Many books have been written on describing a business model. The Business Model Canvas (https://en.wikipedia.org/wiki/Business_Model_Canvas) is a good template for developing new business models and documenting existing ones. However, the Business Model Canvas is not useful when the Enterprise Architect (EA) wants to model the entire enterprise. Most importantly, there could be many business models in a large enterprise. One of the responsibilities of an enterprise architect is to realize the entire enterprise business model. Enterprise Architects need to document a business model map that also represents the entire essence of business. Business Capabilities represent the essence of the business. A business is broken down in many business parts which are commonly known as business capabilities. For example, a 20 year bank would have similar business capabilities (e.g. customer management, account management, case management) as it does today, except the capabilities could very well be more automated today. Like I said, these are fundamental capabilities for a bank that have been followed since ages. Representing business capabilities in a business model should not only show the essence of your business but you can link the capabilities to value propositions which are linked to customer segments and customers jobs.
There are other benefits to represent business capabilities in a business model. Capability contains all resources cost as well, including cost of procuring a service from a partner. EA can inform to their business managers the cost associated in delivering a business service or a product features. Another benefit is to understand the capability gaps while the value proposition is still being defined by business managers. EA can generate a capability heatmap to show capability gaps for the capabilities in questions to support the value proposition and business model. With these maps, senior executives can start creating the strategies needed to realize the future state of the business model or to address customer jobs.
Additionally, Enterprise Architects can create a capability-Information Technology (IT) map to show how capabilities are supported by various organization resources (eg, application systems, people etc.) to realize the Business Model. The capability-IT map below illustates how the capability ‘Manage Prototype’ is supported by various applications systems, business information and people. Moreover, it is also showing in what business processes/activities, the capability ‘Manage Prototype’ is being implemented.
With these business maps on hand, an EA can answers to many questions to their executives and business managers:
- What value propositions are delivered to customers through what channels to what customer segments?
- What capabilities are required to deliver the value propositions?
- What skills are acquired through the external partners to enable which capabilities?
- What bundles of products and services are you offering to each customer segments?
- Which jobs of customers are we solving through which capabilities?
- What are core capabilities that deliver value to customers?
- What revenue is generated from each customer segment for what value?
- What capabilities are implemented through what business processes/activities?
- What application systems are used in what activities?
- What is the cost for delivering a service or feature?
- Who performs what activities and provides what capabilities?
- What business information is created or used in what activities to support what capabilities?
Enterprise Evolver canvas makes it easy to create data driven dynamic business maps with few taps on your tablet iPad. Say goodbye to Powerpoint mapping!