5 August 2014
Business transformation involves significant changes to all areas of an enterprise. It focuses on the future strategies.
These includes strategies, business models, operating models, business processes, information & data, systems, products, business services and channels. These are exactly the deliverables developed by enterprise architecture to understand the current state of an enterprise, to envision and design the future state of the enterprise, to discover the gaps between them, to identify the opportunities for investment in change and to plan the enterprise architecture roadmap to achieve the change initiatives.
This sounds just like what Business Transformation approaches do, doesn’t it?
In fact Enterprise Architecture and Business Transformation disciplines have much more in common, than they have differences.
It’s clear that real Enterprise Architects play a critical role in business transformations. The Chief Enterprise Architect is the most important member of the senior management team leading a business transformation and ensuring that it is effective.
By the way Enterprise Architecture, by definition, should not be misunderstood as only being about IT Architecture or Technical architecture, used just to support IT solution development. This is not what real enterprise architecture is for. Business transformation is rarely limited just to IT projects.
The CxOs are the business leadership responsible for providing business direction, identifying the needs for the business transformation in the first place and making the investment decisions. But the Enterprise Architects will work directly with the CxOs to drive out the devil in the details, planning the future transformation roadmap, developing future scenarios, making projections and forecasting future options. Acting without enterprise architects is equivalent to failing to make proper preparations and is asking for trouble. The enterprise architects perform the important task of analysis and evaluating the impact of strategies and proposed changes in detail, identifying risks and prioritising the transformation initiatives into a viable roadmap. They manage the complexity of transformations and are essential to achieving success and effective transformational changes. Enterprise architecture is about bridging the gap between the transformation vision and strategy and its realisation.
What approach should be taken for leading business transformation?
The recommend approach is based on the books by John Kotter, “Leading Change”, “A Sense of Urgency” and The Heart of Change Field Guide”, together with real enterprise architecture approaches to managing strategic change.
Creating the conditions for business transformation
1 Increasing urgency
For Business Transformation to be successful, then the whole enterprise needs to understand the need for it. The whole enterprise needs to have a view of the current state and the motivation for change. Enterprise Architecture provides an understanding of the existing problems and the desired future vision. Avoid complacency and business as usual behaviours. Business transformation means new behaviours and new ways of working.
2 Building a joint Enterprise Architecture/Business Transformation team
A Business Transformation team should not be a group isolated from the enterprise architecture team, but completely integrated with it. Remember that a real enterprise architecture team is responsible for the future business change within the enterprise (and is not just an IT development function), typically up to between 2 and 5 years into the future. Seriously, how can they be kept separated from a business transformation programme?
Identify the members of the Enterprise Architecture/Business Transformation (EABT) team. Look for a mixture of strong management leaders and include a good influential people from a continuum of all job titles, levels of authority and statuses. Remember that enterprise architects are strong and effective change leaders and already cross cut the whole enterprise. Non-enterprise architects in the EABT team will probably have greater political and financial skills whereas Enterprise architects will have cross domain knowledge about the whole enterprise in detail, analytical skills and significantly greater modelling skills. All team members should have good vision and leadership skills.
Hold honest and convincing discussions, dialogues and workshops. Enterprise architects are often useful as facilitators at this stage.
Ask for emotional commitment from all EABT team members and commitment to work together for the common good of the enterprise.
3 Establishing the Target Transformation Vision models and Strategy
What does business transformation success look like?
Planning the strategies and confirm the business motivation. Enterprise Architects and C-level managers will use a Business Motivation Model for this, identifying Strategies, Goals, Objectives and performance measures.
Analyse the various ideas and options to develop an understanding the various Business Models for the target transformed enterprise. Alternative business models can be produced by the enterprise architects using a Business Model Canvas approach and these can be compared with multiple measures, including total cost of ownership and potential revenue.
Avoid thinking in terms of systems and IT solutions too early, after all this is the job of the enterprise architects later on and business transformation is a business problem. Allow for unfettered innovations to emerge from discussions.
Identify stakeholders including customers, partners and suppliers.
Examining the Outside In views from the perspective of these customers and partners.
Creating detailed Business Scenarios, Customer Journeys and Partner Journeys using any suitable story telling approach. Remember that stories are powerful, especially if they come directly from your customers. The enterprise architects will capture and analyse these business stories, but remember that at this stage these are not detailed IT requirements or user stories/use cases from an Agile software development perspective. Those kinds of deliverables will be defined much further downstream.
Identify opportunities and innovations. The team should consider approaches such as a Blue Ocean Strategy (see the book).
Definition the transformation Vision, Values, Motivations.
Defining the transformed value propositions
Analyse and understand the risks, their probabilities of occurring and their potential mitigation.
