11 November 2013
I was reading this today:
8 August 2013
I’m reading a great new book called Intersection: How Enterprise Design Bridges the Gap Between Business, Technology, and People by Milan Guenther
The book discusses modern Enterprise Architecture perspectives like the Outside In approach and provides a holistic design lead approach that is focus more on the customer than on the underlying applications, technology and infrastructure.
The book also addresses the corporate branding of an enterprise. A successful brand is grounded in the strategic future vision of an enterprise. This strategic vision is also what drives the enterprise architecture initiatives, so it is clear that the enterprise architecture discipline must then provide the key support for understanding what contributes to the brand, what makes the brand successful and what must be done to sustain the brand. This is a refreshing perspective that tends to get lost in most organisations.
The knowledge of messages, business events, interactions with stakeholders, outside in scenarios, business services and value streams that are defined and designed as part of the business architecture domain will all enable senior executive to understand and develop their brand. A brand is not just the value proposition, the set of products and services offered, but includes the development of the reputation of the enterprise, the customer experience it provides and the trust the customers develop. The book describes this in terms of the form, appearance, communication and behaviour of the enterprise and much more
Enterprise Architecture will have a profound impact on the brand and ultimately on the financial success of the business.
This book is a must read that should be on the bookshelf of every true Enterprise Architect.
16 June 2013
What is Enterprise Architecture
Enterprise Architecture is essentially a strategic planning discipline for ensuring that all the strategies of an enterprise are well executed. How should we measure it and how it is performing?
First it’s best to clearly understand what Enterprise Architecture is and who it is for.
Enterprise Architecture bridges the gap between those decision makers who come up with new strategies and objectives and those who are involved in enterprise transformation and investments in change. It is about what the enterprise can do now (baseline capabilities) and what it wants to be able to do in the future (target capabilities).
Enterprise Architecture is all about keeping an organisation robust, viable and continuing to satisfy all its stakeholders in the future, who are interested in the enterprise succeeding and continuing to succeed i.e. the CxOs, Shareholders, Customers, Partners, Suppliers etc.
The Enterprise Architecture deliverables are a conceptual blueprint or Target Operating Model that explicitly defines the mission, vision, strategies, objectives, principles, standards and business capabilities at the strategic level, as well as all the other elements (component types) in the enterprise that define how the business operates. These elements include business functions, business services, business processes, scenarios, value chains, value streams, products, application services, applications, technology and infrastructure and are defined within the following Architecture domains:
|Architecture Domain||Typical object types in the domain|
|Market/Environment||Supplier, Partner, Shareholder, Stakeholder, Regulator, Customer, Contact, Prospect etc.|
|Strategy and Motivation||Drivers, Mission, Vision, Strategy, Objective, Measure, Metrics, Principle, Standard etc.|
|Business||Business Capabilities, Business Functions (Value Chains), Business Process, Strategic Scenarios (Value Streams), Events, Products, Business Services, Organisation Units, Persons and Roles etc.|
|Information||Business Information, Application Data, Stored data (Databases, Files etc.)|
|Applications||Application Services, Applications (Suites, Packages, Components etc.)|
|Infrastructure||IT Infrastructure (Hardware, Nodes, Networks, Devices, Appliances, Servers etc.Physical Infrastructure (Buildings, Facilities, Vehicles, Machinery, etc.)|
Enterprise Architecture also provides several different views of how an enterprise operates and changes, by maintaining a baseline enterprise (operating) model, target enterprise (operating) model(s) and a roadmap of changes to the enterprise’s business capabilities and investments in change ordered within an enterprise transformation roadmap.
Measures and metrics
A large number of organizations use Enterprise Architecture approach in order to plan strategic changes and manage enterprise transformations. Enterprise Architecture is not directly linked to a direct outcome but is usually indirectly related.
One of the major concerns is the failure of many enterprises to actually measure the value of their current or baseline Enterprise Architecture. One is reminded of the old adage ‘What you don’t measure, you can’t manage’. When changes occur as a result of new strategies and target enterprise models, the subsequent enterprise transformation may well be many months or years into the future. Changes are delivered by other groups inside the enterprise or external solution delivery partners. If measures and metrics are not used and actively managed then it becomes rather difficult to compare the old baseline with the new baseline to see what value has been achieved.
Identify the Metrics
The measuring metrics will vary from one enterprise to another. As Enterprise Architecture exists to support the CxOs and decision makers within the enterprise then it is important to define the metrics from their perspective.
Metrics can be identified form a number of perspectives.
