Aggregated enterprise architecture wisdom
This blog post deals with first day at the summer camp for Enterprise Architecture in Week 22 that was held in Denmark at the IT University of Copenhagen. The participants were mostly students. The tagline for this event is “Scandinavian … Continue reading →
I am going to talk about a consequence of the hype cycle that seems to be missed by many. I will use an anecdote to illustrate the point…
About 10 years ago, I was engaged on a short assignment to review a new technology organization’s customer service programs. The company had grown rapidly in a new market that was now maturing. They had 3 customer service systems. They had 4 main customer groups served through 4 sales channels. Each channel used different business processes to execute the same activities and accessed all three systems. The IT solutions had grown organically with the business and were a mess! But now, with the market maturing, there were mainstream solutions from major suppliers that could replace these systems that were starting to constrain the business. However, the cost of resolving this, $15M, was seen as too expensive.
A few years later, the organization had lost its competitive position, had moved from number 1 to number 2 and was taken over by a foreign competitor entering the market. With a more complex product portfolio, more customer groups, a more complex sales model, the customer services systems were now seen as a major constraint to business growth. I happened to be engaged through another consultancy to look at the problem again. This time the cost of sorting it out had grown to $80M. Again the executive board decided that this was too expensive.
Recently, the organization merged with a major competitor. I heard that they had embarked yet again on a program to replace their legacy customer service systems. The market is now much more complex with many more products, it is also more competitive with tighter margins. The systems have grown in complexity since the last attempt to sort them out. I suspect the cost this time will be $150M or more. A ten times increase in cost in ten years. More importantly, the organization was the market leader 10 years ago but now it is in 3rd position with a likely drop to 4th.
The key point is that everything that you build before good practice emerges is likely to be poorly designed and poorly built. It should be thrown away and you should start over. If you don’t you will inevitably perpetuate bad practice. Future development will be compromised because time pressures to deliver tactical business change and the constraint of the legacy. And the cost of replacing it to deliver strategic business change will grow over time.
Sometimes I wonder why there is so much legacy. The answer is obvious if you overlay the adoption cycle with hype cycle…
So what are the lessons:
I am going to talk about a consequence of the hype cycle that seems to be missed by many. I will use an anecdote to illustrate the point…
About 10 years ago, I was engaged on a short assignment to review a new technology organization’s customer service programs. The company had grown rapidly in a new market that was now maturing. They had 3 customer service systems. They had 4 main customer groups served through 4 sales channels. Each channel used different business processes to execute the same activities and accessed all three systems. The IT solutions had grown organically with the business and were a mess! But now, with the market maturing, there were mainstream solutions from major suppliers that could replace these systems that were starting to constrain the business. However, the cost of resolving this, $15M, was seen as too expensive.
A few years later, the organization had lost its competitive position, had moved from number 1 to number 2 and was taken over by a foreign competitor entering the market. With a more complex product portfolio, more customer groups, a more complex sales model, the customer services systems were now seen as a major constraint to business growth. I happened to be engaged through another consultancy to look at the problem again. This time the cost of sorting it out had grown to $80M. Again the executive board decided that this was too expensive.
Recently, the organization merged with a major competitor. I heard that they had embarked yet again on a program to replace their legacy customer service systems. The market is now much more complex with many more products, it is also more competitive with tighter margins. The systems have grown in complexity since the last attempt to sort them out. I suspect the cost this time will be $150M or more. A ten times increase in cost in ten years. More importantly, the organization was the market leader 10 years ago but now it is in 3rd position with a likely drop to 4th.
The key point is that everything that you build before good practice emerges is likely to be poorly designed and poorly built. It should be thrown away and you should start over. If you don’t you will inevitably perpetuate bad practice. Future development will be compromised because time pressures to deliver tactical business change and the constraint of the legacy. And the cost of replacing it to deliver strategic business change will grow over time.
