1. A Framework for Enterprise Architecture Effectiveness
Takaaki Kamogawa,* Hitoshi Okada
1
SAP Japan Co.,Ltd, Tokyo Sankei Bldg., 1-7-2, bhtemachi, Chiyoda-ku, Tokyo, Japan
2
National Institute of Informatics, 2-1-2 Hitotsubashi, Chiyoda-ku, Tokyo, Japan
I
takaaki.kamogawa@sap.com, okada@nii.ac.jp
Abstract- Since Japanese firms have recently been forced to this, there should be one business architecture which
innovate their business models due to several factors, such as describes the business rules by which the business is put
global operations, e-business, and Merger & Acquisition, they together, and includes the IT elements. Thus we call it
are need to have flexible business information systems to adapt
to their industry changes. HistoricaBy, the biggest ehaIIenge
Enterprise Architecture. The reason why this is important is
facing to firms is “adaptation” t any environment. The
o that the rate of change in business environment is causing
flexibility of business information systems to create business organizations to have to synchronize these two activities to
values has been discussed for a long time as one of critical reduce unnecessary delays and to do it cost-effectively. Fig.1.
problems among Information Technology (IT) communities. shows this situation.
One of potential solutions is Enterprise Architecture, which first
started with e-Government. However, the effectiveness of level-uphnovatian
Enterprise Architecture is stir1 highly uncertain and little
research evidence establishes the benefits of architecture or
helps firms asses their architecture. The purpose of this paper
is to clarify problems when firms confront ebusiness system
implementation from an Enterprise Architecture viewpoint, and
to propose an analytical framework in terms of Enterprise
Architecture effectiveness while discussing the relation with
Governance, and other relevant factors.
Keywords: Enterprise Architecture; e-business;
@-Government; Governance
I. INTRODUCTION
TimJEvolution
Enterprise Architecture refers to how IT components fit
together to support business architecture. For instance, there is Fig.1. Positioning of Enterprise Architecture
no way to change automobiles or airplanes without the
product’s design sheets and descriptions. As seen in these In this research we will seek to address the Following major
industries, the architecture for building them is mature. problems:
1. What critical success factors influence the application of
Whereas, when establishing business models; it is
indispensable for firms to describe what they do, and how Enterprise Architecture.
they will do it using IT. Although firms have applied 2. #at business values does Enterprise Architecture bring.
Enterprise Architecture for nearly IO years, the Enterprise The purpose of this paper is to propose an analytical
Architecture effectiveness is still highly uncertain and little framework in terms of Enterprise Architecture effectiveness.
research evidence establishes the benefits of architecture or Section 2 discusses the related works i terms of Enterprise
n
Architecture Frameworks, and Enterprise Modeling to clarify
helps firms assess their architecture.
Although information system departments in Japanese current problems from e-business point’of view. Thereafter,
companies have developed information systems for section 3 addresses a framework to assess Enterprise
Architecture. Section 4 presents a framework to verify
approximately 40 years in Japanese industries, they have been
focusing on maintenance of the existing information system, Enterprise Architecture effectiveness by using business cases
in Japan and the United States. In conclusion section 5
ie. legacy systems which from management viewpoints are
already recognized to be hopelessly inadequate to satisfy concludes the paper and presents future directions with regard
cument demand. In addition, even approximately 10 years to assessing Enterprise Architecture effectiveness.
