In policy-driven, highly-regulated industries, organizations must adapt to ever-changing policies and regulations. For example, when you think of Oversight and Audit functions, they need business transparency to understand how policy and regulatory changes impact Stakeholders and the general business.
In today’s organizations, there is always ongoing transformation with people, process and technology. Understanding the impact and responding to changes in policy or regulation can be a challenge in complex environments. If there is not a clear vision, it is difficult to predict how changes to one function impact other business units. Business Architecture best practices allow for the clarity and transparency necessary to respond proactively to regulatory or policy changes and minimize disruptions to business and value delivery.
Business Architecture provides the blueprint that defines your business and helps you leverage value streams across different connections within your organization. You may have a thousand different processes, and Business Architecture can connect the dots between these processes, business units and Stakeholder maps to provide insight into how changes impact and flow through the entire organization. This transparency helps you efficiently prepare and respond to changes so you can continuously deliver value.
A Use Case: Compliance Audit
Regulatory agencies in the Financial sector exist to protect the public. In the Financial markets, regulators provide a level playing field and protect consumers and financial assets. Their goal is to maintain efficient and transparent markets and ensure businesses and consumers get fair and honest treatment. A major tool used to do this is the audit function.
An audit to ensure compliance with a new regulation or policy generates three distinct value streams:
- Conducting an Audit Value Stream
- Regulatory updates trigger an audit
- Audit gathers and evaluates information pertinent to the audit scope
- Findings bring to the surface gaps in policy or compliance
- Establish Policy Value Stream
- Business initiates internal changes to comply with regulation changes
- Prepare formal policy modifications
- Review, approve and implement policy modifications
- Ensure Policy Compliance
- Implement changes to the existing business model
- Establish metrics to monitor policy effectiveness and compliance
- Evaluate and confirm regulatory compliance
Business Architecture principles help you understand the interconnectivity between these three Value Streams. The regulation change triggers the three Value Streams where the business adjusts through internal changes, ensures implementation of all changes and compliance with new regulations in preparation for an external audit. The blueprint and overall transparency increase the efficiency of this process.
Audit functions are increasingly becoming Agile in that you want to go from the introduction of new regulations to compliance as quickly as possible. Business Architecture is based on an understanding of Value Streams and enables the Agility to understand the impact of new regulations, respond quickly and document compliance with minimal disruption to business outcomes.
Business Architecture principles bring transparency that allows you to understand the complexity of your Stakeholder, policy and solutions dependencies and how regulatory or policy changes impact your process, people, technology and business outcomes. The big picture understanding allows you to respond to ongoing changes proactively and efficiently in regulatory and policy environments.
Watch our on-demand webinar, Business Architecture: Gain the Clarity Needed for Successful Transformations, where xScion’s CTO Mason Chaudhry and Business Process Management expert Ivan Blinov explain how Business Architecture can help you proactively respond to changes in regulatory and policy environments.