The Power of Enterprise Architecture: Turning Business Strategy into Reality

In today’s highly competitive and fast-changing business landscape, companies and industries are in a perpetual state of transformation. Regardless of their size or impact, these transformations are often costly, long, and highly complex. And – even when executed successfully, their improvements are hard to sustain over time. But why is their success rate so low?

Large enterprises today operate based on thousands of unique – yet connected – processes and hold hundreds of layers of IT components within their infrastructures. This makes it increasingly difficult to spot organizational silos, align changes with strategy, and foster collaboration between teams.  

However, when equipped with the right methods and execution roadmap, Enterprise Architecture can create better alignment between the business strategy and infrastructure, ensure stakeholder buy-in and communication, and lay a solid foundation for continuous improvement.

Identifying Drivers for Change

The most successful transformation initiatives rely on evaluating both the origin and impact of strategic changes. Therefore, the first question EA should ask before starting a transformation plan is ‘’why”? Why is the company transforming, and how can we understand that in the larger context of our business landscape? 

To maintain a competitive advantage and consistently deliver value to customers, businesses respond to either external pressures in the market or internal opportunities for improvement. Examples of external drivers for change include technological developments in the market, growing customer demands, changing competitor behavior, or shifts in industry trends. 

Take the retail industry as an example. With the rise of e-commerce and social commerce in the past years, customers are not only expecting retailers to sell online, but they are looking for seamless and personalized experiences across digital channels. This has both raised the bar for sales and delivery infrastructures and demanded a higher standard for data analytics.

Setting Strategic Goals

So, how are these drivers translated into strategic goals? A retail company looking to tap into these opportunities could set a goal to increase revenue by 10% in the next two years by setting up an online shop or improving the digital customer experience through enhanced data analytics. 

The Enterprise Architect will need to model the transformation based on this goal – by connecting it to the company’s current state, identifying the areas that demand change, and effectively communicating the value and impact of the changes with relevant stakeholders.  

However, working towards a high-level goal can be a long and initially ambiguous process. There are layers of architectural elements, resources, and people that will support the execution of that goal – and they all need to be accounted for in planning and communication. This means that once the strategy is set, it’s not only the senior management that needs clarity on the execution. Operational team members who work day-to-day to make these changes happen need to understand the nature, structure, and impact of the projects. Both in the short and long term. 

To account for all these components, enterprise architects can break down the high-level goals into sub-goals. This serves multiple purposes: it provides a clear roadmap for achieving the main goal, establishes more attainable milestones, identifies key stakeholders in the execution process, and facilitates effective communication. By ordering these goals based on priority, companies can then create a clearer, actionable roadmap. This type of goal breakdown can be visualized with an EA tool like BlueDolphin, as shown below.

Example of Goal Breakdown in BlueDolphin | ValueBlue

Connecting Goals to Business Capabilities

Once the goals (or sub-goals) have been defined and visualized, they should be connected to the business capabilities. In other words, the enterprise architect assesses what the company should – and can – do to reach its goals. Let’s consider the example above to illustrate. If a retail company turns to digital channels to sell goods, then one of its key capabilities should be managing the transportation of those goods. 

Naturally, one capability can serve more than one goal. For instance, transportation management can enable home delivery while also allowing customers to return shipments. By having capabilities that can be leveraged for multiple goals – or in different business scenarios – organizations can improve agility and assume a greater impact from their transformation.

To ensure strategic goals are fully reflected in the execution, it’s best to create a comprehensive capability architecture early on. This involves mapping the business capabilities with their characteristics, including applications (and their functions), processes, technology infrastructure, and data. Recording this information in a shared repository, such as an EA tool, can provide a complete and detailed picture of the infrastructure that will support the transformation – and an understanding of the impact of any adjustments on the existing workflows, the value delivered to customers, and ultimately, revenue.

Creating, Validating, and Prioritizing Ideas for Change

Once the goals are clearly defined and the capability architecture is mapped out, changes can be planned from both a strategic and architectural point of view. Ensuring there is a balance between these two is vital in avoiding either overly optimistic transformation plans, or overengineered solutions that stray from the end goal. 

To run an effective ideation cycle, starting with a clear process is key. Most of the time, the first step would be to create a repository for ideas. Of course, these ideas need to be a product of the external or internal drivers for change – and must directly feed into the company’s goals. Finally, the enterprise architect should establish an effective way to evaluate and compare these ideas, so they can be prioritized based on the right incentives. 

The most effective way to prioritize is to create a high-level business case, which will deliver insights into costs, benefits, and risks. This should act as a baseline from which the project management board will assess the ideas and whether to move them forward.

To keep track of proposed ideas, their status, and characteristics, organizations can record them in an EA tool. In BlueDolphin, they can be labeled with completely customizable fields, like ROI, risk of failure, or risk of not executing. For a side-by-side comparison of the projects, the tool uses an ideation dashboard – a report in PowerBI that pulls data from BlueDolphin.

Idea Assessment Dashboard in BlueDolphin | ValueBlue

The Result: Aligning Enterprise Architecture with Business Strategy

Transformation projects often run over time and budget – or ultimately fail. This is often attributed to a lack of alignment between the company’s strategic direction and the infrastructure that supports it. To bridge these gaps and reach strategic goals, EA functions need to understand what is driving the change, break down and map the goals, and use capability-based planning for valuable insights into the impact of changes.

It's essential to note that alignment is not a one-time effort but an ongoing process that requires continuous evaluation. By using these steps and practices as guidelines, EA can shorten time to value, minimize wasted resources, and ultimately drive success.

For more examples of strategic transformation initiatives, especially in areas of growth, technology, and finance, read through our recent playbook on mastering business architecture and strategy for EA.