How to measure enterprise architecture


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Enterprise Architecture is essentially a strategic planning discipline for ensuring that all the strategies of an enterprise are well executed. How should we measure it and how it is performing?

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How to measure enterprise architecture

  1. 1. How to measureEnterprise ArchitectureBy Adrian Campbell,Enterprise Architects Ltd
  2. 2. For more information about Edarat Groupwww.edaratgroup.cominfo@edaratgroup.comWhat is Enterprise ArchitectureEnterprise Architecture is essentially a strategic planning discipline for ensuring that all the strategies of an enterprise are well exe-cuted. How should we measure it and how it is performing?First it’s best to clearly understand what Enterprise Architecture is and who it is for.Enterprise Architecture bridges the gap between those decision makers who come up with new strategies and objectives andthose who are involved in enterprise transformation and investments in change. It is about what the enterprise can do now(baseline capabilities) and what it wants to be able to do in the future (target capabilities).Enterprise Architecture is all about keeping an organisation robust, viable and continuing to satisfy all its stakeholders inthe future, who are interested in the enterprise succeeding and continuing to succeed i.e. the CxOs, Shareholders, Customers,Partners, Suppliers etc.The Enterprise Architecture deliverables are a conceptual blueprint or Target Operating Model that explicitly defines the mission,vision, strategies, objectives, principles, standards and business capabilities at the strategic level, as well as all the other elements(component types) in the enterprise that define how the business operates. These elements include business functions, businessservices, business processes, scenarios, value chains, value streams, products, application services, applications, technology andinfrastructure and are defined within the following Architecture domains:For more information about Enterprise Architectswww.enterprisearchitects.eulondoninfo@enterprisearchitects.euArchitecture Domain Typical object types in the domainMarket/Environment Supplier, Partner, Shareholder, Stakeholder, Regulator, Custom-er, Contact, Prospect etc.Strategy and Motivation Drivers, Mission, Vision, Strategy, Objective, Measure, Metrics,Principle, Standard etc.Business Business Capabilities, Business Functions (Value Chains), BusinessProcess, Strategic Scenarios (Value Streams), Events, Products,Business Services, Organisation Units, Persons and Roles etc.Information Business Information, Application Data, Stored data (Databases,Files etc.)Applications Application Services, Applications (Suites, Packages, Compo-nents etc.)Infrastructure IT Infrastructure (Hardware, Nodes, Networks, Devices, Appli-ances, Servers etc.Physical Infrastructure (Buildings, Facilities, Vehicles, Machinery,etc.)Enterprise Architecture also provides several different views of how an enterprise operates and changes, by maintaining a base-line enterprise (operating) model, target enterprise (operating) model(s) and a roadmap of changes to the enterprise’s businesscapabilities and investments in change ordered within an enterprise transformation roadmap.Measures and metricsA large number of organizations use Enterprise Architecture approach in order to plan strategic changes and manage enterprisetransformations. Enterprise Architecture is not directly linked to a direct outcome but is usually indirectly related.One of the major concerns is the failure of many enterprises to actually measure the value of their current or baseline EnterpriseArchitecture. One is reminded of the old adage What you dont measure, you cant manage. When changes occur as a result ofnew strategies and target enterprise models, the subsequent enterprise transformation may well be many months or years intothe future. Changes are delivered by other groups inside the enterprise or external solution delivery partners. If measures andmetrics are not used and actively managed then it becomes rather difficult to compare the old baseline with the new baseline tosee what value has been achieved.
  3. 3. For more information about Edarat Groupwww.edaratgroup.cominfo@edaratgroup.comFor more information about Enterprise Architectswww.enterprisearchitects.eulondoninfo@enterprisearchitects.euIdentify the MetricsThe measuring metrics will vary from one enterprise to another. As Enterprise Architecture exists to support the CxOs and deci-sion makers within the enterprise then it is important to define the metrics from their perspective.Metrics can be identified form a number of perspectives.Broadly these can be grouped into:More detailed metrics can defined for each Architecture Domain. Here below is a discussion of some of some potential metricsused for measurement of their enterprise architecture’s value.CxO’s MetricsThe Enterprise Architecture is by definition the architecture of the enterprise, so the metrics also need to be defined from theenterprise or business perspective. The CEO and other CxOs are responsible for managing the enterprise so the metrics need tobe ones that they are interested in and keen to measure. These may include: Completed transactions Revenues Operating expenses Profit Revenue per dollar of operating cost Profit per completed transaction Productivity Profits per investmentThe trends and rates of change in the numbers are often more important than the actual numbers.If the enterprise strategies and therefore the target Enterprise Architecture are not having an effect (directly or indirectly) on thenumbers that the CEO is interested in, then the Enterprise Architecture is not being effective.Customer experience metricsOne of the biggest contributions to Enterprise success and profits is the overall customer experience and satisfaction. There arethree categories of Customer experience metrics:Categories Description examplesInternal (Inside Out) met-ricsMetrics that measure the internal efficiency of theenterprise’s functions, processes, applications, infra-structureCost of business processesBusiness Process efficiencyOperating expensesProductivityExternal (Outside In)metricsMetrics that measure the way the enterprise operatesfrom the perspective of those stakeholders outsidethe enterprise.Customer SatisfactionSales per customerProfits per transactionChange related metrics Metrics that measure how well the enterprise trans-formations are being achievedProfits per Investment in changePercentage of the target EA Model that hasbeen implementedPercentage strategies realised
