Funding enterprise level initiatives

31 August 2009

A conversation recently reminded me of an issue I have frequently seen before.

Organisations that have not had an Enterprise Architecture function have funded all changes in projects that are funded by the business areas.

The result is that the first project that needs new infrastructure or new application services that will be shared across the whole enterprise are obliged to seek funding for it on their own. Subsequent business sponsored projects can then reuse this new infrastructure or shared enterprise service without funding any part of it.

However is also not uncommon to find that the new projects in the other business areas don’t actually realise that there is anything that can be reused and can get quite a long way down the road developing their own new applicattions, services or infrastructure that duplicate the functionality before realising they could have reused an existing capability. In some organisations I have seen, the outcome is a large amount of duplicated functionality and therefore additional costs.

With an Enterprise Architecture function in place the EA governance process should prevent projects duplicating functionality, but the funding remains based on the business areas budgets.

What is needed for infrastructure chages and application services and applications that will be used by multiple solutions from mutliple business areas is enterprise level funding. With this funding model, a business area would fund the business specific parts of the solution that a project is delivering and the cross business area functionality would be funded from an enterprise level budget, sponsored by the enterprise architecture review board. Some projects will be initiated that are purely sponsored by the enterprise and not by any of the business areas.

This funding model seems an obvious approach to have in an organisation with an enterprise architecture function in place, but so far I have never encountered it.

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