The document summarizes the findings of a study on why two-thirds of enterprise architecture projects fail. It found that while organizations understand the strategic importance of EA, many projects fail due to a lack of clear objectives, governance, and business involvement. Specifically, few projects fully integrate EA with business strategy and processes or comply with governance agreements. The study provides recommendations for ensuring EA success, including setting clear enterprise-wide objectives, establishing governance and compliance, and involving business stakeholders in tool selection and planning.

1. ECON 201 –003, Assignment #3
Market Intervention
Due Date: February 05, 2013 @ 13.00
1
Question 1: Market for lobster – Revisited (52 points)
Consider again the market for Atlantic lobster presented in Q#1
of the previous
assignment where the annual demand and supply for lobster is
given by the
following equations: 100 0.2
D
P Q= − , and 25 0.1
S
P Q= + , where P is the price per kg
in dollars, Q
D
and Q
S
are respectively the quantity demanded and the quantity

2. supplied (in thousand of Kgs). The government imposes a quota
of 150 thousand
of kgs per year in the lobster industry and licenses are issued to
allocate the rights
to harvest lobster.
1. Reconstruct the Demand and Supply curves in a graphing
paper and show
graphically the equilibrium price P* and quantity Q* for lobster
in the
absence of quota (8 points).
2. Denote the quota by Q and show it graphically. Calculate the
demand price
and the supply price under this quota and show them graphically
(7 points).
3. Calculate the quota wedge (the quota rent) per Kg of lobster
when 150
thousand of Kgs are sold? (7 points)
Another way to achieve the same reduction of the harvested
lobster at 150
thousand of kgs per year is by imposing an excise tax. Consider
now that the

3. government imposes an excise tax that is officially paid by the
fishing industry.
4. Find the excise tax rate (in dollars) and fully explain how
does the tax work
(i.e. which side of the market will it affect and how) by
illustrating your
answers graphically (8 points)
5. Calculate the tax revenue collected by the government in this
scenario and
show it in the graph (7 points).
ECON 201 –003, Assignment #3
Market Intervention
Due Date: February 05, 2013 @ 13.00
2
6. Calculate the incidence of the tax (i.e. the portion paid by
each party per
kg), show it graphically and identify which party
(consumers/producers)
pays the heavier tax burden. Illustrate graphically (10 points)
7. Comment briefly on positive effects (if any) of these policies

4. (5 points)
Question 2: Effect of Taxes (48 points)
In each following cases (16 points) involving taxes, calculate
and explain:
1) Whether the incidence of the tax fall more heavily on
consumers or
producers (4 points).
2) Why the government revenue raised from the tax (calculate
it) is not a good
indicator of the tax (4 points).
3) What missed opportunity or inefficiency arises (3 points).
4) Illustrate your answers with a simple graph (5 points).
a. The government imposes an excise tax on the sale of all
college textbooks.
Before the tax was imposed 1 million textbooks were sold every
year at price
of $50. After the tax is imposed 600, 000 books are sold yearly;
students pay
$55 per book, while publishers receive $30 per book.
b. The government imposes an excise tax on the sale of all
airplane ticket.

5. Before the tax was imposed, 3 million airline tickets were sold
every year at
a price of $500. After the tax is imposed 1.5 million tickets are
sold every
year; travelers pay $550 per ticket, while airlines receive $450
per ticket.
c. The government imposes an excise tax on the sale of all
toothbrushes.
Before the tax 2 million toothbrushes were sold yearly at a price
of $2.00.
After the tax is imposed, 800,000 toothbrushes are sold yearly;
consumers
pay $2.50 per toothbrush, while producers receive $ .75 per
toothbrush.
Please review the following article:
http://strategicppm.wordpress.com/2010/04/05/the-fbis-virtual-
case-file-project-and-project-failure/
· Based on what we’ve covered so far in class, what
technique(s) would YOU have used to ensure the FBI’s Virtual
Case file project was a success? Who should be held liable for
its failure?
· Research another example of a failed EA project and share it
with the class.
Note:

6. Please use the attached document as a reference in answering
the discussion questions.
www.ids-scheer.com
Why two thirds of Enterprise Architecture
projects fail
An explanation for the limited success of
architecture projects
ARIS Expert Paper
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This is the conclusion of a study for the Rotterdam University
carried out by
Jonathan Broer in the summer of 2008, ordered by BPM and EA
software vendor
IDS Scheer. Broer questioned 161 respondents from 89
organizations represent-
ing a range of industries about their vision and implementation
of the enterprise
architecture concept.

