmann

Frank.Lorbacher@detecon.com Verena.Schmidtmann@detecon.com

The Lever for Integration of

Processes and IT
Business meets
Architecture - Mind the Gap
Quick and alert action, increased flexibility, cost reduction: how is that
all supposed to work while the IT is too sluggish and the processes
too complex? The use of business process management (BPM) for
the business aspects and service-oriented architecture (SOA) for the
IT aspects has started the ball rolling in the direction of optimization,
more flexibility, and standardized processes and IT. But the link
between these two areas and their integration is missing.

In this paper the use of a logical business architecture to bridge the

gap between processes and IT is described. Concrete examples from
Detecon projects are drawn on to sketch the design of such an
architecture. The use of the integration of processes and IT as a
contribution to quick and alert action and increased flexibility is
demonstrated. In addition some insight is given into how a logical
business architecture can make an extraordinary contribution to
improving joint understanding and interaction between the various
business and IT units.

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 Business meets Architecture
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Mind the Gap: How business and IT improve collaboration

Have you ever wondered why some companies are faster on the
market with new products than others, why they respond earlier to
changed customer behavior and are able to consistently improve their MIND THE GAP
services - leading to a higher degree of customer satisfaction? The
difference may be that these companies mind the gap. A Detecon study
from 2009 revealed that only 14% of the surveyed companies are
willing to certify that their IT is well-aligned with the company’s business strategy and
demands. But are the IT departments the only ones at fault here? Many companies are
spending lots of money on enhancing their strategic alignment and process quality by
introducing Business Process Management (BPM) within the business departments. At the
same time they are investing in the introduction of a Service Oriented Architecture (SOA), a
more flexible architecture style which aims to overcome existing barriers in the historically
developed IT landscape and to reduce the time needed to adapt to new or changed business
demands. But the exchange of information and deliverables between departments is often
hampered by a lack of mutually agreed deliverables based on a commonly agreed language.

Business Strategy & Strategic Requirements

Business Process
IT Strategy
Strategy

Business Process Logical Service Oriented

Managem ent Business Architecture
(BPM) Architecture (SOA)

Business
Capabilities

Enterprise Architecture Management

Figure 1: Implementation of a logical business architecture to bridge business and IT

To bridge this gap business and IT senior management need a joint approach. Within such
an overarching approach, experts from both sides define the bridging framework, which
comprises a common taxonomy and artifacts for the handover of deliverables based on a
commonly agreed language. This is what we call the Logical Business Architecture.
Typically, the initial project to develop the company-specific framework is initiated by the
corporate CIO or CTO and is led by an enterprise architect. It is important that this initial
work is executed in a short timeframe - two months at the most. After this short phase, the
framework with its components must be optimized as a result of its use within projects and
negotiations between business units or between business units and IT.

Detecon International GmbH z 11/2009 2 www.detecon.com

 Business meets Architecture
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How to bridge the gap

The logical business architecture is the link between the world of processes and IT. This is
where the entire business of an enterprise is broken down into manageable, understandable
units which can be easily handled and which are modeled according to a business logic.
How are these units structured in terms of content?

Enterprise Architecture Management

Business Process Logical Service Oriented
Management Business Architecture
(BPM) Architecture (SOA)

Business
Capabilities

Illustrative Excerpt

Logical Business Architecture

Domain: Customer Relationship Management

Business Capability:
Customer Scoring & Credit Rating
...
...
Business Object: KPI
Risk Profile

Figure 2: Exemplary excerpt of a Logical Business Architecture with Domains,

Business Capabilities, Business Objects and KPIs

Figure 2 provides an illustrative excerpt of how the units are structured into high-level
domains like CRM and detailed business capabilities. Because they are identified top-down
and independently of the concrete process context, stability is emphasized. Business
capabilities can be realized either by means of IT services or human resources. This frees
them from the ballast of a process structure determined by the present organization, as well
as from the restrictions imposed by the IT applications presently in use. In addition to the
clear assignment of business capabilities to domains, business objects are allocated to each
business capability. Performance indicators (KPI) for measuring target achievement and
performance are a further important characteristic which should be designed for each
specific business capability.