Sometimes I wonder why there is so much legacy. The answer is obvious if you overlay the adoption cycle with hype cycle…
So what are the lessons:
In my post last Monday, I discussed that if you leverage enterprise architecture (EA) disciplines and solutions during the business process design phase of your business process management (BPM) projects you can better discover what your best practices are. However, establishing visibility into your operations, and understanding how and why the top performers and departments in […]
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This is part of a series of posts that I’ll be doing about ‘The Really Big Picture‘ at a societal/economic level, in relation to enterprise-architecture.
This post sets out some of the scope and scale of the changes that are or are likely to be coming up on the horizon over the next few years and/or […]
This continues the themes of the previous posts, ‘The Really Big Picture for enterprise-architecture‘ and RBP-EA: The dangers of business-centric ‘enterprise’-architecture.
Much like strategy, enterprise-architecture is one of the few business-disciplines that explicitly focusses on the mid- to longer-term future. As such, one of the unfortunate side-effects is that much of what we do is at risk […]
At the recent Troux Worldwide Conference there was plenty of talk among attendees and speakers about whether EA has a place at the “leadership table”. Some proclaimed that EA was still not seated at the table, while others lamented th…
This one’s been brewing for a while, but the final trigger to get it down in writing was a tweet from yesterday evening:
RT @vernaallee: RT @timkastelle: Good post & important point by @jorgebarba – It matters how you play the game. Not just being first http://bit.ly/lbAi6q
Will recommend Jorge’s post – it makes some very good […]
At the recent Troux Worldwide Conference there was plenty of talk among attendees and speakers about whether EA has a place at the “leadership table”. Some proclaimed that EA was still not seated at the table, while others lamented that EA has a seat at the table but has not yet been invited to actually enjoy the meal.
Troux was listening and decided to host a follow-on, in-depth discussion next Wednesday, May 25th, at the “EA & CIO’s: State of the Union” webinar, 10:00 am CST.
Moderated by Bill Laberis, from CIO Magazine, the webinar features Frank Malta, executive director and chief architect at pharmaceutical powerhouse Merck, and Bill Cason, CTO at Troux.
Bill Laberis will kick-off the discussion by sharing the latest data from CIO Magazine’s annual “State of the CIO” survey. According to that survey, nearly 70% of CIOs today are focused on developing IT strategies to accelerate business goals. This reinforces the notion that EA has moved beyond the ‘alignment’ phase to the ‘let’s achieve business results’ phase of maturation. This means focusing on business process innovation, fostering agility, and driving transformation throughout the enterprise.
According to a similar survey conducted by Troux, 77% of chief architects and/or head of enterprise architects already have a seat at the CIO leadership table, and 60% of CIOs and/or head of EA are heading an IT Strategy Management Program. Does this mean that EA is fulfilling its promise of bridging the gap between IT and the business?
Frank will then describe how, using Troux, Merck built an “Enterprise Business Capability Model” that provides a detailed visual map of business capability strategically aligned with IT resources. The model uses a five-layer approach to trace business process and capabilities to solutions and technologies and provides a complete view of portfolio investment, technology and associated business cases. With this information, Merck business and IT executives can now discuss about business processes, systems and resources in business terms based on facts, rather than guesswork.
Bill Cason will then talk about the external forces driving EA toward a more classic Business Technology Management (BTM) approach which addresses the unification of business and IT decision making across the enterprise.
The webinar will also address issues such as moving the lens of EA from a technology focus to a business focus, how to make EA “consumable” and specific techniques for getting to results quickly, a must have for CIOs and their leadership team
The panel will then turn to listener questions. Join the discussion next Wednesday with your own questions. Registration is still open here
Recently launched at the Open Group meeting in London last week a venture between The Open Group and the TM Forum produced a 110 page report on how their two frameworks (TOGAF and Frameworx) align and where they extend each…
Almost up to date: the previous week’s worth of links and Tweets – sorted into the usual categories, of course.
Enterprise-architecture, business-architecture, business-strategy, business-innovations and other themes at the larger business scope:
practicingEA: Unintended consequences of hyper-connected. Next #entarch challenge: predict these b4 disaster http://tinyurl.com/6zaegec >yes, exactly… strong recommend #itarch #entarch #bizarch #emergence
EABard: 11 Soft Skills For […]
