Archimate and BMC - w195 - 1
Archimate and BMC - w195 - 1
May 2019
Modeling the Business Model Canvas with the ArchiMate® Specification
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Table of Contents
Executive Summary................................................................... 5
Introduction .............................................................................. 6
Conclusion .............................................................................. 28
References............................................................................... 32
Executive Summary
This White Paper will be of interest to Enterprise and Business Architects who are
tasked with modeling the enterprise both as it is and as it will or might be. It will also
be of interest to many of the roles involved with business change and transformation,
including business analysts, program and project management, and their executive
sponsors.
This White Paper supports The Open Group vision of Boundaryless Information
Flow™ by promoting the use of open standards to standardize the way that Enterprise
Architecture themes are modeled.
Introduction
Osterwalder’s Business Model Canvas (BMC) was first introduced to the world in the book “Business Model
Generation” (BMG) in 2010 [1]. Almost from its introduction it proved to be a seminal work, and it has
enjoyed rapid and widespread adoption across the business community; a very rare example of an “instant
classic”.
The ArchiMate® Specification, a standard of The Open Group, is an open and independent modeling
language for Enterprise Architecture that is supported by different tool vendors and consulting firms. The
ArchiMate language enables Enterprise Architects to describe, analyze, and visualize the relationships among
architecture domains in an unambiguous way.
The ArchiMate language, as described in the standard, complements the TOGAF® Standard, a standard of
The Open Group [2], in that it provides a vendor-independent set of concepts, including a graphical
representation, that helps to create a consistent, integrated model “below the waterline”, which can be
depicted in the form of TOGAF views.
The ArchiMate Specification’s coverage of concerns in Enterprise Architecture is wide ranging since it
covers not just the architecture of an enterprise’s IT-based information systems, but also the architecture of
the business itself and the context in which the business operates. It is principally the latter facilities that we
can leverage to model the BMC.
It is important for the purposes of this document to appreciate the distinction between a business model and
an operating model.
A business model is defined in the TOGAF Standard, Version 9.2 [2; §3.28] and in the BMG book as “the
rationale of how an organization creates, delivers, and captures value” [1; pp.15]. A business model
summarizes the essential motivation for the creation and continuance of the enterprise. A central component
of a business model is some sort of exposition of a value proposition, which may be articulated as one or
more statements explaining the value that the enterprise thinks it can offer to its customers, via its products
and services. The use of the word “proposition” is significant, since value is intrinsically subjective, and
hence it cannot be guaranteed that everyone will agree on the value of any given product or service.
Osterwalder emphasizes in this regard that enterprises must try to understand the nature of the problem that
their product/service solves for their consumers.
A business model should also provide a very high-level view of the key parameters that together combine to
produce the value proposition. These are essential too, because there are many ways to produce and deliver
on any given value proposal, and the eventual architecture of the enterprise will be driven by the options
available and the choices made here. Such choices will drive the design of the desirable structures and
behaviors captured in the corresponding operating model.
An operating model explains the configuration of the enterprise resources considered optimal by the
leadership team for the realization of the business model. In other words, how will the business model be
realized by some suitable combination of People, Process, and Technology (PPT).1
Enterprise Architecture has a strong connection with both the business model and the operating model. The
discipline of Enterprise Architecture is above all concerned with helping to define a target operating model to
be achieved sometime in the future, together with a roadmap for migration from the existing model to the
new one. The specific focus of Enterprise Architecture is the strategic alignment of the Information System
based on Information Technology (IS/IT) with the business’s long-term goals. In order to do this
successfully, it is evident that the context of the enterprise and its specific business model must be adequately
researched and documented in the architecture repository. Osterwalder’s BMC is one of the tools that can be
used to facilitate this requirement.
Readers can find more information on business models in the TOGAF® Series Guide: Business Models [6].
1
PPT is a well-used phrase that summarizes the elements which an enterprise can call upon in order to deliver on its essential purpose. Not to be taken
too literally – there are many other elements necessary in a complete operating model description, as the ArchiMate Specification makes clear.
It is important to appreciate that the BMC is meant to be a creative learning tool. According to the authors,
the BMG book is meant to be of service as a handbook for “visionaries, game changers, and challengers”
[1]. Use of the BMC facilitates discussions around what the enterprise’s business model is and also what it
could be or should be in the future.
