Proponents see in enterprise architecture a discipline for bringing balance and harmony to IT expenditures.
Enterprise architecture gurus rarely compare the discipline to yoga when trying to enlighten others about its functions and benefits. Enterprise architecture “is not about IT,” said Matt Newman, a professor of systems management at National Defense University. Newman has developed a certificate program for enterprise architects in the federal government.
Newman said enterprise architecture, although not new, is enjoying a surge in popularity as more people recognize its value for solving business problems that government and industry face. The Office of Management and Budget has used its authority to nudge agencies into compliance with the Bush administration’s enterprise architecture policies.
Federal agencies built many independent, incompatible systems in the past. More recently, agencies used IT as a patchwork means of wiring those independent systems together, said Jeanne Ross, principal research scientist at the Massachusetts Institute of Technology’s Center for Information Systems Research. Now agencies are discovering just how expensive ad hoc integration can be.
“Every time they want to change something, they have to fix all the interfaces and do all the testing to make sure they didn’t mess up something that shouldn’t have been messed up,” Ross said. She is the co-author of a new book, “Enterprise Architecture as Strategy,” published this year by Harvard Business School Press.
Agencies need efficient IT systems, Ross said, and sound enterprise architecture practices are one way to ensure increased efficiency. Enterprise architecture forces agency decision-makers to look for systems they can consolidate and consider outsourcing work that they can’t do efficiently, she said. “It’s just a totally different way of thinking.”
Michael Farber, a vice president at Booz Allen Hamilton, said he agrees with Ross’ holistic view of enterprise architecture. “It’s not just technology, but it’s the people, the processes and everything else.”
Ross and her co-authors describe four stages that agencies go through when adopting enterprise architectures: silos, IT efficiency, process optimization and modularization.
Every organization has information system silos, Ross said. When business problems arise because of those silos, business managers pass the problems to the IT department. The IT department finds solutions, she said, but those typically are one-time fixes.
“They work for a while, but they don’t provide you with a really solid platform,” Ross said. In the second stage, managers take steps to streamline their business operations and become more efficient. They scrutinize everything, including networking costs and desktop interfaces.
Managers rummage through their organizations to uncover the extent of their wastefulness, and it often astounds them, Ross said. For example, they find unused computers and discover they are paying licensing fees for software that no one uses.
After such discoveries, managers begin to standardize their operations by installing, for example, a single desktop interface and e-mail system. They also begin storing data in one place, Ross said.
The organizations she studied saved an average of 25 percent annually after they introduced more discipline and efficiency into their IT spending. “That cost savings is very real,” she said.
At the second stage in Ross’ four-stage scenario, managers do not make fundamental changes. They straighten up the back office, she said. The big changes come at the third stage, which she calls process optimization.
At this stage, managers begin to understand the value of their organization’s data resources. They discover the need for standardized data and build Web-based systems or install middleware to extract that data, Ross said.
“For many organizations, this also involves cleaning up many of the core processes,” she said. In the fourth stage, managers start to understand their agencies’ major business processes. They can buy and install new systems or portions of systems in a plug-and-play fashion because all of their systems now have standardized interfaces. Different divisions can easily share data.
Ross and her co-authors identified dynamic partnering as a fifth stage of enterprise architecture. “Your boundaries now extend beyond your systems and processes and into your customers’ and suppliers’ systems and processes,” she said.
But Ross said she and her colleagues have not found any organizations that have reached that stage.
Each stage in an enterprise architecture strategy is important, Ross said. “If you try to leap over, there are too many things the organization is trying to learn at once about how to govern, how to function, about ‘how do I do my job when the world changes on me?’” she added. “You pretty much have to walk through [the stages] one by one.”
Between the third and fourth stages that Ross describes in the book, agencies often must spend more rather than less money on IT. That realization shocks many managers who expect to save money if they have an enterprise architecture strategy.
But Ross said people shouldn’t lose sight of agencywide efficiency gains. “You’ve shifted a little more into IT, but you have taken significant money out of the organization” by cleaning up the back office.
Not everyone believes her.
“I’ve had people say to me, ‘I think we’ll stop at the third stage,’” Ross said.
Richard Burk, OMB’s chief architect, addresses concerns about the relative costs vs. savings from enterprise architecture in his research. Burk found that an enterprise architecture’s quality dictates the amount of money an agency will save.
Working with the Federal Enterprise Architecture Program Management Office, Burk said he discovered that federal agencies with higher-quality enterprise architecture programs tend to have better IT portfolios. One measure of a good IT portfolio is having a low ratio of IT spending relative to overall discretionary spending, he said.
Burk found, for example, that agencies with enterprise architecture scores less than 3.0 spent 8.2 percent of their discretionary budgets on IT. Agencies with enterprise architecture scores higher than 3.0 spent 6.6 percent of their discretionary funds on IT. Agencies that scored higher than 3.3 on their enterprise architecture assessments spent only 3.8 percent of their discretionary budgets on IT.
On average, the federal government spends 7.5 percent of its discretionary funds on IT, Burk said.
Selling enterprise architecture to the world
Burk’s numbers have not been sufficient, however, to get the attention of agencies that typically face many distractions. Selling enterprise architecture, as OMB has tried to do, requires a great deal of effort, proponents say. Enterprise architecture depends on proof to win converts, and some experts suggest selling it piecemeal.
“I was selling world peace — look at all this wonderful stuff you can do” with enterprise architecture, said Mike Dunham, former chief enterprise architect at the Treasury Department and now chief enterprise architect at Thomas and Herbert Consulting. Potential buyers want proof of the efficiencies, he said. “Where’s the beef?” they ask.
Newman said he recommends putting initial enterprise architecture projects on a 60- to 90-day schedule. Smaller projects have faster returns. A quick success will boost future sales, he said. Enterprise architecture is a familiar buzzword among federal officials now, but Newman advises against using that term.
“I loathe saying ‘enterprise architecture’ before senior managers because they roll their eyes,” Newman said. As enterprise architecture proponents, he said, “We have to ask, ‘Where are the problems?’” With each success, he added, the next sale is easier.
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