Broadly these can be grouped into:
|Internal (Inside Out) metrics||Metrics that measure the internal efficiency of the enterprise’s functions, processes, applications, infrastructure||
|External (Outside In) metrics||Metrics that measure the way the enterprise operates from the perspective of those stakeholders outside the enterprise.||
|Change related metrics||Metrics that measure how well the enterprise transformations are being achieved||
More detailed metrics can defined for each Architecture Domain. Here below is a discussion of some of some potential metrics used for measurement of their enterprise architecture’s value.
The Enterprise Architecture is by definition the architecture of the enterprise, so the metrics also need to be defined from the enterprise or business perspective. The CEO and other CxOs are responsible for managing the enterprise so the metrics need to be ones that they are interested in and keen to measure. These may include:
- Completed transactions
- Operating expenses
- Revenue per dollar of operating cost
- Profit per completed transaction
- Profits per investment
The trends and rates of change in the numbers are often more important than the actual numbers.
If the enterprise strategies and therefore the target Enterprise Architecture are not having an effect (directly or indirectly) on the numbers that the CEO is interested in, then the Enterprise Architecture is not being effective.
Customer experience metrics
One of the biggest contributions to Enterprise success and profits is the overall customer experience and satisfaction. There are three categories of Customer experience metrics:
|Descriptive Metrics||About what happened when a contact, prospect or customer engages with the enterprise||
|Perception Metrics||What did the contact, prospect or customer think about what happened||
|Outcome Metrics||What will the customer do as a result of what happened||
These metrics measures how happy a customer or prospective customer is with the enterprise’s value proposition (their products and business services). What value is provided to the customer? This measure is becoming common with value based pricing approaches. How easy is it for the customers to do business with you? Do the enterprise business services provide for the needs of the customer’s own internal processes? Customer Satisfaction can be increased by better communication with them through their preferred channel, so a measure of Customer communications (messages and interactions, social media) can be useful.
Cost/Benefit ratio to measure the value of any new or changed business capability. This is used to compares the amount of money spent on the transformation (costs) to the amount of money that is being saved after the implementation of the changes (Benefits). These metrics are often measured in terms of money, but in fact the benefits may be non-monetary values such as increased sales, improved customer satisfaction, reduction of risks, increased flexibility, and improved platform for future change.
Productivity and Effectiveness
CEOs will be concerned with the effects of Enterprise Architecture and new investments on production, efficiency and effectiveness. Metrics in this area can focus on:
- Reducing time to market for new investments in change
- Integrating and improving business processes across the enterprise (including with partners)
- Improving the ability to integrate data and interfaces across the enterprise (including with external partners)
- Improving the ability to reuse business functions, business processes and application services
- Increasing agility, flexibility and ability to rapidly change in the event of new strategic scenarios occurring
- Increasing standardization
- Reducing the time taken to develop solutions by maximizing reuse of enterprise architecture models
Governance and compliance
Enterprise Architecture ensures that the strategies of the enterprise are realised.
How many business capabilities are being created, updated or removed? What capability increments are being turned into investment proposals and providing the mandates for new programmes and projects? How many capability increments are being delivered by the solutions that have been subsequently designed and developed? How well are the solutions in compliance with the target enterprise architecture model?
The Enterprise Architecture function will create a well-populated repository of knowledge about the current state of an enterprise and its planned future state vision. The enterprise Architecture models provide a knowledge base for CEOs, CxOs and other decision makers that provides answers to their questions. In essence an enterprise architecture model needs to be designed to answer all their potential questions. How well does it achieve that?
These questions can be about gaps, impacts, dependencies, probabilities of success and failure, risks, costs etc. One of the major concerns of Enterprise Architecture is to reuse the knowledge, information and data as required by various processes and applications throughout the enterprise. Metrics can include the percentage completeness of this knowledge base. How easily and readily available is this knowledge throughout the enterprise to those stakeholders who need it?
A Common Vision of the future state
The whole purpose of Enterprise Architecture is to align investments in change with the strategies for the future of the enterprise. The target Enterprise Architecture Model is the target operating model that provides a common vision for all parts of the enterprise, including internal business units and external partners. How complete is this model and all the associated diagrams and documentation? Is it readily available?
The target enterprise architecture model will reduce the time it takes to conduct a particular enterprise transformation, implement new and changed business capabilities and reduce solution design and delivery time and development costs by maximising reuse of the enterprise level models. It will provide standard components and ensure maximum reuse of them across the whole enterprise. Over time the enterprise architecture will ensure faster development, fewer failures and better alignment to strategic enterprise level requirements and continual improvement.
