Second Question in Stress-testing Your Enterprise Architecture: Which critical effect are you aiming for?

It's time for the second of seven questions stress-testing your enterprise architecture: Which critical effects are you aiming for? In any endeavor it's important to know what you aim for, that will sharpen your decisions, prioritizations and firmness. Be extremely clear on the goals, objectives and effects you want your enterprise architecture should achieve.
The key critical factors in defining, measuring and delivering on the effects are:

• Goal hierarchy: 
• Create a hierarchy of goals that should be reached. The top goal is the critical effect you want to create. Make sure that goals means something concrete and valuable for your stakeholders and customers. If not, revise and rephrase until it does so.
• Under the top goal define sub goals that needs to be reach in order for the top goal to be accomplished. Break down each sub goal into third level goals. 
• As you go from top goal to sub goals you answer the question How will I reach the previous level of goals. As you move upwards you answer the question Why should I reach this goal.
• Visual management:
• Decide on how, who and when you communicate the goals and progress. It's important that you have a clear view on who the recipient of each message is and what they expect from the project.
• Make the communication visible. Put it up so that everyone can see it and follow it. Make it everyone's interest to follow progress and contribute.
• Decide on progress reporting structure. How will reporting add up the ladder and counter measures ripple down?
• Measurement:
• When setting goals make sure you know how to measure progress. Where will you find your data? How fast and with which frequency?
• Setup automatic data capture that collects data as they are created avoiding double entering of information.
• Make the data measurement near realtime, at least once per day and create project heart-beats showing current status.
• Celebrate success:
• Define small steps for mankind but giant leaps for the project. It is important to acknowledge even the small steps forward towards the top goal.
• Find all kinds of ways celebrating success. Involve the project team, top-management, key stakeholders and family. After all it's often your family that has paid a high price when achieving a hard to reach goal.

Once you have defined your critical effects in a goal hierarchy, communicated it visual throughout the organizations to to key stakeholders, measured the progress and celebrated success along the way you will reach your desired effect. I'm saying will because there is no way you cannot reach that goal. The sum of these activities are that you set the entire team's mindset on these effects and they will focus on them.

You will have avoided active inertia - the state where all you do is running around doing a lot of activities not moving progress forward.

The question is: Are these the critical effects or not? That can only you and the future answer.

More to read:

• HBR Nov 2010: Stress-test Your Strategy: The 7 Questions to Ask

RUSH-data enabled through Enterprise Architecture

In a turbulent market an agile organization requires RUSH-data. RUSH-data stands for Realtime, Unfiltered, Shared and Holistic data. An organization with access to RUSH-data has the building blocks to become agile and act upon market changes with unprecedented speed. It does not, however, guarantee that it moves faster and more vigorously than others.

• How do you enable RUSH-data? 
• Which parameters to tune? 
• How can Enterprise Architecture help setting the level for where to extract the data and when? 

First an example to get the thoughts flowing. Zara, the Spanish fast-fashion retailer, co-locate staff from design, manufacturing, supply-chain and store operations in units of 240 people per cohort. That enables the people to share unfiltered data in realtime enabling them to get an holistic view of the current state. That enables them to respond much quicker to market demand and get new designs in stores within 3 weeks instead of 3 months for competitors. The cumulative effect over the years has led Zara to outpace their competition in growth and profitability.

Where does Enterprise Architecture come into play? Isn't this a case for not using Enterprise Architecture and trust oral word-of-mouth instead of complicated ERP systems? Well, it could be if you don't succeed. But we've done communication for thousands of years and still only Zara manages to leverage human communications. So how can Enterprise Architecture help here?

First of all you must have a culture of information sharing and thirst for more data. Otherwise no system in the world can save you. Prepare for a funeral ...

Then I believe Enterprise Architecture can help in these ways for each element of RUSH-data:

• Realtime
• EA sets the non-functional requirements for gathering data. Is it set for real-time or only providing snapshots? How does the snapshots accumulate across IT systems? Will it distort data accuracy and age?
• Which data needs to be available in real-time to enable RUSH-data?Aggregation of data across systems often leads to distortion disabling real-time attributes. When designing the EA design for RUSH-data.
• Unfiltered
• Is data available from its sources or only aggregated in reports with conclusions drawn? Can anomalies be traced or is it averaged and crunched to nonrecognition? Trends are important - however trends indicate strong movements. Developments grow from small significant anomalies that needs to be traced and identified. 
• Shared
• Collaboration and sharing of information is crucial in todays turbulent markets. A large component is to have a culture of sharing. Assuming a sharing culture, then how can EA drive sharing? Through assigning roles and ownership of data it will be much easier to decide upon how and to whom information should be available and in which format. Through an SOA information can be both unfiltered and shared in the right format to each person.
• Holistic
• EA is very good at identifying information ownership throughout an organization. Which master data combined with realtime information from the source will give a holistic view of how we're doing right now? Work on reducing the information size to craft the data-set needed to get the holistic view. Then create services that supply that information in a dynamic manner. Through the SOA the information can be shared, unfiltered access to raw data in realtime. RUSH-data made real through Enterprise Artchitecture.

