By: Harriet Hansen
In this four-part blog series, I will, based on a business-outcome-driven enterprise architecture view, guide you through what you need to do to transform your business. Starting at the beginning of the enterprise architecture efforts, this series will go through what you need to do to form a strategic direction, choose the right enterprise architecture tool to support your efforts, create a roadmap and execute it, and finally how you can use enterprise architecture as a strategic navigator.
The blog series is structured in the following four parts, where each part presents relevant knowledge, timely actions and real results for your enterprise architecture program:
- The vision and strategy phase – gathering management support for future architecture
- The design phase – creating the foundation for positive change
- The delivery phase – transform your business’ capabilities
- Beyond strategy – using enterprise architecture as a strategic navigator
In this first installment, you will learn what you need to do to create an enterprise architecture program with impact. This entails creating a relevant business outcome statement and a value proposition for enterprise architecture in your organization, to ensure the necessary executives’ buy-in for the enterprise architecture program.
The Vision and Strategy Phase
It may be somewhat misleading to call this first step into enterprise architecture a ‘strategy phase’. An ‘enterprise architecture strategy’ is perhaps the last thing I would advise you to make. The reason for this is that your organization probably has too many strategies in the first place. So, creating yet another corporate strategy puts you in danger of fragmenting your organization rather than unifying it.
Instead of creating a new strategy, which may or may not be coherent with the existing strategies in your organization, your strategic point of departure should be your organizations current business strategy. To ensure the crucial support of business managers, you must be able to show what enterprise architecture can do to enable your organization’s strategy. Creating a business outcome statement and a value proposition are simple tactics for doing so and a good way to initiate your enterprise architecture work from a holistic standpoint.
What You Need to Know
Think business-outcome-driven enterprise architecture
The term business-outcome-driven enterprise architecture has been coined by Gartner and is in opposition to a more technology-centric enterprise architecture. Enterprise architecture is evolving from an enterprise-wide technology management practice to a strategically minded intelligence practice. As such, it has the potential to lead an enterprise’s responses to disruptive forces. Enterprise architecture provides a holistic view of the organization. it includes the entire organization in its environment, both external and internal forces of stability and change. The need for this holistic view is becoming more and more urgent, as the disruptive forces of technology have increased in frequency and effect.
It is becoming increasingly difficult to separate IT from Business; there is no Business without IT and the role of IT is becoming more and more important for organizations as the consumers’ expectations of businesses’ technological capabilities, rapidly are rising. These new conditions for organizations, where disruptions can happen at any time, are changing the ways they must conduct business and view themselves on a conceptual level.
The business-outcome-driven approach moves enterprise architecture away from mainly supplying a lean and efficient application portfolio, and into a position where it can help businesses cope with their volatile environments. Business-outcome-driven enterprise architecture’s value comes from ready-to-apply recommendations, that Business and IT leaders can use when adjusting policies and projects to reach their targets while exploiting current business disruptions.
The Value of Enterprise Architecture
When the value of enterprise architecture must be articulated to stakeholders, Enterprise Investment can be used to explain enterprise architecture’s role in realizing the business strategy. Usually, it can be a challenge to define the value of enterprise architecture, as it isn’t clearly represented in the commonly known value chain model developed by Michael Porter. Chris Potts has with his theories on Enterprise Investment, created a model that compliments Porter’s value chain by depicting the value chain of a strategy – see figure 1.
According to Chris Potts, enterprise architecture is a strategic capability that along with other pervasive capabilities fall outside of category in Porter’s value chain. Like other strategic capabilities, enterprise architecture could be illustrated by a horizontal capability, but should not be confused with ‘support activities’ such as IT, facility and HR management. As a strategic capability, enterprise architecture is better described as a steering activity for the organization rather than a support activity.
The complimentary value chain, shown in figure I, illustrates how enterprise architecture along with investment portfolio management enables ‘Enterprise Investment’ that integrates the business strategy with sourcing.
Figure 1 - Enterprise Investment value chain, conceptualized by Chris Potts
Chris Potts’ model presents an approach to enterprise architecture where a calculated investment portfolio is needed to secure overall success for the business strategy. This entails that the investment portfolio, that relies on the structure enterprise architecture supplies, must be diversified to increase the overall chances for success in reaching the business strategy’s desired outcome. As such, the plausibility for an overall loss across the portfolio decrease with the increase of projects.
Creating a Useful Value Proposition + Business Outcome Statement
Contrary to the norm within enterprise architecture, you should start by thinking future architecture before you focus on current architecture. What an enterprise architecture consists of depends on the needs of the given organization.
Your business outcome statement should explain which business needs your enterprise architecture will address on a conceptual level and your value proposition should make it clear on a logical level how you will address those relevant needs. The goal of the value proposition is for you to ensure upper-level management’s explicit support and investment of sufficient resources to integrate enterprise architecture into the organization. The value proposition does this by presenting the value of enterprise architecture in business terms.
Integrating enterprise architecture into the organization implies that the organization and its business units are involved in the creation and maintenance of the architecture through a collaborative effort. Otherwise, the architecture cannot be kept accurate and actionable – as the enterprise architecture consists of both processes, technology, other structures, and culture. The enterprise architecture should not become a function that is separate from the rest of the organization, which for example could be outsourced, or left unmaintained for longer periods of time.
