Enterprise Design Model – Business & Organization

This is the third blog post in the series of Enterprise Design Modeling. It explains one of the business and organizational models, which is the model concerning the business component.

More than a decade ago IBM® introduced the Component Business Model. Back then it was explained as the replacement for the Value Chain Diagram. With the introduction of the Business Design Model it is transparent (in abstract) that both models are complementary.

Component Business Model

This is an example of IBM®’s component business model. It illustrates the building blocks required to deliver the business capabilities, which will perform the business activities.

Looking at the Business Design Model we understand that the business components need (re-) sources. An example is a Human Resource, a person with a certain skillset to support the business component. The business component is part of a business system, in this case the organizational structure. The business capability is delivered by a business component, has access to data and is part of a solution.

In the business architecture community there is some confusion about the definitions of business capability and competency. Based on the Business Design Model we apply the following description as a starting point:

  • Organizational Competency – (aka business competency) the business structure in which the business services interact (via business channels) with one another to create the desired customer experience.
  • Business Capability –the business behavior illustrating the capabilities needed by the business to perform its business activities and the processing of knowledge.
  • Business Component –the organizational behavior of a (human re-) source within the context of an organizational structure, which is needed to deliver the business capability.
  • Operating Model –the holistic model of the organizational competency, which is realized by business capabilities, which are delivered by business components.

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