Digital Transformation and Business Architecture (Part 2 of 3) – Presented by Dr. Giovanni Traverso, Huawei

At The Open Group Shanghai 2016 summit, we invited Dr. Giovanni Traverso, Chief Business Architect of HUAWEI Service Strategy and Architecture Practice, to give a keynote speech “New Open Business Architecture (O-BA) to Support the Construction of Digital Business and Smart Government”.

Huawei was a Diamond Sponsor of this summit, is a Platinum Member of The Open Group and is participating in the creation of the O-BA standard, whose first part was launched in July 2016 as a Preliminary Standard.

Giovanni, who is leading this effort within Huawei, presented Huawei’s perspectives on Business Architecture coming from best practices.

This is part two in a three-part series.

Part 2 – Business Architecture Enables the Digital Transformation

 

So how to approach such complexity of changes without losing sight of the business intents? How to answer the business questions about investment, risk and assurance, responsibilities, relationships, impacts?

In order to answer our business questions we need a discipline that identifies the components of a business and their relationship. Components and their relationships define architecture, so here comes the “Business Architecture”.

Digital business requires the Business Architecture practice to be open and agile. Open means that it should look beyond our organization’s boundaries, be centered on customer experience and projected towards its industry ecosystem, besides internal focus. Agile means that it should decompose the business into loosely coupled and highly cohesive components, so that the architecture is modular and changes can follow business opportunities incrementally, quickly, limiting risks and mastering dependencies.

The O-BA standard, reflecting industry’s best practices, fulfills these requirements being based on Value Streams and Capabilities.

Capabilities represent the modular components of a business, while Value Streams represent the value creation mechanism that delivers value to the business stakeholders, enabled by those Capabilities. On a macroscopic level the whole thing determines the organization’s unique characteristics that in the O-BA are called “competences”.

How do we apply Business Architecture?

In my previous post, we discussed how digital transformation regards Experience / Operations / ICT Infrastructure. This implies that changes have to happen consistently on three fields: Offering (products/services own and in partnership), Business Practice (processes, skills, organization, information), ICT.

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According to this view, technology evolution sustains capability increments, which sustain product and services evolution along with the interactions with ecosystem and customers (determining the customer experience).

This structure unleashes digital business innovation.

In a top-down way, a new business model can be decomposed into required capabilities that will be developed, pulling-in certain technologies.

In a bottom-up way, technology evolution can enable/automate new capabilities that will be made available for business. So we have a bidirectional channel that connects and catalyzes innovation however it is originated.

On the other hand, this structure fits with agile delivery.

The digital ICT branch of an organization can build microservices (reflecting a shared capability map) exposed through APIs, while the Lines of Business (or partners) can rapidly consume them creating service chains that realize a business service or automate some process.

For example, a digital service operator can leverage geo-location technology (already built-in) to create an analytic app that, combined with other existing capabilities, allows to send customized ads to users, generating quickly incremental revenues at marginal cost.

Building upon existing capabilities that are well identified allows to generate new services dynamically “on-demand”, thus enabling the business to set the pace, as opposite to traditional monolithic ICT constructions.

Modern business architecture, based on capability maps, is essential to guarantee coordination so that the benefits of DevOps techniques and the API economy can be applied at scale. That is, without losing sight of the business sense and priorities because capabilities are defined by the business, shared in business language, translated systematically into application, information, technology, process, organization and skills.

Members of The Open Group can download this presentation at http://www.opengroup.org/public/member/proceedings/Shanghai-2016-08/Presentations/Giovanni%20Traverso-Keynote4.pdf

The Open Group Shanghai 2016 event proceedings are available for members here.

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Giovanni Traverso
• 28 years in telecom business, Product Management, R&D Management, Business Unit GM and Transformation Management
• Now leading the Enterprise Architecture team at Huawei Global Services, Standard and Industry Development Dept.
• Certified Business Architect (CBA)
• Contributor to The Open Group Open Business Architecture (O-BA) Standard and the Business Architecture Body of Knowledge (BizBOK)