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Enterprise Architecture and Target Operating Models

How often is an established Enterprise Architecture approach used to create a Target Operating Model?
If the answer is not often, then why not?
If the answer is yes all the time, then how should we go about creating one ?
Are traditional consultancy approaches to target operating models good enough?
 

What is an Operating Model?

The term Operating Model is a fuzzy one. What does it really mean? What is in an Operating Model?

It appears that often some consultants totally go out of their way to avoid mentioning Enterprise Architecture and instead focus solely on the term Operating Model.

This may well be a side effect of the misunderstanding of Enterprise Architecture as only concerned with IT Architecture. Or may be because those consultants want to invent new terminology to make their services sound unique?

Is a Target Operating Model just another name for the Target Enterprise Architecture?
And by Enterprise Architecture of course I don’t mean just the IT Architecture domains, but all the EA domains which now include:
  • Strategy & Motivation
  • Business Architecture
  • Information/Data Architecture
  • Application and Application Service Architecture
  • Technology & Infrastructure Architecture
  • Physical Architecture (I.e. Archimate 3 Physical Elements)
 
It seems to me that a target operating model is fundamentally just another name for the full target Enterprise Architecture model and in particular primarily represents the mapping between the Strategy and Business Architecture domains and the other EA domains.
 

Why do we need an Operating Model?

 
An Operating model at the very least represents the mapping between the strategic views and components, such as :
  • Business Model (BMC)
  • Business Motivation Model (BMM)
  • Wardley Model
  • Strategic Map/Balanced Score Card (SMBSC)
  • Business Capability Models
and the rest of the enterprise architecture models, views and components in the other remaining EA domains.
 
If we update the strategies then we will need to update how those strategies will be realised.
A strategic change / business transformation programme will be used to realise the new strategic changes and essentially change resulting operating model.
Many refer to a Target Operating Model in a simplistic fashion as consisting of People, Processes and Technology, but there is more to it than that.
 
According to POLISM, a definition that comes from Ashridge Business School, an operating model covers six component areas:
Processes
– The business processes that needs to be performed
Organisation and people
– The people and roles performing the processes and how they are grouped into organisation units
Locations, buildings and other assets
– The places where the work is done and the technology, infrastructure and physical equipment in those places needed to support the work
Information
– The Information, data and applications needed to support the work
Sourcing and partners
– External entities, people and organisations outside the enterprise also performing the work
Management
– the management processes for planning and managing the work
Missing from this list is an analysis and understanding of Customers, Risks, Assessments, Performance metrics and measures, and other influences.
A secondary question that I always ask myself is why don’t Business Masters (MBA) courses teach executives and management about Enterprise Architecture?
This may indeed be the source of the fuzziness and lack of preciseness of the term Target Operating Model?
 

Target Enterprise Architecture Model

 
For me a better approach is to use a complete Target Enterprise Architecture Model as the Target Operating Model.
 
The Target Enterprise Architecture Model will consist of a number of more specific models (viewpoints) grouped into a number of EA domains.
 
Each of the EA domains will typically address the needs of different stakeholders and
visualises their concerns. This is a bit like for the POLISM stakeholders above but in better detail.
 
Each of the specific models listed within an EA Domain below may well evolve and change over time independently. The specific models can be updated when necessary as the enterprise itself evolves and changes in reaction to changing business and customer environments.
 
There is traceability connection between each specific model, so creating or updating one model will inform and influence other models. The primary traceability connection are see in the diagram below.
 
As with any target enterprise architecture models, there can be a number of alternative future versions often aligned to different strategic themes,  business scenarios or intermediate transition architectures. There need not be a single view of the future.
 
The complete set of the following specific models makes up the whole target Enterprise Architecture model, grouped into the following EA Domains:
 

 

Strategic Architecture Domain

  • Business Model (BMC)
  • Wardley Model
  • Business Motivation Model (BMM)
  • Strategy Map / Balanced Score Card Model
  • Value Chain Model
 

Influences Doma

  • Influences model
  • Stakeholders model
 

Customer (Outside In) Domain

  • Business Value Network Model
  • Business Scenario Model
  • Customer Journey Model
  • Business Services  (value proposition) Model
  • Business Events Model
  • Business Service Flow Model
 

Risks Domain

  • Risks (RAID) Model
  • Assessment Model
  • Business Capability Domain
  • Business Capability Model
  • Capability Dependency Model
  • Component Business Model
 

Governance and Compliance Domain

  • Business Policy Model
  • Business Rules Model
  • Governance Model
  • Requirements Model
 

Organisation Domain

  • Business Context Model
  • Organisation Structure Model
  • Business Locations Model
  • Business Roles Model
 

Business Process Domain

  • Business Process Hierarchy Model
  • Business Process Flow (Value Streams) Model
 

Knowledge/ Information/ Data Domain

  • Knowledge Model
  • Business Information Flow Model
  • Business Information Object Model
  • Logical Data Object Model
  • Physical Message Model
  • Physical Data Storage Model
 

Applications Domain

  • Application Services Model
  • Application Landscape Model
  • Application Integration Model
 

Infrastructure Domain

  • Infrastructure Services Model
  • Infrastructure Model
  • Network Model
  • Physical Models
 

Roadmap Domain

  • Initiatives Model
  • EA Roadmap Model
  • Project Roadmap Model
  • Programmes and Project Portfolio Model
 
 
 

 

Summary

 
In summary we should not be defining target operating models with yesterday’s approaches, but must instead use today’s better Enterprise Architecture techniques and models for defining the next Target Operating Model.
The models identified above are all fully defined and available in an Abacus model. Anyone who wants to follow this approach can contact me for more details.
 
 

Credit to the author : Adrian Campbell

Infrography credit : created by Shmidt Sergey from Noun Project

 
 

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