Wednesday, October 24, 2007

Enterprise Architecture As Strategy

Seeking further knowledge in Enterprise Architecture led me to read "Enterprise Architecture As Strategy" by Jeanne W. Ross, Peter Weill, and David C. Robertson. It seems that just as with SOA, EA lacks consistent definitions but this book provided some interesting business examples of how EA really can help your organizations.

They define enterprise architecture as "the organizing logic for core business processes and IT infrastructure reflecting the standardization and integration of a company's operating model". This boils down to 2 concepts: business process integration and business process standardization.

There are 4 types of operating models defined in regards to classifying companies:

1. Diversification (low standardization, low integration)
2. Coordination (low standardization, high integration)
3. Replication (high standardization, low integration)
4. Unification (high standardization, high integration)

The operating model represents a general vision of how a company will enable and execute strategies. Focusing on the operating model rather than on individual business strategies gives a company better guidance for developing IT and business process capabilities.

There are some real interesting case studies on how some successful companies like Seven Eleven Japan, CEMEX and UPS truly exploited their IT infrastructure to succeed in the marketplace. It is all about digitizing the core business processes.

Four stages of architecture maturity are defined:
1. Business Silos architecture - maximize individual business unit needs
2. Standardized Technology architecture - providing IT efficiencies through technology standardization and, in most cases, increased centralization of technology management
3. Optimized Core architecture - company wide data and process standardization to company model
4. Business Modularity architecture - manage and reuse loosely coupled IT-enabled business process components to preserve global standards while enabling local differences

Four strategic outcomes from enterprise architecture

1. Better operational excellence - low-cost, reliable and predictable operations
2. More customer intimacy - extraordinary customer service, responsiveness based on deep customer knowledge
3. Greater product leadership - first to market with innovative products and services
4. More strategic agility - respond rapidly to competitor initiatives and new market opportunities

They also mention to build the foundation one project at a time which must meet the short-term business goals and at the same time implementing or at least not undermining the company's architecture. (This was a point in Brown's "Succeeding with SOA") The goal is to have the enterprise architecture as a compass, directing the company toward its intended operating model. The IT Architecture should be viewed as an asset and not a cost.

No comments: