Download PDF: Enterprise Architecture as Strategy by Ross, Weill, and Robertson - A Guide for Creating a Foundation for Business Execution
Enterprise Architecture as Strategy: Creating a Foundation for Business Execution
Do you have a clear vision of how your company will achieve its strategic goals? Do you have a well-defined and integrated set of business processes and IT systems that support your vision? Do you have a way of measuring and improving the performance and value of your processes and systems?
enterprise architecture as strategy ross pdf download
If you answered no to any of these questions, you may be missing a critical element for business success: enterprise architecture (EA).
EA is not just about IT. It is about designing and implementing a coherent and consistent way of operating that aligns with your business strategy. It is about creating a foundation for business execution that enables you to deliver on your promises to customers, shareholders, employees, and partners.
In this article, we will introduce you to a book that explains what EA is, why it matters, and how to do it right. The book is called Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, and it is written by Jeanne W. Ross, Peter Weill, and David C. Robertson, who are experts in the field of EA and IT management. The book is based on years of research and practice at the MIT Center for Information Systems Research (CISR) and other leading organizations.
We will summarize the main ideas and insights from the book and provide you with practical tools and tips that you can use to start or improve your EA journey. By the end of this article, you will learn how to:
Define your operating model, which is the key decision that shapes your EA
Implement your operating model via EA, which is the process of designing and building your business processes and IT infrastructure
Navigate the stages of EA maturity, which is the path of progressing from a fragmented and inefficient EA to a modular and agile EA
Cash in on the learning from EA, which is the benefit of using EA to improve your business performance and innovation
Build the foundation one project at a time, which is the strategy of implementing EA incrementally by aligning IT projects with business priorities
Use EA to guide outsourcing, which is the framework of deciding what IT functions and processes to outsource and how to manage outsourcing relationships
Exploit your foundation for profitable growth, which is the vision of using EA as a source of competitive advantage and strategic differentiation
Take charge! The leadership agenda for EA, which is the summary of the key actions and roles that senior executives need to take to lead EA initiatives and ensure their success
Let's get started!
What is Enterprise Architecture?
Before we dive into the details of how to create an EA, let's first define what it is. According to the book, EA is:
"The organizing logic for business processes and IT infrastructure reflecting the integration and standardization requirements of the firm's operating model."
This definition may sound complex, but it basically means that EA is a blueprint that shows how your business processes (what you do) and IT systems (how you do it) work together to support your business strategy (why you do it).
EA has four components:
Business strategy, which defines your vision, mission, goals, values, and competitive positioning
Operating model, which defines how you organize your business processes and IT infrastructure across your organization
Core business processes, which define the key activities that deliver value to your customers and stakeholders
IT infrastructure, which defines the hardware, software, data, and networks that enable your business processes
and customization, such as cloud computing, web services, or application programming interfaces (APIs).
By aligning these four components, you can create an EA that enables you to execute your business strategy effectively and efficiently. You can also avoid the common pitfalls of having an EA that is misaligned or nonexistent, such as:
Redundancy and waste, which occur when you have duplicate or incompatible business processes and IT systems that increase your costs and complexity
Silo mentality and fragmentation, which occur when you have isolated or disconnected business units and IT systems that hinder your collaboration and coordination
Rigidity and inertia, which occur when you have rigid or outdated business processes and IT systems that limit your flexibility and responsiveness
Inconsistency and confusion, which occur when you have conflicting or unclear business processes and IT systems that reduce your quality and reliability
Creating an EA is not a one-time project. It is an ongoing process that requires constant monitoring and adjustment to keep up with the changes in your business environment and customer expectations. It also requires strong leadership and governance to ensure that your EA is aligned with your business strategy and supported by your organizational culture.
In the next section, we will discuss the first step of creating an EA: defining your operating model.
The Four Types of Operating Models
An operating model is a key decision that shapes your EA. It defines how you organize your business processes and IT infrastructure across your organization. It reflects the degree of integration (sharing data and resources) and standardization (following common rules and procedures) that you need to achieve your strategic goals.
