The case for enterprise architecture – part 2

In the first part of the case for enterprise architecture, benefits from an information technology (IT) point of view were explored. Focusing only on the benefits to IT would be short-sighted, as enterprise architecture has much to offer business.

Kaplan and Norton (2006), argues that most organizations are uncoordinated, often creating conflict and interference between well-run and efficient business units which somehow creates an inefficient enterprise. They lack a single purpose which unites and directs them as a team rather as individual competitors.

These business units are not aligned and focus on creating value at a business level rather than at an enterprise level. In order to run an efficient and profitable enterprise business units need to be aligned with enterprise strategy to create enterprise value. This needs to be cascaded to the business support functions including information technology. (Kaplan and Norton, 2006).

The ability to extract value from alignment rests squarely on the definition of formalized enterprise architecture.

Business without formal business architecture evolves over time to adapt to changing strategy, markets, regulations and legislation. This leads to a loss of a holistic view to enterprise evolution. The most important benefit of formalized enterprise architecture is the understanding of how different parts, or components, of the enterprise fit together and how it interacts with each other. Understanding business operations and supporting technology facilitates understanding on how business behaviour and technology systems may be reused in standardization and optimization projects. (Giachetti, 2009).

Formalized enterprise architecture considers the long term vision and defines the principles necessary to guide business and projects executed within the enterprise. It takes into account constraints like legal and regulatory changes. The defined enterprise architecture promotes to informed planning and decisions on how best to evolve the enterprise to some future state. (Giachetti, 2009).

Formalized enterprise architecture enables rapid impact assessment of prospective change on all levels of the enterprise and allows rapid response to changing markets, legislation and strategy. Understanding impact mitigates risk of change and enables stakeholders to make the best decisions for change. (Giachetti, 2009).

References

Giachetti R.E. (2009), Design for the Entire Business, Industrial Engineer, 41(6):39-43

Kaplan R.S., Norton D.P. (2006), Alignment, Boston: Harvard Business School Press