Business architecture case studies

1. 1
Enterprise Business Architecture
Case Studies

2. 2
EXECUTIVE SUMMARY
In the context of today’s demanding market companies are experiencing the
need for multi layered change. The additional challenge to this environment is
addressing the speed of required change, both from a customer and technology
perspective, using dated tools and techniques. These forces at work are driving
organizational impact which reaches far beyond conventional thinking. IAG
believe architecting the business, through strategic planning, understanding the
holistic enterprise and collective change agendas, is the way forward.
Having a viable business strategy is fundamental to the success of organizations
facing increased competition, shifting customer demands, globalization, new
markets and economic pressures. But having a strategy is not enough.
Organizations must be able to execute against that strategy and demonstrate
quantitative, measurable value.
The challenge facing executive is how to turn business strategy into actionable
results. Business architecture provides a vehicle for interpreting business
strategy in concrete ways that can be deployed as coordinated, clearly
articulated business initiatives.
Executive require a different kind of dashboard. One which is provided through
the tools and techniques deployed in the context of building and practicing
business architecture. This whitepaper discusses business architecture in
practice and the benefits realized by the firms who used their own business
architecture to achieve the desired business outcomes.

3. 3
CONTENTS
Executive Summary.......................................................................................................................2
CONTENTS .....................................................................................................................................3
Case Study Overview ....................................................................................................................4
Human Capital Management Transformation:...........................................................................5
Divisional Non-Core Outsourcing.................................................................................................6
Centralization FTE and Enterprise Restructuring study ...........................................................7
Spans of Control Cost Study capability/function, FTE, role .....................................................8
Data and Process Ownership.......................................................................................................9
Strategic Project Portfolio Development ...................................................................................10
Strategic Alignment......................................................................................................................12
Portfolio Management..................................................................................................................12
Closing Thoughts .........................................................................................................................14

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CASE STUDY OVERVIEW
Business Architecture methods and techniques really come into their own when
applied to a broad range of critical business problems. At the same time,
methods and techniques comprising the discipline of business architecture
continue to evolve.
The following Case Studies are not an exhaustive list yet illustrate the vast
number of ways where value has been driven through the use of the business
architecture collateral to the benefit of achieving the strategic objectives. The
discipline of business architecture applies to multiple common business drivers
some of which are —customer centricity, financial planning, lower operating
costs, optimized application portfolio, modernization and program management
Mature and successful Business Architecture practices work collaboratively with
business leaders, IT Architects, and executives to address current and future
challenges. Adoption and acceptance of Business Architecture, in strategic
planning, has led to an increase in the maturity of the discipline and a business-
centric architecture that focuses on the needs of the business.

5. 5
HUMAN CAPITAL MANAGEMENT TRANSFORMATION:
A Large Tier 1 bank engaged the use of the capability model to transform the HR
function to a future state operating model with the strategic objectives of
outsourcing non-core capabilities, process redesign, and process distribution
across centers of excellence, with Online Delivery and Contact Centre channels.
 They strategically defined what Human Resources will provide in future
state services, support and built a capability model
 Using the capability model they designed the organization around what
functions HR does
 Then decided where those business functions and organizations would
be located
 Knowing the location preferences, to drive lower cost operating models,
they decided which functions could be performed by a 3rd Party
Outsourcing arrangement
 Researching the vendor catalogue leveraged existing relationships and
Offshoring strategies to reduce costs
 Remaining business functions determined the organizational structure
and roles based on spans of control / management and shared services
 In the delivery of those business functions Value Streams where
produced to understand how they would flowed through the organization
 Process Ownership was assigned to ensure future state process were
optimized, efficient and effective with appropriate controls and metrics
Business Model was fully deployed in less than 2 years with supporting
technologies driven off the business needs and design.