7. A clear majority of respondents – 92 percent – believes that EA
should be deter-
mined by the vision, strategy and objectives of the company.
Yet only 40 percent
of them actually included objectives and policies in their EA
program. The align-
ment of Business and IT is seen as the most important argument
for organiza-
tions to start using EA. At the same time connecting IT
architecture and business
elements, and arriving at important decisions about structure
and layout on that
basis, is found to be one of the biggest problems confronting
businesses. Among
the reasons for the failure of EA programs to fulfill
expectations were a lack of
EA awareness and the fact that it took longer than expected to
set up an archi-
tecture.
Why two thirds of Enterprise Architecture projects fail
An explanation for the limited success of architecture projects
Large and medium-sized organizations regard the alignment of
business and
IT as the most important motive for working on an enterprise
architecture
(EA). Other important reasons for putting EA on the agenda are
support for
change processes and strengthening the flexibility of the
company. In spite
of the huge interest in EA it turns out that 66 percent of
programs did not ful-
fill expectations.

8. 2
ARIS Expert Paper
This ARIS Expert Paper comprises:
� an overview of typical Enterprise Architecture project roles
and
drivers
� main targets of Enterprise Architecture projects and
initiatives
� critical success factors derived out of the survey
About the authors:
Sven Roeleven
is Global
Solution
s Manager at IDS
Scheer. After graduating in Public
Administration from Erasmus
University Rotterdam (the
Netherlands), he went on to spe-
cialize in business process man-

9. agement within ERP environ-
ments. Since joining IDS Scheer in
2002, Sven has gained extensive
hands-on experience covering all
ARIS platform products through-
out the course of dozens of proj-
ects within medium-sized and
larger organizations across a vari-
ety of industries.
Jonathan Broer
completed his studies in Business
Informatics at the Rotterdam
University in 2008 (with a minor in
BPM). For his practical training in
the final year of his degree, he
carried out a study of enterprise
architecture at IDS Scheer. Since

10. September 2008 he has been
employed by Capgemini as a con-
sultant in the field of Architecture,
Governance & Infrastructure.
Contact:
[email protected]
Fig. 1: Industries that participated in the study
Drivers for EA
Organizations start using EA for different reasons.
Business and IT streamlining, supporting change
processes and achieving greater flexibility are
the three most important reasons for starting an
EA project. This fits the definition of EA used by
research agency Gartner:
“Enterprise architecture is the process of trans-
lating business vision and strategy into effective
enterprise change [..]”.

11. The fact that EA is determined by vision, strategy
and objectives is also affirmed by 92 percent of
the organizations taking part in the study. In other
words, organizations have a clear understanding
of the reasons for starting an EA project, and they
know that these drivers are partly determined by
the business strategy. In their vision EA is there-
fore a holistic, business-driven discipline.
Older organizations have higher integration of architectures
Apart from their well-developed vision, organizations have also
come quite far in the implementation of enterprise archi-
tectures. 74 percent already use a framework for EA, and the
majority of those without a framework are in the process of
choosing one. The most commonly used standard frameworks
are TOGAF (The Open Group Architecture Framework) and
ArchiMate (adopted by TOGAF in 2008 as standard modeling
language).
The older organizations (more than 50 years old) are often
further ahead in the integration of domain architectures. In
many cases they have been involved in mergers or takeovers
which necessitate a good integration. The presence of lega-
cy systems also plays an important role. It is important after all

12. to know what the consequences of phasing out a system
will be for the entire operational management – the
consequences for data exchanged with the system for example,
or
for the infrastructure on which it runs, or for the processes
supported by the system which is about to be phased out.
Large organizations have more EA roles
There is also a connection between the size of
an organization and the presence of EA relat-
ed roles. The larger the organization, the larg-
er the presence of these roles in the EA work
field.
For small organizations the information archi-
tect is used the most. For large organizations it
is the business architect. Respondent com-
ments show that small organizations approach
EA much more from an IT point of view. Larger
organizations which appear to be more mature
in their enterprise architecture have a more
business-oriented approach, and they cite the
business architect as the most common role.

13. 3
ARIS Expert Paper
Fig. 2: Drivers for EA projects
Fig. 3: Presence of EA related roles
Who is responsible for the purchasing of an EA tool?
As regards the responsibility for purchasing an
EA tool, it is notable that the IT manager and
CIO play a far bigger role in the purchase of an
EA tool than in the purchase of an ERP pack-
age for example. When purchasing an ERP
package there is a larger contribution from the
business, whereas EA tooling is primarily
approached from the IT perspective. This is
rather surprising considering that the older,
larger companies tend to approach EA from a
business perspective. One possible explana-
tion for this is that the business reality has
already been reproduced in a process model-

14. ing tool, and this is the responsibility of the CIO
and the IT manager in most organizations.
Explanations for disappointing results
In spite of the fact that organizations already have a reason-
ably mature vision and implementation, the expected results
are not achieved in 66 percent of the EA projects. The most fre-
quent explanation given for this failure is that connecting EA to
business elements such as strategy and BPM is found to be
difficult in practice.
Other reasons given by many respondents for the failure to meet
expectations were:
� Not enough support from C-level (CIO and CFO for example)
so that EA is not given enough status and expectations
cannot be fulfilled in practice.
� Limited commitment from interested parties so that there is a
return to old habits, and agreements are not complied
with.
� Not enough EA awareness among interested parties inside the
organization. EA not a generally accepted concept

