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Enterprise Architecture: A Strategic Agenda for CXOs · PDF fileEnterprise Architecture: A Strategic Agenda for CXOs. Progressive organizations must look beyond traditional approaches

Feb 01, 2018

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  • Enterprise Architecture: A Strategic Agenda for CXOsProgressive organizations must look beyond traditional approaches and tightly align the enterprise architect role and function with corporate strategy, program management and strategy evaluation lifecycles.

    Executive SummaryTechnology subjects often carry negative equity when real businesspeople are confronted with them. Lets look at a brief dialogue between a CXO and an enterprise architect at a coffee vending machine in the office.

    CXO: What are you working on?

    Enterprise architect: I am working on enterprise architecture matters.

    CXO: Oh, I didnt know that we were planning to make changes to our building.

    Many times, the significance of the EAs work might not be obvious to top-level executives. The reason, in many cases: fundamental archi-tectural concepts were derived from a hardware philosophy. Today, architectural concepts have embraced software applications and data as well as business structures and processes. To counteract old-world thinking, this white paper presents a new twist on the enterprise architec-ture function, arguing for a reorientation to a business and strategy perspective.

    This white paper presents a combination of real-life client situations and illustrative business situations to see how the EA function can play a strategic role in combination with other strategic corporate functions.

    Enterprise Architecture: An Enlightened PerspectiveTo embrace this new view of the enterprise function (as illustrated in Figure 1), organizations need to take note of the following:

    The ever-changing business world: With the only constant being change, enterprises have to adapt, reorganize, gain experience and refine. Therefore, to strategically address these changes and seize emerging business oppor-tunities, it is important to have a running view of enterprise architecture including business and IT strategy, operating models, business processes, designs, people, applications, data and underlying infrastructure. The EA function can play a strategic role in providing a quick understanding of this underlying complexity and simplifying the decision-making process.

    The redoubled emphasis on moving quickly and effectively from strategy to execution: Lead time for action, reaction and adaptation is reducing from years to months, days or even minutes. With a solid knowledge base of all these interlinkages, the EA function can guide and support the implementation of any business change in an effective manner. In other words, the EA can provide the ability to quickly pinpoint which enterprise element needs to be

    Cognizant 20-20 Insights

    cognizant 20-20 insights | june 2013

  • 2

    changed or updated to improve the enterprise performance mandated by corporate strategy.

    Disruptive Technologies: Emerging disruptive information technologies and systems are evolving as the key differentiators among orga-nizations. Therefore, the ability to perceive and fundamentally understand disruptive tech-nologies in business, financial and nontechni-cal terms can be a useful tool for CXOs to plan appropriate responses.

    Figure 2 illustrates the evolution of key EA char-acteristics.

    Given the changing nature of the EA function, what should CXOs be thinking about?

    How their strategic directives or thinking has been translated and interpreted by the management team at the conceptual level.

    How to produce a consistent, transparent and agreed-upon architecture vision to prioritize, plan, implement and control initiatives.

    How to further refine strategic decisions and challenge the derived concepts downstream in a timely manner.

    How to collectively evaluate known and estab-lished governance models, processes and frameworks.

    cognizant 20-20 insights

    Figure 1

    Evolution of Architectural Concept vs. Leading Contemporary Business Issues

    Strategic Business Issues

    Data Center Concepts

    EA Wave

    Broadening EA Scope

    IT Heavy Concepts

    Management Philosophy

    Changing Business World

    Strategy to Execution Lead

    Time

    Disruptive Technologies

    Figure 2

    Recasting the EA Role

    Architecture Characteristics

    Past Practices Current Practices Future Practices

    AlignmentApplication & Technology

    Business & IT Strategy & Operations

    Approach IT Focused EA Framework Oriented Mixture of Frameworks

    Change DriversBusiness Change Driven

    by TechnologyBusiness Demanding Technology Change

    Strategy & Business Imperatives Guiding Technology Change

    Reporting & Sponsorship CIO CIO & BU Heads CEO, COO, CFO, CIO

  • Figure 3 illustrates how CXOs should frame their refined view of the EA function.