after implementing ERP (Enterprise Resource Planning) in
most Japanese top firms, the legacy systems still remain. 11. RELATED WORKS
However, our interest is that we do not assert that the Certainly it is not a new concept for Japanese firms to
remaining legacy systems are not good, but rather how firms implement Enterprise Architecture. There is considerable
manage IT resources to innovate current business models -doubt hodever, that not only business people including senior
toward e-business models more easily and flexibly. To realize executives,, Chief Executive Officer(CE0) and Chief
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n-7803-8971-9/05/$20.00 02005 LEEE

2. Operation Officer(COO), but also for Chief Information levels due to the Clinger-Cohen Act 6 which requires USA
Officers(CIO), and system people understand the difference Federal Agency Chief Information Officers to develop,
between Enterprise Architecture approach and traditional maintain, and facilitate integrated systems architecture. In the
standardization approaches by using modeling framework, or European Union the community is supporting and
techniques which are $milar to Architecture Frameworks we participating in several initiatives and projects, however, they
will discuss later. Moreover, it is often challenging enough for are not responsible for the result of projects [6].With regard to
them to recognize their own existing business system Enterprise Architecture framework.points of view, Zachman
architecture due to more increasing complexity of current Framework was originated in 1987 171. Mainly for business
business information systems, heterogeneous business use, TOGAF, The Open Group Architecture Framework, was
information system environments, and lack of integrated produced by commercial standard consortium, The Open
Enterprise Architecture models. Group in 1995. When we discuss Enterprise Architecture, it is
' Is the Enterprise Modeling Framework a new discipline as essential to address some frameworks for e-Government, in
one of techniques for developing Enterprise Architecture? We which its services are co-produced with the customers, i.e.
have discussed how we should establish enterprise modeling citizens, since it is said that Enterprise Architecture
for over 10 years both from the viewpoint of business domain implementation in government has spread in Japanese firms.
and from the viewpoint of business information system In 1999, FEFA, The Federal Enterprise Architecture
domain. Enterprise Modeling technology was first shown in Framework was produced by the CIO Council. In summary
an international conference in 1992[1]. The IFIP' and WAC2 we present the main frameworks h a p Schekkeman described
Working Conferences were to address problems regarding in his book [6] in Table 1. Due to Japanese industry
enterprise integration [2]. From the process oriented background (METI) Ministry of Economy, Trade and
presentation aspects, several enterprise modeling Industry had surveyed Enterprise Architecture Frameworks
methodologies have been proposed for a decade: CIMOSA3, noted above which US government was trying to use. METI
IEM4, and PERA'. Process oriented presentation has many planed to promote an Enterprise Architectural initiative to
advantages relative to other solutions based on comparative Japanese industries in 2002, which was originally based on
study among the three models mentioned above [3]. As seen the E F A model. Even though several Enterprise Architecture
in the mid 1990's, virtual corporation was discussed [4], the Frameworks have been introduced all over the world and we
concern with the Enterprise Modeling for e-business or only focused on the research regarding the well-know
e-commerce has been growing recently. In particular for frameworks on this section, there are very few research
e-business communities, an e-business reference process reports and thesis which give scientific support how to assess
model has been proposed by MIT [5]. It can provide a the effectiveness of Enterprise Architecture.
standard model for start-ups, which will conduct e-business Enterprise Architecture as noted above is playing a critical
entirely in the virtual world. Enterprise'representation, which role in innovating a firm's business model toward e-business
is standard for designing and creating new enterprise, is model. In general, business model means a realized business
essential for virtual enterprise through using Internet design to create business value based on business vision and
technologies. On the other hand, from the data oriented strategy to deal with related concerned parties. On the other
presentation aspect, which is beneficid for IS communities, hand, e-business means business conducted by utilizing
the Entity Relationship Diagram (ER) q d the Data Flow methods brought by IT, mainly the Internet. When we
Diagram (DFD) have been very useful to describe corporate consider Enterprise Architecture, we should focus on business
data structure for business information system domains for domain as a high priority. In almost all e-business concerns,
decades. In Japanese industries some firms have been trying we have to deal not only with intra-organizational business
t o m e these data and process modeling from points of view architecture but also inter-organizational business vchitecture. ,
regarding business infomation system domains rather than Thus we should seek to identify the scope to discyss business
points of view regarding business domain, but other firms architecture including the relation between firms like banking,
have not. As we stated above, although Enterprise Modeling vendors, suppliers, and customers. Based upon this meaning,
is very close to Enterprise Architecture, it is clear that the we consider business models beyond f m s , in other words
modeling itself will not bring the effectiveness of Enterprise extended enterprise.
