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Anatomy of Agile Enterprise

Janne J. Korhonen

Challenges for the Decade, Part 4: Enterprise Architecture

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In this series of blog posts, I have addressed some of the challenges that the emergence of extended enterprise paradigm entails in terms of strategy, governance, leadership, and, in this last article, enterprise architecture:

Enterprise Architecture

Enterprise Architecture is a critical vehicle for supporting decision-making and aligning strategy with the structure. It provides a comprehensive representation of the extant status and projected future status of the enterprise in terms of relevant components and their relationships. In a dynamic environment, in particular, it is of essence that the enterprise architecture includes analytical methods that enable various kinds of impact analyses on hypothetical change scenarios and mechanisms that demonstrate business value of architecture solutions.

Traditionally, the focus of enterprise architecture has been on technology and information systems architectures, but the increasing responsiveness demands of the ecosystem have recently put a greater emphasis on information and business architectures. Usually, business needs drive information needs, which drive technology decisions, but the highly intelligent enterprises of the future also need to be able to leverage technology to create new business opportunities.

Consequently, the traditional approach of layering the Enterprise Architecture by architectural dimensions does not adequately address higher level IT considerations such as systemic competencies, system and project portfolios, or strategic platforms. In this "IT follows business" paradigm, the enterprise architecture does not support strategic perspectives driven by IT strategy.

Following the tenets of Requisite Organization described before, organizational decision-making levels would provide a more viable basis for the abstraction levels of the enterprise architecture. By redirecting EA dimensions vertically, the external domain of IT strategy can be captured more clearly. The inherent abstraction hierarchies within architectural dimensions become more explicitly represented and can be linked laterally.

I have found it useful to distinguish four levels (in line with requisite strata I-IV) to segregate architectural elements and artifacts:

  1. Strategic level answers to "what" and "why" questions of the current and future business models of the organization. Architectural elements at this level include the goals, core competencies, business models, success factors, and operational environment of an organization. In the extended enterprise setting, the larger context of external environment variables is of importance.
  2. Tactical level addresses the "how" concern: with what kind of organization, end-to-end business processes and organizational capabilities can the resources be assembled to implement the business models.
  3. Operational level integrates business to IT. Elements at this level include enterprise information systems and SOA services that translate underlying technical functions to applicable business functionality for users and service clients.
  4. Real-Time level embraces the application and technology infrastructure: COTS applications, operating systems, infrastructure services, data stores, devices, etc.

These four levels are in line with the respective levels of abstraction that can be identified in planning and implementing enterprise architecture:

  1. Contextual level at which the scope, key principles and the raison d'être of enterprise architecture are determined. Strategic steering and executive sponsorship for the EA endeavor resides here.
  2. Conceptual level at which the requirements for enterprise architecture are identified. It is not yet specified how these requirements are fulfilled logically or physically. Enterprise-wide coordination, coaching and guidance related to enterprise architecture are provided at this level.
  3. Logical level at which solution architectures are specified. The level of abstraction is still independent of physical implementation.
  4. Physical level at which the logical solution is taken as the basis for further design and at which the detailed plans are carried out physically e.g. in information system deployments.

As the same abstraction levels can be used to structure both architectural elements and governance, a composite framework for enterprise architecture and its governance would result in better business/IT alignment throughout the organization. The ownership and stewardship for different architectural artifacts can be readily assigned to governance roles at respective levels. Also, governance processes can be more easily defined around clearly allocated decision-making and responsibility areas.

In the extended enterprise setting, inwardly focused processes and applications must be turned to face outward to customers and business partners. Business and IT are merging and new business logic is emerging. The trend is toward increasing modularization, in which business capabilities are both outsourced and provided in a plug-and-play manner.

Service-Oriented Architecture (SOA) is a standards-based approach to provide software and information resources as context-independent network-accessible business services. Business Process Management (BPM) can stimulate the application of SOA by clearly identifying high value, high impact processes to consume, publish, and/or orchestrate services. Services can be used as implementations of activities within a business process that can be executed in a Business Process Management System (BPMS), and business processes can be exposed as services. BPM provides the context for process control, execution and measurement and is the realm of stateful, long-lived transactions, whereas SOA performs the data access, complex calculations, business rules enactment and transaction processing.

The challenge is to integrate business goals, BPM processes, SOA services and the underlying application and technology infrastructure into a comprehensive framework. Once this holistic model of the organization is in place, however, it will enable flexible reassembly of processes, capabilities and services in new, innovative ways. BPM and SOA bridge the gap between the business processes and application landscape and EA provides visibility into the totality of organizational assets and interdependencies between architectural elements.

Summary

Extended Enterprise represents a paradigm shift from a closed and controllable system to an open, transformational system that calls for coadaptive coordination. Extant organizational and societal structures based on control, competition and coercion fall short in promoting proactive value innovation, coevolutionary collaboration and developmental transformations needed in the future. New, post-conventional ideas and structures are needed in areas including but not limited to strategy, governance, leadership and enterprise architecture.

The entire article "Challenges for the Decade" can be downloaded as a white paper here.

Janne J. Korhonen provides insights into how information technology can be applied strategically to catalyze organizational change and responsiveness. Drawing from both theory and practice, he discusses agile enterprise and its governance.

Janne J. Korhonen

Janne J. Korhonen is an independent business and IT consultant,specializing in enterprise architecture, business process management,service-oriented architecture and pertinent governance models. He has over ten years of experience as an architect and consultant in a variety of extensive and mission-critical IT projects. With strong theoretical underpinnings, his consulting encompasses systemic co-development of business, organization and information technology.

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