The book identifies four types of operating models that represent different combinations of integration and standardization:
Operating ModelIntegrationStandardizationDescriptionExample
DiversificationLowLowA portfolio of independent businesses that operate autonomously and have little need for coordination or consistencyA conglomerate that owns multiple unrelated businesses, such as Berkshire Hathaway
CoordinationHighLowA network of interdependent businesses that share data and resources to deliver customized products or services to different segments of customersA financial services firm that offers tailored solutions to various types of clients, such as American Express
ReplicationLowHighA collection of standardized businesses that follow common rules and procedures to deliver consistent products or services to a large marketA fast-food chain that operates identical restaurants around the world, such as McDonald's
UnificationHighHighA single integrated business that leverages data and resources to deliver uniform products or services to a broad customer baseA consumer goods company that sells standardized products through a global distribution network, such as Procter & Gamble
The choice of an operating model depends on several factors, such as:
Your strategic vision: What is your value proposition and competitive advantage?
Your customer needs: What are the expectations and preferences of your target customers?
Your competitive environment: What are the opportunities and threats in your industry and market?
Your organizational culture: What are the values and norms that guide your behavior and decision making?
You should choose an operating model that best fits your situation and goals. There is no one-size-fits-all solution. Each operating model has its own strengths and weaknesses, opportunities and risks, trade-offs and synergies.
In the next section, we will discuss how to implement your operating model via EA.
How to Implement an Operating Model via Enterprise Architecture
and implement an EA that aligns with your operating model and supports your business execution. This involves designing and building your core business processes and IT infrastructure in a way that enables integration and standardization across your organization.
The book provides a guide on how to implement an EA based on four design principles:
Standardize what differentiates you, which means identifying and focusing on the core business processes that create value for your customers and differentiate you from your competitors, and standardizing them across your organization to ensure consistency and quality.
Optimize what doesn't differentiate you, which means identifying and simplifying the non-core business processes that support your core processes, and optimizing them for efficiency and cost-effectiveness.
Digitize your processes, which means using IT to automate, integrate, and streamline your business processes, and to enable data sharing and analysis.
Design for agility, which means designing your EA in a modular and flexible way that allows you to adapt to changing customer needs and market conditions, and to leverage new technologies and opportunities.
By following these design principles, you can create an EA that enables you to execute your operating model effectively and efficiently. You can also avoid the common mistakes of having an EA that is misaligned with your operating model, such as:
Over-standardizing, which occurs when you standardize too many or too few business processes, resulting in either loss of differentiation or loss of efficiency
Under-integrating, which occurs when you integrate too little or too much data and resources, resulting in either lack of coordination or lack of customization
Over-digitizing, which occurs when you use IT for its own sake or without a clear business purpose, resulting in either waste of resources or complexity of systems
Under-agilizing, which occurs when you design your EA in a rigid or monolithic way that limits your flexibility and responsiveness, resulting in either missed opportunities or increased risks
Implementing an EA is not a one-time project. It is an ongoing process that requires constant monitoring and adjustment to keep up with the changes in your business environment and customer expectations. It also requires strong leadership and governance to ensure that your EA is aligned with your business strategy and supported by your organizational culture.
In the next section, we will discuss how to navigate the stages of EA maturity.
The Four Stages of Enterprise Architecture Maturity
An EA maturity model is a framework for assessing the maturity level of an EA based on its degree of alignment with the operating model and its impact on business performance. The book identifies four stages of EA maturity that represent different levels of progress from a fragmented and inefficient EA to a modular and agile EA:
StageDescriptionCharacteristicsChallenges
Business SilosA low-maturity stage where each business unit has its own business processes and IT systems that are not integrated or standardized across the organization- High local optimization- Low enterprise optimization- High local responsiveness- Low enterprise responsiveness- High local innovation- Low enterprise innovation- Redundancy and waste- Silo mentality and fragmentation- Inconsistency and confusion- Difficulty in scaling and sharing
Standardized TechnologyA medium-maturity stage where the organization has standardized its IT infrastructure (hardware, software, data, networks) across the business units, but not its business processes- Medium local optimization- Medium enterprise optimization- Medium local responsiveness- Medium enterprise responsiveness- Medium local innovation- Medium enterprise innovation- Rigidity and inertia- Loss of differentiation- Resistance to change- Difficulty in customizing and personalizing
Optimized CoreA high-maturity stage where the organization has standardized its core business processes (the ones that create value for customers) across the business units, as well as its IT infrastructure- Low local optimization- High enterprise optimization- Low local responsiveness- High enterprise responsiveness- Low local innovation- High enterprise innovation- Complexity and risk- Loss of flexibility- Dependence on vendors- Difficulty in adapting and integrating
Business ModularityA very high-maturity stage where the organization has modularized its business processes and IT systems into reusable and interchangeable components that can be configured and reconfigured to meet changing customer needs and market conditions- High local optimization- High enterprise optimization- High local responsiveness- High enterprise responsiveness- High local innovation- High enterprise innovation- Coordination and governance- Security and privacy- Quality and reliability- Difficulty in managing and measuring
The purpose of an EA maturity model is to help you understand where you are, where you want to be, and how to get there. You should use the maturity model as a diagnostic tool, not as a prescriptive tool. There is no one-size-fits-all solution. Each stage has its own strengths and weaknesses, opportunities and risks, trade-offs and synergies.