The Enterprise Architecture is often focused on improving or enabling various characteristics and qualities in the future.
Metrics can be based on these qualities can include:
- Viability (ability to remain viable in a changed environment)
- Flexibility (ability to automatically adapt when unexpected external changes occur)
- Agility (Ability to adapt to changing business needs)
- Ease of integration
- Amount of reuse
- Support for innovation
- Service level
Enterprises need to measure Enterprise Architecture by how well it improves the performance of the whole enterprise, meets its business needs, and supports its strategies and investments in change.
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.
10 January 2012
I’m often confronted by solution architects, IT and technical architects who don’t understand what Enterprise Architecture is all about. They usually misinterpret enterprise architecture from their own perspective as some kind of system design of ‘enterprise’ scale IS/IT systems and become frustrated when they discover that it is really something else. It often turns out that they are not usually working at the right level or with the right stakeholders in their organisation to be true enterprise architects. They are not working with the leadership team but within the scope of a small development project.
They can’t therefore see the wood (the ‘Enterprise’) for the trees (a project), let alone the helicopter view…
Enterprise architecture is in reality one of the most powerful management approaches that can be used by an organisation. It is not intended to be used (only) at a solution or project level but for the big decisions that an organisation’s leadership team have to make. The leadership (i.e. the C-level executives, and heads of divisions etc.) have to make the decisions based on the facts and knowledge base (the Enterprise Architecture repository) delivered by the enterprise architecture function. Those decisions are supported by the enterprise architecture function planning their execution in the EA roadmap. Each initiative in the EA roadmap is typically a new or changed Capability or Capability Increment (see MODAF and http://www.mod.uk/NR/rdonlyres/E43D93F6-6F43-4382-86BD-4C3B203F4AC6/0/20090217_CreatingCapabilityArchitectures_V1_0_U.pdf).
Typically the focus of Enterprise Architecture is on:
- Increasing the return on business and IT investments by more closely aligning them with business needs.
- Identifying areas for consolidating and reducing costs
- Improving executive decision making
- Increasing the benefits from innovation
- Delivering strategic change initiatives
- Managing business transformation activities
The Enterprise Architecture is also characterised across the following multiple dimensions:
- Direction: Enterprise Architecture is focused on strategic planning (i.e. business transformation, strategic change programmes) and not on operational change (i.e. run the business, six sigma, lean processes)
- Scope: Enterprise Architecture is focused on the whole of the business (i.e. the Business Model and Business Operating Model) for all business and IS/IT functions, and not just on the IS/IT components.
- Timeline: Enterprise Architecture is focused on the long term view of the future scenarios (up to 3/5 years in the future) and not just on a short term view of current state. Enterprise Architecture is focused on a roadmap of changes to an organisation’s capabilities.
- Value Chain: Enterprise Architecture is focused on the whole of the enterprise (i.e. the extended organization and value chain) and not just on the scope of a delivery project
- Stakeholders: Enterprise Architecture is focused on the needs and concerns of the C-level executives (CEO, CIO, COO etc.), business executives, corporate and business strategists, investors, strategic planners.
(ps. I tried to draw a diagram to illustrate where Enterprise Architecture lies on these dimensions but couldn’t visualise a multi-dimensional space…)
So overall, the primary purpose of Enterprise Architecture is to support strategic change such as :
- The introduction of new customer and supplier channels such as eCommerce
- The consolidation of the existing portfolio of people, processes, application and infrastructure etc.
- The reduction of costs and risks, ensuring the enterprise will remain viable and profitable
- The design of a new organisation, business model and business operating model.
- The due diligence for mergers and acquisitions and management of the resulting integration programme.
- The development of smarter and more effective systems (not just IT systems).
- The introduction of shared services and applications.
- The introduction of new technology, platforms and infrastructure such as SaaS, Cloud etc.
- The introduction of regulatory and legal changes such as Basel 3
In my future blog entries I will explore how Enterprise Architecture supports some of these areas.
The first one will be about how Enterprise Architecture is used to support Due Diligence activities prior to mergers and acquisitions.
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.
I am currently involved with the EAST group (an outreach group of SCiO http://www.scio.org.uk/ ) which is looking at the overlap between Enterprise Architecture and System Thinking, and in particular the Viable System Model (VSM).