6. 6
DIVISIONAL NON-CORE OUTSOURCING
Organizations quite often look at parts of their business which are non-core, are
necessary to be managed but not necessarily provided internally, as they are not
a core strength. In this regard they look at other organizations, with highly
developed specific capabilities, which can be provided at a lower price point, or
can fill a short-term skills gap.
Using the business architecture to deconstruct the business to functions and
process exposes the dimensions of the capabilities, you might consider
outsourcing, or clarify the best options for alternative capability sourcing.
An Investment division, of a large tier 1 bank, focused on operational provisioning
and used the business architecture mapping of capability, business functions,
locations, processes and vendors to deconstruct the business. This analysis
exercise:
 Exposed several outsourcing possibilities from Real Estate Operations to
Documentation Archive and Retrieval processes
 Brought clarity to the opportunity of consolidation of current multi-vendor
relationships
 Produced Cost of Ownership analysis to support the business case
 Enabled the RFP to be very specific as to the capabilities, business
functions and processes which needed to be contracted.
CEO was impressed with the speed of discovery and the foundational basis for
decisions.

7. 7
CENTRALIZATION FTE AND ENTERPRISE
RESTRUCTURING STUDY
Good organizational design is built on the basis of functional alignment, spans of
control and the right balance between distributed and centralized capabilities.
Distributed capabilities support agility and centralizing capabilities will grow
expertise, reduce cost and address complexity.
Using the business architecture a retail organization wanted to know what was
being done, where, by who and what was the driver of effort.
A socialized and executive agreed business functional model was available. This
was used as the foundation for a global survey of the business unit managers.
The FTE data set, by business unit, by location was extracted from the HR
system and aligned to the business functions being performed.
Additionally the business processes were catalogued against the business
functions.
Survey was structured to reflect Business Function- Business Unit-Location-
Business Processes, number of FTE. A drop down was provided to discover
what events where drivers of effort.
The Survey resulting analysis drove a global off-shore, near-shore and
centralization location strategy with approximately 30% reduction in cost base.

8. 8
SPANS OF CONTROL COST STUDY
CAPABILITY/FUNCTION, FTE, ROLE
Finance Transformation, of a large Tier 1 bank, used the business architecture
mapping of capability to business function to business process to role.
It was quickly discovered the number of managers to staff members was on
average 3 to 1. The Spans of control for Industry best practice was a ratio of 6-9.
Adding the dimensions of transactional Time, Frequency and Volume, to
determine the correct number of FTE required to complete the processes, the
business units were Right Sized to the number of people necessary to perform
the work and organized to reflect the industry benchmark number of staff
members to manager ratio.
Sales & Marketing Products & Services Operations & Processing
Risk & Financial
Compliance
Strategy & Governance
Market Research &
Analytics
Product Development Resource Planning Regulatory Advisory Business Strategy Mgmt
Customer Mgmt
Strategy
Product Research &
Analytics
Operations Policy &
Procedure
Alliance Planning
HR Planning &
Governance
Segment Analysis &
Planning
Channel Mgmt Channel Mgmt Risk Mgmt
Programme & Change
Mgmt
Marketing Mgmt Business Continuity
Financial Accounting
& Reporting
Regulatory &
Compliance Policy
Brand Mgmt Information Tech Decision Support Mergers & Acquisition
Sales & Contract
Monitoring
Product Catalogue
Mgmt
Central Service
Management
Balance Sheet Project Mgmt Office
Relationship Mgmt
Product & Service
Monitoring
Vendor Management Credit Oversight Audit
End to End Service
Level Perf Monitoring
Channel Performance Statistics & Measurement Legal Advisory
Business Policy
Oversight
Authorization/Approvals
Risk & Financial
Control
Compensation &
Benefits
Auth & Limits Delegation Financial Data Mgmt
Regulatory Compliance
Monitoring
Client Acquisition &
Referrals
Transactional
Processing
Customer Data Mgmt
Accounts Payable /
Receivables
Project Cost Acct
Contact Mgmt Order Mgmt Statement Prep Investigations
Learning &
Development
Compliant Mgmt Document Mgmt
Collections &
Recovery
Regulatory Reporting
Prospecting & Sales Credit Processing
Credit Approval &
Processing
Business Procedures
Campaign Execution Fees & Billing Mgmt
Financial
Consolidation
M&A Due Diligence
End Consumer Sales Payments Tax Reporting Vendor Mgmt
Strategic
Control
Execute
CAPABILITY MODEL
ILLUSTRATIVE
Product Performance
Mgmt
Campaign
Management
Pricing Policy
Channel Delivery
Mgmt
Product
Configuration Mgmt