    Approaching Enterprise Architecture Strategically Changes in the business environment force orga-nizations to continuously reposition themselves in the market. Repositioning is accompanied by the reorganization of internal structures, which are often complex and difficult to change. These shifts require the firm to improve its ability to plan and implement change. The EA function can bring enterprise-level concerns, viewpoints, challenges and quantitative assessment together and form a common enterprise-level understand-ing to prioritize strategic initiatives.

    By doing this, EAs can allow CXOs to focus investments and resources on those initiatives that generate significant business performance improvements.

    The following things should be kept in mind while implementing EA concepts:

    Integrate the EA function with the corporate strategy cycle.

    Integrate the EA function with the project lifecycle.

    Integrate the EA function with the corporate strategy evaluation cycle.

    Figure 4 highlights our thinking.

    3cognizant 20-20 insights

    Figure 3

    CXO-Driven Target Enterprise Architecture Vision

    Market Positioning

    Market Servicing

    Profit & Volume

    Resource Utilization

    People & Change

    Revenue Growth

    Strategy Translation

    Interdependencies

    CXOs

    Agenda

    Concerns

    Challenges

    Consistent Knowledge, Understanding, Reuse of Assets + Resources + Capabilities

    EAOrchestration

    Operations Perspective

    Technology Perspective

    Emerging Trends

    Governance Perspective

    Financial Perspective

    Sales Perspective

    Technology Integration Shared Architecture

    Vision

    Detailed Target EA

    Figure 4

    Enterprise Architectures Strategic Fingerprints

    Cost Reduction Programs

    Emerging Technologies

    Compliance Requirements

    Emerging Markets

    New Products & Services

    Operational Demands

    Merger & Acquisition Initiatives

    IT Change Programs

    Competitive Advantage

    Strategic Goals

  • Integrating EA with the Corporate Strategy Cycle If EA is a stand-alone activity, then the organi-zation will struggle to realize the EA functions defined objectives and principles. This implies that enterprise architecture management practices need to be carefully embedded in all of the strategy processes including formulation and planning, implementation and evaluation.

    The first step of this integration is the analysis of the as-is enterprise architecture and weighing it against the organizations internal strengths, weaknesses, external threats and opportunities. The enterprise architect needs to help the organi-zation in carrying out this analysis. This analysis can help CXOs better understand the strategic options, their potential implications and the transformation roadmap.

    The second step of this integration is to analyze and design a best project portfolio to implement the transformation roadmap. The enterprise architect needs to help in structuring the project portfolio by promoting the projects that have the highest strategic contribution and synergy.

    The third step of this integration is to include EA-related KPIs in the enterprise performance scorecard to understand the actual performance of current enterprise architecture vis-a-vis planned enterprise architecture.

    Integrating EA with the Project Lifecycle By the end of the strategic cycle, we should have a high-level target EA vision, a roadmap of how to get there and a resulting project portfolio. This can be documented as a conceptual blueprint. However, a blueprint alone is not sufficient to ensure realization. The question is how we can ensure that end results match the strategy. A strategy is more likely to succeed if the cor-

    Figure 5

    EA Entry Points

    Strategy Formulation

    Strategy Implementation

    Strategy Evaluation

    Business Architecture

    EA Governance

    Architecture Vision

    Quick Take

    Business situation: Entering a new market might require redesigning CRM processes to closely interact with sales agents and customers.

    Key goal: Time-to-market. Ultimate need: Additional online sales

    platform.

    Constraint: Market strategy can be developed and rolled out in months but migration to new sales platform might take one to two years.

    Strategic approach: > Focus on highlighting Interdependencies or

    overlaps with other strategic initiatives by translating strategic business initiatives to the IT domain.

    > Illustrate how strategic options affect the different parts and resources of the orga-nization by using cross-domain knowledge.

    > Evaluate strategic options by not only tak-ing opportunities into account, but also the organizations capabilities, potential, limita-tions and unforeseen side effects.

    For example, given the existing skills, business processes and applications, en-tering a new market may

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