Which of the following best describes the relationship between business models and business architecture?

Which of the following best describes the relationship between business models and business architecture?
A . Business Architecture provides a conceptual summary view, whereas business models support in-depth analysis.
B . Business Architecture breaks a business model down into the core functional elements that describe how the business works.
C . Business models are useful for impact analysis, however Business Architecture is needed for scenario analysis.
D . Business model development is a prerequisite for a Business Architecture development.

View Answer

Answer: B

Explanation:

A business model describes how an organization creates, delivers, and captures value for its stakeholders3. A business architecture breaks a business model down into the core functional elements that describe how the business works, such as the value proposition, the customer segments, the channels, the revenue streams, the cost structure, the key resources, the key activities, and the key partnerships3.

The relationship between business models and business architecture is that while business models provide a high-level description of business elements such as customers, markets, and the economic rationale of the business, the business architecture takes this model and breaks it down into more detailed descriptions. It identifies the core functional components and their relationships, which describe how the business operates, the roles involved, the information flowing through the business, and the technology supporting business activities.