Engaging and enabling the Enterprise
4 Communicating the Transformation Vision and strategy
Communication is essential for all business transformations if they are to be successful.
There will be detractors and strong opposition to some of the transformation vision. The enterprise architects in the EABT team will ensure that fact based decisions can be made.
Publish and communicate the business transformation models as widely as possible. This will help make the right decisions and solve problems. Don’t assume either the C level managers or the enterprise architects have a monopoly on good decisions. Challenges need to be addressed and responded to.
Obviously some aspects of the transformation vision and strategy will be commercially sensitive and should not be communicated to the competition without careful thought. However, ultimately remember that the enterprise will want support from all customers, internal stakeholders, outside stakeholders, partners and suppliers and this support and buy in cannot be won without communication. Talk often and modify the transformation visions as needed. The enterprise architects will keep track of alternatives and decisions in the transformation model. The Vision and strategies need to be tied back to all aspects of the transformation model. This becomes infinitely easier using a flexible EA management tool (such as ABACUS) and avoiding spreadsheets and Visio diagrams which rapidly become unmanageable.
Ensure that the joint Enterprise Architecture/Business Transformation (EABT) team is able to lead by example by speaking about the transformation vision at any time and to always evangelise about it.
5 Enabling Action
Enabling transformation change is about removing the barriers to change and empowering staff. It involves removing resistance. Often resistance to change from staff is tied to functional divisions and people who are not measured by enterprise’s transformation success but only by fulfilling their own their own personal goals. Paradoxically, it may be the way they are measured and rewarded by the C-level managers that causes people to resist and avoid supporting transformational change.
To enable the right actions, the authorities, responsibilities and rewards need to be re-aligned with the business transformation vision, goals and objectives.
It is the enterprise architect who takes the business strategies and business model and successfully realise them on behalf of the whole enterprise, so are often best placed to also identify the authorities and responsibilities needed to focus people on benefits to the enterprise.
Ensuring that the Enterprise Architecture /Business Transformation (EABT) team has the right authority is also essential, and is able to resolve competing priorities. This authority is also exercised in relation to the governance and compliance stage.
Establish the appropriate metrics and measures, and maintain a scorecard for the business transformation vision, goals and objectives. It is strange how often performance is ignored and enterprises do not know how to measure success, or align performance to desired outcomes. Costs and revenue need to be balanced with other measurement dimensions. Measures should be aligned to transformation changes in the EA management tool.
6 Define Investment Opportunities
Examine the investment opportunities and develop an investment case. The Enterprise Architects will be best placed to determine how realistic and feasible a specific investment opportunity will be, and determine the fine details. Whereas the C-level management will understand the balance of costs and revenue developed in the Business Model.
Enterprise Architects will use a Business Capability model to scope and plan which business capabilities will be modified by a transformational change.
Transformational changes will typically be classed as short term or long term changes. However by definition, transformational changes will tend to be large and disruptive rather than “low hanging fruit”. Short term transformational changes will however be useful for maintaining the transformation momentum across a number of iterations.
Changes to business capabilities are identified as a number of capability increments. The dependencies between these and their priorities will form the first draft enterprise architecture roadmap and provide the scope and context for subsequent change iterations.
Implementing and sustaining the business transformation
7 Keep up the momentum
It is important to keep up momentum for a business transformation. The EABT team must keep communicating and clarifying the business transformation changes.
The business transformation model must be regularly published and all opportunities taken to speak to all stakeholders about it and inform them on status and progress. Capture feedback and responses to continually validate the vision and measure its effectiveness.
Address the fear, uncertainty and doubt from detractors and sceptics and motivate supporters to evangelise about the transformation. Encourage desired culture and values that reinforce the transformation changes. Keep your eyes on the roadmap and don’t assume everything is done after the success of the first iteration and let performance and concentration levels drop. Don’t let the EABT team get diverted into other side projects. Perseverance is important. Remember that change is the only constant.
Develop communication material including web sites, brochures and posters. Posters can be very effective as information radiators.
8 Enterprise Architecture Governance and Compliance
C level managers will be making the investment decisions and providing funding for investments in change.
Establishing an enterprise architecture governance and compliance capability will ensure successful realisation of transformation changes, and help them become permanent business as usual.
Detractors will often try to derail changes but the formal governance and compliance approaches will enforce decisions made but will also provide a platform for challenges and objections to be discussed openly and objectively.
9 Realising Transformation Changes
Business transformation needs many kinds of potential future changes to occur, not least of which are the key cultural changes and organisational changes.
Business Process changes, Information changes, system changes and procurement changes are also important. However for these I recommend designing for flexibility and adaptability not going for a fixed solution which may be cheaper but will invariably be difficult to change the next time. Business transformation should be thought of as a continuous process, enabling an enterprise the rapidly respond to changing forces in the market environment.
