Enterprise Architecture Today and Tomorrow

Enterprise architecture is a recognized best practice for growing IT’s efficiency and effectiveness in supporting business. Despite this, the practice of EA itself has not always been efficient and effective. In many organizations, this has led to the EA function being formed, then dissolved, and then reconstituted as CIOs try to find the best way for the organization to get value from it. EA as a support function is not unique in this frequent flux—similar situations are found with enterprise PMOs, IT strategy, and process improvement efforts. But it does point out the challenge of delivering the sometimes ambiguous value of architecture in the face of the dynamic demands placed on IT.

EA's greatest strategic value in in how it helps IT plan and align its capabilities with business needs.

In September 2009, Forrester conducted a “State of EA” survey of 416 IT executives to get a sense of current EA. In general, the news is positive:

• The architecture function is broadly accepted and supported. When asked to rate the level of support of EA on a scale ranging from hostile to actively supported, respondents pointed out the active support of the CIO—essential for the goals of architecture—but also the broad acceptance by corporate business management as well as IT developers and operations. Lines of business had the lowest support, but even then 45 percent accepted or supported EA. See figure 1.

• Better IT planning is the most common driver for EA. The architecture function can help application projects deliver on-time/on-budget as well as reduce the cost of IT through technology standardization—but its greatest strategic value is in how it helps IT plan and align its capabilities with business needs. Survey responses show this is the case in most firms, with “Better strategic planning” as the most common choice among business-focused drivers identified by more than 50 percent of firms responding. See figure 2.

• Using reporting structures as an indicator of the importance execs place on a function, architecture has turned a corner over the past few years. Forty percent report directly to the CIO with head of technology planning, strategy, and governance as the next most common reporting relationship. In only 10 percent of reporting firms was architecture reporting into either applications development or infrastructure—a marked change from 2001 where these were the most common reporting relationships. See figure 3.

• Architecture definition is fairly complete for infrastructure and applications—but not for business and information. This can be viewed as disappointing; Forrester has always seen the pillars of enterprise architecture as business, information, application, and technology/infrastructure. The comparatively lower levels of completion, while they may be the result of newness, also suggest that architecture teams are shying away from these more complex architecture focuses. See figure 4.

IT and Business Trends Will Change Enterprise Architecture

How might the practice and utilization of enterprise architecture change over the next few years? Forrester sees four trends impacting the intersection of business and technology—trends that will change the relation of IT to technology and IT to the business. These will become the drivers for a new view of enterprise architecture.

1. Business demand for technology will continue to grow. It’s clear that business execs “get technology”—surveys from as wide sources as McKinsey and Forrester show that non-IT business execs see technology as critical to their firm’s success. This is not just for cost-cutting: business execs also rate highly technology’s importance in executing strategy, differentiating from competitors, and optimizing business models. This business “pull” for technology can be good news for IT, but it will also redefine the IT-business relationship. Business execs will become even more involved with technology selection—either with IT through defined projects or on their own via sourcing solutions to their needs directly from vendors delivered as SaaS solutions or part of business outsourcing. IT will no longer have a “lock” on technology sourcing and provisioning.

This change in business attitude and expectations is already impacting how CIOs see their role. In a 2009 Society of Information Management survey of priorities for 2010, pure business-focused priorities were three of the top four priorities, with the fourth, at #2 priority being “IT-Business Alignment.” The traditional IT-centric priorities of cost reduction, reliability and efficiency, and IT’s own planning were below these at #5, #6, and #7 spots.

2. Tight IT budgets will persist. Despite burgeoning demand, the budget wallet for IT won’t open wide. While Forrester’s latest technology market forecast expects spending to increase by 11 percent overall, for most firms, this translates into a smaller increase in IT budgets. The current expectation of “do more for less” will continue, and balancing business demand with IT capacity will increase as a challenge. IT execs will struggle to balance tactical delivery in response to this demand with a strategic vision for how systems should be provided for the business long-term. The struggle to address these business-focused priorities is reflected in the top initiatives IT is planning for in 2010 and their heavy cost focus. See figure 5.


