Sunday, June 04, 2006

Are You Ready for Enterprise Architecture?

Enterprise Architecture is often sold as a remedy for better aligning IT goals with business goals.  Promises are made that EA can serve as a strategic vehicle for:
  • reducing IT costs
  • enabling business change
  • simplifying technology portfolios
  • supporting greater flexibility
  • improving process effectiveness
  • delivering IT projects quicker and cheaper
  • implementing IT governance, especially regulatory compliance such as Sarbanes-Oxley
  • rationalizing application portfolios
  • plus a thousand more pie-in-the-sky IT objectives
Can your IT organization really do Enterprise Architecture?  It depends.  Is your IT group, itself, ready to embrace EA?  Can it establish the discipline that's needed for a successful EA implementation?  And, perhaps most importantly, does your IT organization start off with sufficient credibility with your own enterprise's business executives?

When it comes to enterprise IT, there's a continuum that ranges between strategic and support. The telltale indicator is to look at where the CIO reports. Does he or she report directly to the CEO, or does the CIO report to the CFO?

If it's the latter, then IT's role is perceived as one of providing support. In this case, when business leaders think IT, they invariably think cost center. With a support IT organization, the most important objective is reducing IT operational and maintenance costs. Beware that EA groups are themselves frequently considered cost-overhead and as such are subject to cost-cutting purges. Generally, the best strategy for cutting costs is to focus initial EA initiatives on consolidation.

Even if your CIO reports to the CEO, or COO, and is therefore considered strategic, there's still the question of how important your executives deem the value of information technology in terms of your business. Much may depend on what others in your industry are doing. Also, does your overall IT organization command credibility across the other parts of the business?  What about the rest of IT?  Have they bought into EA?  Finally, what happens if your architecture efforts are successful?  Are you ready for an explosion of demand?

EA can help an organization improve its ability to deliver IT services. EA can help provide more effective IT governance. EA can even help better align IT capabilities with the needs of the business.  Start slowly. Establish success one step at a time. Be prepared to respond. Build credibility. And, most importantly -- communicate -- continually, effectively, and to all levels of people both inside and outside of IT and across all business areas.

In the final analysis, EA is a critical ingredient for operating a successful 21st-century IT organization, especially when combined with its related disciplines: IT portfolio management, IT governance, IT service management, and IT project management.

1 Comments:

Anonymous Robert Pearson said...

IT, any IT, must earn the respect of business leaders by being able to show exactly
how it can generate profits.
Being able to cut costs is important but never as important as being able to show
how a profit is made.
IT wants to be the goose that lays the "golden eggs" and can do it on demand.
EA, to me, seems to deal more with efficiencies at the Lower Metric level.
This would make it more of an "Enabler". If EA can show how profits can be made
from IT investments in Profit-Enabling Units of Technology and the "Profit Source",
which are Units of Information, then great!

My system does this by establishing a clear line of sight from Company Portfolio Management,
to the Lines of Business, to the IT Portfolio Management and to the Lower Metrics. This enables
the ROI/TCO meter for every LOB. This gives Management a "Finger on the Pulse" of
every LOB and a "Heartbeat" monitor for Profits and Costs. The Strategy for a LOB
can then be derived from actual transactions. In the case of a LOB "cold-start" the
Strategy could be inferred.
To do this requires Business alignment and a "clear line of sight" from:
1) Company Portfolio Management - how we plan to make money here
2) Lines of Business (LOB) - specific ways to make money
3) IT Portfolio Management - how IT will Profit-Enable (ROI) the Lines of Business at an affordable cost (TCO)
4) IT Lower Metrics - Units of Technology and Information
a) Profit-Enablers-Enhancers - Units of Technology
b) Pure Sources of Profit - Units of Information

EA can be a big help reducing friction and inefficiencies in the Units of Technology.
Gartner's old term of "Zero Latency" is what I define and use here.
This is where I planned to use the Flashmap Systems tools.
Now we have Web-enabled SOA coming from the top down and everybody is
thinking "It's EAI only better, quicker and cheaper!". Write one Java program,
throw some WSAD at it, or the non-IBM counterpart to WSAD, and we are off to the races.
Well, it won't work that way.

4:05 AM  

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