Before changes are executed, it is a good idea to conduct a Change Readiness Assessment, if you have not already done this earlier in the Enabling Action stage. This will help find out how prepared the enterprise is for the transformational changes and identify the enterprise’s overall competence, knowledge, skills and capabilities. Any shortfalls will be addressed by planning suitable skills training, and addressing the shortfalls.
For maximum success in strategic business transformations, an enterprise needs to completely and fully use their enterprise architecture resources and enterprise architects. You have to work hard and plan carefully. Building the proper foundation with an enterprise architecture model for the scope of the business transformation will make everything very much easier.
There is no good reason why real Enterprise Architecture and Business Transformation should not be merged as a single discipline. The skills needed for each hugely overlap, especially the Business Architecture domain of enterprise Architecture.
A joint Enterprise Architecture Business Transformation team is essential to achieving successful and viable transformations.
23 March 2013
Tom Graves recently participated in an Open Group TweetJam on Business Architecture. You can read about the results of this at http://weblog.tetradian.com/2013/03/20/opengroup-on-bizarch/
Unfortunately I didn’t hear about this in time to participate but I thought I’d record my own thoughts here.
The questions were:
- How do you define Business Architecture?
- What is the role of the business architect? What real world business problems does Business Architecture solve?
- How is the role of the business architect changing? What are the drivers of this change?
- How does Business Architecture differ from Enterprise Architecture?
- How can business architects and enterprise architects work together?
- What’s in store for Business Architecture in the future?
How do you define Business Architecture?
Business Architecture is one of the primary domains within Enterprise Architecture. It deals with the architecture of the business, ideally from a business perspective and is expressed in business terminology.
It should not really be considered a separate discipline from Enterprise Architecture but often is by those who persist in misunderstanding that Enterprise Architecture is only about IT and not about the whole of the enterprise.
Business Architecture deals with the structure and design of how an enterprise operates, makes money or delivers value, how it organises itself in order to provide products and business services to its customers, clients and consumers. It should be expressed independently of how the business architecture will be mapped to the underlying application architecture and infrastructure architecture, but is more connected to the business/contextual view of the information/data architecture and will include the organisation architecture.
Business Architecture is centred on the business and the business strategy, not on IT or on the IT Strategy and should not be considered just a source of requirements for IT projects (which is the impression that TOGAF gives of Business Architecture).
In general Business Architecture includes the following deliverables:
What is the role of the business architect?
As a specialised type of Enterprise Architect, they are in a leadership role, close to business management working for the CxOs to evaluate and elaborate possible future strategic scenarios.
They have a responsibility to guide, recommend and oversee the realisation of the business strategies identified by the CxOs, but they don’t control the business strategy or make the actual investment and strategic change decisions.
What real world business problems does Business Architecture solve?
As a type of Enterprise Architect, a Business Architect deals with strategic change, business transformation activities concerning topics such as:
- Ecommerce changes
- Cost reduction
- Process improvement and efficiency
- New organisation design
- Mergers & Acquisitions
- Reuse of shared services
- New markets
- Regulatory and legal changes
One should not forget that, by definition, an Enterprise Architecture model covers everything about the enterprise including the environment and market which it operates in, its Business Strategies, its Business Architecture as well as the rest of the Enterprise Architect domains.
How is the role of the business architect changing? What are the drivers of this change?
The role of a Business Architect is becoming much more distinct than it has been. many organisations are maturing their enterprise architecture functions that were previously just centred on IT architecture and are now specifically introducing a Business Architect role.
How the Business Architect role differs from other roles such as a Business Analyst, Business Change manager, Business Transformation Manager etc. is still playing out. I discussed this to some extent in a previous blog post – The difference between a Business Architect and a Business Analyst.
Another current difference is that a Business Architect is often closely associated with the Business units (and perhaps reports to a business line manager of sorts) and therefore is seen as being on the ‘Demand’ side of a business, whereas the rest of the Enterprise Architects (including IT Architects) are often lumped into the IT department and therefore are seen as being on the ‘Supply’ side. In theory, the Enterprise Architects, including Business Architects, should only ever be on the ‘Demand’side and not seen as part of IT. They should report to the CxOs, ideally seen as part of a CEO Office.
How does Business Architecture differ from Enterprise Architecture?
A Business Architect is a type of (a ‘real’) Enterprise Architect. Business Architecture is a sub domain of Enterprise Architecture.
How can business architects and enterprise architects work together?
Of course they can. The distinction in the question is artificial anyway, since a Business Architect is just a type of Enterprise Architect that specialises in the Business Architecture domain.
But in reality many organisations do have an unfortunate tendency to make up their own interpretation of what these roles actually are.
What’s in store for Business Architecture in the future?
