The Economic Value of Enterprise Architecture and How to Show It
Yearly surveys routinely indicate a need for Enterprise Architecture (EA). CIOs often list implementing or improving an EA initiative as a top priority. Despite their position at the “top table”, CIOs are still expected to justify their plans to invest in EA (or elsewhere), based on the plan’s expected effectiveness.
In theory, the benefits of Enterprise Architecture should justify themselves. But the niche and expert nature of the practice means the value doesn’t always translate well to those outside of the immediate stakeholder community.
In this case, CIOs, Chief Architects, EAs and the like, need to show the economic value. But how?
The Economic Value of EA
The need for Enterprise Architecture can be summed up by two of its main goals – aligning the business and its operations with IT, and bridging the gap between the organization’s current state, and its desired future state.
Economic success in EA often comes as a result of nearing the ideal state of these two goals. I say nearing, as Enterprise Architecture initiatives rarely achieve perfect alignment. The two goals work against each other in this regard – success in bridging the current/future gap, creates a constantly changing landscape, and business/IT alignment has to be adjusted accordingly.
With this in mind, it could be said that EA’s economic value is achieved in the long term, as opposed to the shorter term. That said, there are a number of markers of success that can be achieved along the way – each providing clear and tangible benefits to the organization that undoubtedly hold economic value of their own merit.
There are a number of indicators of success within EA that indicate the initiative’s economic value. Four core indicators come in the form of improving strategic planning, communication and risk evaluation, and tactical advancements. These markers can be seen as best practices in order to work towards, to fufil the overall goal of making an EA initiative an economic success.
Improving Strategic Planning
Enterprise Architecture is often seen as the bridge between defining a strategy and its implementation – hence one of EAs main goals being to bridge the gap between the business’ current state, and its future.
EA adds a much needed dimension of transparency to strategy implementation. It’s often the guiding rope for implementing strategy that will affect the whole business. Because different business departments often work in silos that aren’t all completely in sync, new initiatives can suffer from a lack of foresight and lead to disparity and disconnections in data and ideas.
Enterprise Architecture works as a framework to ensure no department/silo is overlooked, and that with the new strategy, each separate business arm is still working towards the same goal.
Enterprise Architecture is arguably concerned with strategic planning, first and foremost. But there will always come a time when that strategy has to be communicated to the wider business for it to be successfully implemented.
The problem most businesses will find here, is that due to the holistic, top down, and all encompassing perspective EA has on the business, and the universal/inter-departmental changes any strategy EAs suggest can cause.
This is where the right Enterprise Architecture tool is important. Rather than just the actioning of Enterprise Architecture itself.
The right Enterprise Architecture tool can enable the various stakeholders relevant to a proposed scheme, to actually collaborate on the project to ensure the strategy works in the best interest of all parties.
In the past, Enterprise Architecture has been deemed as an “ivory tower” profession, catering only to the expert. This is still true to some extent, especially when talking about back end data and the repository. However, that doesn’t mean the results at the front end aren’t useful to non Enterprise Architects.
The right tool can enable true collaboration (in tool, not just reports and feedback which can slow down the process) and therefore be a great asset to line managers, C-Level executives and others as they can be a more critical part of the planning process.
All in all, this facilitating of true collaboration should improve the communication and coordination of strategy implementation, and lead to less false starts, wrong turns and a return on investment that’s both faster and more fruitful.
As well as improving the Strategic Planning process, Enterprise Architecture plays a huge role in improving processes overall. By taking a look into what is aligned, and what isn’t, EAs can uncover areas of redundancies – where two separate processes are being actioned when they could be merged into one.
There are many examples of this across varying sectors, especially when an organization has been void of EA until now, or is on the lower end of EA maturity. These businesses tend to be less aligned and so suffer from the issues typical to such situations. These issues can range from a non standardized practice for keeping and labeling data, leading to duplication and corruption, to different departments holding separate licenses for software that does essentially the same thing.
By identifying these discrepancies, Enterprise Architects can save an organization both time and money. Both of which hold clear economic value.
Taking Better Risks
Modern Enterprise Architecture is often seen as a two headed coin. One side, the Foundational side, deals with the ‘legacy’ IT-based tasks – what we refer to as keeping the lights on, keeping costs down etc. The tactical value of Enterprise Architecture resonates most vibrantly here.
Vanguard Enterprise Architecture is the other side of this coin. This more modern take on Enterprise Architecture was introduced to reflect ITs shift from a solely support based domain, to a role more central to the business.
Vanguard EAs are the forward thinkers, more concerned with innovating, and bridging current and future gaps in technology, than the alignment in the present. In this regard, Enterprise Architecture becomes a fantastic tool for evaluating risk.
Although evaluating risk can never be seen as an exact science, Vanguard EAs are invaluable in that they can help indicate what strategies should, or should not be pursued based on their potential value to the business, and the costs it could take to implement them.
The Business Capability Model, for example, can indicate what a business is already suited to achieve. Therefore, they can be used to point out strategies the business might be able to implement more readily.