Enterprise Architecture Enterprise Architecture Value and BenefitsValue and Benefits

““When it comes to When it comes to executing your strategyexecuting your strategy, your , your enterprise architecture may matter far more than enterprise architecture may matter far more than your strategy itselfyour strategy itself” ” Enterprise Architecture as StrategyEnterprise Architecture as Strategy

Think ChangeWhat seems like only a ripple

today...Can become the wave of the

future

What is the Objective of EA within the What is the Objective of EA within the Organisation?Organisation?

• The objective is focused on the The objective is focused on the importance of the relationship importance of the relationship among goals and functions within the among goals and functions within the organisation, and the manner in organisation, and the manner in which these elements enable the which these elements enable the strategy.strategy.

Enterprise Architecture Enterprise Architecture ValueValue

EA Value1.Insight2.Guidance3.Compliance4.Governance5.Facilitation

Organisation

EA Value IdentifiedEA Value Identified• InsightInsight

– Enterprise Architecture can/should provide the business with deep, stakeholder Enterprise Architecture can/should provide the business with deep, stakeholder specific insight specific insight into how all components within the enterprise are related to each otherinto how all components within the enterprise are related to each other ,depend on each other ,depend on each other and function in a stable or possibly ineffective and/or inefficient state. and function in a stable or possibly ineffective and/or inefficient state.

• GuidanceGuidance– Following on from providing insight into the state of the enterprise and what is working and what Following on from providing insight into the state of the enterprise and what is working and what

is not working (well or viably), is not working (well or viably), Enterprise Architecture provides business with guidance to what Enterprise Architecture provides business with guidance to what needs or can be done to achieve viability or optimal state needs or can be done to achieve viability or optimal state (for the current understood desired (for the current understood desired state of the enterprise).state of the enterprise).

• ComplianceCompliance– Also directly linked with Guidance is the value in Also directly linked with Guidance is the value in providing a measure of compliance of the providing a measure of compliance of the

defined solution to the holistic Enterprise Architecturedefined solution to the holistic Enterprise Architecture, in the sense that it needs to be checked , in the sense that it needs to be checked that the proposed solution does not violate or deviate from the greater EA or that it cause conflict that the proposed solution does not violate or deviate from the greater EA or that it cause conflict with other areas or components of the holistic EA. It also provides a control to test viability of a with other areas or components of the holistic EA. It also provides a control to test viability of a solution prior to embarking on development of a proposed solution.solution prior to embarking on development of a proposed solution.

• GovernanceGovernance– It is something that happens so frequently, that what is being developed (or changed) deviates It is something that happens so frequently, that what is being developed (or changed) deviates

from the initial approved solution or spiral out of control due to a lack of an objective control from the initial approved solution or spiral out of control due to a lack of an objective control source. In that EA plays an source. In that EA plays an integral role in governing the project progress through staged integral role in governing the project progress through staged controls controls to ensure that the development stays compliant to the holistic EA, the project/change to ensure that the development stays compliant to the holistic EA, the project/change purpose (and requirements) and not break the budget either. purpose (and requirements) and not break the budget either.

• FacilitationFacilitation– Enterprise Architecture provided the initial view and what can/should change, so it should also Enterprise Architecture provided the initial view and what can/should change, so it should also

function as the tool to function as the tool to show where the implementation will impactshow where the implementation will impact, , where it should integrate and where it should integrate and what change management needs to take place.what change management needs to take place. A comprehensive, holistic EA should be a guiding A comprehensive, holistic EA should be a guiding tool to facilitate the smooth post development change implementationtool to facilitate the smooth post development change implementation

Graphical Representation of ValueGraphical Representation of Value

Eliminate

Reduce

Create

Raise

VIValue

Innovation

EA goes beyond Value Creation into Value EA goes beyond Value Creation into Value InnovationInnovation

Four Actions Framework – Creating Value Four Actions Framework – Creating Value InnovationInnovation

EliminateWhich of the

factors that the industry takes for granted should be

eliminated?