The Viable System Model has been around for many years, coming out of Stafford Beer’s work http://en.wikipedia.org/wiki/Anthony_Stafford_Beer
This diagram looks complex at first but you can also read a very accessible description of the Viable System Model at http://www.scio.org.uk/resource/vsmg_3/screen.php?page=0cybeyes and at http://en.wikipedia.org/wiki/Viable_system_model
An excellent book to read is Patrick Hoverstadt’s book ‘Fractal Organization: Creating Sustainable Organizations with the Viable System Model’ See http://amzn.to/mjHz6F
But what is the Viable System Model?
The Viable System Model is a recursive view of five main systems within an organisation.
The word ‘System’ here doesn’t mean an IT system or an information system but has the more generic meaning of the word ‘System’. See http://en.wikipedia.org/wiki/System
Those five systems are concerned with the following functions and capabilities:
|System 5||Policy, ultimate authority, identity.|
|System 4||Adaptation, forward planning, strategy.|
|System 3||Internal regulation, optimisation, synergy.|
|System 2||Conflict resolution, stability.|
|System 1||Primary activities.|
System 1 systems within an organisation are realised by those organisation units that actually make products, deliver business services and create value.
System 2 systems are those organisation units that provide the coordination functions.
System 3 systems are those that provide the audit and operational control functions.
System 4 systems are those that look forward to the future and the external environment.
System 5 systems provide the strategy and business direction.
The Viable System Model is recursive so that the same five systems appear at all levels within an organisation, but it’s easy to see equivalent VSM systems at various levels in an organisation.
At at the top level it is possible to see that the Executive Board is a level 5 system, the general management are mainly level 3 systems, the system 2’s are the programme managers, project managers and solution architects. The system 1’s are the operational service delivery units and project teams.
Where does that leave Enterprise Architects? Well the Enterprise Architect function is essential a system 4 system with it’s focus on strategic planning for the long terms view and creation of roadmaps of strategic initiatives.
The strategic Enterprise Architects (system 4) with their long term, external and strategic focus work in co-operation with the Solution Architects (system 3) with their immediate operational, internal, lean, design and delivery focus.
It’s clear to see with our Viable System Model lens that solution architects and enterprise architects are not doing the same job but a completely different job.
From an Architecture Continuum perspective (TOGAF9 http://pubs.opengroup.org/architecture/togaf9-doc/arch/chap39.html) then the Viable System Model is an example of a generic Foundation Architecture. and a thus a key architecture to reuse when designing organisation specific target enterprise architectures.
The SCiO group has developed the SCiO Organisational Maturity Model http://www.scio.org.uk/OMM which is based on the Viable System Model.
This can be used for assessing the strengths and weaknesses in your enterprise, looking at how efficiently it is working today, both in the immediate operational perspective but aslo the log term viability of your enterprise in the face of changing external market and business environment.
The on-line questionnaire for the SCiO Organisational Maturity Model addresses six aspects of the Viable System Model:
- Resource and Performance Delivery
- Managing strategy
The outcomes are expressed in terms of a measure of maturity across those six dimensions and a diagnosis of which Archetypes (i.e VSM anti-patterns) apply to your enterprise and which need to be addressed.
Unlike Lean manufacturing which only focuses on operational efficiencies in the the lowest level System 1, System 2 and System 3 systems within an organisation, the Viable System Model looks at the whole enterprise from a recursive perspective which is more sound and holistic.
In some ways it is surprising that it hasn’t yet reached a tipping point within organisations or their enterprise architects. Maybe this is because everyone is too focused on the day to day need for operational efficiency and approaches such as Lean Manufacturing (http://en.wikipedia.org/wiki/Lean_manufacturing) and forgets about planning for the future. This is the difference between being reactive and proactive.
and the excellent book: The Service-oriented Enterprise by Tom Graves, http://amzn.to/kAzR7F
The next time you are challenged on the purpose and value of Enterprise Architecture, then answer that it’s the difference between the external and future oriented perspective of the VSM system 4 as opposed to the inside and now, operational efficiency perspective of system 3 and service delivery perspectives of system 1 and 2.
As a system 4 system, the enterprise architecture function focuses on:
- Supporting the business strategy developed by system 5
- Analysing strategic change initiatives
- Planning and creating strategic road-maps
- Scenario analysis
- Assessment of future risk, agility and viability of the enterprise
- Coordinating with system 3 systems (i.e. portfolio and programme management, project management and solutions architecture)
- Governing the realisation of those strategic changes and development of new business capabilities.
The more one looks at the Viable System Model, the more it looks like the unifying theory behind Enterprise Architecture.