“If you want to truly understand something, try to change it.” — Kurt Lewin
In today’s fast-paced business environment, organizations must be agile, adaptable, and resilient in order to stay ahead of the competition.
When a big business tries to change the world, it’s size can get in the way if it doesn’t have a great enterprise architecture.
A great enterprise architecture is the foundation for execution.
By building a strong foundation for enterprise architecture, businesses can increase their agility, resilience, and growth.
This approach involves creating a shared understanding of the organization’s current and future state, defining a clear vision for its operations, and implementing flexible and scalable technology solutions.
In this article, I will explore the key elements of strategic enterprise architecture and how businesses can use it to achieve improved execution, business agility, and strategic alignment.
What is Enterprise Architecture?
Enterprise Architecture (EA) is a systematic approach to designing and managing the structure of an organization’s processes, information, and technology in support of its overall strategy.
It provides a blueprint for aligning an organization’s technology with its business goals, enabling it to make informed decisions about technology investments, identify inefficiencies and redundancies, and ensure that new initiatives are aligned with the overall strategy of the business.
Enterprise Architecture covers a broad range of topics, including business processes, information systems, data management, security, infrastructure, and technology governance.
It provides a holistic view of the organization and helps to ensure that all aspects of the business are aligned and integrated, leading to increased efficiency, agility, and better decision-making.
Ultimately, Enterprise Architecture is a discipline that helps organizations to align their technology with their business strategy, improve business processes, and achieve better results. It provides a framework for making informed decisions about technology investments and ensuring that technology is used effectively to support the overall goals of the business.
How is an “Enterprise” Different than a “Business”?
An enterprise is bigger. And bigger doesn’t always mean better in a digital world. It’s not the big that eat the small, it’s the fast that eat the slow.
An enterprise is a specific type of business, one that is large and complex, whereas a business can refer to any type of commercial operation.
An enterprise is a term used to describe a large-scale business organization, often one that operates in multiple locations or countries and has a complex structure with multiple departments, subsidiaries, and business units.
Enterprises are typically characterized by their size, scope, and complexity, as well as their ability to innovate, grow, and compete in the global market.
A business, on the other hand, is a more general term that can refer to any type of organization, regardless of size, that is engaged in commercial activities with the goal of generating profits.
A business can be a small, local operation or a multinational enterprise, and can range from a sole proprietorship to a publicly traded corporation.
End-to-End Approach for Enterprise Architecture as Strategy
Enterprise Architecture is a complicated space. I’ve been lucky to learn from the best of the best at Microsoft over several years.
That said, one of the best books I’ve read on the topic is Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, by Jeanne W. Ross, Peter Weill, and David C. Robertson.
It’s an evergreen book on how any company can build a better foundation for better execution and better business agility.
It’s the clearest I’ve ever seen on designing an end-to-end enterprise architecture approach to better support business strategy. It basically says there are 3 parts to designing and enterprise architecture for better execution:
- Operating Model
- Enterprise Architecture
- IT Engagement Model
For an overview of each model, see How To Build a Strong Foundation for Execution.
The business operation model is about two key things that matter, in terms of execution:
- Business process integration (impacts innovation, and complexity, depending on how data is shared)
- Standardization (which impacts innovation and there are four market models to choose from)
You can choose among 4 operating models:
- Diversification (low standardization, low integration)
- Coordination (low standardization, high integration)
- Replication (high standardization, low integration)
- Unification (high standardization, high integration)
For more on operating models, see How Choosing an Operating Model Improves Business Agility.
According to the authors, the enterprise architecture is about the following:
- Business processes
- IT (Information Technology) infrastructure
- Integration
- Standardization
- Long term view
- Processes
- Systems
- Technologies
According to the authors, there are 4 stages of business process based on patterns and how you can measure maturity:
- Business silos
- Standardized technology
- Optimized core
- Business modularity
Let’s take a quick look at each ones…
The 4 Stages of Business Process Maturity
Business process maturity is a journey that organizations go through as they strive to improve the efficiency and effectiveness of their operations.
There are four stages of business process maturity: business silos, technology standardization, optimized core, and business modularity.
Each stage builds upon the previous one, and the ultimate goal is to reach business modularity, where processes are highly efficient, standardized, and integrated across the entire organization. In this stage, the organization is able to quickly adapt to changing market conditions and customer needs, while maintaining a high level of operational efficiency.
Let’s take a closer look at each of these stages.
1. Business Silos
“Business Silos” refers to the separation and isolation of different parts of an organization from each other, often resulting in inefficient communication and coordination between different departments, systems, and processes.
Business silos can occur when different parts of an organization have different goals, processes, technologies, and cultures, leading to a lack of alignment and cooperation between different parts of the business. This can result in duplicated efforts, conflicting priorities, and a general lack of efficiency.
