You might think that technology supports your business, but you’re wrong: Technology has become your business. The 21st century reality is that you don’t have a business without technology; it has become as integral to the way your business operates as are people, finances, suppliers, business partners, and all the rest. That means it’s too risky to build your business and only then look to put supporting digital technology underneath. Instead, business and technology must be designed and built together, as a unified whole – there are simply too many design tradeoffs between the physical and digital aspects of your business to risk doing it any other way. The new mindset is that “your business is embodied in your technology,” and this calls for a new approach to business technology architecture and strategy.
Rather than IT’s current focus on siloed applications and outsourcing arrangements to support your business, Forrester‘s Business Capability Architecture starts with the reason you’re in business – to produce the best business outcomes for your organization – bringing businesspeople and technology staff together around continually improving how your business achieves its outcomes.
By viewing – and specifically designing – your organization’s overall outcomes as the sum total of the outcomes of your business capability implementations, you create a clearer view of your organization as an intricate network of people, processes, technology, and resources (both physical and digital), making it easier to identify areas where application and technology silos lead to broken business outcomes.
For example, social technology may help your customer service business capability, but customer service also needs the benefits of BPM, SOA, event processing, embedded analytics, and more. When your focus is on customer service as a capability, you get above technology silos and capture interrelated synergies from them all, while avoiding the pitfalls of conflicting designs between the various silos.
To recentre your strategy around your business capabilities, answer this series of five key questions:
• What metrics represent your most important top-level business outcomes? Clarity on top-level outcomes is the lens that focuses your organization’s success. Across the range of both financial and soft metrics (e.g., customer satisfaction), some metrics have much more correlation with your organization’s near- and long-term success than others, and these metrics become the central priority and focus of your business capability design efforts.
• Which capabilities most drive your top-level metrics? Clarity on the connections between top-level and capability-level outcomes narrows and focuses business improvement analysis. For example, if capital spending is a critical top-level metric, opportunities to reduce capital investment for a manufacturing capability become more interesting.
• What changes to a capability will improve key capability metrics? Focusing first on the capabilities that most drive top-level outcomes, identify opportunities to drive integrated business-technology improvement. To identify tech-driven investment opportunities, look for ways that a given technology addresses the business dynamics of each capability. For example, a highly variable capability that is sensitive to fixed- costs might benefit from cloud-based options that can be easily scaled back to reduce expenses in hard times.
• What portfolio of initiatives can deliver the necessary capability change? Don’t stop with a single technology to improve a capability: Consider all of the parts of a capability, rather than focusing on individual siloed applications and technologies. Aim for a portfolio of initiatives that will deliver value now while, over time, weave legacy applications, B2B relationships, diverse data stores, varied user interfaces, collaboration platforms, and more into the long-term success of each capability.
• How must your technology platform evolve to enable the change portfolio? Your portfolio of integrated business-technology initiatives becomes the basis for planning the evolution of your technology base to deliver near-term business outcome improvements in a way that also facilitates sustained long-term change. Getting above technology silos allows you to see how technology for SOA, event processing, BPM, embedded analytics, and many other technologies should form a unified multitechnology platform for your business capabilities.
Randy Heffner is Vice President and Principal Analyst at Forrester Research, serving enterprise architecture professionals. He will be speaking at Forrester’s IT Forum, May 25-27 in Las Vegas.