What You Need to Do
Step 1: Establish the right enterprise architecture mindset
Steer your enterprise architecture with your organization’s strategy: Enterprise architecture’s value stems from being a strategic capability that can help realize the organization’s strategy.
You must focus on how enterprise architecture can help fulfill the Business’ overall objectives. Too many get lost in creating the ‘perfect enterprise architecture’ for their organization without thinking about what any intentional outcome. With no concrete goals that add value to the organization, it becomes unclear which parts of the architecture are more important or urgent than others. Avoid getting lost in the modeling jungle; avoid to model for the sake of modeling. Let the objectives of the business strategy guide your work!
Step 2: Create a business outcome statement and a good value proposition
Collaborate with stakeholders from both Business and IT: You must involve the right stakeholders. It is not enough to read about the official goals of the organization – they may not reflect what actually happens in the different departments. Engage with stakeholders and ask them questions about their needs, troubles, and successes. Use the gathered information and the organization’s strategy to create a relevant business outcome statement and a value proposition.
A business outcome statement could for example be:
“The enterprise architecture program enables Business Leaders to support and innovate core business processes”
The Value proposition should detail how enterprise architecture will realize the business outcome statement. It should Formulate strategic, financial, business and IT offerings of enterprise architecture.
You should in your value proposition include models that clearly illustrates the value of enterprise architecture as a strategic capability. This can, for example, be done by using Chris Potts’ value chain model and/or by using the Business Model Canvas (see figure 2) to explain where and how enterprise architecture creates business value.
Remember that this is on the logical plane, so you should not create a full actionable roadmap yet – for that purpose you will need to have more knowledge about your organization’s current and needed business capabilities.
Figure 2 - Business Model Canvas in QualiWare, conceptualized by Alexander Osterwalder
Step 3: Gather executive support
Make yourself understood – speak Business, not IT: Clearly conveying the value of enterprise architecture is crucial to get the needed executive support. You need executive support to secure sufficient resources and mandate to start a collaborative effort across the organization.
Use your value proposition in your communications with executives to explain what enterprise architecture can provide the business. As a supplement to the value proposition, you can create models that target different areas of the organization personalizing the information for each executive.
Relevant models you could use include Stakeholder Models, Strategy Models, Value Proposition Canvas, Enterprise Investment Portfolio, and Business Context Diagrams.
Step 4: Show ability to produce results
Define measurable and relevant goals: Define measurable goals for enterprise architecture that are relevant to the Business – as such, you shouldn’t count architectural artifacts as a measure of success. The relevant results come from how you use the architectural artifacts. Make sure that the measurements are based on progress rather than status. It is more interesting to know how a performance has improved over time than the status of its output.
For a more detailed description on how to create good KPI’s, literature suggestions for further readings are provided at the end of the post.
Step 5: Communicate!
Perhaps the most undervalued step is communication. Make a communication plan for informing and involving the organization in the progress of its enterprise architecture. Make sure to share all relevant information with stakeholders on a regular basis. You should continuously draw attention to even the small successes of your enterprise architecture program.
Real Results of the Vision and Strategy Phase
During this phase, you have created a sketch of the organization’s future architectural needs and secured the basic conditions for the enterprise architecture project to succeed. The products of this first stage are:
- Business outcome statement
- Value proposition
- Executive Support
- Measurable goals and KPI’s
- Communication plan
To learn more about ‘The design phase – Creating the foundation for positive change’, please read the next installment in this series. In the design phase, you will choose a suitable enterprise architecture tool to support your efforts, decide on modeling standards and start to build your enterprise architecture repository.
Sources & further readings
Brand, Saul, Jack Santos, Betsy Burton, and Brian Burke. "Define a Value Proposition for a Winning Business-Outcome-Driven EA Program." Gartner, 2017: (G00310309). Link to Gartner article (Registration needed)
Hoverstadt, Patrick. The Fractal Organization: Creating sustainable organization with the Viable System Model. Wiley & sons, 2008. Get it here
LeHong, Hung. »Digital Business KPIs: Defining and Measuring Success.« Gartner, 2016: (G00297283). Link to Gartner article (Registration needed)
Osterwalder, Alexander, og Yves Pigneur. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. John Wiley and Sons, 2010. Get it here
Porter, Michael E. Competitive Advantage: Creating and Sustaining Superior Performance. THE FREE PRESS, A Division of Simon & Schuster Inc., 1985. Get it here
Potts, Chris. Dominicbarrow.com. 2017. http://www.dominicbarrow.com/chris-potts-articles.html
Potts, Chris. »Where does EA fit in the Value Chain?« http://www.dominicbarrow.com/download/wsa-where-does-ea-fit-in-the-value-chain-2.pdf , 2013.
Santos, Jack, Betsy Burton, and Marcus Blosch. "The Enterprise Architect's first 100 days." Gartner, 2016: (G00300193). Link to Gartner article (Registration needed)
Scheibenreif, Don, Betsy Burton, and Marcus Blosch. "Toolkit: Business Outcome Statements Deliver Value to Your Business and Guidance for EA." Gartner , 2015: (G00261513 ). Link to Gartner article (Registration needed)