We will see more and more Business Architecture roles in the future as organisations mature their enterprise architecture strategy and capabilities, and they realise that they need to get to grips with their business model and how it is realised. They will need Business Architects to help them do that.
For most enterprises embarking on large scale strategic planning and business transformation programmes it is all about staying robust, viable and efficient, continuing to deliver good outcomes and value to their customers/consumers/clients in the future. Enterprises should be wanting to stay competitive and efficient and beat the competition.
If the enterprise is to succeed, it must make strategic decisions and investments in change based on a thorough architectural gap analysis/impact analysis that is only possible with business architecture as a key part of their enterprise architecture function.
4 September 2012
I recently saw a Forrester blog entry from George Colony at: http://blogs.forrester.com/george_colony/12-08-27-enterprise_architects_for_dummies_ceos
And recently I’ve been reading an interesting book called Good to Great by James Collins. See http://en.wikipedia.org/wiki/Good_to_Great
The Forrester blog talks about succeeding with realizing the business strategy by involving enterprise architects, whereas the Good to Great book doesn’t mention enterprise architects but just talks about needing the best people to achieve great things.
It raises the question ‘Does an organisation need enterprise architects to achieve greatness?’, and ‘What does an enterprise architect need to do to be great themselves?’.
An Enterprise architect will certainly bring a logical enterprise-wide view of strategic change, usually cutting across organisation boundaries. They will look at the strategic design of the enterprise vision in terms of interconnecting business capabilities, where a business capability is a similar concept to a ‘system’ as described in system thinking and the viable system model. They will help with the business thinking.
But is this how senior executives see strategic change?
I’ve experienced organisation restructuring close up at a large number of organisations over recent years and in all cases, the enterprise architects were not involved at all. The re-structuring tends to be done along business functional lines. Nothing wrong with that perhaps, but it does tend to bake in the old silo boundaries and restrict cross functional reuse of business capabilities.
Is this good or great, or merely good enough?
How do senior executives see enterprise architects?
Enterprise architects work with the executives, senior business stakeholders and heads of all the business functions to build a holistic enterprise architecture vision model that links the enterprise’s mission, business strategies and priorities to the current and future needs in an efficient and viable fashion.
For enterprise architects it’s typically not sufficient to merely produce a good vision and good roadmap, but the focus should be on producing a great one that is robust and viable way into the future.
Quick and dirty is not a great approach and is often a waste of money from a long term enterprise perspective.
There will inevitably be a sort of creative tension between the various lines of business and enterprise architecture. Part of the reason for this this is that the lines of business invariably take a top down view and the enterprise architects are naturally working across functional silos. There is often a sort of conflict of overlapping RACIs, a clash of who appears to be responsible for making a decision. Generally that is easy, it’s the business strategy owned by the business that makes the decisions.
But as George Colony observes in his blog, it’s the enterprise architects that span both the business and technical domains and act as ‘an internal trusted advisor who marries the best interests of the business with long-term technology strategy’.
An analogy is within the realm of politics, where the politicians take the decisions helped and supported by their advisors. Also like politics, the lines of business are often challenging each other and pandering to popularity polls.
This raises another thought, should an enterprise architect be popular or be professional? Can they be both at the same time? Should an enterprise architect indeed be a kind of politician following the whims of the time, or should they be seen to be standing up for doing the right things for the future?
Tactical short term changes are invariably much easier to build a business case and obtain investment for than multi-year long term strategic changes will ever be. Should an enterprise architect just focus on short term fixes, or do their job and focus on strategic change. Like a politician, should an enterprise architect aim to be liked and popular, or respected for their work furthering the best interests of the enterprise?
It’s rather like a politician who can only achieve changes within a single parliament, and therefore shies away from embarking on initiatives that will take a long time and multiple parliaments to achieve. Should an enterprise architect just be popular and play politics? Does this make an enterprise architect great? In fact, what does make a great enterprise architect? Ideally 40% of our job is communication. Maybe communication really means playing to the populous crowds? Does promising bread and circuses make things great?
James Collins says that good to great companies follow the principle of “First Who, Then What” and hire good people. Collins talks about good CEO’s typically have much humility. So maybe a great enterprise architect should also be humble? Perhaps a great enterprise architect is one who makes great decisions? But then if it is only the lines of business who make the decisions, what then? Often the enterprise architect is not in the position to make enterprise level decisions, only recommendations.
To be great enterprise architects should be focused on being neutral and not taking sides, working faithfully for the enterprise as a trusted advisor, taking the enterprise in whatever direction it chooses to go at whatever speed it wants to go, realizing the collective enterprise vision. In turn, the enterprise needs to treat enterprise architects as true trusted advisors and not just delivery agents. Enterprise architects should follow a set of principles, be honourable, forthright and avoid compromise, keeping the organisation honest. Maybe in doing that they won’t always be popular but they will be doing their job.