Detecon International GmbH z 11/2009 3 www.detecon.com

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How to increase flexibility and reduce costs at the same time

What are the design principles which must be considered in addition to the content criteria of
a business capability so that the logical business architecture, as the link between process
and IT architecture, can contribute to increasing the business flexibility and to reducing costs
in processes and IT?

The business capabilities should be designed so that they can exist autonomously without
being isolated. Fundamental design principles should enable the independent development
of the business capabilities, while at the same time ensuring that they share enough
common features to achieve the highest possible degree of standardization for their
interaction. They can then be used as a toolbox of building blocks which can be assembled
in flexible compositions for the execution of processes. If a high degree of implementation
standardization is achieved, then there will be savings in the set-up costs for additional and
changed processes and in the integration costs for new IT components.

What are the most important design principles for business capabilities so that on the one
hand greater flexibility and, on the other hand, cost efficiency through standardization can be
achieved?

Besides reusability and abstraction for increasing the usage of a single capability in different
business processes free from organizational straitjackets, further important design principles
for business capabilities include independence from specific status, modularity, and
granularity. If business capabilities are specified on the strict basis of structural logic,
liberated from any concrete context of processes and organization and without the ballast of
the currently implemented IT applications, a mapping from business processes via
capabilities to IT services and applications becomes possible. This mapping creates an
integrated view of process and IT architecture and a standard language between business
and IT. The joint language can also contribute to the simplification of agreements in
communications with partners and suppliers. The resulting transparency can be used to
realize cost effects by advancing standardization efforts from the technological to the
business process area. Also investments into IT can be steered more purposefully in line
with how critical the supported processes are to business.

Detecon International GmbH z 11/2009 4 www.detecon.com

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The logical business architecture proves of value

A large, multinational telecommunications company used the medium of a logical business
architecture for the development of a joint target structure for their CRM landscape. It
enabled them to bring about agreement on a common language and vision throughout the
business and IT parts of their fixed line and wireless divisions. During a 5 month
consolidation project, an overarching CRM target architecture was designed on the basis of
architectural guiding principles, and a road map of implementation initiatives was begun.
Requirement management based on business capabilities made it possible to secure firm
control over the highly complex existing application landscapes, comprising of around 400
applications, and to reflect the differing requirements of the involved business departments:
marketing, sales, and customer service. With the logical business architecture, synergies,
dependencies, and necessary adaptations were quickly identified, specified, and
transformed into implementation measures which resulted in a reduction in maintenance and
operation costs of 18%.

Even after completion of the project the portfolio management of the business capabilities
means that the strategic planning process for the CRM landscape can be performed in an
integrated way between business and IT. This leads on to the overarching management of
the implementation covering both the process and IT aspects. The company can respond
specifically to unexpected changes during implementation, raising the overall level of
quickness and alertness whenever there are changes on the market.

Detecon International GmbH z 11/2009 5 www.detecon.com

 Recommendation
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Recommendations
A stable logical business architecture opens the door to increased flexibility in processes and
IT. It is the foundation for a low-cost, rapidly effective adaptation to market changes and
technological developments. BPM and SOA play a decisive role in the realization of this
holistic approach.

Management should keep the following points in mind when setting up a logical business
architecture:
Q Always select a top-down procedure for the design and specification of the logical
business architecture. This is the only way to ensure that the identified business
capabilities satisfy the requirements derived from the corporate strategy.
Q The business capabilities within the logical business architecture describe the business
functionality required for the implementation of the business model. Current
organizational circumstances and IT restrictions must not be allowed to play a role during
their customization.
Q A logical business architecture not only supports communication and coordination
between the business side and IT, but performs the same function between the various
business departments. So representatives of all units must participate in its development.
Q Do not spend too much time working on a concept. After a relatively brief phase for the
definition of the architecture elements and top level business objects, they should be
quickly put to the test in practice, e.g. in projects.
Q Establish a change request procedure which coordinates and implements change
requests on business capabilities within the framework of the portfolio lifecycle
management process.
Q Establish a governance function comprising representatives from business units and IT
for the maintenance and evolution of the logical business architecture. This could be an
architecture board, provided that it is authorized to make decisions.
Q Support demonstrated by senior management within the framework of a communication
concept will increase the acceptance of the logical business architecture. The logical
business architecture will then rapidly be applied on a broad scale going beyond the
binding requirements.

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