Linking IT And Business

Peter Herzum, President of Herzum Software, speaks with FST about how by linking their business and IT strategies, companies across Europe can truly optimize their business.

FST. Starting with the basics, what exactly is an enterprise architecture and what benefits can businesses expect to achieve by adopting such a framework?

PH. As an IT discipline, EA provides the principles, models and reference architectures, patterns, standards, best practices, and other enterprise-wide deliverables that guide an enterprise through acquiring, outsourcing, integrating, developing, modifying, operating, and retiring the elements of an IT portfolio of applications, projects, technologies. It provides the crucial link between IT strategy, the various enterprise-level IT activities, and individual projects, and delivers to IT executives the information required to plan, manage and monitor progress of IT activities.

As a business discipline, EA provides the principles, best practices, models, patterns required to plan, transform and optimise the business.

As a combined business and IT discipline, EA is the link between business strategy, IT strategy, business initiatives, IT programmes, and IT projects. It creates the structure that enables you to align business and IT, and make sure that IT investments contribute to business objectives.

Companies properly adopting EA typically demonstrate high levels of business agility, speed-to-market, IT effectiveness, and a number of other characteristics allowing them to better compete in their industry. As a concrete example, the company may see after three years of EA investments a 25 percent reduction in overall IT costs, a 50 percent increase in IT spending effectiveness (measured as the ability to succeed with IT projects, and make sure that these projects directly contribute to business objectives), and line-of-sight from business drivers to IT projects.

FST. Many organisations face the challenge of proving the financial impact of their information technology projects. With this in mind, how does EA improve a company’s return on investment?

PH. The main challenge organisations face is often execution: it is difficult to have any ROI if you cannot execute on your IT initiatives! EA helps address this.

Furthermore, it is difficult to measure the financial impact of IT projects without the structure provided by a successful EA programme. This structure enables meaningful discussions about IT investments, and supports analysis of financial impacts not only in terms of IT costs and impacts, but also in terms of business costs and impacts. This leads to better investment decisions.

EA also supports the ability to trace investments to specific business drivers, and to regularly monitor business drivers impact. And a mature EA provides the structure required to find synergies between projects, or find normalisation opportunities across the application portfolio.

So EA can for example lead to support investment analysis, project execution and delivery, progress tracking at the enterprise-level. It can also provide the ability to progressively reach significant levels of IT and business agility, and to identifying synergies between projects and applications.

But it is not easy; many EA programmes fail to provide any IT or business benefit.

FST. What then is your approach with regard to EA? What can a client expect from you and no other and how does your organisation differentiate itself in its EA approach?

PH. Our unique approach to IT is named COSM, and has two parts: The first is COSM Enterprise, which addresses enterprise-level disciplines such as business strategy, IT strategy, enterprise architecture, portfolio management, IT and programme management, and others. Second, there is COSM Project, a project-level methodology supporting not only software development and integration using modern best practices (such as Service Oriented Architectures, component-based development, software factories, model-driven development, and more), but also covering the whole software supply chain, including migration, deployment, operation and retirement.

COSM is unique because it covers both the enterprise and project spaces, with a set of actionable best practices. While it is strongly enterprise architecture centric, it also recognises other disciplines crucial for success. We believe it is the only ‘boardroom to code’ approach today.

Each enterprise approaches EA with its own specific objectives and starting from different levels of complexity, size, maturity. Some enterprise will focus on technical architecture, integration architecture, application architecture, or on business architecture. And we can help them achieve results at all entry points.

But we believe we are further ahead of the competition in seeing both the forest and the trees; all enterprises will want to bring together the various architectural viewpoints, across the enterprise and across projects, and slowly adopt a similar set of best practices, models, techniques, organisational structures – we master these best practices.

FST. How would you describe the process by which you help an organisation achieve its desired results?

PH. On the surface, it is simple: an organisation approaches us with a specific challenge – typical this year are specific business transformation challenges, the set-up of an EA programme, or the enterprise-wide adoption of a service oriented architecture.

Our team typically performs a rapid (10 days) baseline and inventory, appropriate to the challenge, and helps the customer define the IT and business objectives. Based on this, our team helps define a roadmap with clear short-term (90 days), medium-term (12 months), and long-term (3 years) milestones and benefits.

At this point, we partner with the customer to make sure that they achieve their tactical and strategic objectives with specific projects. We can do this with focus and efficiency because of our mastery of enterprise-level and project-level IT challenges, and how they relate to the business challenges. And because we can help jump-start the customer using appropriate best-practices, supported by templates and other acccelerators.

FST. What developments has the EA market seen in recent years and what do you think the future holds?

PH. The EA market has structured the best practices required to succeed with EA, and is now optimising them. Just as an example, we can today provide typical ‘application portfolio architectural patterns’, discuss the patterns typical in any business of a portfolio of hundreds of applications, and how to impact this portfolio to lower costs.

In addition, at least my company has been able to link these to the other business and IT disciplines, at the enterprise and the project level.

The market has also evolved a number of tools and technologies supporting the best practices, such as portfolio management tools, enterprise repositories and SOA infrastructures. Companies starting with EA today don’t need to reinvent the wheel!

The vision I am personally after is to ‘unify IT’ – create an integrated set of tools, frameworks, best practices that allow enterprises to cost-effectively ‘manage IT as a business, for the business’. This will, for example, involve:

•ERP applications specifically designed for IT (ERP4IT).
•IT Dashboards allowing executives, managers and architects to manage, architect, and monitor in real-time the various IT activities.
•The ability to rapidly find and semantically correlate information that can be structured, semi-structured, unstructured, or available only in models, and create usable knowledge out of it.
•The commoditisation of software factories.

We do, in part, do each one of these items today. We just want to commoditise this.

FST. With this in mind, what will enterprise architects need to do differently to best support future business strategies and to exploit the changing IT environment?

PH. In general, they will need to continue to master technologies, software engineering techniques, software architecture, and project management. But they will also need to master increasing levels of complexity, and hence learn to understand and navigate multiple contexts, at the enterprise, business unit and department levels.

They must remember the ‘A’ in enterprise architecture. At the end, EA is about helping architect the enterprise. For example, not many architects today know the best practices for architecting not one application, but a whole portfolio of hundreds or even thousands of applications.

They will need to adopt business disciplines that are unfortunately still rarely taught today in IT education: for example, balanced scorecards and techniques for business strategy definition, business accounting and administration, budgeting, business process modelling. They will need to become more managers and less ‘tekkies’, and also add political skills to their toolset.

They will need to partner with business executives and IT executives, to provide them with the models, structured information, and target blueprints that executives need to reach their business objectives.

They will also need to help build the agility and the protection mechanisms that will allow IT organisations to ride rather than react to changing technologies waves. Lastly, they will need to learn to time-box the focus on each strategic subjects, and make sure that they explicitly transfer ‘control’ and ‘knowledge’ about the subject when the time-box is over. Given the rarity of good enterprise architects, the most common failure cause for enterprise architects is to try to achieve too much on too many subjects.

About the author
Peter Herzum is President of Herzum Software, an international IT consulting group, and a successful entrepreneur, with over 15 years IT experience. He has helped create many of the modern IT disciplines, including component-based development, SOAs, software factories, and enterprise architecture. Herzum helps companies around the world define IT strategies, establish enterprise architecture efforts and resolve complex development and integration problems.
Herzum is the creator of COSM, the only agile approach to project-level and enterprise-level IT and able to support ‘boardroom to code’. He is also the principal author of the best-selling book Business Component Factory and a regular speaker at senior management events and technology conferences worldwide.