It has been said that ‘business leaders rarely succeed in marrying empirical rigor and creative thinking’, so it is the enterprise architects task to help them do this better and achieve a great enterprise and not just one that is just good enough. Just good enough is never good enough.
In my opinion, without enterprise architects, an enterprise cannot easily become great and may only achieve greatness through simple luck.
11 November 2011
Enterprise Architecture is all about supporting strategic planning and business transformation activities, although many organisations seem to almost wilfully forget that this is one of the main purposes of Enterprise Architecture if not the most important one.
A business strategy is a long-term plan of changes for the whole enterprise which will address things like offering new products an business services, dealing with new customer or market segments, opening up niche opportunities, growth via mergers & acquisitions, cost consolidations and increased efficiencies. See http://en.wikipedia.org/wiki/Strategic_planning and http://en.wikipedia.org/wiki/Business_transformation
Enterprise Architecture primarily focuses on what an enterprise needs to do in order to stay viable, efficient and profitable in the future. In Viable System Model (VSM) terms, Enterprise Architecture is a System 4 type of system. See http://en.wikipedia.org/wiki/Viable_system_model
Enterprise Architecture bridges the gap between new strategy ideas and the execution of those ideas, in the same way that the intelligence corp in the military provide intelligence about current and future capabilities to the generals and ensure that the appropriate planning takes place in order to win the military campaigns.
Many organisations without an Enterprise Architecture function will risk failing to properly implement or deliver the on their business strategy.
It is frequently reported that many strategic ideas and initiatives identified by C-level executives are never properly implemented or seen through to full operation by the business units. That big picture of the business strategy on the white board in the CEO’s office or a high level presentation can look deceptively simple in a board meeting, but as they say ‘the devil is in the detail’. The C-level executives are responsible for seeing that the strategy is implemented, but it will be the Enterprise Architect that works out the detail.
Organisations need to know where they are now and create a baseline Enterprise Architecture model of their current state, then create a future target Enterprise Architecture model and do impact and gap analysis between them. The future state Enterprise Architecture model often needs to contain not just one single future target model but multiple complementary or competing models of the many future scenarios that are likely to have been developed using Scenario Planning techniques. See http://en.wikipedia.org/wiki/Scenario_planning
Strategic business transformation can be hard. Enterprise Architecture makes it far easier to answer questions such as:
- What Strategic initiatives are needed to fill the gaps found and address risks and issues?
- What new or changed business capabilities will be needed?
- What needs to be done when?
- How does one prioritise the different strategic business initiatives on an Enterprise Architecture roadmap?
- When are these investments in change going to be delivered?
- How will the initiatives be funded?
- What are the dependencies between the strategic initiatives?
- How will the business model be changed?
- How will the target Business Operating Model be changed?
- What organisation units and business functions need to be changed?
- What value chain and value streams need to be changed?
- What are the costs and potential revenues?
- How feasible is the business strategy?
- What feedback mechanisms between ‘systems’ will be needed?
- How will change be governed and how will compliance be assured? (i.e. how do we overcome resistance from difficult stakeholders, and the ‘Not invented here’ anti pattern?)
- What controls, KPI’s, CSF’s, incentives, bonus structures will be needed?
- What changes to the principles and standards will be needed?
- How do we align people, processes and technology?
- What other things have we forgotten?
I recommend reading the books:
- ‘Making Strategy Work: Leading Effective Execution and Change’ by Lawrence Hrebiniak and
- ‘Enterprise Architecture As Strategy: Creating a Foundation for Business Execution’ by Jeanne Ross and Peter Weill.
30 December 2010
We are used to the idea of a Programme/Project Management Office (PMO) but often organisations fail to understand (or perhaps deliberately misunderstand) what the Enterprise Architecture function does. I propose that the Enterprise Architecture function is, in effect, an Office of the CEO, or an Office of the CEO and Strategic Change Management.
The book ‘Enterprise Architect as Strategy’ (http://www.architectureasstrategy.com/book/eas/ ) gives us the right way of thinking and talking about what enterprise architecture is for – creating a foundation for the execution of the Business Strategy.
This book is an essential read for senior executives, business leaders and enterprise architects.
Many people within an organisation will understand the big picture view of the business strategy, such as the CEO of course, but perhaps only at a shallow level of detail.
Would the C-level executives understand all the potential nuances and wrinkles that come with that business strategy? Perhaps not unless they were a ‘details’ person.
What does the CEO do? They will spend time in evaluating ideas, formulating the mission and vision of their orgnaisation, innovating the business model to ensure the company remains competive in their market, looks for future opportunities for expansion and carving out a niche market.
