Articulating and measuring the business benefit of enterprise architecture has always been a bit tricky. But lately we have noticed this exercise is becoming easier for all corporate stakeholders. Key to this development is adopting an Enterprise Portfolio Management (EPM) approach.
EPM establishes a nomenclature—like a Rosetta Stone—between IT and business executives. It also organizes critical business information assets into six interconnected portfolios: goals and strategy, investments, information, technology, applications, and business architecture.
It has always been the job of the enterprise architect (EA) to understand the current and future state of these portfolios and to ensure alignment across them. For a long time we talked about business and IT alignment as if business and IT were different things. But clearly they are connected, and by understanding the relationships between these six portfolios, EAs can help the business achieve its objectives through informed decision making.
An EA’s job is to inform the decision-making process. This sounds simple, but enterprises are complex and the models EAs work with are often perceived as too theoretical to embrace that complexity. In many ways, this is undermining an EA’s ability to do his or her job.
EPM offers an organizing model that provides EAs with the tools and communication mechanisms that are most effective in talking to people outside the enterprise architecture function—even outside IT. By taking an EPM-oriented approach, the EA can become a much more valued asset to the business. In fact, I think if you are an EA today and you are not evolving to an EPM-oriented approach, you will really struggle to break out of IT and fully contribute to your company’s strategy.
A lot of people have ownership for parts of these six connected portfolios, but only the EA understands the relationships across them and can provide the governance so crucial to making informed decisions. This is the birthright of EAs.
At a recent conference I was struck by how many EAs have evolved their roles using an EPMcentric approach. These EAs have moved into new reporting relationships beyond IT and are tasked to lead some significant business transformations.
In one case, a highly successful multinational has grown through acquisitions of more than 100 companies with vastly different business models. Its business now spans everything from no-touch retail products to high-end, extremely complicated portfolios that require a consultative sales approach. The company’s goal is to optimize on a single business model in order to gain synergies and the benefits of scale. The EA team was selected to lead the transformation and is reporting to the COO.
In another example, the client has developed a number of siloed financial products. With its customer demographics changing, it needs to evolve that model so that it can offer a full suite of services to every customer and maintain a single view of that customer. Once again, the EA team was selected to lead the transformation and reports to the COO.
At the end of the day, the outcomes we are looking for in optimizing these enterprise portfolios are to remove cost, increase agility, or reduce risk. EPM is at the core of realizing these outcomes. And EAs who adopt an EPM-based approach are best positioned to be the steward of informed decision making and an integral part of the business transformation process.