Organizing Principle of the Enterprise Business Architecture

The Organizing Principle of the Enterprise Business Architecture is the value stream as defined by James Martin in his book, The Great Transition. ”A value stream is an end-to-end collection of activities that creates a result for a "customer," who may be the ultimate customer or an internal "end user" of the value stream. The value stream has a clear goal: to satisfy (or, better, to delight) the customer.“ 

Similar to organizational or functional hierarchies, an enterprise's value stream structure illustrated in the model at left is a classification framework. However, considering the rigorous method by which value streams are designed, derived and inter-connected via what each produces that is of value - the inputs and outputs - it goes beyond a simple classification of processes. The value streams reflect customer centric (or internal “end user”) end-to-end flows through the enterprise and explicitly capture dependencies and relationships between processes in terms of their business artifacts or inputs and outputs. In a metaphorical sense, it is similar to a manufactured product’s “bill of materials;” hence, the model at left represents an enterprise’s “bill of value streams.” 

The choice of an organizing principle for the Enterprise Business Architecture reveals much about an enterprise. In the 21st Century Information Age, the enterprise must focus on the customer (or consumer, client, member, patient, user and etc.) and how to best serve these customers to gain a competitive advantage. This 21st Century Information Age is characterized by the fact that customers can be reached by anyone, anytime and anywhere. Considering the era of social and mobile computing, that obviously means competitors can reach those very same customers, anytime and anywhere as well. Why would any enterprise in the 21st Century choose a functionally centric model over a process centric model that is based on value streams? It makes no sense! In the Information Age, a functionally centric model is out of date, representing a mindset characteristic of the Industrial Age.

The enterprise must evolve, grow and expand up from Industrial Age functional thinking, and commit to integrating the cross-functional, end-to-end processes focused on the Information Age customer. The process centric and customer centric integrated value streams must become the new organizing principle for the enterprise, far surpassing a classified table for example, of capabilities which are inherently functionally centric. It is extremely difficult and impracticable to integrate components without a well defined and purposeful organizing principle. The focus on the customer provides the reason, purpose and criteria for integrating the functional components.