It is the Enterprise Architect who has the job of maintaining the big picture on the behalf of the CEO, in sufficient detail to ensure that it becomes a knowledge base to support the executive’s decision making and help them to realise the business strategy and govern the implementation of that strategy.
In this way the Enterprise Architecture function is effectively the Office of the CEO, providing strategic support to the CEO and the other C-level executives. It’s also worth stating here that effective companies focus on enterprise architecture and don’t jump straight into IT architecture. Enterprise Architecture is not the same discipline as IT Architecture.
We can look at the the Enterprise Architecture function in terms of Deming’s Plan-Act-Do-Check process improvement process:
The CEO and other C-level executives will stablish the mission, vision, goals, objectives, principles and metrics to identify the main outcomes of the business strategy.
The Enterprise Architect will help executives, business leaders and strategic planners to develop the business model, operating model, and other enterprise architecture models supporting business model innovation
The CEO and other C-level executives will evolve and innovate the Business Model.
The Enterprise Architect will take the business strategy and business model and support the development of the target operating model, communicate the business strategy, model the target and interim enterprise architecture models, plan an EA roadmap of strategic initiatives, identify and define the required capabilities, define the mandates for the investment programmes and key projects, define standards and process improvements. They will usually define the IT strategy to ensure that it fits with the business strategy rather than being developed in isolation (as unfortunately often happens).
The Enterprise Architect will perform EA governance, compliance and design assurance against those programes & projects implementing the strategic changes and new capabilities. They will perform gap analysis and impact analysis, measuring the performance and compare the results against the expected outcomes.
All the while the Enterprise Architect will report to the CEO and act as their trusted advisor. They will analyze the gaps, risks, costs, issues, assumptions and dynamics to determine their cause and determine where to apply further strategic changes in the next iteration of the cycle and improve the overall maturity level of the enterprise.
The mission of Enterprise Architecture is to improve the implementation and excecution of the business strategy, ensuring that the enterprise will survive, continue to develop and remain profitable in the future.
An interesting example to look at is the US Department of Health and Human Services which has established an Office of Enterprise Architecture as part of the Office of the CIO. http://www.hhs.gov/ocio/ea/index.html
As the the book ‘Enterprise Architect as Strategy’ says – ‘When it comes to executing your Business Strategy your Enterprise Architecture may matter more than your strategy itself… ’
23 December 2010
If you want to execute a business strategy then you’ll need an Enterprise Architecture function.
Enterprise architecture (EA) is about change – strategic change in an enterprise.
But not exogenous change – reactive change forced on the enterprise by outside exigencies – although that sort of change and those external forces may be taken into account. No, enterprise architecture is about endogenous change – directed, planned, strategy-driven change within the enterprise.
Enterprise architecture is about describing the desired future state of the enterprise and plotting a course towards that position in enterprise ‘state space’ known as the Target Architecture.
Recently there was a long and fruitful discussion on LinkedIn, between practitioners, of the proposition that “EA is not the glue between IT and “The Business”. EA is the glue between Strategy and Execution.”. Aside from the questions of whether “glue” is the right metaphor and the possible mereological fallacy of considering IT and “The Business” as separate entities in need of glueing, the proposition is also something of a false dichotomy.
The two aspects – Business-IT Alignment and Strategy Formulation-Strategy Execution are neither mutually exclusive nor independent from each other. So, as with many false dichotomies, the ‘correct’ answer is “both and neither”. But in terms of importance to the business or enterprise, being the glue between strategy formulation and its (presumably) successful execution is critical whereas getting IT aligned to the business needs is only a very useful and desirable outcome.
But the question this immediately raises is what exactly it means to be the glue between strategy formulation and strategy execution – which despite the lengthy discussion was not really answered.
How exactly does EA help strategies get executed – and executed well?
The standard ‘authorities’ [like “Enterprise Architecture as Strategy” by Ross, Weill and Robertson] actually don’t help all that much – offering general aphorisms like “First build your foundation for execution” and “Define your operating model”. Well, yes – but what does that mean and how does that get your strategy off the drawing board and put into effect?
In recent weeks I’ve been reading a somewhat ‘non-standard’ EA textbook, by a professor at Wharton Business School which addresses exactly this problem.
That book is “Making Strategy Work – Leading Effective Execution and Change” – and even though Dr. Hrebiniak never mentions the term, I would contend it is a book about Enterprise Architecture because it is about change, strategic change, in an enterprise.