9. 9
DATA STEWARDSHIP: GOLDEN SOURCE,
OWNERSHIP, RATIONALIZATION, MI REPORTING
Data stewardship is of primary focus in these days of privacy yet regulatory
transparency. Organizations are looking to produce single version of the truth
data sets to streamline redundant information, improve business intelligence and
provide effective reporting.
DATA AND PROCESS OWNERSHIP
Large Tier 1 Insurance Company Enterprise Architecture team used the business
architecture capability model to map the application inventory.
Each application was reviewed for business value and the data was catalogued
to the business capability it underpinned. The analysis revealed the opportunity
to rationalize, or componentize the data, to a Golden Source and the applications
which would consume or provide data to it. It also identified the logical business
owner and stewardship.
Strategy & Governance
Business
Architecture &
Operating Model
Global MIS
Strategy
Governance
Business Strategy
Management
Alliance Planning
Mgmt
End to End
Service Level
Management
Executive &
Stakeholder
Management
IT Architecture
Risk
Operational
Risk Control
Management
Balance Sheet
Management
Treasury
Management
Financial Accntg
& Reporting
Decision
Support
Financial
Internal Audit
Regulatory &
Compliance
Compliance
Sales/Product
Monitoring
Sales, Market & Relationships
Market Management
External
Corporate
Comms
Marketing
Management
Brand
Management
Client Relationship Management Sales & Distribution
Independent
Asset
Management
Electronic
Service
Channel
Management
Market Risk
Control
Management
Settlement Risk
Control
Management
Legal Awareness
& Compliance
Regulatory &
Legal Doc.
Management
Products & Services
Business resource
& sales planning
Client mkt
research &
analytics
Branch Telephone Post Online Email IntermediaryPDA
Hedge Funds
Management
Securities
Product
Management
Funds Product
Management
Trade Services
Management
Product /
Servicing Sourcing
FX & MM
Management
Cash
Management
Structured
Product
Management
Card Product
Management
Insurance
Products
Management
Operations & Processing
Merchant
Operations
Corporate
Actions
Management
Client Tax
Reporting
Performance
Measurement
Safe Keeping
Management
Payments Custody
Nostro Cash
Management
Market Data
Management
Involved 3rd
Party
Maintenance
Specific Product Processing
Credit Processing
Securities
Processing
Card Processing
Fund Processing
FX & MM
Processing
Structured
Products
Processing
Trade Services
Processing
Insurance
Processing
Hedge Fund
Processing
Product Management Service Management
Product & Services
Support
Execution
Management
Trade
Reporting
Order
Management &
Grouping
Execution Services
Confirmation &
Matching
Allocations
Product & Service
Control
Processing &
Execution
Support
Research &
Analysis
Customer & Transaction Services
Client Support
Customer Insight
Customer
Management
Strategy
Business Policies
and Procedures
Operations
strategy & policy
Correspondent
Banking
Authorisations
Cash Services Rewards Admin
Securitisation
(incl.
Syndications)
Segmented
Servicing
Credit Risk
Control
Management
Contact
Management
Relationship
Management
Client Acquisition
& Referrals
Counter/
Branch
Services
Product
Catalogue
Management
Credit
Management
Client Account
Admin
Reconciliation
Credit
Approval
Management
Document
Management
Fees & Billing
Management
Client
Accounting &
Reporting
Operational
Monitoring
Clearing
Settlement
Segment
Analysis &
Planning
Customer
Behaviour
Models
Collections and
Recovery
Collateral
Handling
Prospecting &
Sales
Sales Execution
Sales Force
Management
Group / PB
Advisory Services
Client Risk
Profiling
Discretionary
Portfolio Mgt
Services
Family Office
Services
Trust & Estate
Planning
Strategic Asset
Allocation
Tactical Asset
Allocation
Cross-Product/Service Client Facing Processing
Design apps & IT
infrastructure
Build apps & IT
infrastructure
Operate &
maintain apps &
IT i/f
Business
continuity
Security
Information Technology
Legal
Programme &
Change
Management
Facilities
Operation &
Maintenance
Procurement HR & Payroll
Internal Comms
(excl. customer)
Support & Logistics
Support Infrastructure
OPS Design &
Implement
Centralised Service Centre Management
Cross-Product/Service Non-Client Facing Processing
GSC
Monitoring
Service Centre
Mgmt
AML/Fraud
Detection
Lending
Deposits
Underwriting Claims
ATM
Pricing
/Quotes
Reference Data
Financial
Planning
Trust
Administration
Valuation
Investigations
Legal &
Regulatory Risk
Mgmt
Direct
In-Direct

