EA872 Weekly Blog Entry 6

In "Digital Business Success Will Be Driven by Economic Architecture," we defined economic architecture as, "a discipline for driving an enterprise's business model through financial metrics and key performance indicators. It is a critical tool to plan, track and manage future-state value creation mechanisms."
Economic architecture enables business and IT leaders to better express the financial underpinnings and potential benefits of their digitalization initiatives and the impact of their investment decisions. By integrating the different economic architecture elements (income statements, balance sheets, market share and so on), coupled with microeconomic and macroeconomic trends, EA practitioners can illustrate and highlight a variety of business and technology investment scenarios from different financial perspectives, which should be attractive to business executives and boards of directors.


Today, the reality is that most organizations will progressively develop their approach and practice of EA, and as part of the EA efforts, they will evolve their economic architecture. This is because many organizations are still figuring out business-outcome-driven EA (see Note 2), and many organizations are in the early stages of developing their digital business strategies that extend beyond the current focus, which is still predominantly on digital marketing and selling online and through social and mobile.
 
As more organizations begin to embrace the value proposition of economic architecture and use it as a competitive weapon, we expect the pendulum to shift. According to respondents in Gartner's 2015 Digital Business Survey of IT, Business and Marketing Executives, the top mindset or behavior that has to change for their organization to realize, build and optimize its digital opportunities is understanding digital business models, developing clear value propositions and justifying investment


 
One of the keys to business growth lies in continuous innovation; consistently unlocking value by revisiting the organization's value creation mechanisms or economic architectures. In the digital era, inventing, or investing and deploying technology is done because of identified business opportunities that will re-engineer the income statement and balance sheet. In other words, to be competitive and successful, organizations must understand what they can do with new business/operating models and technology (new and emerging) to change or enhance their financial positions. Conversely, they must also continuously revisit their economic environment and financial statements to find new opportunities to introduce new business/operating models that exploit technology.

EA practitioners: 

1. Gain a thorough understanding of your company's strategic capabilities, value drivers and differentiators. Do the same for the industry or vertical in which your company operates and competes. Understand your current and potential competitors (such as, digerati, ² interlopers and players in adjacent industries), business and operating models, and key financial and performance metrics (economic architectures)
2. Find ways to evolve and transform your enterprise through understanding the environment in which it operates. Also, consider rearchitecting the company's business architecture, information architecture, solution architecture, technical architecture and other viewpoints of enterprise architecture based on economic and financial drivers.
3. Provide business and IT leaders with the diagnostic deliverables, economic consequences and actionable deliverables that help focus and balance their organization's investment decisions.
4. Use economic architectures as a competitive weapon, balancing short- and long-term targeted outcomes the business seeks to achieve by exploiting the economic architectures, and making digital investment recommendations that will change the organization's business direction and drive its competitive advantage.
   
   
   
   
    
   Regardless of your organization's level of EA maturity, EA practitioners must begin to reactively and proactively apply economic architecture as another viewpoint of EA to provide higher business value to their organization. EA practitioners do not need to become economists or financial and accounting experts. However, they must be comfortable and conversant with the different and more-sophisticated business, operating and financial models that will underpin digital business initiatives. They must identify, understand and examine the current- and future-state business economic and financial levers that are susceptible to digital transformation and thus business strategy and the future business state. Ultimately, EA practitioners will be required to proactively leverage and manipulate their organization's economic architectures — driven by making investment recommendations in digital technologies — as part of EA, to continuously change their organization's business economics, value-creation mechanisms, and profitability, and to drive targeted business outcomes.  
   
   
   http://www.gartner.com/document/3184121?ref=feed 

 
 

Business Outcome-Driven Enterprise Architecture

Last week I was reading article how different Business outcome- Driven Enterprise Architecture are used. Regardless of the specific framework or combination of frameworks that you are using, organizations can increase the business value and impact from their EA efforts by developing a stage plan that is focused on business outcomes. A business outcome is a statement of a specific business benefit result that is measurable, achievable within a specified time frame, and in support of the business strategy and objectives. 
A business outcome is expressed as a change occurring with a specific short- or long-term time frame. The best way to ensure that a business outcome is targeted to meet business needs is to map it to the critical strategic questions that senior executives are asking. The focus on business outcomes shifts the thinking away from "what enterprise architects do" and moves it toward "delivering signature-ready deliverables that drive business change," thus enabling enterprise architects to take a pragmatic approach to developing EA. Once a stage plan is created, with a defined focus on business outcomes, the EA team can work on effectively executing the stage plan through the EA delivery cycle.