15. in daily business activities.
� Financial and political issues that thwart EA projects.
� Setting up an architecture takes longer than expected. This
means it takes longer for the results to become visible,
which means there is a considerable risk factor for EA.
Another possible explanation is the discrep-
ancy between initial intentions for EA on the
one hand and the actual realization of the
architectures and degree of compliance with
agreements on the other. For example: 92 per-
cent of the organizations believe that vision,
strategy and objectives are determining fac-
tors for EA, yet only 40 percent incorporated
them in the architecture. On this basis it is of
course impossible to define the direct impact
of strategic choices on the architectural lay-
out. The following histogram provides an
overview of the most frequently recorded
domain architectures, including those for
objective and policies.
4

16. ARIS Expert Paper
Fig. 4: Responsibility for IT investments
Fig. 5: Most common EA problems
Fig 6: Most commonly recorded domain architectures
The three most frequently recorded architectures are found to be
the application architecture, process architecture and
information architecture.
The recording of domain architectures does not mean there is a
successful enterprise architecture in place however.
Agreements also have to be complied with about the use of one
another’s information, the methods to be used, owner-
ship, and procedures for arriving at innovations. All
this is collectively referred to as EA Governance. In the
following graph, four principles of EA Governance
show that the organizations do not score highly for
maturity. This may help to explain the disappointing

17. results of EA projects. Even when a big effort has been
made to sort out EA, a lack of (compliance with) agree-
ments leads to relatively low yields.
Since the recorded EA is not an integrated component
of operational management, there is a lack of commit-
ment. This undermines the status of EA inside the
organization. Also, architectures are often constructed
which bear no relation to other architectures inside
the organization. As a result there are no gains from
rapid impact analyses, coordination between domain
owners and integrated project scheduling. Structural monitoring
of compliance with architectural principles can help in
this regard, but this is not sufficiently applied in practice.
How can we ensure the success of an EA project?
The study shows that the following three rules will help to
create the right conditions for making EA successful in an
organization:
1. Set clear, enterprise-wide EA objectives before you start, and
manage expectations inside the organization. The
objectives affect the choice of the EA concept, including the

18. choice of domain architectures and the degree of inte-
gration between them. With clear objectives it is easier to
manage expectations in relation to EA inside the organi-
zation. In this way disappointment is avoided and the
organization does not have to spend a lot of time and energy
trying to create an architecture which is never realized. By
deploying EA enterprise-wide it is also easier to demon-
strate that a shared approach to EA pays off, in comparison to
the silos of documentation in Excel, Word and niche
tools, with all the duplication and inconsistencies these involve.
Use it to raise the level of commitment and cele-
brate the successes achieved.
2. Set up EA Governance and comply with it. If the methods and
agreements drawn up are not complied with by the EA
roles, the yield from the EA initiative will be inadequate.
Appoint a Chief EA to oversee compliance who also reports
to higher management (C-level). Higher management can in turn
ask for feedback through the Chief EA about the
impact of strategic management choices on operational
management and operational structures. In the context of
EA Governance, it is important to specify in the standard
project approach that it is mandatory to check what infor-
mation has already been recorded on the scope of the project;
this information should be used as a starting point

19. for the TO-BE situation. It is also important of course that EA
owners validate innovations according to a fixed
release procedure, and for the new AS-IS situation to be
documented in the EA tool before discharging responsibil-
ity for the project.
3. Make sure the business is sufficiently involved in these
initiatives, starting with the choice of the EA tool. Do not
allow EA procedures and tooling to become an IT matter,
otherwise the EA will not serve as driver of business and
IT streamlining. Choose a tool that supports all domain
architectures and is able to connect them in a single repos-
itory. Also make sure the tool can incorporate ownership,
combine the different methods used, and produce flexible
reports. Tools that already provide standard EA frameworks
such as TOGAF, IAF and ArchiMate are preferable in this
regard.
5
ARIS Expert Paper
Fig 7: The way EA is implemented

20. ARIS Expert Paper
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IDS Scheer AG
Headquarters
Altenkesseler Str. 17
66115 Saarbruecken
Phone: +49 681 210-0
Fax: +49 681 210-1000
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reserved. The contents of this document is subject to copyright
law. Changes, abridgments, extensions and sup-

21. plements require the prior written consent from IDS Scheer AG,
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that this copyright notice is retained
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U.S. pat. D561,778, pat. D561,777, pat. D547,322, pat.
D547,323, pat. D547,324
ID-Number: EP-EA-0609-EN