Enterprise Architecture Value Model
Eapen George and George Feuerlicht
School of Software, University of Technology, Broadway, Sydney, Australia
Keywords: Enterprise Architecture, EA Maturity, Business-IT Alignment, EA Value Model.
Abstract: Enterprise Architecture (EA) is gaining acceptability as an approach for strategic alignment of business and
IT. While it is widely accepted that EA is essential for optimizing the value of IT in organizations, most IT
managers find it difficult to communicate the value of EA using terms meaningful to business decision
makers. This paper presents a Value Model for expressing the business value contribution of EA function in
organizations. The model aims to communicate the value of EA to stakeholders and senior management
using a language that can be understood by business leaders. This simple, two dimensional model relates
major Enterprise Architecture activities to key business objectives. High level business metrics are used as a
basis of the evaluation of the maturity of Enterprise Architecture function.
1 INTRODUCTION
In today’s globalized world enterprises need to be
able to rapidly respond to competition and changing
needs of the customers. Understanding the
complexities of the enterprise and the business
environment they operate in is critical for effective
management of organizational assets and for
creating differentiators essential for long-term
survival (Kearns, 2004). An enterprise ecosystem,
especially in the context of large enterprises,
consists of a number of loosely interconnected
business units and entities that may have different
business drivers but contribute to a common goal of
sustaining competitive advantage (Gam, 2006;
2006a). Business success is often closely related to
effective use of Information Technology (IT) and
Enterprise Architecture (EA) is gaining acceptability
as an approach to strategically align business and IT.
While it is widely accepted that EA is essential for
optimizing the value of IT in organizations, most IT
managers find it difficult to communicate the value
of EA using terms meaningful to business decision
makers. There is a lack of good models that clearly
communicate the business value of enterprise
architecture, and this makes it difficult to maintain
support for EA programs and activities. In this paper
we introduce a simple value model that can be used
to define and communicate the value of EA to both
IT and business professionals. In the following
section (section 2) we discuss the changing role of
EA and the relationship between business objectives
and EA activities. In section 3 we propose the EA
value model and discuss how it can be used to assess
the contribution of the EA function to business
objectives. Section 4 presents our conclusions.
2 CHANGING ROLE OF EA
The role of Information Technology (IT) in
organizations has been changing from a supporting
role to a business partner role (Ross, 2006).
Traditionally EA was focused on recording the
existing environment, documenting IT assets and
attempting to achieve cost reduction through
standardization and reuse. Today, Enterprise
Architecture is being used as an approach to
managing both business and IT at a strategic level
(Gam, 2009; 2009b) and forms the basis for
achieving agile business-IT environment enabling IT
to respond to rapid changes in business requirements
as market conditions change (Ross, 2006). At the
same time, the building blocks of IT (i.e.
infrastructure components, business applications,
etc.) are becoming commoditized, reducing the
competitive advantage that organizations gain
directly from deploying individual IT components. It
is the combination of various IT components and
business functions in the context of EA framework
that can deliver business value and competitive
advantage.
376
George E. and Feuerlicht G..
Enterprise Architecture Value Model.
DOI: 10.5220/0004564903760381
In Proceedings of the 15th International Conference on Enterprise Information Systems (ICEIS-2013), pages 376-381
ISBN: 978-989-8565-61-7
Copyright
c
2013 SCITEPRESS (Science and Technology Publications, Lda.)
2.1 Evaluation of IT Contribution
The function of EA as an instrument for creating and
delivering business value needs to be communicated
to key stakeholders in the organization (Raad, 2008).
Both academic research and IT practitioners have
attempted to produce models that clearly
characterize the relationship between EA and the
business value created by the implementation of EA,
but the indirect nature of EA contribution to
business makes this process difficult. As illustrated
in Figure 1, EA helps IT functions to deliver value
indirectly, for example by reducing complexity
through standardization of technology platforms,
and by improving governance through defining roles
and responsibilities.
Figure 1: Business impact of EA.
Organizations typically evaluate the contribution
of IT functions against a set of business objectives.
These objectives can change over time as the focus
and needs of the organization evolves. For example,
the contribution to the achievement of the following
four business objectives can be used to assess the
value of IT:
a) Management of costs
b) Management of risk
c) Increased innovation
d) Improved Agility
2.2 Enterprise Architecture Activities
Enterprise Architecture in an organization is
achieved through the means of EA activities that
cover management activities and analysis and design
approaches (Ber, 2012). The activities carried out in
the context of EA can vary from organization to
organization depending on the scale, maturity and
objectives of the organization. However, it is
possible to identify a number of core activities that
typically occur and can be classified as EA
activities. For example, a recent publication
identifies eight core activities that include defining
IT strategy, modelling EA component architecture,
facilitating IT transformation, developing and
enforcing standards and managing IT risks (Ben,
2012). In another classification developed to discuss
the efficiency of the EA function, EA activities have
been divided into management, delivery and
conformance activities (Raad, 2009). In this paper,
the EA function is described as having three core
activities: 1) Planning, 2) Implementation and 3)
Governance.
