Enterprise architecture is an important aspect of modern business practices. It involves the strategic alignment of an organization's IT infrastructure with its overall goals and objectives.
Specifically, it is the organizing logic enabling business processes and IT infrastructure that reflect the company's operating model and vision. It's a long term view, focusing on building capabilities for the future, rather than reacting to customer demands.
In order to understand the evolution and significance of enterprise architecture, it is essential to delve into its history and the four stages of architectural maturity. By exploring these concepts, we can gain insight into how enterprise architecture evolves over time and its impact on organizational success.
Enterprise architecture has become an integral part of modern organizations. Its history can be traced back to the early 1980s when it emerged as a response to the increasing complexity and interdependence of IT systems within enterprises. Companies go through four stages of architectural maturity when they develop and implement their architecture.
Business Silos
Standardized Technology
Optimized Core
Business Modularity
Business Silos
The first stage is the business silos stage, characterized by a lack of formal architecture practices and business-unit specific decision-making processes. Companies in this stage do not yet rely on or make use of established technology standards across the organization. The goal is to automate and streamline processes. Innovation is encouraged by the business units, however; they are not coordinated and could be conflicting with other units creating a group of systems that do not talk to one another. This can lead to inefficiency and waste in resources with many one-off solutions. Overall, a business silos environment hinders integration and standardization of business processes.
Standardized Technology
With the next stage comes standardization. In the standardized technology stage, businesses seek to consolidate or simplify their technology stack by decreasing the amount of processes and tools managed. Fewer platforms equal lower costs. It also means services can be shared among different business units, increasing security, reliability and improving development speed. Automating and streamlining processes is still the primary goal, however data is still stuck in multiple applications and systems. So, companies in this stage often use a data warehouse to store shared data.
Going Global
Optimized Core
The shift from local, business unit applications and shared infrastructure to enterprise-wide systems and shared data. In the optimized core stage, focus is shifted to a top-down, holistic approach in organizing data. Core data and processes are digitized and optimized depending upon the company's operating model. Certain data that needs to be shared across multiple business units or across the organization is made easier by eliminating data redundancy and inefficiencies. At this stage, senior leaders gain a better understanding of, and ability to communicate the company’s operating model, and to recognize the necessary capabilities and opportunities to execute or adjust the architecture to the company’s operating model. This results in an efficient and optimized core of digitized business processes and enables a more flexible environment that is capable of global reach.
Business Modularity
This stage focuses on strategic agility, efficiency and flexibility. Business modularity architectures build on the optimized core with modules that are reusable or customizable and support business processes. Processes that were digitized in the previous stage are improved. Companies can make services that are reusable and shareable with interfaces to access those modules and their data. These web services can choose modules from both internal and external sources. Another option is to give business unit managers more freedom to design front-end processes that they can make or buy and integrate into the optimized core, adding new features and abilities to the existing architecture.
Modularity does not lessen the need for standardization. Instead, individual modules complement, not replace, the optimized core. By making core processes predictable, modular architectures enable innovation. Local experiments are separated and isolated, allowing the best new ideas to be spread without affecting or disturbing the main business. It is very important in this stage to quickly spot strategic opportunities that can use and improve the core capabilities of the company. All of the lessons learned from earlier stages are applied as expertise to guide the company through market changes and dynamics for a more resilient, agile and innovative enterprise.
As companies move from one stage of architecture to another, they change their focus from optimizing locally to optimizing globally, transforming how they operate their business. Companies in stage 1 are very different from companies in stage 4. By understanding the general characteristics and organizational change of each stage, the company can create value from the current stage and get ready for the next. Ultimately, the goal of enterprise architecture is less about reaching a specific final state and more about understanding what direction the company is taking, and designing infrastructures to support that direction.