WHAT SMART COMPANIES DO
Designing enterprise architecture
By Professor David Robertson (July, 2006)
|Excerpt from webcast: Continuous business improvement, engaging for change (2:50)|
Companies usually have an architecture, but often not the right one
Inside every company is a core set of systems and processes that executes thousands of daily transactions that keep a firm in business – taking orders, purchasing supplies, delivering products, and paying employees. The organizational logic for these systems and processes – the company’s enterprise architecture – can help or hinder its efforts to execute its strategy. In our study of over 150 companies, no less than 60 percent did not have the right architecture they needed to execute their strategies. Whether through M&A, changes in environment, competitive moves, or just poor planning, their architecture didn’t support their strategy, hurting the performance of the company.
Focus on enterprise architecture, not IT architecture
Almost all of the companies surveyed had an “architect”, usually in IT, whose job was to design and improve the IT systems in the company. Yet these architects’ efforts usually focused on IT architecture and had little impact. Top performing companies, on the other hand, take a business-focused view and design an enterprise architecture – a plan for the overall organization of the company’s systems and processes. They define how they will do business (an operating model), and design the architecture of the processes and systems critical to their current and future operations. They then leverage this for profitable growth. Based on our survey, we estimate that only 5% of firms do this well.
An immediate return on architecture investment
Designing, implementing, and leveraging an enterprise architecture gives your company greater agility, faster time to market, lower risk, and lower costs, making you both more efficient and more agile than your competitors. Companies cannot predict the future but they can decide what makes them successful. They can create a low cost, high quality core of stability and constancy in a turbulent world. With a strong core of systems and processes, great companies slide smoothly into the next opportunity while their competitors stumble.
”Enterprise Architecture as Strategy”, a new book co-authored by David Robertson, explains what top performing companies do. It is about what makes them successful, and how to design and implement a stable foundation of systems and processes that will allow your company to achieve greatness.
David Robertson teaches this topic in the Program for Executive Development.