Enterprise Architecture in the Digital Age - Why should companies care?
Enterprise Architecture in the Digital Age – Why should companies care?
Digital is no longer the ‘new kid on the block’. Established companies need to up their game if they are going to survive and thrive.1 In a new McKinsey & Henley Business School survey2 with 100+ participants, over 60% of organisations recognised this need. But incumbents face challenges that start-ups do not have; they have processes and systems ingrained over many years. The survey found that tackling complexity arising from poorly connected systems is perceived as an equally important goal to digital transformation, both present in more than 60% of companies. This complexity inhibits progressive change.
What can organisations do about this? Anyone knows that radically upgrading a building is likely to be more difficult than creating a new one from ground up. You would not do either without a qualified architect. Enterprise architects perform a similar role in connecting processes and systems. Yet the survey found that many organisations are introducing new customer services and products, and trying to link these to existing administrative ‘plumbing’ without fully engaging enterprise architects. A key reason is that in 40% of companies, business peers including top management did not know that the EA (enterprise architecture) function even existed!
How do EA leaders help companies go digital? There are two main levers. The first is that they have a deep understanding of how to connect the large number of processes and systems in most organisations. If someone is not designing the equivalent of your heating, water and electrics then it may become increasingly complex and costly. A corollary is that enterprise architects know the techniques of efficient digital transformation, for example when and how to design a central hub with services to users rather than connecting everything point-to-point.
The second lever is that top EA leaders are proactive and engaged with the CxO team in strategic planning. They help challenge and redesign the business and operating models to link with enhanced processes and systems. The survey found that top EA leaders spend more time on this activity and use EA artefacts such as capability models to expand business IT alignment. As a result, they focus more strongly on measuring and delivering business benefits, up to twice as much as their least effective peers.
So what is Henley doing to help create effective EA leaders? It has launched a new focused version of an international programme developed with Technische Universität München (TUM), Germany) and TIAS School for Business and Society (TIAS), the Netherlands.
The Strategy & Enterprise Architecture programme starts at Henley in September 2016. It is directed by Professor Sharm Manwani, who redesigned operating models and led EA as a CIO in Electrolux. He comments, ‘We are committed to raising the strategic capability of business IT professionals - and our testimonials confirm we are helping them increase their business influence.’
Dr Oliver Bossert of McKinsey, who co-developed the EA Survey with Professor Manwani will be presenting at the Strategy & Business Design module in Henley. He comments, ‘Our clients stress the need for this type of EA leadership education and I am delighted to participate in supporting this goal at Henley.’
2 McKinsey and Henley Business School EA Survey
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