Technology Service Provider Industry Business Reference Architecture Guide

Your guide to building business capability maps, value streams, and strategy maps in the technology service provider industry.

Analyst Perspective

In the age of disruption, IT must end misalignment and enable value realization.

An industry business reference architecture helps accelerate your strategy design process and enhances your firm's ability to align people, process, and technology with key business priorities.

A business reference architecture is a powerful tool to enable communication with business stakeholders and will provide the context in which to align strategically for a scalable, profitable future.

Justin St-Maurice, PhD
Principal Research Director
Technology Services Industry
Info-Tech Research Group

Executive Summary

Your Challenge

• You need to improve your organization's understanding of business capabilities and how IT can support the delivery of essential services.
• You work for an organization that wants to sharpen their alignment and focus on organizational outcomes and value by using automation and cost-effective methods that produce the most reliable and high-quality outcomes.
• Before executing any strategic initiatives, use this blueprint to understand how the organization creates value.

Common Obstacles

• You don't have a clear path for capturing the right information, engaging the right people, linking with the needs of the business, and aligning with IT.
• The business and IT often speak in their own languages without a holistic and integrated view of mission, strategy, goals, objectives, business processes, projects, and measures of success.
• The business and IT organizations often focus their attention within silos and miss the big picture need for a synergistic approach for successful outcomes.

Info-Tech's Approach

• Build your organization's capability map by defining the organization's value stream and validating the technology services industry reference architecture.
• Use business capabilities to define strategic focus by defining the organization's key capabilities and developing a prioritized strategy map.
• Assess key capabilities for planning priorities through a review of business processes, information, application, and technology support of key capabilities.
• Adopt capability-based strategy planning by ongoing identification and road mapping of capability gaps.

Info-Tech Insight

Using an industry-specific reference architecture is central, and has many benefits, to organizational priorities. It is critical to understanding, modeling, and communicating the operating environment and the direction of the organization but, more significantly, to enable measurable top-line organizational outcomes and unlock direct value.

Industry overview: Managed service providers

Businesses everywhere are looking to outsource commodity services so they can focus internal resources on thought leadership and core business delivery. In the world of Exponential IT, technology service providers (TSPs) are destined to be key partners that enable the future of innovation across industries. They will be crucial to any customer looking to leverage new technology without being distracted by day-to-day operations.

TSPs are notoriously ahead of the curve when it comes to leveraging new technologies such as generative artificial intelligence. Deploying new technologies, however, requires scaffolded capabilities to assess business value, ensure appropriate context, and manage delivery to clients. TSPs need to remain humble and embrace their own technology challenges to be authentic in their new role. As the underlying IT departments that power TSPs continue the move the bar higher, strategic business capabilities will become increasingly critical to acknowledge, leverage, and maintain.

Mastering your own internal IT builds credibility with clients and creates real opportunities for consulting. Leading by example includes developing meaningful relationships between IT and business and leveraging insightful business architecture documents to facilitate both amicable and difficult conversations.

Figure above: Value Stream Cycle for TSPs

Business value realization

Business value defines the success criteria of an organization as manifested through organizational goals and outcomes, and it is interpreted from four perspectives:

• Profit generation: The revenue generated from a business capability with a product that is enabled with modern technologies.
• Cost reduction: The cost reduction when performing business capabilities with a product that is enabled with modern technologies.
• Service enablement: The productivity and efficiency gains of internal business operations from products and capabilities enhanced with modern technologies.
• Customer and market reach: The improved reach and insights of the business in existing or new markets.

Business Value Matrix

Value, goals, and outcomes cannot be achieved without business capabilities

Break down your business goals into strategic and achievable initiatives focused on specific value streams and business capabilities.

Technology Service Provider business capability map

Business capability map defined

In business architecture, the primary view of an organization is known as a business capability map.

A business capability defines what a business does to enable value creation, rather than how. Business capabilities:

• Represent stable business functions.
• Are unique and independent of each other.
• Typically will have a defined business outcome.

A business capability map provides details that help the business architecture practitioner direct attention to a specific area of the business for further assessment.

Glossary of key concepts

A business reference architecture consists of a set of models to provide clarity and actionable insight and value. Typical techniques and terms used in developing these models are:

Source: The Open Group, 2009

Tools and templates to compile and communicate your reference architecture work

The Technology Service Provider Industry Business Reference Architecture Template is a place for you to collect all of the activity outputs and outcomes you’ve completed for use in next steps.