In Osterwalder’s book, the BMC is suggested as the principal tool to be used in any approach to defining a
business model. I will briefly explain the nine building blocks of the BMC in this section of the document.2
The graphic defining the BMC as offered in the BMG book is reproduced in Figure 1.
2
Notwithstanding this brief explanation, I strongly encourage readers to read the inspirational original.
Apart from simply listing items in each of these nine categories, the BMC is meant to be used as a tool for
linking items together from different sections, showing, for example, how a partner takes care of an activity,
or how a channel impacts a customer. The major focus of Osterwalder’s work is the requirement for modern
businesses to reconfigure or even re-invent themselves frequently in response to rapidly changing factors in
their environment. The BMC is meant to be used to facilitate thinking about these changes.
Apart from explaining the BMC, the BMG book also includes a chapter on business model patterns, giving
examples of each pattern by using the BMC technique to depict the business model of some famous
companies. I will use one of these patterns to illustrate the ways the ArchiMate Specification might be used
to model a BMC. There are further chapters in the BMG book on design and strategy.
The nine building blocks are referred to in the BMG book by a two-letter acronym, as summarized here:
VP Value Proposition
KA Key Activities
KR Key Resources
CH Channels
CR Customer Relationships
CS Customer Segments
KP Key Partners
C$ Cost Structure
R$ Revenue Streams
VP – Value Proposition
A Value Proposition “seeks to solve customer problems” [1; pp.16]. A VP is expressed in the BMC as the
enterprise’s products and/or services, but this should be accompanied by some statements regarding their
perceived value to the end consumer. This is the most important part of any business model; if an enterprise
does not create enough value for enough people it will inevitably fail at some point. It is important for an
enterprise to know what the characteristics are of the value it offers. The possible ingredients of value have
been thoroughly examined by academics and researchers over the years, and the BMG book offers some
examples.3
3
See, for example, the Value Discipline Model in The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your
Market, by Michael Treacy and Fred Wiersema [7].
KA – Key Activities
Key Activities pinpoint the essential transformational behaviors that are required to produce the value
expressed in the VP. Activities identify the “work” that the organization must be able to do; the activities
required to sustain CH, CR, and R$. Note that KA may be performed by KP. This is the first indication of the
core capabilities required by the enterprise; i.e., capabilities to execute the KA.
KR – Key Resources
A list of the resources the enterprise depends upon for value creation. KA depend upon the use of KR. The
BMG book suggests four categories of resource: physical, financial, intellectual, and human.
CH – Channels
“Communication, distribution, and sales channels comprise a company’s interface with customers” [1;
pp.26]. VP is delivered to customers through a variety of channels, which include a list of the ways that
customers can interact with the enterprise. CH indicate “touch points” along a customer journey. The after-
sales channel should be included here too.
CR – Customer Relationships
Customer Relationships are expressions of the form of the enterprise’s relationships with its customers,
within each segment [CS]. For example, what is the appropriate form of customer acquisition, retention, and
sales promotion? Examples of relationship types given in the BMG book are: personal, self-serve, user
communities, and co-creation. Relationship definitions revolve around the mutual emotional expectations of
the enterprise and their customers. The range of options here have also been well researched throughout the
years.4
CS – Customer Segments
The breakdown of the customer into segments or distinct groupings of customers. Understanding the
customer and their needs is fundamental to the business model. What customer problem does the enterprise
try to solve with its products and services? Deciding on which customers to serve is part of this section.
There are various types of CS; e.g., “mass market”, some of which are explained in the BMG book.
KP – Key Partners
A list of the partners upon which the enterprise relies for value creation. Partners take care of some part of the
KA on behalf of the enterprise. Also included are key suppliers. What KR does the enterprise get from
partners/suppliers? This building block might include the identity of alliances and joint ventures.
C$ – Cost Structure
What does the enterprise have to spend its money on to produce value? C$ describes the cost streams
resulting from the maintenance of resources (KR) and the performance of activities (KA).
4
See, for example, the “Apostle Model” of consumer behavior by Annette Franz [8].
R$ – Revenue Streams
Where do the enterprise’s earnings come from? For example, does it come from asset sales, usage fees,
subscription fees, lending/renting/leasing, licensing, brokerage, advertising, etc. R$ describes the revenue
streams of the enterprise that arise from its interactions with its customers. R$ describes the dollar rewards
that flow to the enterprise as a result of creating value.
