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Using Enterprise Architecture to Achieve Your Business Objective

A well-known advertisement says “Just Do It,” but when companies choose to utilize technology as an important resource for enhancing growth and profitability, they should do it well. Yet, a recent study by the IT Policy Compliance Group indicates that 85 percent of IT departments are adding no measurable value to their businesses and 11 percent are trying to add value and failing, actually spending more and delivering less. As a controlled resource, IT spending and delivery must be carefully executed to maximize any contribution. When directed well, IT investments can make a positive impact. When directed haphazardly, they can significantly affect your profitability.

Some companies have poured billions of dollars into failed IT programs that resulted in massive write-offs and operational chaos, while other firms have successfully leveraged the power of technology to gain a competitive advantage through decreased business cycle times, improved market insight and enhanced customer interaction. So how can executives direct this scarce resource more effectively and make a positive difference? One solution to consider is enterprise architecture (EA), a discipline that combines the definition of business strategy and goals, the rigor of systems analysis, and program management to help maximize investment returns.

The Big Picture

Most companies have some basic combination of activities from the point that they understand the right product or service for their customer to the point of sales. This is also known as a “value chain.” Each of these functions has different challenges and goals and, ideally, each will be able to adapt easily in response to those forces. EA evaluates the strategies and business pressures on the organization and lays out a roadmap for IT that maximizes agility based on the ways your business is changing. It also provides powerful insights into the way an organization operates as a comprehensive value “ecosystem.”

In an enterprise with many opportunities to fund technology, senior leaders need to carefully allocate IT resources (both budget and focus) to ensure that strategic goals are achieved through the investment. EA looks at business processes and their interdependency separately from any technology or automation, and helps chart strategies for leadership to evolve and strengthen the organization’s competitive differentiation. It is a big-picture perspective that integrates views of business capabilities, information, applications and technology in an effort to provide a consistent context for strategic investment in technology.

Careful Planning is Needed

Many companies have some type of planning for project investments and tracking results. PMOs and IT Portfolio Management functions help bring quality to how technology is delivered. However, without EA discipline, there is no way of ensuring what should be delivered. With increasing dependence on third parties, the need to carefully plan the scope and goals of IT investments becomes critical.

EA develops deep insights into business strategies and helps align technology investments to maximize them, regardless of who will perform the engineering. Architecture frameworks and disciplines allow competing or unrelated interests to be matched in the context of the ongoing development and implementation of new technology. It also applies a systemic understanding of how businesses operate to the analysis and prioritization of IT investment, resulting in strategies that clearly align to business needs.

 

 

Failed EA programs focus only on evaluating new technologies and creating IT standards without building a good understanding of the intrinsic structures and functions of the business. Given EA’s strategic nature, it is critical to properly charter, staff and structure it for maximum benefit.

Conclusion

As technology dependence continues to become more pervasive across organizations, EA can help companies develop a holistic integration of technology into their business operations. Those that do not have strong frameworks for evaluating and planning their IT investments will be subject to the whims of vendors and their marketing. A firm’s technology platforms are a critical part of delivering the goods and services that it provides to its customers — and EA can help create well-reasoned, actionable strategies for advancing these platforms. So make sure your investments are allocated to maximize your company’s competitive advantage in the marketplace.

Next Steps

• If you don’t have an EA function, consider implementing one
• If you have one, evaluate it to ensure that it are focused on the right activities
• Empower your EA function to propose operational changes and improvements, and hold them accountable for the results
• Make sure that you have the right people
• Once your EA function is in place, implement measures to ensure that it continues to provide measurable value over time

Rashmi Kumar, Senior Director, and Gustav Hoyer, Director, are the co-authors of this story.