Enterprise Architecture

Enterprise Architecture Best Practice: Communicating & Quantifying Value

One of the common threads that I have come across while researching Enterprise Architecture with respect to its rollout and adoption within organizations is the importance of communication and value quantification.

Many cases studies have hammered home a common theme that communication is a critical success factor in EA engagements. Particular EA challenges include working with a wide assortment of stakeholders who are unfamiliar with EA and how it adds value. A successful EA implementation and adoption depends upon stakeholders having an understanding of how EA adds value.

Bernard, (2012) asserts that translating value to the bottom line is a major concern for key executives and line of business managers with respect to an EA program.  I believe that his list of quantifiable benefits would shore up any “marketing” plan for EA implementation. Blosch (2012) states that EA is quite frequently new to many business executives and that these executives often need help to understand the value that EA is adding. Articulating the value proposition of EA is paramount and the ten benefits as paraphrased from Bernard (2012, pgs. 72-74) are as listed below:

Shortening Planning Cycles: The EA repository provides a wealth of information that is already preassembled for strategic planning or BPI (Business Process Improvement) activities.

More Effective Planning Meetings: EA can help reduce uncertainties by providing a common baseline.

Shorter Decision Making Cycles: A majority of strategy, business and technology information is already pre-vetted and assembled thereby abbreviating the decision making process.

Improved Reference Information: Reference data is gathered using a standardized methodology that lends itself to practicable storage on the EA repository; thus data mining and business analysis capabilities are enhanced.

Reduction of Duplicative Resources: EA enables current enterprise resources to be inventoried and then subsequently analyzed for value overlap and performance gaps.

Reduced Re-work: Greatly reduces potential for individual program level initiatives, which typically involve duplicative processes and implementations if not crafted in sync with an overarching strategy.

Improved Resource Integration and Performance: Resources are planned and utilized on an enterprise-wide basis thus promoting enterprise wide integration. Future state requirements are compared to current state requirements to identify performance gaps.

Fewer People in a Process: EA supports BPR (Business Process Reengineering) and BPI (Business Process Improvement), which can lead to streamlined processes.

Improved Communication: An EA approach helps to reduce misunderstandings and potential rework via a common language of the business.

Reduction in Cycle Time: EA facilitates the capturing of “Lessons learned” from completed projects. These lessons can then be reapplied to future projects making implementation more effective and efficient.

With these ten quantifiable benefits of EA in hand, EA practitioners should work to communicate the benefits of EA to the organization as a whole. Concentrating on gathering executive level support is another key to initial organizational or line of business adoption.  In turn, executives must remain actively engaged in showing their support. They should also communicate expectations that the business should participate in the burgeoning EA or any other process improvement initiative.

Doucet et al (2009 pgs. 460 – 465) describe the AIDA (Attention, Interest, Desire, Action) method that is commonly used in advertising to sway behavior. A marketing communications model is used to push the EA from a level of Unawareness to full Adoption. The full six communications objectives are as follows: Unaware, Awareness, Interest, Desire, Action and Adoption.

At differing stages of the objectives, different communication approaches are employed. In the earlier Unaware states, more broad based statements about EA benefits and effectiveness are communicated. As the objectives move closer to the adoption stage, the details on EA become more focused until actual benchmarks, touchstones and guidelines are shared for full adoption.

In a similar manner, the “Coherency Management State” of an organization ranging from Level 0 (Absent) to Level 5 (Innovating) will dictate communication objectives (Doucet et al., 2009. Pg. 465).

  • Level 0 (Absent): Recognize the importance and create awareness of EA.
  • Level 1 (Introduced): Find an isolated application of EA and encourage use elsewhere in the organization
  • Level 2 (Encouraged): Reinforce and promote values and practices
  • Level 3 (Instituted): Widen the adoption
  • Level 4 (Optimized): Communicate results and organizational wins achieved through EA
  • Level 5 (Innovating): Maintain sustained interest in continuous improvement

Blosch (2012, pg. 10) promotes the idea of recognizing and measuring the impact of a communications strategy to make sure that it is having the desired effect.

