What is the value of Enterprise Architecture?

Usually the hardest thing about Enterprise Architecture is “selling” it to senior executives. What value does Enterprise Architecture provide? What Enterprise Architecture does? How much is it going to cost us? This poster can answer those questions.

The Business Model Canvas

The Business Model Canvas (by Strategyzer), is a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model. If you haven’t seen it before, take a look at this short video that explains it briefly.

Now that the Canvas is explained, let’s focus on what a business model for Enterprise Architecture might look like.

Value Proposition

Value Proposition is about “products” that Enterprise Architecture sells. The value that Enterprise Architecture delivers can be classified in two groups: Guidance and Control.

1. Guidance
Enterprise Architecture guides enterprises in identifying core competencies and business priorities. It also provides guidance in how to create practical and efficient means to manage information technology portfolios, how to rationalize existing systems and projects to gain cost reductions, and how to help remove redundancy in information systems. Enterprise Architecture demonstrates which technology investments and assets directly support business goals, strategies, and needs.

2. Control
Enterprise Architecture controls proposed solutions, services or changes. Since Enterprise Architecture sees the whole picture (from business, data, information and technology angles), it can address all areas affected and reduce exposure to the risk of unintended impacts.

Customer Segments

Enterprise Architecture takes input from C-level people but also feeds information back to them. Enterprise Architecture customers are broad but most common ones are:
1. CIO’s and COO’s
2. Business Stakeholders
3. Heads of IT Departments
4. Project Managers
5. Solution Architects

Channels

Usual ways that Enterprise Architects deliver value to their customers are:

1. Portals – such as Enterprise Architecture Repository that holds relevant information about the enterprise: application and technology inventory, data sources, business capabilities and services, standards, principles, architecture and solution building blocks and decision logs.

2. Personal Assistance – establishing role of trusted advisor by directly assisting the stakeholders and/or becoming a project team member

3. Governance Processes – rigid compliance and quality assurance through integration with PMO, Procurement and Supplier processes

Customer Relationships

The relationship between customers and Enterprise Architecture is maintained in one of these ways:

1. Communities – different communities of practice (per domain, per technology, pet initiative etc.) are one way of keeping communication open between Enterprise Architects and customers

2. Portals/Dashboards – reporting dashboards customized per stakeholder groups

Key Resources

The key resources that form Enterprise Architecture value proposition are:

1. Domain Architects – Domain Architects are members of Enterprise Architecture team and are usually split by Business, Data, Application and Technology domains

2. EA Platform – by Enterprise Architecture Platform it is assumed a platform (known as Architecture Repository) that provides insights into architectural artifact and reports generated out of those artifacts

Key Activities

Key Activities that Enterprise Architects perform could be summarized in four steps:
1. Observe – collect current information from as many sources as practically possible
2. Orient – analyze this information, and use it to update your current reality
3. Decide – determine a course of action
4. Act – follow through on your decision

These four steps are knows as OODA (Observe, Orient, Decide, Act) loop. It’s a continuous cycle of improvement. Observing the results of actions, seeing whether they’ve achieved the results that were intended, reviewing and revising initial decision, and moving to the next action.

Observe – Enterprise Architecture observers what is currently happening in the enterprise environment. Can current internal or external events impact existing strategy in direct or indirect way? If yes, is the enterprise ready to adapt to the new environment? Observing is key to a successful decision. If this step is flawed, that will lead architects to a flawed decision, and a flawed subsequent action. While speed is important, so is improving analytical skills and being able to see what’s really happening.

Orient – Enterprise Architecture needs to properly interpret previously observed situation. There are many events that influence orientation and at the end directly impact decisions taken. Usual influences are: market changes, technology disruptors, internal company culture, personal previous experiences, internal supporters/adversaries, organisational structure and new information coming in.

Decide – Decisions are based on the observations made and the orientation used. Enterprise Architecture can decide to prioritise investments in certain business capabilities in order to better meet some new market conditions that were previously observed.

Act – is the stage where decisions get implemented. Enterprise Architecture guides and controls implementation of decisions made in the previous step. That can be an implementation of a new system to support new business capabilities.

Key Partnerships

In order to successfully deliver value to the customers, Enterprise Architecture needs to form partnerships with different enterprise groups in a form of tight process integration between them. Key partnerships of Enterprise Architecture are:

1. Suppliers – third party vendors delivering application and infrastructure services

2. PMO – Project Management Office that is keeping control of the current and planned project and funds planned for them

3. Procurement – purchasing group within an enterprise responsible for acquiring new resources, software licenses etc.

Cost Structure

Enterprise Architecture requires budget for:

1. EA platform – development and management of Architecture Repository and reporting dashboard

2. Human Resources – salaries of Enterprise Architects and organisation of communities of practice

Revenue Streams

Enterprise Architecture does not directly generate any revenue. However, indirectly it can lead to significant cost savings. Some of the ways Enterprise Architecture (EA) helps keeping spending under control are:
– EA reduces technology costs and accelerates time to market by facilitating common approaches
– EA shifts IT spending from temporary stop-gap projects to strategic initiatives
– EA flags redundant, non-strategic and high risk projects before they get funding
– EA ensures IT spending is aligned with business strategy and goals