Reduce

Which factors should be reduced

well below the industry standard?

Raise

Which factors should be raised well above the

industry standard?

Create

Which factors should be created that the industry

has never offered?

A new Value Curve

Enterprise Architecture Metrics Enterprise Architecture Metrics

Company Specific Metrics (EA Maturity Levels)

Industry Standard Specific Metrics

(E.g. Payment Specific)

Regulated Metrics

(E.g. SOX and BASEL II)

Level 1 –MetricsThis will be company specific aligned to Strategic Objectives

Level 2 –MetricsThese metrics will be aligned to industry specific measures ensuring Value within the industry

Level 3 –MetricsThese metrics will be aligned to regulatory specific measures

What are EA Benefits?What are EA Benefits?• Evolutionary EA development &

governance• Improved risk management

• Provides a holistic view of the enterprise

• Improved staff management

• Improved alignment to business strategy

• Improved strategic agility

• Improved alignment with partners • Increased economies of scale

• Improved asset management • Increased efficiency

• Improved business processes • Increased interoperability and integration

• Improved business-IT alignment • Increased market value

• Improved change management • Increased quality

• Improved communication • Increased reusability

• Improved customer orientation • Increased stability

• Improved decision making • Increased standardization

• Improved innovation • Reduced complexity

• Improved management of IT investments

• Reduced costs

• Shortened cycle times

Categorisation of EA BenefitsCategorisation of EA BenefitsSource: (Niemi 2006), model applied from (Giaglis,Mylonopoulos et al.)Source: (Niemi 2006), model applied from (Giaglis,Mylonopoulos et al.)

What is the cost of deploying an What is the cost of deploying an EA?EA?

EA Value = EA Benefits – EA Costs

EA Cost = EA Benefits – EA Value

Therefore

What is the Cost of EA Benefits?What is the Cost of EA Value?Where Cost can be classified into direct and indirect costs

Calculating the ROI of Deploying Enterprise Calculating the ROI of Deploying Enterprise Architecture?Architecture?

• Quantify the Costs of:Quantify the Costs of:– Defining standards and guidelines.Defining standards and guidelines.– Preparing reference architecturePreparing reference architecture– Defining and maintaining IT roadmapDefining and maintaining IT roadmap– Governance activities.Governance activities.– ConsultancyConsultancy– Defining Strategy for moving from "as-Defining Strategy for moving from "as-

is" to "to-be" architectureis" to "to-be" architecture

Quantifying Cost Reductions Quantifying Cost Reductions (Gartner 2006)(Gartner 2006)

• How much can we save by eliminating redundancy and How much can we save by eliminating redundancy and moving to shared IT services?moving to shared IT services?– Up to 40%, but probably 15% to 20% over the total costs for the Up to 40%, but probably 15% to 20% over the total costs for the

particular functional area of IT.particular functional area of IT.

• What type of savings can we expect from server What type of savings can we expect from server consolidation?consolidation?– Typically, 20% in terms of asset cost, but not necessarily any savings in Typically, 20% in terms of asset cost, but not necessarily any savings in

personnel costs that make up the entire TCO picture.personnel costs that make up the entire TCO picture.

• What type of savings should we expect from implementing What type of savings should we expect from implementing process models, such as IT Information Library?process models, such as IT Information Library?– Expect 20% to 30% of overall operating costs over three years.Expect 20% to 30% of overall operating costs over three years.

• What other IT initiatives have the potential to materially What other IT initiatives have the potential to materially reduce IT costs?reduce IT costs?

– Degree of reuse in application development —Degree of reuse in application development —– Extent and age of the applications portfolioExtent and age of the applications portfolio– Flexibility of IT staff (for example, the ability among IT personnel to take Flexibility of IT staff (for example, the ability among IT personnel to take

on various roles)on various roles)– Formality and quality of asset management processesFormality and quality of asset management processes

If you have one last breath If you have one last breath use it to say...use it to say...