Quantitative Measures:

·      Timeliness of communications

·      Production to plan

·      Readership statistics

·      Amount of feedback

·      Number of communications sent out by channel

·      Access and use of EA artifacts

 

Qualitative Measures

·      Feedback from stakeholders

·      Assessment of stakeholders perception of EA

·      Adoption of EA, where and how widely it is being use

Marketing the EA program with a credible list of quantifiable benefits and paring that list with a robust, well thought out communications strategy should greatly support adoption and diffusion of EA throughout the organization.

References:

Bernard, Scott A. (2012). Linking Strategy, Business and Technology. EA3 An Introduction to Enterprise Architecture (3rd ed.). Bloomington, IN: Author House.

Blosch, M (2012, August 16). Best Practices: Communicating the Value of Enterprise Architecture. Retrieved from Gartner.

Doucet, G., Gotze, J., Saha, P., & Bernard, S. (Eds.). (2009) Coherency Management (1st Ed.). Bloomington, IN: Author House.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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Enterprise Architecture and Business Process Management

We know that Enterprise Architecture is a logical framework that helps forge a relationship between business, strategy and technology. Within those macro concepts lies various organizational structures, processes and informational flows that help businesses meet their end goals.

With respect to business processes, businesses themselves are dynamic and must change to adapt with the latest market conditions in order to remain a going concern. Thus, proper attention must be paid to processes and the continuous improvement of those processes.

As organizations grow, they need to continuously analyze and refine their processes to ensure they are doing business as effectively and efficiently as possible. Fine-tuning processes gives an organization a competitive advantage in a global marketplace.(Project Management Approach For Business Process Improvement, 2010)

EA and business process management (BPM) are not mutually exclusive. Redshaw (2005. Pg. 3) defines BPM as “the management of all the processes supporting a business transaction/event from the beginning to the end while applying the policies/rules needed to support an organization’s stated business model at a specific point in time.” BPM offers advantages to large institutions as it enables a linkage between IT systems and business processes. Jensen (2010) offers this summarization:

“When done together, BPM provides the business context, understanding and metrics, and EA the discipline for translating business vision and strategy into architectural change. Both are, in fact, needed for sustainable continuous optimization. It is important to realize the value of direct collaboration across BPM and EA boundaries. Only when supported by appropriate collaboration and governance processes can BPM and EA roles work effectively together towards the common goals of the enterprise.” (Jensen, 2010)

EA can support BPM projects by helping project teams become better acquainted with the very processes they are trying to improve. A project manager assigned to a new project can simply access the EA repository to get up to date information on the current processes pertinent to his/her domain. With respect to EA3 framework, “The enterprise’s key business and support processes are documented at the Business level of the EA framework” (Bernard, 2012. Pg. 127).

As processes are improved and changed and project wins or losses are accumulated, this knowledge is shared back into the EA repository for reuse and can be leveraged across the organization.

Quick process improvement wins and one off pinpoint projects may embody a “silo-ed” or parochial approach not in keeping with a broader strategic outlook. Ignoring emerging business strategies can be a costly mistake. For example, energy and resources could be mobilized by a bank to architect a new customer account management or card/payments processing system within the enterprise, accompanied by revised processes. The bank could simultaneously be moving forward with emerging cloud strategies that render the new architected solutions meaningless and obsolete. This hypothetical example of creating solutions in isolation from the overall strategy would be a very costly endeavor in terms of time and money and should obviously be avoided.

By definition, business process management projects embedded within an EA framework are guaranteed to align to the overall organizational strategy. EA becomes a key enabler to ensure process improvement projects are aligned to the strategy for the existing enterprise, as well as any future state strategies.

Wells Fargo and its use of Enterprise Architecture and BPM

As with most organizations of comparable size, Wells Fargo wrestled with issues from both the business and IT (Information Technology) ends of the house. The business had to gain a better understanding of what it needed. It also had to become better acquainted with the capabilities and solutions available from IT. On the other side of the coin, IT had to remain agile enough to deliver and react to changes in business conditions. In this manner IT could be better positioned to deliver solutions that met various business needs.

Olding (2008) found that Wells Fargo operated a very decentralized structure but lacked the coordinated ability to understand what was occurring in other groups that were employing business process management initiatives. A disadvantage of not embedding the BPM experiences within an EA framework was the failure to capitalize on successes that were gained across other “silo-ed” groups. Integrating EA into the approach dramatically simplified the process of capturing those wins for organizational reuse.

