How Do You Model Business Transformation?

Paula Quiroz

2 years ago

How Do You Model Business Transformation?

As a business architect, one of the most powerful tools I can use to explore, design, communicate and execute on business transformation is to model my business.

There are a lot of different ways to model your business. The question many begin to ask is, what technique is really the best way to model business transformation?

To explore this question, I created a chart to help us understand what types of modeling is typically used to support business transformation, and how it might be employed. Please note, this is not an exhaustive list, but rather a list of some of the most popular techniques.

Figure 1: Different Models Serve Different Needs.

There are a number of other modeling techniques. Business Model Canvas is typically used to model potential future and Current-State business models.

A Governance Model which is used to define and manage the interactions between people, teams, and businesses. A Value Stream is designed to illustrate how customers, partners, etc. work end-to-end with your business.

Future-State Modeling

My experience is that business capability modeling is one of the best ways to model your business future-state.

That is because, business capability modeling is a technique for illustrating and representing an organization’s future-focused business strategy, independent of the org structure, processes, people or domains. It is a great way to inform and guide decision-making without getting into the weeds of organizational and domain political issues.

A business model canvas can also be used to explore your future-state business model. The only issue is that it is linked to very specific and detailed operational issues. The same can be said for governance models and value streams. They can be very useful as future-state models, although most traditional uses have been current-state.

Current-State Modeling

Business process modeling is the most common current-state modeling technique. Much of that comes from the heritage of Six Sigma which is focused on business process improvement and removing obstacles and constraints.

Operating models as well are generally used to represent how a business operates in Current State. It can also be linked to a value stream model to illustrate the impact of business operations on a broader ecosystem.

Functional and service models are also typically used for current-state business representation. Although there is nothing that should keep an organization from using these to represent your future-state organizational structure or services.

The Power of A Mash-up

One of the most powerful techniques is to blend two models together to address more complex questions or issues. Say for example, your executive wants to understand the impact of your future state vision on your current state organizational structure. In this case, a mash-up where you combine the current organization by future business capability can be very powerful.

You could also combine a future business capability model with a current process model to show which processes will need to be evolved versus completely transformed. Or combine a future state business model canvas and a current state business model canvas to illustrate how your business models will change over time.

Bottom Line

I have said this many times, to support business transformation, you must look at future-state first and foremost. However, to explore, design and communicate your business transformation journey, a mash-up of different models can be very powerful.

Think of the types of questions your senior executives are or should be asking. Then create deliverable models that begin to address their questions. Don’t worry about getting the questions 100% right. It is better to begin to create deliverables that have some value than wait for the perfect question.