10. 10
STRATEGIC PROJECT PORTFOLIO DEVELOPMENT
All transformation programs will be strategic. Not all strategy implementations will
be transformational. One common application of capability modeling is in
developing strategic project portfolios.
Organizations struggle with identifying strategic projects because each business
lead submits project proposals, based on how or what their organization can do
to support a strategic plan. This approach is flawed as it will not address an end
to end solution to execute on the strategy. Strategic plans need to be broken
down to reveal the objectives and therefore the projects necessary to fulfill the
plan. A clear disconnect in a strategy development and therefore deployment.
A capability approach resolves this problem by identifying first the capabilities
necessary to support the strategic plan and then assessing their ability to affect
the plan. It is only then projects can be identified to address capability gaps.
Finance Division of a large global Investment bank used this strategy mapping
and deployment methodology to ensure all projects were aligned to strategic
goals.

11. 11
PROJECT PRIORITIZATION
There are always more projects than discretionary funding can support. A project
tabled for funding should have positive ROIs but the important question is “Which
projects create the most business value?” A quick alignment of projects to
capability to business strategy provides a fast first pass. Then a more detailed
assessment of each project’s impact to capability improvement will narrow the
prioritization.
Large Global Organization had a year over year spend exceeding 75MM. Project
names were nebulous and clarity was limited as to the business outcomes and
strategic alignment.
Project scope and Business Outcomes were mapped to the capability model
definitions which identified a number of projects operating/impacting the same
capabilities, projects which had delivery dependencies and projects which were
not directly related to a strategic capability.
These results prompted;
 a reorder of project delivery in line with the clear dependencies
 project deliverables were able to be reused or consumed by other
concurrent projects
 non-strategic projects were stopped and funding redirected,
 a Consolidation of the portfolio mix where associated projects were
bundled into programmes
 Redirection of funding from realized savings
Domain Competency Capability Definition
Project1
Project2
Project3
Project4
Total
Budget in MM 0.5 10 15 7 32.5
Strategy 0
Management activities to analyse environment and to establish and monitor the
strategic direction, ensuring it aligns to the overall corporate mission, vision,
principles, goals etc
Includes value analysis and planning. May include client profitability and
segmentation as well as product profitability. Input of Group Strategy requirements
into product and service development developments.Also includes M&A activity
Note there are Business Strategy Planning activities carried out by business support
which fall into this domain
Refers to annual planning of business resources and sales .
Plan and allocate budgets across all lines of activity for both revenue and cost
centers at the macro and executive level (normally annual)
Make buy/rent decision for physical (e.g. property)
Includes profitability reporting (client, products, teams, enterprise etc)
Also capture, analyse and report for other process and performance metrics (e.g.
volume, exceptions, statistics and general reporting).
Conduct and consolidate market research and information on client segments
internally. Incorporate information on competitor, participant, and customer behaviors
(e.g. channel behaviour, access devices).
Analyse customer satisfaction. Develop guidelines and approach to gather, store,
analyse data and draw conclusions based on customer needs and review of
competitive landscape. Identify trends: buying behaviors, risk profiles, customer
segmentation by agent channel, customer segmentation by product, etc.
Sales / Product
Monitoring
The functions undertaken as part of the strategy to monitor the sales of products and
services, covering profitability, client distribution, risk profiles of products to company
and coverage of products and services taken up by clients.
1 1
Identify potential alliance partners, screen them and develop high-level commercial
agreements.
Manage alliance partners relationship.
Includes all non product related alliances & partnership, including Sourcing, BPOs,
Management Providers, IT Outsourcers. Includes Sourcing Strategy.
Operations Strategy &
Policy
Design and select operational processes and the major policies and plans around
them
1 1
Customer
Insight
Provides data and analysis on customer wants, needs and behaviours that can be
used by other competency areas 0
Customer Management
Strategy
Management activities to establish customer direction (e.g. customer growth and
loyalty), ensuring it aligns to the overall strategy. Includes client profitability analysis. 1 1 2
Customer Behaviour
Models
Consolidate internal/external customer insight & activity data (spending patterns,
share of wallets, delinquency data). Develop/refine behavioral models (production
feedback). Oversee roll-out & track value of models. Maintain comprehensive internal
and external customer and transaction data. Develop hypotheses, refine rules and
models. Assess coverage and impact of models
1 1
Segment Analysis and
Planning
Determine market segmentation and set coverage and performance targets. Analyze
competitive environment, compare and determine competitive responses
1 1 2
Governance The administration of: business direction, organasition, target performance,
accomplishing continual improvement in the business reorganisation; interaction of
the enterprises business assets & resources.
0
Develop and maintain the business capability model that defines the scope and
mechanics of operations.
Develop and refine business architectures. Support interpretation and deployment.
Define underlying procedures and techniques. Map selected industry standards into
the blueprint.
Executive & Stakeholder
Management
Executive Management of the business and its alliance partners (as a high
performing team) to achieve strategic and operational management objectives.
Includes a direct input from performance measurement component
0
IT Architecture Develop and maintain the Application IT architecture that adapts to the business
architecture requirements via the IT Strategy of the . Develop and maintain the IT
models that define the scope and mechanics of the 's operations
0
End to End Service Level
Management
Driving and monitoring the meeting of customer service standards, income generation
and cost management and the delivery of the customer service (linked to proposition
devt and deployment). Includes external partners. - i.e. control of alliances. Planning
and control of business SLAs.
0
4
1
1
1
0
1
Business Architecture &
Operating Model
Alliance Planning &
Management
1
1
Client Market Research
and Analytics
1
Global MIS
1 1 1
Business Resource &
Sales Planning
1
Business Strategy
Management
1