For example, a company’s sales and marketing departments may operate in silos, leading to a lack of coordination between these departments and causing issues such as leads being lost, or customer data not being shared effectively.
Similarly, different IT systems may also operate in silos, leading to inefficiencies in data management and decision-making.
In the context of Enterprise Architecture as Strategy, it is important to address business silos and work towards breaking down the barriers between different parts of the organization in order to improve alignment, efficiency, and overall business performance.
This can be achieved through a variety of means, including developing shared processes and technologies, improving communication and collaboration between different departments, and creating a common culture and vision for the organization.
2. Standardized Technology
“Standardized Technology” refers to the use of common and consistent technology platforms, tools, and systems across an organization.
Standardizing technology can help to improve efficiency, reduce costs, and increase agility by ensuring that all parts of an organization are using the same technology platforms, tools, and systems.
This can help to eliminate the need for separate and incompatible technologies, reduce the amount of time and effort spent on integrating different systems, and improve the ability to share data and information between different parts of the organization.
For example, standardizing technology can involve using a common customer relationship management (CRM) system across the entire organization or standardizing the use of a specific type of software development platform or tool.
In the context of Enterprise Architecture as Strategy, standardized technology is seen as an important component for improving the overall efficiency and performance of an organization.
By aligning technology choices with overall business goals and objectives, organizations can create a technology landscape that supports their strategy and enables them to be more responsive and agile in response to changing business needs.
3. Optimized Core
“Optimized Core” is a term used in Enterprise Architecture (EA) to describe a key aspect of an organization’s technology strategy. The concept of an Optimized Core refers to the idea that an organization should focus on optimizing and streamlining its core systems and processes, in order to improve efficiency and competitiveness.
In the context of Enterprise Architecture as Strategy, the Optimized Core refers to the set of critical business processes and information systems that are at the heart of an organization’s operations and are essential to achieving its goals.
By focusing on these core systems and processes, organizations can improve efficiency, reduce costs, and better align their technology with their overall strategy.
For example, an organization might focus on optimizing its core financial systems, such as its accounting and invoicing systems, in order to improve accuracy and reduce the time it takes to process transactions.
Or, it might focus on optimizing its customer relationship management (CRM) systems in order to better understand its customers and improve customer satisfaction.
In conclusion, the concept of an Optimized Core is an important aspect of Enterprise Architecture as strategy, as it helps organizations to focus their resources and efforts on the most critical and essential systems and processes in order to achieve better results.
4. Business Modularity
In the context of Enterprise Architecture as Strategy, “Business Modularity” refers to the idea of breaking down complex business processes into smaller, more manageable units or modules.
The goal of business modularity is to improve the efficiency, flexibility, and scalability of an organization’s processes by enabling them to be broken down into smaller, reusable components.
This can help to simplify the design and implementation of complex business processes, reduce the time and effort required to make changes to those processes, and make it easier to integrate new processes or technologies into an organization.
For example, an organization might use business modularity to break down its sales process into smaller, more manageable steps such as lead generation, qualification, and closing.
By doing this, the organization can more easily manage and improve each step of the process and reuse those steps in other areas of the business as needed.
In the context of Enterprise Architecture as strategy, business modularity is seen as an important tool for improving the overall agility and responsiveness of an organization.
By breaking down complex processes into smaller, more manageable units, organizations can create a more flexible and scalable business architecture that supports their strategy and enables them to be more responsive to changing business needs.
The Future of Business: Harnessing the Power of Enterprise Architecture for Agile and Resilient Operations
Enterprise architecture can be a powerful strategy for organizations to become more agile and resilient.
By aligning business processes, technology, and data, organizations can streamline their operations, improve decision making, and respond quickly to changing market conditions.
By considering enterprise architecture as a holistic approach to business strategy, organizations can achieve better alignment between their operations and their overall goals, and ultimately become more agile and resilient.
Businesses can achieve this by regularly reviewing and updating their enterprise architecture, incorporating feedback from all stakeholders, and implementing flexible and scalable technology solutions.
By doing so, organizations can remain competitive in an ever-changing business environment and continue to grow and succeed for years to come.
Related Articles on Enterprise Architecture as Strategy
Why Some Companies Execute Better
3 Linking Mechanisms that Shape a Company’s Foundation
How To Build a Strong Foundation for Execution
6 Steps to Building a Better Enterprise Architecture
4 Types of Operating Models for Business Agility
How To Turn IT into an Asset Rather than a Liability
Digitize Core Processes for Better Agility and Business Growth
How Choosing an Operating Model Improves Business Agility
Get the Book
Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, by Jeanne W. Ross, Peter Weill, and David C. Robertson.
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