Next thing to do is how to visualize RUSH-data. What's your opinion on the best ways to make visualization simple, fast and collaborative?

More reading:

• Don Sull's blog on RUSH-data: http://blogs.ft.com/donsullblog/category/rush-data/
• Matthias Scholander on the CIO Perspective of RUSH-data: http://www.matthiasscholander.com/2010/08/strategic-agility-the-cio-perspective/

Enterprise Architecture creating the engine for network-based business models

In a world where the network-based organizations are creating the new business models, Enterprise Architecture play the key role in making it all happen.
Value chains represent all activities performed to create the value experienced by a customer. Michael Porter has described this in his 5 Forces where the relative strength of each participant is reflected in the amount of profit they can extract from the value chain.
The business model is the engine in a firm's network-based strategy in how to cooperate with others to create value. The business model therefore plays a crucial role in determining how much profit a single firm can extract from the value chain.
In a value chain there are four sources of value creation; Novelty, Lock-In, Complementaries, and Efficiency.

Two questions that struck me are:

• How can a single firm control and steer its business model in a network-based value chain? 
• How can Enterprise Architecture enable the business model to become the engine through leveraging the four sources of value creation?

I think the answer to both questions can be found in using Enterprise Architecture, EA, to guide and steer successful execution enabling the four sources of value creation. Most transactions and interactions, if not most of the value, are created through IT systems. Enterprise Architecture will enable an organization to identify the most crucial parts of its IT system that creates the four sources of value creation. Once identified the organization can through Enterprise Architecture focus its effort on each of the four sources:

• Efficiency
• Integration with other partners done quickly and with no effort. Finding the best suited product with low search costs. Reliable lead-times and costs.
• EA focuses on the business processes and information exchanged. Thus it is possible to remove bottlenecks and based on which levels of efficiency creates the most value put the efforts there.
• Complementaries
• Flexibility in terms of vertical and horizontal integration. Offer additional services and products that complement the product. 
• EA will based on which types of vertical integration is available enable fast and smooth integration. Information necessary to provide data about available complementaries, especially those that change over time, is identified through EA.
• Lock-in
• Raising the switching costs through efficient loyalty activities. Recognizing me as a customer. Not just discounts but more importantly access to improved information, priority, customization, etc.
• EA identifies which information and business processes that drive the most customer loyalty. Providing that information through the different processes and through the value chain enables larger shares of profit to be extracted.
• Novelty
• Enable flexibility in terms of transaction structure, transaction content, offerings through network of partners and complementaries.
• EA does not only focus on the current state of affairs, but more importantly where the organization is heading. Areas where Novelty are important will be identified and necessary information, business process and IT system support is created.

I think you should ask yourself: What is you position within the value chain? How are we utilizing the four sources of value creation within our current business model? Which IT system support is needed?

Further reading:

• The Network Challenge: Strategy, Profit and Risk in an Interlinked World by Paul R. Kleindorfer
• TOGAF 9 A Pocket Guide by Andrew Josey

Has Enterprise Architecture reached its Plateau of Productivity?

Enterprise Architects pride themselves with driving IT from a business perspective. Are they doing that or is it just another case of technology driven IT? This time with structure and control as underlying forces.

What shall Enterprise Architects do to really benefit their organization and add value?
There are two main drivers that you as a business leader have to balance between; Exploitation and Innovation.

• Exploitation. Exploit any given opportunity to the maximum. Be as efficient and operate with low cost. The IT delivery itself should of course be Lean. But more importantly it should enable other departments to be lean in their processes and operations. Embrace possibilities. Don't be too reliant on standards, especially IT standards. Let each business area decide what is best for them in terms of functionality, not in which system to use. 
• Innovation. Innovate within the IT delivery. How can we help the business being more efficient? Have IT drive Innovation, from idea generation to replication of new products, services and business models across geographies. Enable exploitation of new innovations through effective and efficient IT solutions. What should they look like? Well, be close to the business and listen, invest in agile IT support systems that are evolving over time. Calculate at least 25% of IT costs to be spent on new development, not just IT operations and roll-out.

The aim for an Enterprise Architect is to enable, guide and steer the IT delivery between these two extremes. Pushing Exploitation to be as efficient and extract as much profits out of any given opportunity. Driving Innovation to create new opportunities and being agile enabling new sources of revenue.

The most important things to get right are then:

• Interfaces. Let interfaces drive the enterprise integration, not standard systems. Service Bus is a technological solution to a business problem. Get the business solution right then the technology will solve itself. Having interfaces, common data models and master data drive integration will definitely drive integration across business domains in large enterprises.
• Collaboration. Share ideas, solutions and experiences across all silos. Collaborate physically and digitally. Use video, IM, YouTube, Twitter, etc to share and discuss across the entire enterprise. "If Xerox knew what Xerox knows" is a famous quotation from an organization inventing everything but not exploiting anything to their benefit.

Plateau of Productivity? Yes, unless we focus on interfaces and collaboration instead of steering and controlling Enterprise Architects have definitely reached the Plateau of Productivity. What do you think are the constraints for enterprises making more usage of Enterprise Architects to avoid the Success Trap of staying in the Exploitation domain and getting stuck?