3. Globalization drives a process focus and shared services strategy. In response to even more dynamic global business, firms both global and regional are looking for economies of scale, consistency of practices—and responsiveness to localized opportunities. Process optimization will expand IT’s business involvement. Shared services organizations will require a much better focus on business services that business execs value.

4. Continued technology innovation opens new doors for business and IT to work together to enable business change. SaaS and cloud provide the means to side-step IT capacity constraints. Packaged application evolution will enable more modular business functionality. Web 2.0 and social computing will change how customers engage vendors and how business engages IT. The net result of these trends will be a shift of IT from “builder and operator of systems” to “orchestrator of solutions.”


What does this mean for enterprise architecture?

First: CIOs must involve EA more at the front-lines of shaping and channeling business demand for technology, rather than keeping it in the “back office” of project design and technology standards. Many forward-looking CIOs are doing this today—teaming EA with relationship managers so they can develop business-focused technology strategies. This is positive but runs the risk of making EA functions reactive to local business needs. To counter-balance this, EAs at the direction of their CIOs will invest in business architecture—using this to analyze business needs, identify where common strategies make sense, help prioritize the alignment of IT capacity to where it has the highest enterprise value, and, ultimately, influence business and IT strategy.

Second: EA functions will increase their efforts on information architecture, as an outcome of their business architecture development, and to guide process optimization and BI programs. Process optimization can tend to be “bottoms-up,” focusing on one process, and then another and then a third. The risk is that this creates siloed views and muddles data quality and data governance efforts. Forrester believes that BPM and Master Data Management efforts must be integrated—and information architecture is essential to provide the big picture context.

Third: Globalization and global business process focus will draw EA into the role of mediating between local needs for flexibility and customization and global process needs for commonality and consistency. This, of course, has a large IT component—designing architectures that provide both local and global needs. But it has a larger business operating model component—one that must be resolved by business management using EA’s global view as a key tool. Some advanced global firms are already aligning their EA functions around global processes to help guide this transformation.

Fourth: Vendor consolidation, which is a core tactic in IT cost control, will increasingly involve EA. Vendor consolidation can be “today” focused: “who have we got for vendors and what are we spending on them today?” Vendor consolidation requires a view of future needs so that the mix of vendors can be optimized for these needs. Vendor management groups can simply poll IT managers for their needs and get a defensive set of requirements. EA teams will become involved in vendor consolidation to merge today’s needs with tomorrow’s needs—the directions of the IT organization—and so help resolve the political issues arising from consolidation efforts.

The Shift from Today’s Practice of Enterprise Architecture to Tomorrow’s Practices

Forrester has identified the characteristics of what we call “Next Generation EA.” Whereas EA 1.0 has been goaled around technology consistency and project support, Next Generation EA will have a charter to help business and IT succeed via IT’s new mission of “orchestrator of business solutions.” As IT becomes more integrated with the business and more “business demand” focused, EA will shift from a technology focus to a business focus. This means a shift of vision and mission, strategy, EA disciplines, and how EA is measured. See figure 6.

• EA leaders contemplating this shift have challenges at several levels:

• They need to reposition themselves to meet the expectations of IT and business—from a “tactical and technical” function to a business-focused strategy one.

• They have to learn how to develop and use business architecture.

• They need to ramp up their information architecture and their involvement with process optimization initiatives.

• They must shift their technology efforts away from “picking standards” toward shaping IT capabilities.

• They need to shift the thought process of their architects from being experts on “the right architecture” toward being effective as facilitators of business decisions.

This is a tall order. Forrester expects that, for those EA leaders who embrace it, this transformation will consume their attention over the next few years. Our research is tilting from “EA 1.0” practices to the practices, case studies, and tools these EA leaders need for this transformation. EA heads, and their bosses, may want to participate in Forrester’s Enterprise Architecture Forum 2010 which examines these areas through keynotes, sessions, and networking.

by Alex Cullen, a vice president, research director, at Forrester. He is a leading expert on IT planning and strategy, governance, enterprise architecture value, and enterprise architecture practices