Stage Planning: Focus on Target, Frame and Plan
Thinking in terms of stage planning guides EA practitioners through the practical steps to:
Target: Clearly identify the highest priority target business outcomes that EA efforts will address in the next iteration, based on understanding the disruptive opportunities and threats impacting your business and your business strategy.
Frame: Streamline EA development to create only the deliverables that directly address the highest-priority business outcomes and address the questions and concerns of specific stakeholders.
Plan: Decompose the deliverables to identify the tasks, dependencies and resources required to create those deliverables.

Key Challenges

• Leading enterprise architects develop enterprise architecture in iterations. Targeting a limited set of business outcomes for each iteration is critical to the success of the EA program.
• Enterprise architects must clearly frame the deliverables that are linked to the target business outcomes to guide and focus the enterprise architecture development.
• Planning for EA development must concentrate exclusively on the deliverables required to address the target business outcomes.
  
   http://www.gartner.com/document/3118219?ref=feed 
    

 

EA 872 Week 4 - How to Ensure Your Governance Framework Works

I was reading an article about how to make sure your company has Governance Framework Works.

Governance can make or break successful IT and project management. Most leading organizations develop designed approaches to management very carefully. Even the best frameworks, however, will fail if not properly executed by CIOs or those responsible for management.

The ideal management structure is not necessarily dictated by organizational structures or even constitutional structures for those in the public sector. It is driven by the characteristics and the organizational dynamics of those in leadership positions, and their willingness and ability to engage in decision-making processes. Leaders who are disengaged, fear IT decisions, avoid conflict or lack the time may not be ideally suited for a role in governance. Similarly, those with high engagement, strong convictions, the absence of fear of conflict and plenty of time are also ill-suited to participate in governance if they lack decision-making authority or the ability to execute decisions. They may be very opinionated, but opinions do not constitute management.

1. Authority: Individuals involved in governance must have the organizational authority to make final decisions and make sure they are executed. Further, they control organization resources and are empowered to direct them to a purpose.
2. Aptitude: Individuals involved in governance must have the aptitude to make decisions, including around complex IT or business-process-related issues. They need not have the expertise; but, they must have the intellectual willingness to learn what they need to do and render a decision with confidence and conviction.

Governance processes can take many forms, and there may be several processes operating simultaneously. A management process can be any process in which a decision is required. Often, these happen routinely through the standard chain of command. Most organizations also have a separation of functions that results in concurrent processes working toward the same end. For example, budgeting and procurement are types of governance processes that may come to bear on the same project or IT operation. Each requires decisions, and each may involve different policy makers. In these situations, the governance framework must bring decision makers (the who) together to ensure the harmony of objectives.

EA 872 Week 3 - EA Capability Primer for 2016

EA must balance the need to lead business/technology innovation while transforming the existing (largely technology) estate. The innovation challenge is driven by digital business trends that leverage emerging technology to create new business designs by blurring the digital and physical worlds. In almost every industry, there is evidence of digital transformation underway converging people, business and things. To be successful, organizations must adopt new ways of working and competencies to capitalize quickly on the opportunities as they arise. Vanguard enterprise architects are individuals or teams within EA practices who are primarily focused on leading and driving innovation with disruptive technologies and new or reinvigorated business models (bimodal Mode 2) with a focus on delivering business outcomes. Vanguard enterprise architects are playing a leading role in this transformation, with 70% of leading enterprise architects reporting in a Gartner survey they are either responsible or accountable for the success of their digital business strategy over the next two years. 
In contrast, foundational enterprise architects are individuals or teams primarily focused on delivering business outcomes by optimizing or maintaining the current business model, including the systems of record and maintaining the existing estate (bimodal Mode 1). Foundational enterprise architects are guiding organizations to transform the way they deliver services to an evolving set of service delivery models, including public and private cloud, business process outsourcing and partnering with organizations to drive new value.
While these two modes of operating are distinct in terms of the skills, talents, tools and techniques they require, both work on a single EA, focus on business outcomes and require consistent approaches to governance, resourcing, planning and communication. The challenge for EA leaders is to balance both modes of operation within the EA team.
The increased focus on digital business is driving changes to the EA tool market, with larger vendors extending their product offerings into what could eventually become a digital business design and execution platform.  These extended capabilities target users beyond the EA team by addressing the need for tools to support related disciplines such as innovation management, governance, risk and compliance (GRC), program and portfolio management (PPM) and application portfolio management (APM).
With the increased focus on delivering business outcomes, CIOs are looking to outsource technology architecture to key vendors and partners.  This represents an opportunity for EA service providers to shape new services to organizations, and to create and offer solution and technology architecture services.
http://www.gartner.com/document/3187623?ref=solrAll&refval=168851872&qid=684b7b7c769b0e57f143da83ef8aead3