Towards the end of chapter six he provides a very plausible answer to the question of how strategy execution is glued to strategy formulation in the form of a “Strategy Review Process – Planning, Execution, and Controls” [Figure 6.2]. See http://www.amazon.com/Making-Strategy-Work-Effective-Execution/dp/013146745X
In essence the process is an adaptive closed-loop feedback control (socio-technical) system that seeks to bring actual business performance towards that demanded by the ‘control’ input of strategic objectives through the following six steps:
1) Strategy Formulation – including resource capabilities and constraints, strategy and goals, industry forces and competitor analysis
2) Strategy Planning and Execution – including meeting the demands of strategy, [changing] organisational structure, Integration Requirements and Methods, Information Requirements, Hiring and Training People [Developing organisational skills and knowledge] and Appropriate Incentives
3) Review of Actual Business Performance – including emergent deviations from the planned strategy
4) Cause-Effect Analysis and Learning
5) Feedback / Change – including changes in strategy and changes in the capabilities of the organisation
6) Continuation and Follow-Through – including integration and review of strategy changes, resource (re)allocations and agreement on business performance objectives and measures
Where step 6 feeds back and leads back into step 1, closing the loop. Dr. Hrebiniak asserts “Every organisation must fashion its own strategy review process. It’s not a luxury but a necessity. It’s that important. …It supports execution”. I’m not sure how much the professor is hyping his own process – but if the strategy review process is the enterprise’s only formal link between formulation and execution, I‘d say there is little hyperbole – it really is that important. Execution is delivery, formulation is just structured aspiration.
So what has this to do with Enterprise Architecture?
Step 1 is strategy formulation – and it is the usual process of matching internal and external analyses of the enterprise for the future. Enterprise Architecture is *the* key contributor to the internal analysis – the resource capabilities and constraints are (should be) described by the EA model, the strategy and goals are the EA (model) Motivation Decomposition.
Step 2 is essentially the strategic planning of change – including people, processes and technology wrapped up as organisational ‘capabilities’, or business architecture, information architecture, functionality (or ‘applications’) architecture and technology architecture. Many would regard this as definitively Enterprise Architecture. Not only that, the changes are described by the Target and Current Enterprise Architectures (models) and a number of intermediate Transitional Architectures and the differences between them. The planning process is the EA gap analysis process.
This is EA as a strategic planning for change function for the enterprise.
In step 3 – the intended target or transitional enterprise architecture (model) provides the baseline against which actual achievement can be objectively measured.
In step 4 – well, correlation is not causation; it is actually remarkably difficult to determine the contributory causative factors to any particular outcome or effect. EA has a role in assessing how much of the (change in) business performance achieved is down to what changes in the enterprise.
This is EA as the basis for impact analysis of change. Did investing in that software development really cause the increase in sales of snow-shovels or was it that the weather was more inclement than most people anticipated this year?
Step 5 brings in capabilities again. EA should describe the relationship between the organisational capabilities and the resulting business performance. EA is there to help assess what returns investing in particular capabilities is likely to achieve – and therefore find the optimum investment pattern.
And step 6 is again into describing the architecture of the enterprise as it is now and how we want it to be – and how we are going to measure the progress towards the ‘to-be’.
From this perspective, Enterprise Architecture can be seen to suffuse the entire Strategy Review Process, making it systematic, rigorous and cohesive – like a resin glue.
So if you are the CEO of a company that does not have an Enterprise Architecture function or a Strategy Review Process, presumably you think all you need do is formulate and promulgate a strategy and the execution will take care of itself?
Me neither – I think you need some glue.
by Ian Glossop, Enterprise Architect.
8 July 2010
I recommend you read Chris Curran’s excellent blog entry on 16 Enterprise Architecture Strategies Learned The Hard Way
I’ve included his list below with my views and comments following that.
1. An exhaustive enterprise level blueprint is virtually impossible to build – it’s too big and no one will buy-in
2. The best strategy blends a direction-setting enterprise blueprint and business unit and domain blueprints
3. Centralized accountability for the EA function is a predictor of success
4. A centralized team of architects is critical in driving EA standards and approaches
5. Architects must be assigned to projects as core team members (60%+ of total EA FTEs) rather than “advisors”
6. EA should be measured in 2 ways: business capabilities delivered and costs of core services
7. Measure EA as an asset – what does it cost to provide the service and what return does the business get from the business capabilities delivered?
8. Architecture leadership requires strong management, business operations and technology skills, most likely in 3 different types of people; don’t expect your chief architect to run the EA function
9. Methods and governance must be integrated into existing work processes (eg, project approvals, SDLC) rather than a new overlay
10. Enterprise Architecture is not always the best name for communicating; maybe Strategy & Planning or Enterprise Transformation is better
11. The best large companies have “business architecture” teams reporting to the business (or dual reporting to business and IT)
12. Leading companies have reference architectures in place for 90% of the technical domains
13. Your senior enterprise architects must have the right cultural skills and awareness to integrate well with upstream business partners and downstream technical users
14. High performance groups maintain consistent, formalized EA involvement in the SDLC to translate blueprints into sufficiently detailed starting architectures for each project as well as accurate cost and resource estimates
15. Mature organizations target 40% EA resource time for strategic planning and 60% on SDLC tasks, and typically err on spending more time on SDLC tasks
16. Strong credibility and trust amongst Business and IT partners is a predictor of EA success. Credibility has typically been gained via joint strategic planning efforts, one project at a time.