The ArchiMate Specification [3; §1.1] describes the ArchiMate modeling language as: “a visual language
with a set of default iconography for describing, analyzing, and communicating many concerns of Enterprise
Architectures as they change over time. The standard provides a set of entities and relationships with their
corresponding iconography for the representation of Architecture Descriptions”.
This document assumes that the reader has at least a basic understanding of the ArchiMate Specification, so I
will not explain all the details here. Readers can refer to other texts and documents for more information; for
example, The Open Group White Paper: Understanding the Basics – An Introduction to the ArchiMate®
Modeling Language, Version 3.0.1 [5] is a good primer for this subject. My purpose here is confined to
explaining how the ArchiMate Specification might be used to model the BMC.
The image that represents the full ArchiMate framework is reproduced in Figure 2 [3; Fig. 3].
Business
Application
Layers
Technology
Physical
Implementation
& Migration
Aspects
As would be the case with any modeling language, there is generally more than one useful way to model any
given “real-world” thing in the ArchiMate Specification. Also, models may be pitched at different levels of
abstraction. Hence, an Enterprise or Business Architect might want to make use of the ArchiMate
Specification and the BMC format in at least two different contexts:
• As a bottom-up summary of the existing Enterprise Architecture, or operating model, in the form of a
business model, in which case elements from the Business Architecture Layer would be appropriate
• As a top-down definition of the enterprise business model, leading to the definition of the Business
Architecture, in which case a selection of the strategy layer and motivation aspect elements from the
ArchiMate Specification would be appropriate
It might also be desirable to create a cross-layer view bringing together the elements from both of these
perspectives. Cross-layer views rely principally on realization relationships between elements in the different
layers.
Later in this document I will list the ArchiMate elements I suggest could be used to model the BMC in these
two ways, and reproduce the definitions of what these elements represent. I will then show an example
mapping of a BMC pattern taken from the BMG book using these elements.
ArchiMate Relationships
The relationships between the elements of an architecture are a fundamental part of any architecture
description, since they help us to understand the role that each element plays with respect to other elements in
the system under examination.
The ArchiMate Specification offers a rich set of relationships with which to model the associations between
the elements that make up an architecture. These can be applied within an aspect or layer, between layers, or
to link layers to the motivation aspect.
Any element of the ArchiMate Specification can be specialized, and any element can be decomposed by
disaggregation or decomposition into sub-elements of the same type. Any two elements can be associated
using the default “association” relationship.
• The addition of attributes to any element in the language, a set of which is known as a profile [3; §15.1]
• The creation of stereotypes; a new language type based on an existing type, the name of which is
indicated between guillemets (<< >>) [3; §15.2]
ArchiMate Views
Enterprise Architecture becomes complex very rapidly, so the ArchiMate Specification [3; §14], in common
with the TOGAF Standard, mentions the use of views as a way to manage this. Views allow us to selectively
reveal those elements and relationships that exist in the overall architecture which are relevant for a particular
purpose and for a particular audience. Each ArchiMate view tells a story about the Enterprise Architecture to
an audience, addressing some concern that they have. In this document I will make use of the idea of views in
order to show how the ArchiMate Specification might be used to represent the BMC.
In Table 1 I remind readers of the ArchiMate definition of these elements reproduced from the ArchiMate
Specification.
It is also useful to include the notion of value in the depiction of a business model. The concept of value is
found in the motivation aspect of the ArchiMate Specification, and may be associated with any core element.
In Table 3 is a reminder of the definition of these elements taken from the ArchiMate Specification.
Table 3: Strategy Layer and Motivation Aspect Elements of the ArchiMate Specification
The “Bait and Hook” type of business model is founded on the premise that the consumer buys an attractive,
inexpensive, or even free initial product that encourages “continuing future purchases of related products or
services” [1; pp.104]. Famous examples of this model include razors with disposable blades, printers with ink
cartridges, and mobile phones that lock the consumer into a subscription service. The BMC for this pattern in
the BMG book looks something like Figure 5.
5
Refer to www.gillette.co.uk.
• The Customer Interaction view, which focuses on the following building blocks of the BMC: CR, CH,
CS, and R$
• The Core Capability view, which focuses on the following building blocks of the BMC: KA, KR, KP,
and C$
Later in this document I will show how elements in these views may be linked up to reveal the whole BMC
model (Appendix A and Appendix B). As far as possible I have tried to restrict myself to modeling only the
items shown in the Gillette BMC example (Figure 5), as a means of validating the mappings used.
