The Role of Enterprise Architecture in Digital Transformation
In today’s fast-changing and increasingly complex world, for many organizations it has become important to improve their IT systems and digital solutions. For this purpose, enterprise architecture provides a good tool.
This article discusses the role enterprise architecture can play in an organization’s digital transformation. It will first briefly introduce enterprise architecture (EA) and then proceed to discuss how EA can be used and the benefits it provides in developing an organization’s IT infrastructure.
What is enterprise architecture?
Enterprise Architecture (EA) is a practice that helps approach the organization’s IT systems, applications, and processes strategically and align them with business objectives. It offers a framework with which the organization can better manage its digital transformation.
Modeling in Enterprise Architecture
In EA, models are used to depict the current state of the organization’s IT infrastructure. In strategic planning and implementations, models describe the end goal of the digital transformation as well as the intermediary steps needed to achieve the goal.
EA helps in the digital transition by increasing agility. It is important that for each iteration of the transformation process, the current stage is updated, and the planned steps are reflected against the current stage and the end goal.
Why enterprise architecture is important?
EA is the most valuable used in strategy formulation and implementation phases. This is because EA helps to assess the readiness of the organization for transformation and decide how to execute the chosen strategy.
Strategy planning tool
In strategic planning, the executive leadership defines what the organization wants to achieve and what are the future goals. When the organization is planning on digital transformation, EA provides tools for strategic decision-making.
EA involves splitting the company’s key outcomes, such as products, customers, experiences, and core enterprise processes into separate components. This is helpful when the decision-makers need to identify the organization’s critical people-process-technology bundles. With this, it is possible to find new opportunities but also the areas that need readjustment and strategy reformulation.
According to Simon et al. (2003), EA is the most valuable used in strategy formulation and implementation phases. This is because EA helps to assess the readiness of the organization for transformation and decide how to execute the chosen strategy.
As a decision-making tool
EA provides tools for cross-sectional decision-making. For example, it provides tools that help software developers, product experts, R&D, production planners, and finance people work together in developing new functions for future software (Ross & Beath, 2020).
EA models can be used to depict potential courses of action, which helps to create awareness and commitment to a specific solution. Thus, it provides support for rational arguments for the proposed solution.
However, van de Linden & van Zee (2015) noted that decision-making often involves political aspects, and rational arguments alone are not always enough for the most rational solutions to be selected. Therefore, for the suggestions to be accepted, they also need to resonate on an emotional level and contribute to creating a positive business image.
How to measure the benefits of EA?
Connecting the benefits to the business outcomes that the EA will be enabling is a good way to find quantifiable metrics
Collecting quantified data about the benefits of EA is challenging. It is crucial to start to think about the metrics already at the early stages of the transformation project. Connecting the benefits to the business outcomes that the EA will be enabling is a good way to find quantifiable metrics.
These metrics can be, for example,
- The time it takes to respond to and solve issues in production.
- How many bottlenecks in dataflows, time-consuming tasks, or high-risk processes the enterprise architecture has pointed out?
- How much time and resources have been saved compared to the situation before the EA was utilized (Hackney, 2022)?
In studies about the benefits of EA, it has been noted that EA was especially helpful in pointing out the risks involved in business processes and IT. EA provided better insight into the current situation but also of the strategic vision for the future (Plessius et al., 2015).
One of the major qualitative benefits of EA is that it enhances communication between the stakeholders and helps align the business processes and IT.
One of the major qualitative benefits of EA is that it enhances communication between the stakeholders and helps align the business processes and IT. By providing a common language, the people from different departments of the organization can communicate more effectively with each other. EA also helps the organization better utilize existing IT resources so that they are more efficiently aligned with the organization’s business goals. Even though these benefits might be harder to measure, their impact is easy to detect.
Conclusions
Enterprise architecture is a highly versatile tool applicable across various organizational levels during digital transformation planning and implementation. It plays a crucial role in supporting strategy formulation and implementation, as well as decision-making.
By offering a comprehensive view of the organization’s current and future IT infrastructure, enterprise architecture becomes an invaluable asset for digital transformation projects. Although the benefits of investing in enterprise architecture may not always be immediately observable, thoughtful consideration of metrics at the project’s outset renders them quantifiable and more easily noticeable.
Resources:
Hackney, H., 2022. Developing a Business Case for Your Organization’s EA Practice. [Online]
Available at: https://www.architectureandgovernance.com/elevating-ea/developing-a-business-case-for-your-organizations-ea-practice
[Accessed 22 10 2023].
Plessius, H., van Steenbergen, M. & Slot, R., 2015. Towards an Enterprise Architecture Benefits Measurement Instrument. Stockholm, Springer, p. 363–374.
Ross, J. & Beath, C., 2020. Why You — Yes, You — Need Enterprise Architecture. (Online)
Available at: https://sloanreview.mit.edu/article/why-you-yes-you-need-enterprise-architecture, Accessed 21 10 2023.
Simon, D., Fischbach, K. & Schoder, D., 2013. Enterprise Architecture Management and Its Role in Corporate Strategic Management. Information Systems and e-Business Management, Volume 12, pp. 5-42.
van der Linden, D. & van Zee, M., 2015. Insights from a Study on Decision Making in Enterprise Architecture. Short Paper Proceedings of the 8th IFIP WG 8.1 Working Conference on the Practice of Enterprise Modeling, pp. 21-30.