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Why Business Should Take Enterprise Architecture Seriously: September 2013
Why Business Should Take Enterprise Architecture Seriously: September 2013
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Patrick Hoverstadt
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Patrick Hoverstadt
Abstract
This chapter discusses why business leaders should take EA more
seriously as a truly strategic discipline. The author argues that to manage
a complex enterprise you must understand how it functions, and to
understand it an adequate model designed for the purpose is needed.
Also, you must have the right information on which to base decisions,
and for the organization to provide that information reliably, an
adequate model of the organization as a system is necessary to make
any sensible judgment about the informational needs of strategic
decision making.
Keywords
Enterprise Architecture, Complexity, Conant-Ashby, Conway’s Law,
Viable Systems Model, VSM
The Credibility Problem
Traditionally, EA has shared the fate of many other business
disciplines that aspire to be taken seriously and listened to by
those “leading” the enterprise that sit on the board. And the
question of whether EA deserves to be taken seriously by the rest
of the business is not either a flippant one, or indeed a trivial one -
well not if you happen to be an enterprise architect anyway. In case
this is interpreted as a whinge by some disappointed and
disillusioned techie frustrated that their voice isn’t heard in the
corridors of power, let me start by pointing out that I don’t count
myself as an “Enterprise Architect” although my business is the
design of organizations.
However, if this is the limited view that both corporate boards and
even the EA community have of EA, then its not surprising if the
discipline has an extremely limited significance for boards and
strategic decision makers. In this model, the legitimate role that
EA could or should have for the strategic decision process (as
opposed to the process of carrying out strategy) is advising on
opportunities that new technologies or information sources might
offer and on the limitations to adoption and risks of change. Again,
this is a legitimate role as an informational input to strategic
decision making, but a very limited one.
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How then does this relate to EA and its potential as a genuinely
strategic service for the organization? Well, if boards need a model
of the organization they are trying to manage if they are to manage
it successfully, then the question of how and by whom such a
model could be built and maintained is not currently clear. Nor is
the nature of the model that is necessary. Clearly it is far from
being just a model of the IT. What is needed is a genuine
architecture of the enterprise – what it does, processes, people,
structures, finances, values, performance, decision making,
communications, information flows, markets, change, risks,
relationships and technology. This may seem like a tall order, but
actually is relatively straight forward and eminently do-able
provided it is structured around a core model of the organization.
Currently, no business function provides decision makers with
such a model. The informational vacuum is usually filled by purely
financial models which try to reduce the complexity of the
enterprise to a set of accounts – accounts which have been
designed for quite a different purpose.
For these organizations, their model of the enterprise was not just
deficient, but fatally deficient. They simply did not understand
their business and how it sat in its operating environment until it
was far too late. Someone, some business discipline needs to
provide adequate models of how the enterprise works that can
assist decision makers to understand the working of their
organizations as systems to manage them more effectively and
whatever the current role and practice of EA, what is needed is a
genuine architecture of the enterprise. This is a truly strategic role.
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The argument here is quite simple, but disconcertingly radical. The
decisions that organizations take tend to depend on the
information available. This means that strategic decisions are
often driven by the structure of information – which is very clearly
in the domain of EA. Management science laws and theorems
aside, the argument has good common sense underpinning it. Any
strategy worthy of the name has to be built from information
available to the decision makers. If it isn’t, is it any more than a
fantasy?
That’s the theory. The practice was very far from this. In practice
what we found, when we looked at this situation, was a massive
imbalance in information provision. Performance management
information was in plentiful supply, so the principal providers of
acute care –hospital trusts had copious information on levels of
activity and even sometimes on the quality of outcomes. The data
quality of this information and the interpretation of it were both
highly questionable – as one director of commissioning said “for
over 80% of services we contract, we don’t understand them well
enough to even know what questions we should be asking to find
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out if they’re any good”. Nevertheless, there was information of
sorts and lots of it available to commissioners. On the other side of
the equation, in the information to understand health needs,
information was very scarce, extremely patchy, had to be sought
and specifically sourced, and the data quality was extremely poor,
so the information wasn’t trustworthy.
Much more serious was the strategic deficit. PCTs largely failed to
break the cycle of year on year contracting. So the central problem
they were set up to solve – assessing health needs and
commissioning services to match those needs – was largely
ignored. In fact of course the reverse happened, existing services
became more entrenched as the focus of PCTs fell on managing the
relationship with them more and more tightly.
The reality then was that the strategic direction for health
provision had switched from that intended – creating new services
to address known health needs - to managing existing services
more efficiently. This strategy shift was driven and determined by
the availability of information. The architecture of the system was
dictating the strategy. This wasn’t a single example remember, this
was replicated across all the PCTs investigated.
It was also invisible. Those taking these decisions were aware that
they were supposed to be taking cycle breaking decisions and
changing provision, but they pushed this to the back of their minds
and got on with the job they could do, rather than worrying about
the job they couldn’t. The problem was largely undiscussable. The
psychological trap for those engaged in decision making was
difficult for them to see and of course was extremely
uncomfortable when it was made visible. Not just the strategy
itself was being dominated by the availability of information which
was in turn determined by the enterprise architecture, but even the
thinking processes of the strategists. At a more mundane level, the
clarity that there were two types of information necessary for
effective decision making – external information on health needs
and internal information on performance – was lost. Information
was just information, numbers were just numbers and their
meaning and significance were largely lost.
Looking from the outside in this case, the outcome seems perverse
– organizations set up with huge budgets to do a fairly specific
strategic job, not only do not do so, but also manage to create a
situation where they can remain largely unaware that they are not
doing it. And yet it is hard to see what else the outcome could have
been. With a highly unbalanced information system, decision
makers took the only decisions they were able to take given the
information available. The strategy was determined by the
architecture. The NHS isn’t an isolated example; the same effect
can be seen in all sorts of organization, public sector, private
sector, large and small.
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of information generated by specific disciplines: financial, HR, IT,
operations, marketing etc.
Management
Governance
Co-ordination
Ops 1
Local
Ops 2
Local
Ops 3
Local
Viable
Operations Units Systems
Model
Conclusions
Looked at from a systems and management science perspective,
there are at least two arguments that can be advanced for why
business leaders should take EA much more seriously as a truly
strategic discipline. Comfortingly both these arguments have the
ring of common sense about them. How can you hope to manage a
complex enterprise if you don’t understand how it functions and
how could you understand it without an adequate model designed
for the purpose? And how can you take strategic decisions if you
don’t have the right information on which to base those decisions
and how will the organization provide that information reliably if it
isn’t designed to do that? Of course the two arguments are
mutually supporting because it is only with an adequate model of
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the organization as a system that we can make any sensible
judgment about the informational needs of strategic decision
making.
References
Ashby, W. R. (1957). An Introduction To Cybernetics. London: Chapman
& Hall.
Beer, S. (1979). The Heart of Enterprise, John Wiley, London and New
York
Beer, S. (1981). Brain of the firm. Wiley.
Conant, R. C. & Ashby W.R. (1970) Every good regulator of a system
must be a model of that system Int. J. Systems Sci. vol. 1, No. 2, 89-
97
Conway, M. E. (1968), "How do Committees Invent?", Datamation 14:
28–31
Hoverstadt, P. (2008). The Fractal Organization : Creating Sustainable
Organizations with the Viable Systems Model. Chichester, West
Sussex: John Wiley & Sons.
Mculloch W. (1965) Embodiments of Mind. MIT Press