Does Business Strategy Change Demand a Change to Enterprise Architecture?

winning the long gameOver the last several years, I have gotten to read several books on business strategy and enterprise architecture. What I found most interesting was just how well Paul Leinwand’s book “The Essential Advantage” fit with Jeanne Ross’s “Enterprise Architecture as Strategy”. Both propose a resources/capabilities based approach to strategy.

However, as I was finishing a new book on strategy, “Winning the Long Game” by Steven Krupp, I came across an updated perspective to a capabilities approach to strategy. The perspective amazingly was hidden in the appendix of the book. Here Krupp reviewed strategic thinking starting with Michael Porter. And in this process, Krupp effectively updated resources/capabilities thinking. He stressed the importance of creating organizations that can adapt to “continual changing environments through processes of mutation and natural selection…Successful firms need a set of meta-capabilities—which operate at a higher level than their standard operational capabilities—to integrate, build, and reconfigure competencies in order to succeed in rapidly changing environments.” (Winning the Long Game, Steven Krupp, page 268).

Leaders are needed that can drive dynamic capabilities

strategyKrupp suggests that businesses need to develop leaders who have the skill to evolve dynamic capabilities and to connect deeply with their firm’s organizational processes. “This means becoming more strategic, beyond the confines of narrow mindsets, fixed game plans, or rigid solutions” (Winning the Long Game, Steven Krupp, page 268).  In talking with a good friend who has been a chief enterprise architect, these thoughts need to impact the thinking of enterprise architects. Historically, enterprise architecture has been application or process centric. In most cases, they have assumed relative homeostasis for organizational capabilities, processes, and applications.

However, this assumption does not work as enterprise strategies become shorter and processes and capabilities need to evolve, change, or be added to in order to handle a continually changing business environment and the threat of shorter and shorter corporate lives. Increasingly, this puts data front and center. Enterprises need data to drive digital transformation whether it is about changing customer experience, changing operational processes, acting as one company, or even morphing business models. This requirement means that enterprise architects need to move from application or process centric architecture to “data centric architecture”. It also means that an up-to-date Information Model needs to be created and actively managed.

In a world where strategy changes can cause a change in business model, data can no longer be an afterthought of application design. It needs to be a fore thought and as important, it needs to be forward facing versus backward facing. Data governance and experimentation is needed as well to enable changing business models. This means that enterprise data needs to be flexible enough to support new processes and continual process improvements at the same time.

Parting thoughts

shutterstock_228267580 - CopyChanging strategic thinking clearly demands big change in how we think about enterprise architecture. It puts data front and center. At the same time, enterprise architects have an increasingly important role in enabling changes to enterprise architecture and to the access and use of data. Central to this is moving from “application centric architecture” to “data centric architecture”. In many cases, this journey should start with application consolidation. It is the time to start. The clock is ticking for your enterprise and the leaders that drive it’s strategy. According to Fortune magazine, the average life of a Fortune 500 firm has moved from 56 years to 20 years and it is even starting to even shorten from this. Those with responsive business strategies and responsive architectures will clearly win in the future.

Additional Materials

How does data drive the data ready enterprise (an eBook)

Solution Page:

Corporate Governance

Maturity Assessment:

Governance Maturity Assessment Tool

Related materials

Why Enterprise Architects Need to Think About Data First?

Why  Enterprise Architects need to instill data-ready thinking?

Jeanne Ross says effective governance doesn’t just happen. How to govern data + information

Governing the enterprise in an era of #data insecurity. What COBIT5 recommends?

7 reasons why business strategists—and even CEOs—need to know their chief enterprise architect

Enterprise Architects Need to Instill Data-Ready Thinking

Good Corporate Governance Is Built Upon Good Information and Data Governance

Using COBIT 5 to Deliver Information and Data Governance

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@MylesSuer

Comments

  • Daymond Smart

    Myles, enjoyed your post. Definitely will be reading Steven Krupp’s book

    For me, EA has always been a business centric function from several perspectives. First, it works with the business to gain an understanding of the business capabilities that are needed to achieve the business strategy. Secondly, it collaborates across the business and IT to determine what specific business process improvements, business information, systems and analytic / reporting data sources are needed to enable those business capabilities. Finally, it works with business / IT leaders to understand business priorities within an integrated roadmap to identify the optimal path to target state.

    But just as importantly, EA can help a business achieve the ability to quickly adapt to changing business strategies / market conditions and to continuously improve itself in small increments. I typically see the process side of EA helping the most there, especially from an automation and consistency perspective. From a data perspective, I believe that is where businesses have the opportunity to differentiate themselves from peers more and more, by leveraging the data in innovative ways and deriving consistent business guidance.

    An essential piece to enable all this is an integration architecture that can decouple and abstract systems (so they can change independently) and an information architecture that leverages an enterprise information model to underpin data transformation logic, data quality & master data rules that are applied to data in applications, interfaces and enterprise analytic / reporting stores.

    In addition, to keep up with the rate of change in today’s business climate, I feel it’s clear that the enterprise architecture must provide several core “meta capabilities” that allow the business to do more and more without IT, so it can continuously adapt & optimize itself. These include the ability to:

    1) Graphically design and continuously improve automated processes and workflows

    2) Graphically design composite web / mobile role based user interfaces for data entry / retrieval
    3) Leverage SaaS solution that quickly tie into on prem solutions in a low risk, cost effective manner
    4) Tie all three into an underlying event driven, enterprise service layer, managed by IT
    5) Use configurable BI tools to tie into an enterprise BI data layer (relational and non relational data) for advanced analytics

  • MH

    Data
    Centricity is a key element of architecture work.

    As organizations
    normally have a few EA/SAs only, they need to focused, only on main important
    programs which make a difference to the enterprise. Let’s say the company is in
    need to establish a new business capability or adjust an existing one by
    disruptive change in technology. To get to the right oversight and governance I
    can only imagine an EA to generate a cohesive view on the impact and advantages
    this may course. Hence, they need to work in close collaboration with key
    business stakeholders to reach first hand understanding of demand and business
    needs on one hand. On the other, they translate this into actable programs
    creating competitive advantages.

    Therefore I fully agree, an architect show see the big picture and deal with
    data information which gives him/her the right insight to generate a future
    state that really propels an enterprise.

    However, a sound understanding of business architecture (how the company act,
    drives revenue, etc.) is crucial in combination with data centricity. BI&A
    can support and several enterprise derive their strategies out of ‘big data
    analytics’ still I believe mid to long term perspective is a key element of today’s
    enterprise (multinationals) to get the staff behind the journey. Fare too often
    companies are driven by a short to mid-term changes in direction. This
    generates more perception than providing help to people understanding company’s
    goals. But key is at least a robust business understanding for all staff to
    perform best. EA’s can be very powerful stewards who require to have very good
    biz knowledge in combination of Application to Infrastructure know how.

    Enabled, EAs can make a difference in and to organization surfacing
    capabilities and generating competitive advantages.

    Best M.H.