In the next section, we will discuss how to navigate the stages of EA maturity.
How to Navigate the Stages of Enterprise Architecture Maturity
Navigating the stages of EA maturity is not a linear or sequential process. It is a cyclical and iterative process that involves moving from one stage to another by addressing the key challenges and opportunities at each stage. The book provides a roadmap for navigating the stages of EA maturity based on four steps:
Assess your current stage, which means evaluating your current level of EA maturity based on the criteria and indicators of each stage
Define your target stage, which means deciding your desired level of EA maturity based on your strategic goals and operating model
Identify the gaps, which means comparing your current stage and your target stage and identifying the gaps that need to be closed
Close the gaps, which means developing and implementing an action plan to close the gaps by applying the design principles and best practices of EA
By following these steps, you can advance from one stage to another by improving your alignment with your operating model and increasing your impact on business performance. You can also avoid the common pitfalls of navigating the stages of EA maturity, such as:
Skipping stages, which occurs when you try to jump from a low-maturity stage to a high-maturity stage without addressing the intermediate stages, resulting in unrealistic expectations and poor results
Regressing stages, which occurs when you move from a high-maturity stage to a low-maturity stage due to changes in your business environment or customer expectations, resulting in loss of alignment and value
Stagnating stages, which occurs when you stay at a medium-maturity stage without progressing to a higher-maturity stage, resulting in loss of competitiveness and innovation
Mismatching stages, which occurs when you choose a target stage that does not fit your operating model or business strategy, resulting in loss of differentiation and efficiency
Navigating the stages of EA maturity is not a one-time project. It is an ongoing process that requires constant monitoring and adjustment to keep up with the changes in your business environment and customer expectations. It also requires strong leadership and governance to ensure that your EA is aligned with your business strategy and supported by your organizational culture.
In the next section, we will discuss how to cash in on the learning from EA.
How to Cash In on the Learning from Enterprise Architecture
An EA is not just a blueprint. It is also a source of knowledge and insights that can help you improve your business performance and innovation. By creating an EA, you can learn about your business processes, IT systems, data, customers, competitors, markets, opportunities, threats, strengths, weaknesses, etc. You can use this learning to make better decisions, solve problems, identify opportunities, generate ideas, etc.
The book provides a set of best practices for leveraging the learning from EA based on four actions:
Capture the learning, which means documenting and storing the knowledge and insights gained from EA in a structured and accessible way
Analyze the learning, which means processing and interpreting the knowledge and insights gained from EA using various methods and tools, such as data mining, business intelligence, analytics, etc.
and insights gained from EA to various audiences and stakeholders, such as managers, employees, customers, partners, etc.
Apply the learning, which means using and exploiting the knowledge and insights gained from EA to improve your business performance and innovation, such as by optimizing your processes, enhancing your products, creating new services, entering new markets, etc.
By following these actions, you can cash in on the learning from EA and create value for your organization and customers. You can also avoid the common mistakes of wasting the learning from EA, such as:
Ignoring the learning, which occurs when you do not document or store the knowledge and insights gained from EA, resulting in loss of memory and evidence
Misinterpreting the learning, which occurs when you do not process or analyze the knowledge and insights gained from EA correctly or objectively, resulting in errors and biases
Hiding the learning, which occurs when you do not share or disseminate the knowledge and insights gained from EA openly or widely, resulting in silos and gaps
Misusing the learning, which occurs when you do not use or exploit the knowledge and insights gained from EA appropriately or ethically, resulting in harm or misuse
Cashing in on the learning from EA is not a one-time project. It is an ongoing process that requires constant feedback and improvement to keep up with the changes in your business environment and customer expectations. It also requires strong leadership and governance to ensure that the learning from EA is aligned with your business strategy and supported by your organizational culture.
In the next section, we will discuss how to build the foundation one project at a time.
How to Build the Foundation One Project at a Time
An EA is not a big bang. It is a gradual evolution that involves imp