Architecture. From the potential benefits of e-business conducted by
On the other hand, the Enterprise Architectural initiative in extended enterprise, we address requirements of Enterprise
the United States is emerging as a significant Architecture effectiveness for organizationswhich result from I
business-technology trend in the government sector. This cost and time savings to bring competitive advantage and to
trend is visible at the federal, state, and local government support organizational change. At first e-business lowers the:
cots of inventories, product customizations, communications,
I International Federation for Information Processing and telecommunications. In addition to that, e-business
2 International Federation of Automatic Control lowers the costs of processing, distributing, storing, and
3 Open System Architecture for CIM
4 Integrated enterprise modeling
5 Purdue Enterprise Reference Architecture the Information Technology Management Reform Act also known as the
Clinger-Cohen Act of 1996
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3. retrieving paper-based information. It also further reduces Ai first, we will focus on what influential factors accelerate
telecommunication costs since it is supported by the Internet Enterprise Architecture application based on these
technology itself, which provides services cheaper than vdue assumptions. During this analysis, the following perspectives
added networks like Electronic Data Exchange (EDI). Besides, will also be addressed:
e-business is able to reduce inventories and also allow product -Enterprise Architecture Development Power (EADP).
customization costs and indirect sales costs to decrease -Enterprise Architecture Cognition (EAC).
through online business. Secondly, e-business facilitates -Enterprise Architecture with Governance (EAWG).
organization responsiveness to changing business models by EADP shows that the roles and skills of those involved
supporting business process engineering efforts. Finally, when applying Enterprise Architecture are a key success
e-business results in a competitive advantage by contributing factor. EAC means that it is critical for senior executives to be
not only to cost efficiency but also to customer focus and aware of the benefits of Enterprise Architecture. This includes
product differentiation. Since e-business has become the not only the CIO and IT managers but also the CEO, COO,
standard in our society and business world, firms have to and line of business managers.
innovate their business models adapting to external EAWG presents that Governance means control processes,
environments like laws, competitors, and supplier relationship rules, standards, roles and organization structure, which are
more quickly and flexibly i order to evolve their models
n needed to drive the Enterprise Architectural initiative. Even if
more quickly than before. When we do that, it is essential to f m s have established Enterprise Architecture, they would
recognize not only business structure but also business not have maintained it without a Governance mechanism for a
information system structure. Our current interest for our long time. In the internet era, firms have to anticipate where
research is how Enterprise Architecture affects business and how they will alter the cohesion and boundaries of the
vdues, and what results occur when applying Enterprise enterprises. It is necessary that Enterprise Architecture
Architecture. Kamogawa and Okada raised problems when reflects the latest developments and supports collaboration
we innovate enterprise model to adapt to e-business once and communication in which all stakeholders are involved.
firms introduce Enterprise Architecture regarding this From Enterprise Architectural initiative points of view,
argument [SI. Governance should take into consideration that it consists of
In the next section, based on our interest and related work IT principle, IT architecture, TT investment management
we discussed to this point, we will discuss a framework to framework, and prioritization.
assess Enterprise Architecture. Secondly, we will focus on what business values are
brought by Enterprise Architectural initiative. From the
business information system point of view, we can only
assume from the related works noted above in Section 2 that
the benefits of Enterprise kchitecture are as follows:
T
”
- - WhanmllaLET-rIW,
nrdfhmFEWioD4
1) Improve visibility €or business processes and
information system.
2) Exclude the engineer’s own skills and techniques
when developing business information system.
I I DEVELOP A FRAMEWORK TO ASSESS
i.
ENTERPRISE ARCITECTURE 3) Accelerate productivity for developing business
4) information system.
As we discussed in an earlier section, firms do not have to From the business point of view, we can also assume from
develop Enterprise Architecture by themselves from the the survey [lo] that the following business benefits should be
beginning. Instead, firms can refer to the Enterprise brought as an analytical dimensions:
Architecture Frameworks. However, the framework itself 1) Business Process Excellence, low
cannot impact on anything directly though it will guide cost-consciousness, efficient and productive
architecture development. Based on the outcome of the business operations.
survey regarding Enterprise Architecture trend 2004[9], the 2) Customer Oriented, Extraordinary customer
following assumptions can be made: service, responsiveness, and relationship, based on
1) Methodologies and tools for Enterprise Architecture deep customer information (familiarity) and
will be effective for developing and maintaining knowledge (research).