At Wells Fargo, a BPM Working Group was established with EA as its champion. The business set out to capture the current state of BPM technologies and approaches around a dozen lines of business. The results indicated that there were over 20 different BPM technologies being employed, each with their own varying approaches to implementation (Olding, 2008). In order to maximize the value of BPM, coordination had to occur across these lines of business.

A seasoned Enterprise Architect within the company made use of a communications strategy to raise awareness of the duplicative uncoordinated approaches dotting the landscape. Business analysts, project managers, executives, and technology professionals were engaged and best practices from the various approaches were discussed and reworked into an EA framework.

A year later, senior executives were presented with the best practices from various approaches, which had since been re-developed using a common framework. The commonality gained from the EA framework allowed for patterns of success to be easily identified, communicated and thus ultimately standardized. With senior level executive backing, the EA framework will persist in the organization allowing the bank to quickly identify opportunities for standardization.

Burns, Neutens, Newman & Power (2009, pg. 11) state, “Successful EA functions measure, and communicate, results that matter to the business, which in turn only strengthens the message that EA is not simply the preserve of the IT department.” This dovetails into the approach that Wells Fargo’s Enterprise Architect employed; the communication of pertinent information back to various business lines to gain acceptance.

The lessons learned from Wells Fargo’s use of BPM and EA as paraphrased from (Olding, 2008. Pgs 5-6):

  • Communicate at all levels of the enterprise.
  • Build BPM adoption from the bottom up. Approach business groups with proven examples and internal successes that will help drive the willingness to adopt new approaches.
  • Facilitate, do not own. Allow business groups to manage their own processes aligned within the framework.
  • Build EA from the top down.
  • Use BPM to derive the needed context and then incorporate it into the EA

As of 2008 Wells Fargo Financial (a business unit of the Wells Fargo & Co.) currently had nine BPM deployments in production and another four projects in the works. Gene Rawls, VP of continuous development, information services, for Wells Fargo Financial has stated that not having to reinvent the wheel saves months of development work for every deployment (Feig, 2008). Project turnaround time from the initial go-ahead for a BPM project to its actual deployment, is just three months.

References:

Bernard, Scott A. (2012). Linking Strategy, Business and Technology. EA3 An Introduction to Enterprise Architecture (3rd ed.). Bloomington, IN: Author House.

Burns, P., Neutens, M., Newman, D., & Power, Tim. (2009). Building Value through Enterprise Architecture: A Global Study. Booz & Co. Retrieved November 14, 2012.

Feig, N. (2008, June 1). The Transparent Bank: The Strategic Benefits of BPM — Banks are taking business process management beyond simple workflow automation to actually measure and optimize processes ranging from online account opening to compliance. Bank Systems + Technology, Vol 31. Retrieved from Factiva database.

Olding, Elise. (2008, December 7). BPM and EA Work Together to Deliver Business Value at Wells Fargo Bank. Retrieved from Gartner October 29, 2012.

Jensen, Claus Torp. (2010, February 10). Continuous improvement with BPM and EA together. Retrieved November 13, 2012.

Project Management Approach For Business Process Improvement. Retrieved November 12, 2012 from http://www.pmhut.com/project-management-approach-for-business-process-improvement

Redshaw, P. (2005, February 24). How Banks Can Benefit From Business Process Management. Retrieved from Gartner October 29, 2012.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

 

Enterprise Architecture and Best Practices

Enterprise Architecture (EA) is the overarching framework that relies on a combination of artifacts in each domain area to paint a picture of the organization’s current (and future) capabilities. Best practices are proven methodologies for implementing portions of the architecture.

Both “Best Practices” and “Artifacts” are two of the six core elements that are necessary for an EA approach to be considered complete. A best practice can be used as an artifact within the EA leading to complementary effects. For example, best practices such as SWOT Analysis and Balanced Scorecard can be used as artifacts within EA at the strategic level. The Knowledge Management Plan, which outlines how data and information is shared across the enterprise, is an artifact that resides at the Data & Information functional area on the EA cubed framework.

