When it comes to the enterprise, thin is in — as in slimming down business processes and reducing the level of complexity that comes with running organizations in the 21st century.
That goal would be challenging enough without the arrival of trends like Big Data and mobility. There are also the continuing struggles to secure company data, manage risk, meet compliance deadlines and overcome regulatory hurdles. Organizations find themselves trying to corral more information than ever, and key business decisions hinge on whether they can analyze all that data in a timely manner.
Enterprise architects are called upon to deal with that complexity in a way that reduces information overload and finds new mixes of business capabilities within organizations. They can also help with the search for differentiation, as companies look to separate themselves from competitors who are gaining access to a wider range of technology tools.
In this podcast, two executives with Enterprise Architects talk about how they help companies in verticals such as finance, defense, utilities and education deal with business challenges and transformation.
Huge Evans is the chief executive officer and founder of Enterprise Architects, and Craig Martin is its chief operations officer and chief architect.
Dana Gardner, principal analyst with Interarbor Solutions, leads the discussion. Their conversation took place ahead of The Open Group conference held last week in Sydney, Australia, titled “How Does Enterprise Architecture Transform the Enterprise?”
Download the podcast (33:33) or use the player:
Here are some excerpts:
Dana Gardner: Let’s look at this first from a big-picture perspective and then drill down into what you are going to get into at the conference in a couple of weeks. What are some of the big problems that businesses are facing, that they need to solve, and that architecture-level solutions can really benefit them. I’ll open this up to both Hugh and Craig?
Huge Evans: Thanks very much, Dana. I’ll start with the trend in the industry around fast-paced change and disruptive innovation. You’ll find that many organizations, many industries, at the moment in the U.S., Australia, and around the world are struggling with the challenges of how to reinvent themselves with an increasing number of interesting and innovative business models coming through.
For many organizations, this means that they need to wrap their arms around an understanding of their current business activities and what options they’ve got to leverage their strategic advantages.
We’re seeing business architecture as a tool for business model innovation, and on the other side, we’re also seeing business architecture as a tool that’s being used to better manage risk, compliance, security, and new technology trends around things like cloud, Big Data, and so on.
Craig Martin: Yes, there is a strong drive within the industry to try and reduce complexity. As organizations are growing, the business stakeholders are confronted with a large amount of information, especially within the architecture space. We’re seeing that they’re struggling with this complexity and have to make accurate and efficient business decisions on all this information.
What we are seeing, and based upon what Hugh has already discussed, is that some of those industry drivers are around disruptive business models. For example, we’re seeing it with the likes of higher education, the utility space, and financial services space, which are the dominant three.
There is a lot of change occurring in those spaces, and businesses are looking for ways to make them more agile to adapt to that change, and looking towards disciplined architecture and the business-architecture discipline to try and help them in that process.
Gardner: I think I know a bit about how we got here — computing, globalization, outsourcing, companies expanding across borders, the ability to enter new markets freely, and dealing with security, but also great opportunity. Did I miss anything? Is there anything about the past 10 or 15 years in business practices that have led now to this need for a greater emphasis on that strategic architectural level of thinking?
Martin: A lot has to do with basically building blocks. We’ve seen a journey that’s traveled within the architecture disciplines specifically. We call it the commodification of the business, and we’ve seen that maturity in the IT space. A lot of processes that used to be innovative in our business are now becoming fairly utility and core to the business.
In any Tier 1 organization, a lot of the processes that used to differentiate them are now freely available in a number of vendor platforms, and any of their competitors can acquire those.
So they are looking for that differentiation, the ability to be able to differentiate themselves from their competitors, and away from that sort of utility space. That’s a shift that’s beginning to occur. Because a lot of those IT aspects have become industrialized, that’s also moving up into the business space.
In other words, how can we now take complex mysteries in the business space and codify them? In other words, how can we create building blocks for them, so that organizations now can actually effectively work with those building blocks and string them together in different ways to solve more complex business problems?
Evans: I’ll add to that, Dana. EA is now around 30 years old, but the rise in EA has really come from the need for IT systems to interoperate, and to create common standards and common understanding within an organization for how an IT estate is going to come together and deliver the right type of business value.
Through the 1990s we saw the proliferation of technologies as a result of the extension of distributed computing models and the emergence of the Internet. We’ve seen now the ubiquity of the Internet and technology across business. The same sort of concepts that ring true in technology architecture extend out into the business, around how the business interoperates with its components.
The need to change very fast for business, which is occurring now in the current economy, with the entrepreneurship and the innovation going on, is seeing this type of thinking come to the fore. This type of thinking enables organizations to change more rapidly. The architecture itself won’t make the organization change rapidly, but it will provide the appropriate references and enable people to have the right conversations to make that happen.
Gardner: So architecture can come as a benefit when the complexity kicks in. When you try to change an organization, you don’t get lost along the way. Give me a sense about what sort of paybacks your clients get when they do this correctly, and what happens when you don’t do this very well?
Evans: Business architecture, as well as strategic architecture, is still quite a nascent capability for organizations, and many organizations are really still trying to get a grip on this. The general rule is that organizations don’t manage this so well at the moment, but organizations are looking to improving in this area, because of the obvious, even heuristic payoffs that you get from being better organized.
You end up spending less money, because you’re a more efficient organization, and you end up delivering better value to customers, because you’re a more effective organization. This efficiency and effectiveness need within organizations is worth the price of investment in this area.
The actual tangible benefits that we’re seeing across our customers includes reduced cost of their IT estate.
You have improved security and improved compliance, because organizations can see where their capabilities are meeting the various risk and compliance profiles, and you are also seeing organizations bring products to market quicker.
The ability to move through the product management process, bring products to market more rapidly, and respond to customer need more rapidly puts organizations in front and makes them more competitive.
The sorts of industries we’re seeing acting in this area would include the postal industry, where they are moving from a traditional mail- to parcels, which is a result of a move towards online retailing. You’re also seeing it in the telco sector and you’re seeing it in the banking and finance sector.
In the banking and finance sector, we’ve also seen a lot of this investment driven by the merger and acquisition (M&A) activity that’s come out of the financial crisis in various countries where we operate. These organizations are getting real value from understanding where the enterprise boundaries are, how they bring the business together, how they better integrate the organizations and acquisitions, and how they better divest.