Enterprise Architecture IT strategy

How is Enterprise Architecture used to enable IT strategy in a business?

Posted on Posted in Enterprise Architecture, IT Strategy

Jeanne W. Ross, Peter Weill and David C. Robertson wrote a book called “Enterprise Architecture as a Strategy”. They introduced an idea to execute a strategy; firstly a company should build the foundation for business execution .Foundation for business digitizes routine tasks to provide reliability and predictability in processes. Foundation provides fulfilment criteria, IT structure for a company, strategic limits and IT cooperation model to ensure the business and technological projects are achieved and priorities are established.

IT strategy has two components:

  • Operating model: There is a level of standardization and integration of processes based on organisation’s strategies. Standardization is defined as performing business processes regardless of who is performing and when and where. Integration is combining efforts of different business units.
  • EA is the structured business process & IT infrastructure based on the operating model. It defines the core capabilities.

A company should first decide on its operating model and then implement the operating model via EA. Based on scope of standardization and integration level, there are four operating models with different key IT capabilities:

  • Diversification: have a low level of standardization and low level of integration. It includes independent business units with different customers and expertise. E.g. Johnson and Johnson, GE. IT provides economic of scales without limiting independence.
  • Coordination: have a low level of standardization and high level of integration. It includes unique business units which need to know each other’s transactions. E.g. Scotland Yard, MetLife. IT has access to shared data through standard technology interface.
  • Replication: have a high level of standardization and low level of integration. It includes independent but similar business units’ .E.g. UNICEF, Marriott Hotel chain. IT provides a standard infrastructure and application components for global efficiencies.
  • Unification: have a high level of standardization and high level of integration. It includes single business units with the global process. E.g. UPS, Delta Airlines. IT has access to global data access with systems reinforcing global processes.

EA can also be categorized into stages according to their maturity level in an organisation. There are 4 stages as follows:

  • Business Silos: use local data and application but have no integration with rest of the business unit.
  • Standardized Technology: has standardization of IT infrastructure within a whole organisation. The application is local but the data is shared.
  • Optimized Core: has standardization of technology, application, and data within the organisation. Application and data are used to support general organisation process.
  • Business modularity: applications are built in a modular way so that they provide fulfilment of the individual requirement based on common standards.

The implication of maturity of EA in an organisation is that newly developed EA have a high percentage of IT investment in local applications. However, as an architecture matures IT investment increases in shared data and enterprise systems .Also, there is an increase in strategic agility, operational efficiency, risk management, IT development time and management satisfaction.

In a study, 70% of the respondents indicated that their EA programs were in existence for fewer than 10 years and also relatively small in size .It indicates that even though EA was born 27 years ago as a field , only in last 10 years more and more organisations are using it because of the benefits associated with it.

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