As EA is the integration of strategy, business and technology, organizational strategic dictates can greatly influence the use or adoption of a best practice. If rapid application development, reusability or speed to market are important to the business, then the best practice of Service-Oriented Architecture (SOA) can be used within the EA to meet this end.

This example from T-Mobile highlights an example of SOA within an EA framework enabling quick development and reusability:

“For example, one T-Mobile project was to create a service that would let subscribers customize their ring sounds. The project group assumed that it would have to create most of the software from scratch. But the architecture group found code that had already been written elsewhere at T-Mobile that could be used as the basis of the development effort. The reuse reduced the development cycle time by a factor of two, says Moiin. [vice president of technical strategy for T-Mobile International]” [2].

Another example of EA driving a best practice selection is evident at Verizon. The enterprise architects at Verizon have incorporated an SOA best practice into their EA framework with the aim of building a large repository of web services that will help cut development times.

“‘We had to give incentives to developers to develop the Web services,’ says Kheradpir. ‘When they say they want to develop a certain functionality, we say: ‘You can do that, but you have to build a Web service also.’’

Though the developers grumbled at first, they eventually saw that everybody wins with a rapidly expanding repository of services. ‘This is going to be our strategy for enterprise architecture,’ says Kheradpir. ‘Now developers can go to the Web site and grab a service and start coding the higher-level application they need, rather than spending so much time at the integration and infrastructure level’”[2].

[1] Bernard, Scott A. “Linking Strategy, Business and Technology. EA3 An Introduction to Enterprise Architecture.” Bloomington, IN: Author House, 2012, Third Edition

[2] Koch, Christopher. “A New Blueprint for the Enterprise”, April 8th 2005. Retrieved from web: http://www.cio.com.au/article/30960/new_blueprint_enterprise/?pp=4

The Importance of Standards in Large Complex Organizations

Large complex organizations require standards with respect to developing strategic goals, business processes, and technology solutions because agreed upon guiding principles support organizational efficiencies. Without standards in these spaces, there is the increased potential for duplication of functionality, as localized business units implement processes and technologies with disregard for the enterprise as a whole. When the enterprise as a whole considers items such as applications, tools and vendors, standards help ensure seamless integration.

Examples of enterprise standards might be:

  • “The acquisition of purchased applications is preferred to the development of custom applications.” [1]
  • An example of an infrastructure-driven principle might be, “The technology architecture must strive to reduce application integration complexity” [1]
  • “Open industry standards are preferred to proprietary standards.” [1]

These hypothetical top down standards can help settle the “battle of best practices” [2]. Standards also provide direction and can guide the line of business staff’s decision-making so that the entire organization is aligned to strategic goals. Furthermore, the minimization of diversity in technology solutions typically lowers complexity, which in turn helps to lower associated costs.

Enterprise Architecture standards also have a place in facilitating “post merger/acquisition streamlining and new product/service rollouts” [2]. Successfully and rapidly integrating new acquisitions onto a common framework can be vital to success.

Here are two banking examples where post merger system integration problems arose in financial services companies:

  • In 1996, when Wells Fargo & Co. bought First Interstate Bancorp, thousands of customers left because of missing records, long lines at branches, and administrative snarls. In 1997, Wells Fargo announced a $150 million write-off to cover lost deposits due to its faulty IT integration. [3]
  • In 1998, First Union Corp. and CoreStates Financial Corp. merged to form one of the largest U.S. banks. In 1999, First Union saw its stock price tumble on news of lower-than-expected earnings resulting from customer attrition. The problems arose from First Union’s ill-fated attempt at rapidly moving customers to a new branch-banking system. [3]

Having robust Enterprise Architecture standards in place may have helped to reduce the risk of failure when integrating these dissimilar entities.

References:

[1] Fournier, R., “Build for Business Innovation – Flexible, Standardized Enterprise Architectures Will Produce Several IT Benefits.” Information Week, November 1, 1999. Retrieved from Factiva database.

[2] Bernard, Scott A. “Linking Strategy, Business and Technology. EA3 An Introduction to Enterprise Architecture.” Bloomington, IN: Author House, 2012, Third Edition

[3] Popovich, Steven G., “Meeting the Pressures to Accelerate IT Integration”, Mergers & Acquisitions: The Dealmakers Journal, December 1, 2001. Retrieved from Factiva database.