Something exciting is happening in the world of enterprise architecture. It`s the identification of major payback for organisations which took the leap of faith a decade ago, and committed to enterprise architecture as a discipline and way of setting and fulfilling strategy, allocating and managing infrastructure, and applying best practice in IT governance.
The first detailed report cards are in, and they indicate that a decade on, the organisations that committed to enterprise architecture have gained the promised competitive advantage, and are far ahead in their fields. They are more flexible; more agile; more profitable; more able to adapt to change; they can identify return on IT investment; and they can make the right decisions regarding future IT spend.
The commonality is that they have digitised their core business processes in line with best-observed business practice and with enterprise architecture principles. In so doing, they have laid a foundation for execution, thereby aligning IT and business imperatives.
The first step to make this happen is to define an operating model of the enterprise, along with business process standardisation and integration necessary for delivering goods and services to customers. This is a vital step: companies with a foundation for execution supporting an operating model report 17% greater strategic effectiveness - a metric tightly aligned with profitability.
In addition, these companies have reported higher operational efficiency (31%), customer intimacy (33%), product leadership (34%) and strategic ability (29%) than companies that have not developed a foundation for execution. (As reported in Harvard Business Press`s "Enterprise Architecture as Strategy".)
Deal with change
In "Enterprise Architecture as Strategy", Jeanne W Ross, Peter Weill and David C Robertson report that of 103 US and European companies surveyed, those which had laid an enterprise architecture foundation were more profitable, got to market faster, derived more value from their IT investment, and were better prepared to deal with change than their competitors.
Companies that had digitised their core processes had on average 25% lower IT costs.
Stuart MacGregor, CEO of Real IRM Solutions
They found that companies that had digitised their core processes had on average 25% lower IT costs; and digitising of core processes yields the benefit of an effective foundation for execution.
The authors of this definitive work report comments such as these:
* Different parts of our company give different answers to the same customer questions.
* Meeting a new regulatory or reporting requirement is a major effort.
* Our business lacks agility.
* IT is consistently a bottleneck.
* Different business processes complete the same activity across the company, each with a different system.
* Information needed to make key product and customer decisions is not available.
* Many people are tasked with taking data from one system, manipulating it, and re-keying it into other systems.
* Senior management hates discussing IT, and managers don`t know if IT is delivering value.
None of this is new or unique. We have seen time and again that companies which fail to organise their activities along enterprise architecture guidelines struggle to meet their strategic objectives, align IT with business, and deliver demonstrable return on investment. But now, for the first time, we can see the incontestable link between enterprise architecture and the long-term ability of an organisation to outperform its competitors.
Share