EA Planning is concerned with the selection and
evolution of EA frameworks, tools and artefacts and
with planning the products and methodologies used
within the IT organization. It deals with resolving
conflicts between the various actors and roles within
the EA function, and product non-conformance
issues, and stakeholder management.
EA Implementation is responsible for creating
and maintaining EA products and artefacts, and
provides guidance to senior management to assist
with EA decision-making. EA implementation also
validates projects and operational changes ensuring
that they conform to the architectural standards.
EA Governance ensures that projects are
executed as per EA policies and guidelines, and that
operational changes are implemented as described in
the target architectures. EA governance includes
developing EA capability across the key teams in the
organization.
The purpose of breaking down the EA function
into EA activities is to develop a high level model
that provides effective decision making guidance to
IT and business leadership. Having the EA function
categorized into Planning, Implementation and
Governance provides focus on the performance
measurement of different aspects of the EA
program.
3 THE EA VALUE MODEL
Business leadership stakeholders are more likely to
understand and appreciate the value of EA when it is
expressed in terms of business objectives. Value
Model is a model that relates the value delivered by
the EA towards the achievement of the business
objectives (Figure 2).
The EA Value Model provides a framework to
enhance understanding of the relationship between
the EA activities and the business objectives. The
EA activities through their support of IT programs
contribute to the achievement of the business
objectives. The following approach can be used for
assessing the nature and the extent of the
relationships within the EA Value Model:
a) dimensions relevant to the EA activity
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377
b) Assess the impact of the EA activity on the
business objectives.
Figure 2: EA Value Model.
In general, the maturity level determines the IT
impact and the level of achievement of the
corresponding business objectives. In Figure 2 we
use circles where the level of fill indicates the
magnitude of impact of EA activity on a given
business objective. For example, EA Planning has a
high impact on the “Manage Costs” business
objective since design standardization initiatives will
reduce development costs (see section 3.1 below for
further discussion of this point).
3.1 Assessment of the EA Activities
The EA value model forms a basis for evaluation of
the contribution of EA. In order to determine the
impact of EA, the general notion of EA maturity can
be used. EA maturity assessment is a useful tool that
is not yet widely used in practice. Maturity
assessment evaluates EA program status, degree of
completion and efficiency, and provides metrics that
show progress and highlight the value of EA. In this
paper we propose that EA maturity assessment be
used to measure the status of EA activities. The
approach to the maturity assessment needs careful
consideration.
The EA maturity assessment approaches define
various stages of maturity for targeted capability
areas (dimensions) that are being evaluated.
Different EA assessment methodologies currently
available such as TOGAF AMM (TOGAF, 2009),
OMB EA Assessment guidelines (OMB, 2004,
2005) measure different dimensions and support
various objectives, such as architecture compliance
(expressed as a percentage of noncompliant systems)
and the maturity progression of the EA. For
example, OMB (Office of Management and Budget)
adopts five maturity levels (OMB, 2004, 2005). The
MIT CISR (Ross 2006) model has four levels of
maturity and helps to define the architectural
maturity at a macro level.
In this paper we adopt the MIT four level
maturity model for assessing EA activities, as we
believe that the MIT CISR model is well suited to
supporting assessments of business value of EA in
practice. The four levels of architectural maturity are
characterised by management practices, IT
investment patterns and attaining certain defining IT
capabilities:
Level 1: (Business Silos) in the MIT model is
characterised by individual business unit IT solution
deployment enabling specific business unit
efficiencies.
Level 2: (Standardised Technology) is
characterised by technology standardization and
shared infrastructure services
Level 3: (Optimised Core) is characterised by
data sharing across the enterprise and adopting
standard business processes across the business units
Level 4: (Business Modularity) is characterised
by adoption of reusable application and process
components to enable agile and flexible operating
environment.
Business value derived from IT is steadily
increased as the architectural maturity progresses
from level 1 through to level 4. A key finding of the
MIT CISR research project (Ross, 2006) was that
organizations typically go through the four levels of
maturity in a sequential progression (i.e. not jumping
over levels). Adopting this approach the maturity
level of each of the EA Activities (i.e. EA Planning,
EA Implementation and EA Governance) can be
assessed and a value assigned to it. The various EA
maturity assessment approaches define dimensions
or topic areas in which the assessment takes place.
For example, the U.S Government OMB EA
Assessment framework has twelve dimensions
(OMB 2004, 2005).
In this paper the key dimensions (topic areas)
where the assessment takes place in order to
establish the business value contribution of EA are
introduced. Some dimensions are common across all
EA activities while other dimensions are specific to
a given EA activity. Standardization, integration,
simplification and agility are common dimensions.