  4. 4. For more information about Edarat Groupwww.edaratgroup.cominfo@edaratgroup.comFor more information about Enterprise Architectswww.enterprisearchitects.eulondoninfo@enterprisearchitects.euThese metrics measures how happy a customer or prospective customer is with the enterprises value proposition (their prod-ucts and business services). What value is provided to the customer? This measure is becoming common with value based pric-ing approaches. How easy is it for the customers to do business with you? Do the enterprise business services provide for theneeds of the customer’s own internal processes? Customer Satisfaction can be increased by better communication with themthrough their preferred channel, so a measure of Customer communications (messages and interactions, social media) can beuseful.Cost BenefitCost/Benefit ratio to measure the value of any new or changed business capability. This is used to compares the amount of mon-ey spent on the transformation (costs) to the amount of money that is being saved after the implementation of the changes(Benefits). These metrics are often measured in terms of money, but in fact the benefits may be non-monetary values such asincreased sales, improved customer satisfaction, reduction of risks, increased flexibility, and improved platform for future change.Productivity and EffectivenessCEOs will be concerned with the effects of Enterprise Architecture and new investments on production, efficiency and effec-tiveness. Metrics in this area can focus on: Reducing time to market for new investments in change Integrating and improving business processes across the enterprise (including with partners) Improving the ability to integrate data and interfaces across the enterprise (including with external partners) Improving the ability to reuse business functions, business processes and application services Increasing agility, flexibility and ability to rapidly change in the event of new strategic scenarios occurring Increasing standardization Reducing the time taken to develop solutions by maximizing reuse of enterprise architecture modelsGovernance and complianceEnterprise Architecture ensures that the strategies of the enterprise are realised.How many business capabilities are being created, updated or removed? What capability increments are being turned into in-vestment proposals and providing the mandates for new programmes and projects? How many capability increments are beingdelivered by the solutions that have been subsequently designed and developed? How well are the solutions in compliancewith the target enterprise architecture model?Category Description ExamplesDescriptive Met-ricsAbout what happened when a contact, pro-spect or customer engages with the enterpriseCall and email volumeAverage call timeCalls lostWebsite visitsAverage transaction valuesAverage calls per customerPerception Met-ricsWhat did the contact, prospect or customerthink about what happenedCustomer satisfaction with their experienceGoal completion rateComplaint resolution rateOutcome Met-ricsWhat will the customer do as a result of whathappenedLikelihood of recommendingLikelihood to purchaseActual purchases madeReturning customersChurn ratesValue provided
  5. 5. For more information about Edarat Groupwww.edaratgroup.cominfo@edaratgroup.comFor more information about Enterprise Architectswww.enterprisearchitects.eulondoninfo@enterprisearchitects.euKnowledgeThe Enterprise Architecture function will create a well-populated repository of knowledge about the current state of an enter-prise and its planned future state vision. The enterprise Architecture models provide a knowledge base for CEOs, CxOs andother decision makers that provides answers to their questions. In essence an enterprise architecture model needs to be de-signed to answer all their potential questions. How well does it achieve that?These questions can be about gaps, impacts, dependencies, probabilities of success and failure, risks, costs etc. One of themajor concerns of Enterprise Architecture is to reuse the knowledge, information and data as required by various processes andapplications throughout the enterprise. Metrics can include the percentage completeness of this knowledge base. How easilyand readily available is this knowledge throughout the enterprise to those stakeholders who need it?A Common Vision of the future stateThe whole purpose of Enterprise Architecture is to align investments in change with the strategies for the future of the enterprise.The target Enterprise Architecture Model is the target operating model that provides a common vision for all parts of the enter-prise, including internal business units and external partners. How complete is this model and all the associated diagrams anddocumentation? Is it readily available?Enterprise TransformationThe target enterprise architecture model will reduce the time it takes to conduct a particular enterprise transformation, implementnew and changed business capabilities and reduce solution design and delivery time and development costs by maximisingreuse of the enterprise level models. It will provide standard components and ensure maximum reuse of them across the wholeenterprise. Over time the enterprise architecture will ensure faster development, fewer failures and better alignment to strategicenterprise level requirements and continual improvement.QualitiesThe Enterprise Architecture is often focused on improving or enabling various characteristics and qualities in the future.Metrics can be based on these qualities can include: Efficiency Robustness Reliability Viability (ability to remain viable in a changed environment) Flexibility (ability to automatically adapt when unexpected external changes occur) Complexity Agility (Ability to adapt to changing business needs) Adaptability Ease of integration Amount of reuse Support for innovation Service level Quality AccuracyIn conclusionEnterprises need to measure Enterprise Architecture by how well it improves the performance of the whole enterprise, meets itsbusiness needs, and supports its strategies and investments in change.