Which of the following terms represents multi-dimensional views of capabilities, end-to-end value delivery, information, and organizational structure?
A. Architecture
B. Architecture Vision
C. Business Architecture
D. Target Architecture
Q3: What is a representation of an end-to-end collection of value-adding activities that create an overall result for a customer?
A. Business Architecture
B. Business Capability
C. Course of Action
D. Value Stream
Q4: Which of the following is a model describing the rationale for how an organization creates, delivers, and captures value?
A. Application Model
B. Business Model
C. Data Model
D. Technology Model
Q5: Which of the following enables a subject to be represented in a form that enables reasoning, insight, and clarity concerning the essence of the subject matter?
A. Business Architecture
B. Business Capabilities
C. Modeling
D. Value Analysis
3.6 Recommended Reading
The following are recommended sources of further information for this chapter:
• The TOGAF Standard, Version 9.2, Part I: Introduction, Definitions
4.1 Key Learning Points
This chapter will help you to understand the topic of business modeling and how it relates to Enterprise Architecture within the context of the TOGAF standard.
Key Points Explained
This chapter will help you to answer the following questions:
• What is a business model?
• What are the impacts and benefits of business models?
• What are some different example representations of business models?
• How to explain the relationship between business models and Business Architecture?
• How are business models used according to the TOGAF standard?
• Why business model innovation should be approached in a structured manner?
4.2 The Definition of Business Model
(Syllabus Reference: Unit 1, Learning Outcome 1.1.1: You should be able to define what a business model is.)
Definition: A business model is a description of the rationale for how an organization creates, delivers, and captures value.
See also Section 3.2, Business Model.
All Organizations have a Business Model
All Organizations have a business model, regardless of whether it is explicitly documented. Where it is not explicitly documented it may be an abstract concept that exists in a leader’s mind, or encapsulated in the way of working for the organization (e.g., the procedures and behavior).
Business models provide a high-level visual representation of the design of a business at various states; for example, current state, transitional state, or future state. They describe the rationale for how an organization creates, captures, and delivers value to its various internal and external stakeholders.
Business models also provide a basis for establishing a common understanding of how to describe and manipulate the business in pursuit of new strategic alternatives. In that sense, business models are a starting point for discussions around business innovation and strategy planning for the allocation of resources.
The development of a business model is initially performed at a relatively abstract or conceptual level. Maintenance of this summary view encourages and enables the creative thought process that underpins innovation. It also helps to communicate key ideas about the vision and strategy to a broad audience, at a level that is appropriate to generate cross-disciplinary discussion and promote buy-in.
Usually there is sufficient information available in a draft business model for interested parties to explore overall feasibility and support strategic decision-making. On the other hand, this sketch view does not normally contain sufficient information to perform a risk assessment or to develop a plan to execute the agreed strategy.
4.3 The Impact and Benefits of Business Models
(Syllabus Reference: Unit 1, Learning Outcome 1.1.2: You should be able to describe the impact and benefits of business models.)
Business leaders can obtain powerful leverage using business model artifacts in conjunction with other strategic planning artifacts, Business Architecture views, and organizational change methods to accelerate strategic execution and alignment.
Why Business Models Matter?
The business model “forces” managers to think rigorously about their business.A business model’s great strength as a planning tool is that it focuses attention on how all the elements of the system fit into a working whole.
[Source: Joan Magretta, Harvard Business Review]
Business model artifacts highlight the critical relationships between the various elements that constitute a business in ways that:
• Are not fully covered by other approaches or techniques and, therefore, contribute to a more complete examination of costs, revenues, and other business perspectives
• Are covered by other approaches or techniques – but through a different method or viewpoint – in which case business modeling helps cross-check and correlate other points of information and assumptions
The
