Enterprise Architecture is the high-level analysis and documentation of an enterprise in its current and future states of an integrated strategy, business, and technology perspective. An enterprise is an organization or sub-activity whose boundary can be defined by common-held goals, processes, and resources and one common reporting center.
Enterprise Architecture is driven by strategic goals and business requirements.
Enterprise Architecture = Strategy + Business + Technology
Enterprise Architecture (EA) has got the following characteristics:
- Direction: EA is focused on strategic planning i.e. business transformation, strategic change programs, and not on operational change i.e. run the business. It examines the key business information, application, and technology strategies and their impact on business functions.
- Scope: EA is focused on the whole of the business i.e. the Business Model and Business Operating Model for all business and IS/IT functions, and not just on the IS/IT components. EA consists of recognition of all IT levels and provides a general framework for creating enterprise-wide information systems that can help support an organization’s strategy execution in a coordinated manner by aligning business processes with the data and technologies that support them
- Unified principles and practices: EA involves a formal description of the structure and functions of the components of an enterprise (including people, processes, information, and technologies), the interrelations between these components and principles and provides guidelines to govern their creation and development over time.
- Timeline: EA is focused on the long-term view of the future scenarios up to 3/5 years in the future and not just on a short-term view of the current state
- Value Chain: EA is focused on the whole of the enterprise i.e. the extended organization and value chain and not just on the scope of a delivery project
- Stakeholders: EA is focused on the needs and concerns of the C-level executives such as CEO, CIO, and COO Etc., business executives, corporate and business strategists, investors, strategic planners.
Enterprise Architecture’s purpose is often to help a business in the following ways:
- To optimize fragmented processes (both manual and automated) into an integrated environment that is responsive to change and supportive of the delivery of the business strategy. e.g. The rapid growth of Dell has led it to be a multi-national company that provides regional-specific hardware, infrastructure, and IT services and solutions. It ended up with unique manufacturing facilities, regional order management systems, and different operating processes and systems throughout the world. In order to achieve its corporate objectives, Dell needed to consolidating multi-national systems to improve efficiency, reduce costs and enforce common standards.
- To create a map of IT assets and business processes and a set of governance principles that drive an ongoing discussion about business strategy and how it can be expressed through IT.g. When Syngenta was formed by the merger of Novartis and AstraZeneca’s agribusinesses, there were two separate IT groups-one was technically focused and the other was strategically focused. Enterprise Architecture’s purpose to help the company to simplify and lower the cost of IT, provide standard governance, support key applications such as SAP and Microsoft, and present one face to the customer.
- To ensure that an organization’s IT investments are closely aligned with business goals and processes so that limited IT resources are allocated to areas of highest impact on organizational performance e.g. Walt Disney wanted to achieve the right balance between IT efficiency and business innovation to have a competitive advantage.
- To provide a blueprint that is employed by each and every stakeholder for their own work purposes. For instance, National Strategy for Police Information Systems used Enterprise Architecture’s purpose is to provide a high degree of interoperability demanded by the business, both between forces and between applications, both intra and inter force in order to reduce cross-boundary effects.
- To provide a key tool in managing the outsourcing of service delivery. For instance, private sector service providers were required to use a framework provided by The Department of Social Security (DSS) (United Kingdom). Enterprise Architecture’s purpose is to help the department in capitalizing on their experience, expertise, and self-financing abilities and play a greater role in the development of the Department’s new IS/IT systems.
- To avoid fragmented and duplicated applications and technology platforms, for instance, to help manage IAG NZ‘s complex systems environment, Enterprise Architecture was designed to better understand and manage their applications, infrastructure, and interfaces. The overriding goal was to have “a single point of truth” about the design and dependencies between technology components. And Department of social security (United Kingdom) used the architecture framework to have a single logical data repository capable of supporting all of the Department’s core business activities. Framework helped in reducing duplication of stored data and, thus costs to the taxpayer and the potential for fraudulent claims. It also ensured that information common to different benefits only needed to be captured once, so providing an improved service to the public.
- Help an enterprise to stay agile and to solve the problems that it faces e.g. Tesco revamped its Enterprise Architecture to scale and build an execution platform to support its worldwide growth and have a consistent and repeatable process for defining solution architectures. It also helped in guiding decisions and investments. Agility will also help reduce the time it takes to implement new solutions.
The enterprise architecture benefits include the following:
- Simplification of an enterprise. The enterprise architecture benefits include more efficient business operation with lower costs, more shared capabilities, lower management costs, more flexible workforce, more organization, less duplication and redundancies, and improved business productivity.
- Align technology operation to the business wants. The enterprise architecture benefits include help to analyze business models and create an enterprise-wide transformation project portfolio that guides decisions and investments. It also increases the return on business and IT investments.
- Align enterprise components to the strategy. The enterprise architecture benefits include help in supporting strategic changes such as the due diligence for mergers and acquisitions and management of the resulting integration program, the design of a new organization, business model and business operating model, introduction of regulatory and legal changes, the introduction of new technology, platforms, and infrastructures such as SaaS, Cloud, etc. and consolidation of the existing portfolio of people, processes, application, and infrastructure, etc.
- More Effective IT operation. EA helps in lower software development support, and maintenance costs increased portability of applications, improved interoperability, and easier system and network management, improved ability to address critical enterprise-wide issues like security, and easier upgrade and exchange of system components.
- Effective management and exploitation of information through IT. EA helps in Identifying areas for consolidating and reducing costs, improve executive decision making, increase the benefits from innovation and manage business transformation activities.
- Better return on existing investment, reduced risk for future investment. EA helps in reduced complexity in the business and IT, maximum return on investment in existing business and IT infrastructure, the flexibility to make, buy, or out-source business and IT solutions, reduced risk overall in new investments, and their cost of ownership.
Enterprise Architecture is not an approach to fix just one type of problem but applies to many. Hence, constructing up the right architecture depends on the quality of the planning process. The selection of a particular framework or just having EA is rarely the key to success. Instead; it is how the framework is applied that makes a difference. The EA that fits an enterprise often is a mix of multiple frameworks. It’s a long-term commitment with continuous improvements and not just a “one-off”. It should be a “live” document that needs to be updated when necessary.
Also, this won’t solve all the problems, but just help assess which those problems are and it is up to the management to fix them.
While designing the architecture, there should be a focus on the business requirements and the strategic goals and how can Information Technology help to achieve both.
A well-organized Information system can help an enterprise to have integrated and improved information about the organization‘s resources. This, in turn, will enable better communication and common understanding between different stakeholders and helps to reduce re-work and duplicated efforts, more profitability, and quicker time to market, improve strategy execution, and even reduced IT costs.