In Figure 6 the use of ArchiMate Business Architecture Layer elements is shown to model the VP building
block of the BMC. The narrative that accompanies this view is as follows:
• Value: value elements are used to express the value that the enterprise believes the consumer perceives in
respect of the products on offer; for example, [VP] Enables Personal Hygiene
The relationship used between values, products, and the customer is association.
• Product: the product element of the ArchiMate Specification can be used to model the generic products
that the enterprise offers in its marketplace
A product is a collection (aggregation) of services bound by a contract; for example, the [VP] Shaving
Products product aggregating a service [VP] Shaving Materials Purchasing, together with a [VP]
Warranty contract.
• Business actor: a business actor, Gillette, is shown, which realizes this service
Since a business model is focused on the enterprise’s interaction with external entities, and the
abstraction level is very coarse-grained, it is necessary to personify the enterprise itself in some way in
order to derive a meaningful model.
Central to the notion of expressing a business model is a definition of the nature of the Customer
Relationships (CR). In the “Bait and Hook” pattern, the idea is to foster a lock-in relationship, so that the
6
Some or all of the flows shown could be redefined as business objects; e.g., [R$] <<Financial Resource>> Money. In that case access relationships
would be needed with other elements of the model.
customer is locked into using the products of the enterprise. It seems appropriate to use the ArchiMate
element “business collaboration” to model CR. In this example, the collaboration is between Gillette and
their customers.
Where there is a business collaboration there would typically be a corresponding business behavior.7 The
behavior here can be thought of as the processes which solve the customer’s problem, via the use of the
enterprise’s products. I have modeled this as a business interaction and named it [CR] Perform Personal
Hygiene.
The portion of this behavior which affects the enterprise directly is the purchase of Gillette’s products, which
produces a revenue stream. The model shows an ArchiMate flow relationship (i.e., flow of money) for each
purchase type (handle or blades), from [CS] Customers to [KP] Retailers to Gillette. This flow is designated
as part of the R$ building block of the BMC, representing revenue streams. Notice the use of notes to
document which purchases are frequent and which are infrequent. This pattern of purchasing is the ideal
outcome of a “Bait and Hook” business model.
There also appears a selection of ArchiMate elements representing other building blocks of the BMC relevant
to this view. Gillette hosts a [CH] Outbound Logistics business interface which serves one of Gillette’s key
partners, [KP] Retailers. Retailers in turn offer a [CH] Retail Outlet business interface, which is used by [CS]
Customers.
7
Although this does not have to be shown, depending upon its relevance to the view.
Gillette offers and hosts both [CH] Inbound Logistics and [CH] Outbound Logistics business interfaces. Note
that the BMC does not include a specific building block to accommodate the channels the enterprise supports
with its KP, so the use of CH on the inbound side is an extension I have made.8 These CH interfaces are used
by Manufacturers and Retailers respectively.
Gillette performs three Key Activities (KA) – relationship “assigned to” – in the example given in the BMG
book. KA are modeled as business functions:
• [KA] Logistics: similarly, this KA produces a cost stream [C$] Supply Chain Costs
• [KA] Marketing: The example also shows Gillette’s investment in Marketing, a KA which reinforces the
Gillette brand, modeled as a stereotyped business object
The model shows that this KA generates a C$ too. [KP] Retailers “draw upon” the Gillette brand (read
access relationship), in the sense that it sustains sales in their stores.
8
Equally, the BMC does not have a building block for partner relationships either. As this affects the nature of the supply chain, it could be assumed
that this was an important aspect of some business models.
“Bait and Hook” Pattern using the Strategy Layer and Motivation
Aspect Elements
Value Proposition View
In Figure 9, the use of ArchiMate motivation aspect elements is shown to model the VP building block of the
BMC. The narrative that accompanies this view is as follows:
• Value: the value element is used to express the value that the enterprise believes the consumer perceives
in respect of the products on offer; for example, [VP] Enables Personal Hygiene
• [CS] Customer is modeled using the element Stakeholder, as is the enterprise Gillette itself
Figure 10: Customer Interaction View using Strategy Layer and Motivation Aspect Elements
In this view, the customer interaction with Gillette is modeled. [CR] Lock-in Relationship is modeled as a
capability which is associated with Gillette and the [CS] Customer, which are modeled as stakeholders. This
capability influences outcomes [R$] Shaving Products Purchase, [R$] Handle Purchase, and [R$] Blade
Purchase, with the emphasis on [R$] Blade Purchase (note the use of a “++”).
