Strategic Enterprise Architecture (SEA)By Faisal Hoque | Posted 2009-04-16 Email Print
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Business models are serious business -- too important to leave to the marketers and pitchmen.
In fact, I’m going to use a different term for business model: Strategic Enterprise Architecture, or SEA. This will allow me to break it down into its components in a way that makes it an operational definition. Of course the term architecture can mean different things to different people as well, so let me narrow it down.
Enterprise architecture isn’t just technology. Some people assume that enterprise architecture describes only technology assets. By ignoring business architecture altogether, this misconception encourages companies to develop a road map that innovates technology – but with no direct connection to business and process.
Business Architecture Isn’t Just Processes. Others make the mistake of interpreting business architecture to mean just the business processes that the company performs. This ignores the big-picture view of the business, and makes it difficult for decision-makers to determine not just what processes exist, but also why these processes are executed the way that they are.
A question often asked is how to quantify the value of a strategic enterprise architecture, and how that value can be demonstrated in financial terms. According to Steve Philips, the chief information officer of Avnet, Inc., the $15.6B worldwide distributor of electronic components, computer products, and technology services, it’s a tough question to answer.
“When I look at the value of enterprise architecture, I don't believe you can calculate the return on investment. The value of enterprise architecture only becomes apparent over time when the value of a strong enterprise architecture is demonstrated through the delivery of new initiatives and capabilities. The right enterprise architecture can enable business growth rather than be an inhibitor to growth.”
Perhaps the best way to visualize what an SEA is and how it adds value to the firm would be to show the types of information it might include. Typically, it classifies elements into four broad areas:
The overall identity of the firm – This might include such elements as brands, the corporate mission, the reputation of the firm in the marketplace, the target market, and general differentiators for the firm. It might also include elements that describe the company’s unique culture, such as values, office rules, and behavioral expectations.
The strategy for the firm – Elements in this category could describe how the firm translates its mission and values into concrete action. An important component of this role might be the ability to coordinate between multiple business units, each of which presumably needs to play a unique role to help meet common, strategic goals. Strategy might include elements like goals, a timeframe for achieving those goals, the resources that are required, and custom performance indicators.
The internal assets that help the firm to achieve its strategic goals – This could include all of the resources that the firm might muster to pursue its strategy. These might be products and services; organizational assets, including the reporting structure, geographic distribution, roles/responsibilities, and individual resources; financial resources; intellectual property; distribution channels; and physical assets like real estate, operational and information technology, and so on.
The external business environment in which the firm competes – This would include customers, suppliers, partners, and competitors. In addition, it could include demographics for the market and industry; potential entrants; information about compliance; emerging technologies; the external availability of technology resources, and general trends that influence the company’s position in its market.