Enterprise Architecture is dead!
Long live Enterprise Architecture
Recently, I heard numerous comments alluding to the death of enterprise architecture – that it is staid, overly complex, and ultimately irrelevant for tackling today’s business challenges.
Interestingly, these same statements are often then followed by statements that identify the need for the fundamentals of enterprise architecture – the need to identify customers and not processes, the need to identify key information inside important business functions, the need to understand how best to expose and manage this key information, the need to identify emerging technologies and understand how they can be incorporated into the technology roadmap etc – all of which are staples of enterprise architecture.
It strikes me that the people who are dismissing enterprise architecture are perhaps the people that need it most.
It strikes me that the people who are dismissing enterprise architecture are perhaps the people that need it most. I thought it would be a valuable exercise to look at some key business trends right now and look at how, if at all, enterprise architecture could be used to tackle them. I’d be interested to hear your views.
Key trend – pricing pressure
Let’s look at the key trend of pricing pressure, profit pressure and cost cutting.
Never far away from the business agenda is the need to sustain profit and manage cost. Not necessarily in that order. An additional dimension is now present whereby many companies are facing pricing pressure due to the prevalence of online service provision and new market entrants without traditional infrastructure asset bases to manage (e.g. online shopping). Changing consumer behaviour is also contributing – consumers are (apparently) less brand-loyal these days, so expensive brand-driven pricing is becoming harder to maintain. On the profit front regulation, particularly in banking, energy, and pharmaceutical sectors, has reduced profitability. And finally, rising wage prices have impacted costs, as has higher cost of raw materials in the supply chain (e.g. transport, energy, and food markets).
There are a number of responses that enterprise architects can consider – some of which could be:
1. Cost pressure
Cost pressure can be alleviated through enabling a more flexible, dynamic workforce. Considering primarily business architecture, architects can examine the existing operating model, then consider how the operating model could change to facilitate more flexible working arrangements.
Defining key roles and responsibilities abstracted from individuals (producing a more logical business architecture, as opposed to physical) enables different scenarios to be applied, which in turn can be used to drive different logical operating models, that vary by product, service, geography or business unit.
Pricing pressure can be alleviated through more flexible and/or more dynamic pricing capabilities, which are in turn underpinned by new or modified technology landscapes.
Utilising then primarily application architecture, the architect can examine what new applications or technologies will be needed to support this change in the operating model. Distributed working brings with it a number of challenges both functionally and non-functionally, as well as security and privacy, all of which can be calculated by the enterprise architect;
2. Profit pressure
Profit pressure is perhaps more challenging – maintaining profitability in a changing regulatory environment is not easy, but the enterprise architect can influence the situation by explicitly building data and reporting architectures to address immediate and foreseen regulatory requirements.
Often, regulatory changes take the form of simple statements. Yet, to meet them, they require complex solutions and/or workarounds, especially to source the right information and get it into the right format. Enterprise architects can first use business architecture to decode regulatory requirements into a standard taxonomy (hopefully, in line with existing architectures) so that the impact of the change can be understood and compared to existing solutions or options. The architect can then use information architecture, or data architecture, to understand fully what information is needed, how to get it, and what integration changes are necessary, or even what new data service or analytic technologies are needed to either meet the immediate need, or accelerate response times to future needs;
3. Pricing pressure
Pricing pressure is perhaps even more complex. Pricing pressure can be alleviated through more flexible and/or more dynamic pricing capabilities, which are in turn underpinned by new or modified technology landscapes. Again, starting with business architecture, the architect can look at the business model and look at different products or services that can be provided to different customers or customer segments given existing resources and capabilities.
Alternatively, the architect can look at creating different business models for certain product types or geographies, and propose an operating model that supports these different business models. Moving forward, the architect can then focus on business capabilities, and in particular, look at different capabilities needed by the business to implement new or more dynamic pricing strategies.
Examples include automated credit decisioning, automatic price sourcing and/or matching, trade promotions planning, campaign management, point-of-sale alternate product suggestion, or more custom analytic-based capabilities that promote products based on buying history or search patterns. These capabilities can then be further deconstructed along the usual enterprise architecture path, to identify key information, data, application, technology, infrastructure, and security dimensions, resulting in a corresponding set of work packages that the architect can then sequence and integrate into the existing project landscape.
Modelling approaches and frameworks available
In completing the above activities, the architect has a wide range of modelling approaches and frameworks that can be used. There is more than enough open, free material available to undertake such activities. For example –
Provides a next generation business model approach that captures many more dimensions of the business model and can be used to create sophisticated models of business across traditionally disconnected aspects, particularly around regulatory requirements, risk, compliance, strategy, and value proposition;
Provides a very simple, effective approach to developing a business model that contains the dimensions above;
Provides a very comprehensive framework, TOGAF, for undertaking enterprise architecture, including a multi-layered view of business architecture;
Provides a model specifically for modeling the motivation of a business.
I’m keen on your thoughts – what trend should we look at next?