12. 12
STRATEGIC ALIGNMENT
Given the significant regulatory agenda a Global Credit Risk CEO wanted to
know what projects were globally working on Credit Risk capabilities and
functions. The Global Enterprise Business Architecture team had the ability to
provide the CEO with a report which focused on Risk Capabilities, to business
function, to projects, to region, to total spend. His department assessments lead
to a prioritization and rationalization of regional efforts to global focus driving cost
down and raising the global strategic risk profile.
PORTFOLIO MANAGEMENT
A second case study is an example of the most active application of business
architecture in organizations.
Business vision is the driver of the strategy, the strategy is the driver of Portfolio
Planning and subsequently approved projects ensuring overlap and duplication
of spend or effort is not present. This highly valuable and strategic application of
business architecture ensures the entire organization is focused on the end
game.
If we consider the regulatory agenda, in play at the moment, we will recognize
organizations are aligning approved projects to the regulator or the regulation
and not the business capability or process. As a result Dodd Frank, SOX, Basel,
all focused on Finance capability and financial reporting process, are
predominantly funded, resourced and managed separately within the same
portfolio.
Accenture released a white paper in 2011 warning to “Tear up the Road Once”.
By design, in the current state practice of the annual budget cycle and project
funding, most regulatory programmes are “tearing up the road” a multitude of
times as each regulator publishes new/revised regulations.
We present here a Portfolio Management case study from Ford.

13. 13

14. 14
CLOSING THOUGHTS
Strategic change initiatives are rapidly growing and the number is increasing in
many organizations. This demands an architected view to ensure investment is
focused on strategically aligned initiatives. The holistic viewpoint of the business
architecture exposes multiple programs impacting the same business
capabilities, i.e. improve customer experience, or compete against each other
with conflicting objectives, in effect countering expected business outcomes.
Business Architecture is an enabler to your organization's capability to manage
change and the challenges of change. To get all key stakeholders on board and
demonstrate efforts are contributing toward a valuable goal, you need a well-
defined, documented, and visible strategic plan using business architecture.