Download the TSP Industry Business Reference Architecture Template

Info-Tech's methodology for reference architecture

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

“Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.”

Guided Implementation

“Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.”

Workshop

“We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.”

Consulting

“Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.”

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation

What does a typical Guided Implementation (GI) on this topic look like?

A GI is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is six to nine calls over the course of one to four months.

Phase 1

Build Your Organization's Capability Map

This phase will walk you through the following activities:

• Identify and assemble key stakeholders
• Determine how the organization creates value
• Define and validate value streams
• Determine which business capabilities support value streams
• Accelerate the process with an industry reference architecture
• Validate the business capability map
• Establish Level 2 capability decomposition priorities
• Decompose Level 2 capabilities

This phase involves the following participants:

• Enterprise/Business Architect
• Business Analysts
• Business Unit Leads
• CIO
• Department Executive and Senior Managers

Technology Service Provider Industry Business Reference Architecture

Step 1.1

Define the organization's value stream

Activities

1.1.1 Identify and assemble key stakeholders
1.1.2 Determine how the organization creates value
1.1.3 Define and validate value streams

This step involves the following participants:

• Enterprise/business architect
• Business analysts
• Business unit leads
• CIO
• Department executive and senior managers

Outcomes of this step

Defined and validated value streams specific to your organization.

1.1.1 Identify and assemble key stakeholders

1-3 hours

Build an accurate depiction of the business.

1. It is important to make sure the right stakeholders participate in this exercise. The exercise of identifying capabilities for an organization is very introspective and requires deep analysis.
2. Consider:
   1. Who are the decision makers and key influencers?
   2. Who will impact the business capability work? Who has a vested interest in the success or failure of the outcome?
   3. Who has the skills and competencies necessary to help you be successful?
3. Avoid:
   1. Don't focus on the organizational structure and hierarchy. Often stakeholder groups don't fit the traditional structure.
   2. Don't ignore subject matter experts on either the business or IT side. You will need to consider both.

Download the TSP Industry Business Reference Architecture Template

Input

• List of who is accountable for key business areas and decisions
• Organizational chart
• List of who has decision-making authority

Output

• A list of the key stakeholders
• Prioritized list of decision-making support needs
• TSP Industry Business Reference Architecture Template

Materials

• Whiteboard/flip charts
• TSP Industry Business Reference Architecture Template

Participants

• Enterprise/business architect
• Business analysts
• Business unit leads
• CIO
• Department executive and senior managers

Define the organization's value streams

Value streams connect business goals to the organization's value realization activities. They enable an organization to create and capture value in the marketplace by engaging in a set of interconnected activities. Those activities are dependent on the specific industry segment an organization operates within. Value streams can extend beyond the organization into the supporting ecosystem, whereas business processes are contained within and the organization has complete control over them.

There are two types of value streams:

1. Core value streams.
2. Support value streams.

Core value streams are mostly externally facing: they deliver value to either an external or internal customer and they tie to the customer perspective of the strategy map.

Support value streams are internally facing and provide the foundational support for an organization to operate.

An effective method for ensuring all value streams have been considered is to understand there can be different end-value receivers. Info-Tech recommends identifying and organizing the value streams with customers and partners as end-value receivers.

Step 1.1.3 – Define the organization's value stream

NOTE: Illustrative example derived from empirical research.

Determine how the organization creates value

Begin the process by identifying and locating the business mission and vision statements.

• Corporate Websites
• Business Strategy Documents
• Business Mission
• Business Executives
• Business Vision

What Is Business Context?

"The business context encompasses an understanding of the factors impacting the business from various perspectives, including how decisions are made and what the business is ultimately trying to achieve. The business context is used by IT to identify key implications for the execution of its strategic initiatives."

Source: Business Wire, 2018

1.1.2 Determine how the organization creates value

1-3 hours

The first step to delivering value is defining how it will happen.

1. Use the organization's industry segment to start a discussion on how value is created for customers. Working back from the moment value is realized by the customer, consider the sequential steps required to deliver value in your industry segment.
2. Consider:
   1. Who are your customers?
   2. What tasks are your customers looking to accomplish?
   3. How does your organization's set of products and services help them accomplish that?
   4. What are the benefits the organization delivers to them?
   5. Don't boil the ocean. Focus on your industry segment and how you deliver value to your partners and customers specifically.

Download the TSP Industry Business Reference Architecture Template