These are my comments on Chris’s list.
1. The enterprise architecture blueprint (i.e. the enterprise architecture content) needs to be developed in iterations, and treated as a living document/model that will never be complete. Aim for each iteration to provide value in it’s own right, to both the business and the rest of the organisation.
2. I agree that there needs to be different aspects to the business and IS strategies that address different segments of the enterprise. They shouldn’t conflict with each other though. Enterprise Architecture is all about aligning the IS strategy to the Business strategy and target business [operating] model.
3. The EA function needs an executive sponsor such as the COO that is accountable for the success of EA. I’m increasingly of the opinion that the EA function should not report to a CIO that is only focused on IT. This sends out the wrong message to the organisation as a whole. The COO should be focused on the success of the business and how it operates as a whole and not just the success of IT. In some cases success for the business may mean less IT as business capabilities in the cloud are used instead of local IT capabilities.
I’ve seen some suggestions that a new C-level post is needed to manage Strategic Change and Enterprise Architecture , that of a Chief Strategic Officer (CSO). This new role makes sense if the COO is only responsible for service delivery operations & support activities.
4. I agree – A centralized team of enterprise architects is critical in driving EA standards and approaches. There is also room for federated EA teams in large global organisations where centralised control is not feasible or even possible with local regional and country based regulatory environments.
5. Its the Solution Architects that should be assigned to projects as core team members. Enterprise Architects will be involved from a governance, compliance and design assurance perspective in quality gates/steering group meetings, and as an advisor. There are usually not that many enterprise architects and too many projects for them to be core members of every project.
Being a ‘Core’ member of a project team implies that they are managed by the project manager, whereas the relationship should be the other way around – the project manager needs to heed the advise and direction coming from the enterprise architects who have a governance sign off at the end of each project phase in project steering group meetings.
6. I agree that EA should be measured in terms of business capabilities delivered, but also in terms of value delivered. Cost of services is just one of many ways of measuring value. The value of EA is indirect though and value is only realised by solutions that deliver the business capabilities in the future many months away. To measure EA properly though means that there need to be a good record of decisions that are made by EA and the eventual outcome of these decisions in the future. This doesn’t happen much in my experience at the moment.
7. EA is a core business function in the same way that Finance Management or Sales & Marketing are core business functions. We should treat the Enterprise Architecture content as a knowledge management asset. The value is the return on knowledge (ROK) that is used in supporting decision making.
8. The EA function does need strong leadership. Doesn’t always get it though. In all the EA teams I have encountered, the Chief Enterprise Architect does also run the EA function. Within a larger EA team, there are often specific managers for the Business Architecture, Information Architecture, Application Architecture, Infrastructure Architecture aspects.
9. I partially agree. Aspects of EA Governance, Compliance and Design Assurance processes should be integrated into existing Strategic Planning, Portfolio Management, Programme and Project Management, Software Development and Service Delivery processes, but the Enterprise Architecture Development process (i.e. TOGAF ADM) will be a new overlay.
10. The name ‘Enterprise Architecture’ is all too easily confused with ‘Solution Architecture’, ‘IT Architecture’ which is a source of confusion so there are often suggestions for new names for ‘real’ Enterprise Architecture. I’ve not yet found a new name I like though it is becoming common to include Enterprise Architecture within a Strategic Change Management team.
11. Business Architecture is just one of the domains of Enterprise Architecture. All of Enterprise Architecture should be reporting to the business (i.e. the COO) rather than to IT (i.e. the CIO).
12. A Reference Architecture is a key component of the target Enterprise Architecture as a whole. In some cases these are provided by industry reference architectures.
13. I agree in general although I’d say that Enterprise Architects probably need to be much more business focused than IT focused. IT is often seen as part of the ‘problem’ and EA needs to be in alignment with the business.
14. This is more the responsibility of the Solution Architects who need to liaise with the Enterprise Architects to translate the Enterprise Building blocks into Solution Building Blocks. The Solution Architects should ideally form part of a ‘virtual’ EA team.
15. The 40% EA resource time on strategic planning and 60% on SDLC tasks mainly reflects the current overemphasis on IT Architecture being done by Enterprise Architects. I think the ideal percentages should be the other way around i.e. 60% strategic planning and 40% project related work.
16. I agree that the credibility of the Enterprise Architects and their trust relationships is critical. Building that credibility and trust starts with working closely with the business on strategic change programmes