Being a Trusted Advisor Through Business Modelling

Giovanni is by day a corporate solution architect, and by night a start-up product owner. With a genetic predisposition to analyse and design, he enjoys the ever-winding journey from the land of technology to the land of business.

Giovanni Focaraccio talks with Noelene Noone about delivering the need for pure business analysis and how to be a trusted advisor through business modelling.

Defining a business model for business would typically be done at an executive level — describing how it is going to make money to survive and grow.  How do you think a business analyst could use the business model in building their solution?

In my experience, the business model of most companies seldom change and many solutions are limited to a specific functional area which, in isolation, has little impact on the overall business model. The opportunity for a business analyst lies in solutions, like customer-facing digital products, that are businesses in their own right.  

In those cases, the business analyst needs to ensure that there is a solid business model underpinning the product to ensure success. Here the business analyst can facilitate the articulation of the business model as it is not always clear from a list of high-level business requirements – it can lead to the discovery of gaps in the upstream thinking and bring to the surface additional requirements.

Are we as business analysts well equipped to understand and interpret a business model to use in analysing our solution?

Business analysts are well equipped in terms of core skills (like systems thinking) and traits to understand and use business models. The bigger challenge I see is how the majority of analysts working at the solution level perceive their role as one that is there to merely expand and clarify on the higher-order business needs expressed by the solution stakeholders. 

Instead, the business analyst should act in an advisory capacity and use tools like the business model canvas to act as a soundboard for the stated business needs, potentially pointing out some flaws or gaps.

Do you then see the business analyst taking it a step further – moving from a business analysis role of designing solutions to the strategic role of business modelling?

There is only so much opportunity to do business model work and many analysts enjoy working at the solution level. I think it is valuable to grow to a point where business models become integrated with our general approach to creating a shared understanding of the problem and solution options regardless of what level of abstraction we happen to be working at.

With the business model in hand, how can the business analyst move into the detail of business processes? 

As far as the general use of “business process” goes, the business model is more a structural view of how key aspects of the business are configured to create and capture value. The value chain is one level down from the business model and describes the top-level process which in turn is broken down into various business processes. 

It’s important to note that the business model includes some aspects such as target customer segment and value proposition which could remain stable despite major changes in value chain design and business process design.

Have you seen the value chain used effectively in strategic analysis?

I’ve seen it used effectively and ineffectively. The challenge comes in when the strategic analysis is reduced to efficiency seeking measures on the existing value chain configuration. “Try harder” and “Be better” are great mottos but they are not strategies. 

Value chains should be compared with those of competitors to ensure some form of sustainable advantage.  The value chain can then be adapted or remain in support of the chosen business model

Another tool often used is the organisational hierarchy.  How important do you think organisation hierarchies are for a business analyst coming in from the outside to get a grip on the business model?

There are many factors which impact organisational design, some of them highly political, some of them regulatory and some of them plain emotional. I wouldn’t read too much in regards to business models from the organisational hierarchies, but understanding them is important to ensure they support the chosen business model. 

If the goal is to understand the existing business model I’d prefer to elicit it directly with the business stakeholders by way of observation and interviews.

There are many notations we can use to document a business process flowing from the business model – activity models, decision trees, swim-lanes and pools, state diagrams.  Do you have any favourites and do you think some of them have become outdated?

I like BPMN (Business Process Model and Notation) as it is more graphically nuanced than previous processing notations and provides better ability to show orchestration between processes and parties. It also supports evolving logical process designs to executable code providing better traceability. 

Having said that I am a strong supporter of creating multiple models and clearly differentiating why I’m modelling (to understand, to communicate, to document for future reference).

How do you think the business model definition assists a business analyst in getting to the root of a problem and solving it rather than putting on a band-aid to treat the symptoms?

The business model is a great tool to get buy-in.  It facilitates the integration and balancing of higher-order perspectives into a configuration that is easier to evaluate and compare. When more people buy into the problem to be solved it brings understanding and focus. Progress is measured in terms of delivering against the chosen business model which takes pressure off from just delivery any old solution.

When a business analyst gets to one or more solutions – how could she use the original business model to validate the solution?  Should she consider the impact and possible change this might bring to the business model?

It’s important to see the business model as a higher-order solution to the problem of the competitive landscape, macro trends as well as capabilities and resources the organisation has in hand. The business analyst should be constantly using the business model as a lighthouse towards which to orientate the solution architecture. 

Although breakthrough technology can enable changes in business models, this is very rare and the solution typically needs to align to the business model (assuming it is well-conceived).

With the evolution of many linear traditional business models to digital products and services, do business analysts have the toolkit to facilitate a shared understanding of the problem and solution space? How do you see this toolkit evolving as business models evolve?

There are many new tools and methods that can be used to analyse problems and opportunities and define innovative digital solutions. Not surprisingly many of these tools stem from the agile product development and UX disciplines driven by the proliferation of successful tech-startups. 

Unfortunately, I’m not seeing the majority of business analysts pro-actively learning these tools and methods or leading the adoption of them back in their workplace. Somewhere along the line business analysis has become somewhat codified and the tools and methods used within large businesses are often constrained by centralised governance bodies.

The result is innovative ideas and windows of opportunity not being capitalised on as they can’t meet traditional business case metrics and when they do they often achieve this by blatant speculation and a premature commitment to what the end product is going to look like. The actual execution may be highly incremental, especially since agile development methodologies are in vogue at many large organizations but there is a big difference between execution in an incremental fashion and truly being agile. 

I would urge business analysts to lean into this space as it seems likely that they will end up working closely with UX designers and product owners or even having to perform aspects of those roles or risk being replaced by them.

‘Being a Trusted Advisor Through Business Modelling’ with Giovanni Focaraccio was first published in the Inter-View Report 2017.