A method and system are described for using business artifacts to identify elements of a component business model. Artifacts operated upon by the business are first identified, and then used to analyze the business into business operations. This is done by identifying every business activity that acts on an artifact, creating directed graphs for the business activities, and decomposing the directed graphs into sub-graphs, each sub-graph representing a business operation and being annotated by a verb expression, the annotated sub-graph representing a business service. The business services are then clustered into non-overlapping components, using common affinities reflected in the verb expressions, and organized by partitioning into internal and external operations, exposing a business service for each external operation. The components are then clustered into non-overlapping business competencies, and arranged by accountability level.

 
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