Enterprise Architecture. 3) Innovation, First to market with innovative
2) The more Governance that is established and products and services, usually dependent on rapid
penetrated into the T community, including the IT
T R&D commercialization processes.
Department, the more beneficial Enterprise 4) Strategic A&pbi&y, the ability to respond
Architecture will be to Enterprise Architecture rapidly to competitor initiatives and new market
development and maintenance. penetration opportunities.
3) If the top management of a f m improves cognition Thirdly, we will focus on how both the influential factors
with regard to Enterprise Architecture, the effect and and the strategic business values should be related to present
benefits of Enterprise Architecture will be higher.
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4. a framework in Fig.2. From an e-business point of view, This pattern shows that the key to Enterprise Architecture
business processes engineering has to be a key issue with effectiveness is governance, and also its development power.
connection to not only intra-organizational business Thus Enterprise Architecture effectiveness could be
architecturebut also inter-organizationalbusiness architecture. accelerated if both factors influence Enterprise Architectural
How it is developed and by whom are important factors. initiative,
Governance methodology to develop and maintain Enterprise Pattem#2: Correlation bemeen governance and EA
Architecture, which is relevant with management processes, is cognition.
also one of critical success factors. If the management This pattern shows that the key to Enterprise Architecture
processes go well when Enterprise Architecture is applied, the effectiveness is governance, and its cognition. Thus
cost and time frame of business operations will be more Enterprise Architecture effectiveness could be accelerated if
affected. In addition to the guiding principles, prioritizing IT both govemance and cognition for Enterprise Architecture
investment t get the competitive advantage, creating new
o influence Enterprise Architectural initiative.
services and products, and focusing on customer service are Pattern#3: Correlation between EA Cognition and EA
key issues. Finally, senior management must recognize Development Power.
Enterprise Architecture initiative to be a strategic adaptability This pattern shows that the key to Enterprise Architecture
option to best competitors. effectivenessis its development power, and also its cognition.
Thus Enterprise Architecture effectiveness could be
accelerated if both development power and cognition for
I Infiucntial factors Enterprise Architecture influence Enterprise Architectural
initiative.
IV. BUSINESS CASES
We explore case studies regarding several firms' Enterprise
Architecture of which there are very few cases in Japan at this
moment, and also show a bench mark in a Japanese case and
American case respectively to verify the framework we
presented in the previous section.
(1)Japanesefir-mcases
10 Japanese fr cases are surveyed [ 1I], and as a result,
im
we see the significant success factors, namely, standardization,
modeling, principles, and transition planning (from previous
F i g 2 An analysis pattem far Enterprise Architecture effectiveness architecture to new architecture). Thus Japanese firms have a
tendency to focus on standarhzation (See Table 2.).
When the effectiveness of Enterprise Architecture is
analyzed using three influential factors noted in this section, TABLE JAPANESEFIRM CASES FOR AWLYING ENTERPRISE
2. ARCIilTEcTUTU3.
three analysis patterns can be raised. (See Fig.3.)
EA (7
Development
I.*.f
,...-.
.*a
EA Effectivcmss
,
&V"E
If we assume that EAWG and EAC work interactively and
simultaneously with the standardization initiative, we can say
that in the case of pattern #2, Enterprise Architecture
Pattem#l effectiveness could be accelerated. Based on the Japanese
EA
I
Cognition EA Effectiveness EA fm cases noted earlier, standardization is critically involved
in Governance and Cognition factor than other factors (See
Fig.4.). As a result, we can bring about the following
EA Effectiveness relationship:
.,.....* * ,
,/ *./'
Govemance +
,*
. EA EAWG+EAC > EADP+EAC.
Pattern% Pattern#3 Cognition EAWG+EAC > EADP+EAWG.
1')Enraprbs
ArchiloctM
Fig.3. Analysis pittems for Enterprise Archilecture effectiveness
Pattem#l: Correlation between govemnce and
Enterprise Architeetun. (EA) development power.
