Operating Model and Enterprise Architecture

Enterprise Architecture is the logic of organizing for business processes and IT infrastructure reflecting the integration and standardization requirements of company’s operating model.1

Above mentioned is one of many definitions of Enterprise Architecture, but the only one I came across that describes integration and standardization requirements of operating model. An operating model is in essence an executable vision that supports the strategy and ambition of a company. A good operating model provides a systematic foundation for execution of the strategy, it provides clarity around how company will grow and sustain it’s capabilities. Existence (non existence) of Operating model can have considerable impact on maturity of the business processes, capabilities, IT infrastructure and integration between those.  Usually although selection of Operating model is daunting task, it requires to be done.

Responding the changing market dynamics, companies can change their operating model, or even inflexibilities developed in companies operating model can make it very hard for company to respond to changes. Companies are seen to have for distinctive types of Operating Models i.e. Coordination, Unification, Diversification and Replication. 2 The type of operating model can substantially change how Enterprise Architecture can be used to implement the strategy. True Enterprise Architect will identify and communicate processes, data/information, technologies and customer interfaces to take operating model from being just a vision to reality which can be executed. Thus focussing on operating model rather than individual business strategies provides better guidance for developing IT and process capabilities.

Many companies/ professionals/ experienced enterprise architects mistake one or more of following as sufficiency of enterprise architecture

  • Standardization of Technology
  • Adoption of and industry standard EA framework
  • Diagraming one or more of architecture tenants (Business, Data, Application & Technology) 3.

Unless these applied together to support company’s operating model, the EA exercise may not address what really matters at strategic level. Architects and analysts engaged in creating diagrams for current state (Baseline Architecture) and hoped-for future state (Target Architecture) capabilities may just a be futile effort unless it can be aligned to Business Vision which is provided via Operating Model. Via, creation of Architecture Core Diagram 4, also known as “<<Industry>> on a Page” ex. “Bank on a Page” etc, the organization commits to build and improve the foundation for execution of that operating model. Organizations need to follow their own path or journey as such to define initiatives to build the most needed business capabilities. The prioritization of business capabilities is decided by effective business model. The business model provides clear direction for which capabilities need to be developed first. The journey to reach their is achieved hand in hand with maturing Enterprise Architecture capability. So much for that in next post.

References

  1. Enterprise Architecture as a Strategy : Creating a Foundation for Business Execution, 2006, Ross J, Weill P, Roberson D.
  2. Forget Strategy: Focus IT on Your Operating Model, Ross, Jeanne W, 2005, MIT Sloan Center for Information Research.
  3. B-DAT – The Open Group Architecture Framework
  4. Enterprise Architecture as a Strategy : Creating a Foundation for Business Execution, 2006, Ross J, Weill P, Roberson D.

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