Stakeholder management in the context of EA
Planning and conformance in the context of EA
Governance are dimensions that are specific to an
EA activity. The validity of the choice of the
dimensions will be further researched as part of
continuing work on the model.
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For example, Figure 3 illustrates the progressive
stages of maturity that the EA Implementation
activity can deliver for the standardization
dimension. Higher levels of maturity also imply the
achievement of the lower levels, so that Level 2
implies Level 1, and Level 3 implies Level 1 and 2,
etc.
Figure 3: EA Implementation activity assessment for the
standardization dimension.
The maturity level characterization will vary
with the dimensions and the approach will be to
determine the maturity in each of the dimensions.
This is illustrated in the guidelines shown below for
EA Implementation (Integration) and EA
Governance (Conformance).
EA Implementation - Integration Dimension
Level 1: Solution architecture focused
Level 2: Shared infrastructures
Level 3: Enables data integration between multiple
core IT programs
Level 4: Enables modularization and reuse across
the enterprise
EA Governance - Conformance Dimension
Level 1: EA Governance is individual project
focused
Level 2: Ensures conformance to infrastructure
standards and processes
Level 3: Data quality and data model conformance
Level 4: Conformance to reuse standards
The next step in the model is to assess the impact
on the business objectives. For example, EA
Planning at level 1 has limited impact on reducing
the cost or the risk associated with of IT programs.
As EA Planning progresses into level 2
(Standardized Level) the impact on cost and risk is
more significant. Shared infrastructures will reduce
costs and facilitate risk mitigation efforts. Figure 4
illustrates how moving from level 1 to level 2 in the
dimension of standardization provides improved
business value in the area of managed costs.
Not all EA activities will have a significant
impact, with some even having no impact on the
achievement of business objectives. For example,
advancing the level of EA Governance may not
increase Innovation business objective significantly.
Figure 4: Business value impact of increasing maturity of
EA activties.
3.2 Application of the EA Value Model
The EA Value Model can be used in a number of
different ways to assess the contribution of the EA
function. It can be used to assess the progress that
specific EA activities have achieved in meeting
business objectives. If the organization is focusing
on specific business objective, for example
increasing agility, the current contribution of EA
activities on agility can be assessed and focused
investment made to improve agility.
The EA Value Model provides a framework for
assessing the contribution of the EA function
towards achieving business objectives. The model
provides a framework that organizations can use in
their specific context. A typical approach to using
the model in an organization involves the following
steps:
a) Validate the business objectives of the
organization. If changes or additions are
necessary, these can be incorporated into the
EA Value Model.
b) Validate the EA activities as appropriate for the
organization.
c) Define an assessment and maturity framework
for assessing the EA activities. (Start with one
of the publicly available EA maturity
assessment frameworks and customize it to suit
the objectives being addressed.)
d) Review the model and assessment at fixed
periodic times to ascertain progress.
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e) Review the model and assessment when
business objectives and focus areas change.
4 CONCLUSIONS
Most available value models focus on the efficiency
of the EA function. Ross (Ross, 2004) has
highlighted that greater business benefit comes from
increased level of maturity. Ragowsky et al. (Rag,
2012) emphasize in their OITM (Organizational IT
Maturity) model the need for an organization-wide
integrated approach to derive maximum benefit from
IT. The OITM presents a 5 level maturity model
with increasing benefit as organizations progress to
higher levels.
Other authors evaluate EA contributions using
the balanced scorecard approach. De Vries (De
vries, 2012) has argued that intangible assets such as
EA programs do not have a value isolated from the
organizational context and strategy. EA, used in
conjunction with a balanced scorecard creates the
strategic context to enable intangible assets, such as
value creating processes as EA, to integrate with
other intangible assets.
The EA Value Model presented in this paper is
designed to evaluate the EA contribution in the
context of the organization. The maturity
assessments are focused on this. The strategic
context of the organization is enabled through the
business objectives alignment. The EA Value Model
is based on the validated assumption (Ross, 2004)
that EA delivers a greater value as its maturity
increases. The value delivered is assessed in the
context of the business objectives to be achieved by
the IT function. The model provides a high level
view of the EA value and provides management
with insight into how the value is being delivered,
which EA activity makes the contribution, what
progress has been made and where focus needs to be
in the future. The model can also be used to
highlight the current and future strategy needs.
Achievements of the current strategy are highlighted
by the assessment, and strategy can be adjusted
based on investment needs. The overall goal of the
Value Model is to provide top IT management with
a tool and a method for evaluating the business value
of the EA and for making informed decisions about
future investments into the EA program based on
business needs. Future work will directed towards
validation of the choice of dimensions that
characterize various EA activities and determining
the magnitude of impact of EA activities on business
objectives.
ACKNOWLEDGEMENTS
This research was supported by GAČR (Grant
Agency, Czech Republic) grant No. P403/11/0574
and the Research Centre for Human Centered
Technology Design at the University of Technology,
Sydney.
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