Gillette hosts a [CH] Outbound Logistics channel, modeled as a resource used by retailers. Retailers host a
[CH] Retail Channel, which is used by customers.
Figure 11: Core Capability View Modeled using Strategy Layer and Motivation Aspect Elements
In this view Gillette hosts both [CH] Inbound Logistics and [CH] Outbound Logistics channels, modeled as
resources. [KP] Manufacturers and [KP] Retailer, modeled as stakeholders, use these channels.
• [KA] R&D results in the production of [KR] Patents, which are modeled as a stereotyped resource
Note the flow relationship between the capability and the resource. This activity results in [C$] R&D
Costs.
• [KA] Marketing results in the reinforcement of the brand, modeled as a flow, and incurs [C$] Marketing
Costs
9
A future proposed addition to the ArchiMate Specification is the concept of “value stream”. This new concept might also be appropriate here.
Cross-Layer Views
Although not fully developed in this document, it also possible to create cross-layer views that contain both
strategy layer with motivation aspect elements and Business Architecture elements. The realization
relationship will commonly be used here, although other relationships are possible.
Conclusion
Ostwerwalder’s Business Model Canvas (BMC) is a popular and effective basis for supporting discussions
concerning an enterprise’s business model. Enterprise Architects can capture many of the features of the
BMC using the ArchiMate modeling language. The resulting models will provide a solid foundation for the
subsequent elaboration of the Enterprise Architecture and its IT-based information systems.
Appendix B: “Bait and Hook” – BMC for Gillette using the Strategy
Layer and the Motivation Aspect
Figure 14: Full BMC Model using the Strategy Layer and Motivation Aspect
• Combining ArchiMate® 3.0 with Other Standards – BMM/BS/BMC, Marc Lankhorst, BiZZdesign BV,
September 2016; refer to: https://bizzdesign.com/blog/combining-archimate-3-0-with-other-standards-
bmm-bs-bmc/
• Mapping the Business Model Canvas to ArchiMate®, L.O. Meertens, M.E. Iacob, L.J.M. Nieuwenhuis,
M.J. van Sinderen, University of Twente and H. Jonkers, D. Quartel, BiZZdesign BV; refer to:
https://ris.utwente.nl/ws/portalfiles/portal/5363569/Meertens12mapping.pdf
• Business Model Canvas (BMC) with ArchiMate®, Eero Hosiaisluoma, December 2016; refer to:
www.hosiaisluoma.fi/blog/business-model-canvas-bmc-archimate
• Business Model Canvas to ArchiMate® (the short version), Tom G., July 2011; refer to:
http://weblog.tetradian.com/2011/07/26/bmcanvas-to-archimate-short
These references coincide with the mappings used in this document to some extent. However, as far as I
know none of these sources has attempted to produce an actual meaningful ArchiMate model using their
mappings, and some of these mappings use a mixture of abstraction levels, which is not appropriate given
that the BMC is pitched at a single level of abstraction.
References
(Please note that the links below are good at the time of writing but cannot be guaranteed for the future.)
[1] Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers,
Alexander Osterwalder, Yves Pigneur, published by John Wiley & Sons, 2010
[2] The TOGAF® Standard, Version 9.2, a standard of The Open Group (C182), April 2018, published by
The Open Group; refer to: www.opengroup.org/library/c182
[3] ArchiMate® 3.0.1 Specification, a standard of The Open Group (C162), June 2016, published by The
Open Group; refer to: www.opengroup.org/library/c162
[4] Unified Modeling Language™ (UML®), Object Management Group (OMG); refer to: www.uml.org
[5] ArchiMate® 2.0 – Understanding the Basics, White Paper (W130), February 2013, published by The
Open Group; refer to: www.opengroup.org/library/w130
[6] TOGAF® Series Guide: Business Models, June 2018 (G18A), published by The Open Group; refer to:
www.opengroup.org/library/g18a
[7] The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your
Market, Michael Treacy, Fred Wiersema, published by Basic Books, 1997
[8] The Apostle Model, Annette Franz, published by CustomerThink Corp, February 2012; refer to:
www.customerthink.com/the_apostle_model/
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