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5. (3) A firm case i United States as a benchtnurk case
n
Cisco Systems, a high-tech company strongly stresses that
the standardization can bring a lot of benefits from Cisco’s
-
EA
I...
+...-‘.
Pattern# 1
;w*v
EA Effectiveness
EA
*&“crnance
experiences as follows7 (Business Process Excellence and
EAWG):
-Training and education cost can be’reduced.
-Development cycle time can be reduced.
-TCO can be reduced.
Cognition E Effectiveness
A Devtlopmcnt
-System integration time can be rquced.
y .1
T
Pattem#2
/
Govemmce
.
/’
Pattem#3
..-.
EA Effecriveness
’ *
EA
Cisco’s architecture had been constructed like a “silos”
situation which results in many redundant business rules,
many adjustment work, and many architecture levels. Cisco
changed this architecture to a new Enterprise Architecture
based on web portal services for customers, employee,
PI FatoT&c
suppliers and partners. Cisco’s business process became
Arrhileclwe
almost completely automated and standardized (Business
Fig.4. An analysis pattem for Enterprise Architecture effectiveness with
standardizationinitiative Process Excellence and EADP). Cisco’ IT Governance
focuses on searching for a “best value” return (Customer
To discuss further in depth, we will investigate’ two Oriented, Innovation and EAWG), the outcome of business
business cases as a benchmark to valid the effect of proposed returns in the short run, and strict standardization. In addition
framework. to,that, the business information system and business levels
have to be aligned strictly among every organization
(2) A firm case in Japan as a benchmark case
(Strategic adaptability and EAC). As a result, we can map
Tokyo Mitsubishi Bank (TMB) is one of the major banks these patterns into the framework to show the result, which is
in Japan. TMB started to implement Enterprise Architecture presented by arrows (See Fig.5.).
’
in 2002. The purpose of this implementation was to keep
integration between business strategy and system structure,
and to realize system optimization [ 121. The point in case of
TMB is that every knowledge asset, including intangible
assets stored in a single database, was triggered by senior
management awareness (Strategic adaptability and EAC). The
purpose of this is that TMB considered this approach one of
methods to realize total optimization from dependent personal
skills. At first TMB developed a principle which defines ; hipk
system development and maintenance, and EA policy which ; &.i
describes the statements that presented the integrity between
business strategy and system design policy to valid
implementation for business requirements (Customer
Oriented and EAWG). TMB also developed three level
architecture models (Innovation and EADP). The level-1
describes six main system groups just for management. The
level-:! describes 5 subsystems to be broken down from Fig.5. A proposed framework f r Enterprise Architecture effectiveness
o
level-] to show application logic and data and relation with
other subsystems for business users. The level-3 describes a V, CONCLUSION
detailed design for applications which are over 200 for system Thus we can see that EADP can bring business process
people. In addition, TMB defined a technology standard excellence and innovation, and EAWG can also bring
which specifies its own technology standard and technology business process excellence, customer orientation, and
trends, and also specifies assessment criteria which shows the innovation. Moreover, EAC can bring strategic adaptability.
criteria for selecting packages and products (Innovation and These results are validated based on the two cases noted above
EAWG). Moreover TMB defined Enterprise Architecture and by applying cases to proposed analytical framework
management process, which is conducted by several reviews described in section 3. As we can analyze that pattem#2 is the
to keep the quality (Business Process Excellence and EAWG). most effective, Enterprise Architecture Governance and
As a result, we can map these.pattems into the framework. cognition are the most influential factors to bring about values
Fig.5 shows the result of this, which is presented by dotted (See Fig.5.).
arrows. We may, therefore, through analysis of the relationship
Data Sburce:ERPResearch foyum,2005.02.09
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6. between proposed framework and business cases, propose an develop an Ekerprise Architecture effectiveness model for
analytical framework in conclusion of this paper. We stress firms to use in their business model innovation using the
that it is essential that assessing Enterprise Architecture Enterprise Architecture initiative.
effectiveness based on this study‘s approach be key to the
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