As the business world continues to digitize and grow in complexity, many businesses will need to avail themselves of "enterprise architecture"—the process of defining every aspect of an organization's structure for the successful development and execution of strategy. Enterprise architecture may not be synonymous with enterprise transformation, but it is a means to that end.
There are some significant challenges to leveraging enterprise architecture for success. By definition, architecting a business is a vast undertaking; designing every aspect of an organization's structure including people, processes, strategies, and accountabilities requires time, resources, and education. The biggest challenge blocking most businesses from prioritizing enterprise architecture is its emergence as a new discipline. Because it is new, most organizations don’t know what enterprise architecture is and/or how to utilize it.
Enterprise architecture: Not just IT anymore
According to Jeanne Ross, Director and Principal Research Scientist at MIT Sloan’s Center for Information Systems Research (CISR), enterprise architecture no longer falls under the IT umbrella. Ross studies the use of enterprise architecture as a business strategy in global companies. In the ZDNet interview, "Enterprise architecture and enterprise transformation: Related but distinct concepts that can change the world," Ross helped define the term. "Enterprise architecture is an enterprise effort, initiative, and impact," said Ross. "We've got to continue to push that enterprise architecture is about designing the way this company will do business, and that it's far beyond the scope of IT alone."
Another reason that enterprise architecture is not a common best practice: there are currently no enterprise architecture experts. There is no career path, major, or graduate school program that creates leaders in this new discipline, although some schools are starting to create areas of focus based on the emerging need within organizations. So where do we find our enterprise architects? According to Ross, "Businesses should look for employees that display a strong aptitude for designing process, workflows, and structure in alignment with the business goals of an organization."
"Businesses should look for employees that display a strong aptitude for designing process, workflows, and structure in alignment with the business goals of an organization."
Enterprise architecture in practice
In her research, Ross often sites USAA, the diversified financial services organization, as an example of a company advanced in its use of enterprise architecture to achieve specific results. Prior to using enterprise architecture, USAA had an increased level of business complexity that was in conflict with their ultimate goal: providing a better customer experience. Using enterprise architecture, USAA went from having four major businesses to separating their product lines from marketing and customer interface. "Now there is one big organization called Member Experience, and there are still lines of business, but they don't talk to the customers. That is a major restructuring."
According to a 2012 article in Forbes, "[USSA's] executive team concluded that in order to be fully customer-centric, it required a world-class voice-of-the-customer program so it could understand member needs in new and deeper ways. It required a customer segmentation scheme based on those needs to guide the design of products and services. It required an organization and governance structure that would let USAA go to market in a radically different fashion that spanned traditional product silos. In short, what USAA needed was a radical transformation in the way it did business."
"One of the keys to their success has been their framework," says Ross. "USAA looked at their business and business architecture as the same thing. As a result of the effort put into enterprise architecture, USAA has been able to improve the productivity and efficiency of their organization while achieving a superior level of customer service."
UPS, CEMEX, Delta Airlines, ING Direct, TD Banknorth are all companies that have realized value through enterprise architecture. Their case studies and more can be found in Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, authored by Ross and her colleagues Peter Weill, Director at MIT Sloan's Center for Information Systems Research and David C. Robertson, Professor of Technology and Strategy at IMD International.
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