How business architecture can help strategy formulation business architecture can be used in many places in the organization. 

After all, it's a discipline that helps to model the different parts of the organization and how these different parts work together to deliver value to the customer but it can also be used as a model to understand what-if scenarios and analyze options for the future. 

Beginner's Guide About How Business Architecture Can Help Strategy In 2020

For example in strategy formulation what is strategy business strategy is about what choices the business should make to achieve a certain objective at the highest level the business usually would like to grow so what is the strategy for growth one possibility is to create a new product to sell to new or existing customers another possibility is to increase the market share through acquisition. 

Another possibility is to attract competitors, customers, by offering them better service in this article. I'll walk through a specific example of how a bank might use business architecture to explore its options and formulate its business strategy

Let's take the bank it may offer currently many products like the safe-deposit boxes CDs checking accounts home and auto loans credit cards and retirement savings accounts for its customers typically customers like mark and mary would interact with this bank both through online and retail branches the bank has a lot of data about mark and mary collected over time data. 

Like the transaction, history bank balances some of their spending patterns and so on sometimes information might even come from external sources like LexisNexis to grow their business senior leadership think that they should be offering insurance to the customers who come in for a bank loan that would be a new product that could bring in more business. 

It feels like they're leaving money on the table by not offering auto insurance great idea so they call a business architect to help map out the strategy the red box defines what happens inside the bank the business architect encourages the leaders to think outside the red box what else is happening in this ecosystem that might affect the strategy a better picture begins to emerge just like uber for example which also collects information about their customers. 

They know how many people take rides how long these rides are what time of the day these rides are offered and what they might even pick up for dinner through their uber eats service tesla plans to offer end-to-end coverage for the cars including maintenance and insurance they want to collect information about their customers and since they're truly a data and technology company they have systems in place including their cars that constantly collect data and a huge volume of that most of us use google maps for navigation. 

Google is another company that collects information about where you travel and the places you frequent using this information and possibly combining that with the google searches that you do they can correlate all this information to get a pretty good picture about you as a person amazon is another company that is collecting information about yourself through Alexa and what your buying habits may be for example. 

They can guess how wealthy you are based on what you buy another part of amazon called amazon web services offers services to businesses like banks wherein they can manage the bank's full i.t operations essentially. 

There's a data party going outside your organization what if these companies start sharing data and you are not invited to that party when you get to offer insurance one of the most important things to get information about is the customer and their car but these companies have a lot more of that information put together the data. 

How Business Architecture Can Help Strategy In 2020

You collect by asking mark and mary about their driving habits is going to be minuscule compared to the data that these companies are collecting you may want to offer insurance but they have the data on which the insurance premium is based on also offering car insurance means you'll have to establish relationships with a new set of regulators in the insurance industry. 

So what else is going on outside the red box think of the technologies that are advancing at breakneck speed for individuals we have voice-activated systems to control any device autonomous cars for comfortable transportation mobile phones that can hold thousands of apps and virtual reality that can help you experience the world without physically being there for businesses. 

We have robotic process automation that automates processes big data which removes constraints on how much data you can actually collect about a customer IoT devices that can attach to any equipment for sensing blockchain to ensure the integrity of transactions cybersecurity to ensure data integrity drones for many applications including security and delivery cloud computing to rent out your computing needs and artificial intelligence that can look for patterns and make intelligent decisions for the business and for the customer. 

There are many more technologies and we haven't mentioned all of them here but what if the bank could use these technologies and combine them in unique ways to grow and get the competitive advantage that they want for example the bank already has a lot of financial information about its customers here's. 

One idea financial health is a very important part of people's lives that requires making a good income being financially smart and saving enough for emergencies and a comfortable retirement combining its own data about the customer with other external data the bank might be able to guide and support the full financial life cycle of the customer, in other words, offering a better financial blueprint for its customers. 

For example, if the customer is willing to share his or her resume and since the bank has relationships with many businesses locally who use their services the bank can help the customer find the right jobs using ai smart matching perhaps.

A job as a data scientist in this case the salary from the job will be directly deposited to the bank which grows its own business with its relationships with local businesses such as grocery stores and restaurants the bank can set up systems to help customers spend their money wisely. 

So there are many different strategic options that the bank can explore with the help of the business architect through this exercise and enlightenment the senior leaders decide that instead of growing through offering insurance as a new product they should actually leverage technology to build on their strengths so they decide to focus on and offer more value to customers by helping them with their full life cycle financial management. 

You see how business architecture can help explore these options and formulate the strategy business architecture can have a huge impact at the very foundation of the business and yet companies don't use it as much as they should imagine that this bank went with the first option of offering auto insurance they might be struggling in the future or operating in the red ocean. 

Conclusion

Now by taking a different approach they have opened up a completely new market called the blue ocean to operate.