The complexity of IT budget coordination and the launch of IT projects.
• Growth of “Information” value and connectivity between business and IT.
• Lack of transparent and clear connections between business and IT.
• Whether solving the actual business problems using IT is possible?
• How to make IT give companies greater value?
• How to change IT with changes within business?
• IT systems are complex, unmanageable and expensive to maintain.
• IT systems restrain an organization from responding adequately to changes within business.
• Business-critical information is untimely and inadequate.
• Communication culture between business and IT is missing.
As a result, the business does not see any value in information technologies. CIO’s face difficulties in pushing new ideas if they talk about technology. They are not understood. Everything they can do is to support what already exists and do the objectives pitched by the business. The serious problems arise with the justification of IT budgets. In fact, the CIO acts more like a foreman who fills in the holes, rather than a top manager who is developing the company. Top managers quickly lose interest in IT projects, and therefore, they lose funding and fail. IT department are replaced with various system integrators to implement “fancy schmancy” solutions that will “save” the business. The ideas also arise to take all company’s IT assets and services and outsource them. It will be difficult for the IT department to fight with integrators and the result is predictable – the integrators have one key competence, i.e. technology, and that is their forte. The IT department is turning into a “swamp”, and the best employees leave taking away the unique knowledge and skills. The goals of an integrator or an outsourcing company are the same as your company’s – making a profit. But unlike the IT department, whose interests coincide with the interests of your company, the integrator’s interests may not coincide with yours, including unique ideas and visions. At best, it will be “like everyone else,” and the business will lose its identity (if it is inextricably linked to IT) or quoting one movie character: “… we will have everything new in an old fashioned manner…”. The end is sad.
The Main Aspects of Enterprise Architecture
To fight the above-mentioned problems and consequences, the Enterprise Architecture helps shape the following important criteria.
Structuring the Enterprise
When building an Enterprise Architecture, the first and most important aspect is an understanding of the enterprise’s organizational structure, principles of management, decision-making, etc. The organizational structure is a fixed and ordered set of objects and connections between them. Depending on the specialization and operations the organization may have:
•Vertical structure – in terms of subordination
•Horizontal structure – in terms of functions and operations.
Accordingly, the management structures are distinguished as linear based on “chief – subordinate” principle and functional, i.e. “professional integration based on the operational specifics”. As a result, organization structure can be represented as the following main types and their varieties:
• Flat, the simplest structure, is suitable for work or project teams, or a small organization.
• Breakdown (bureaucratic) is based on the organizational structure, the functional division of labor and employees’ responsibilities.
• Linear, direct control (head – subordinate), communication between departments occurs through heads of departments only.
• Functional, interaction is based on function.
• Linear-functional – the interaction is combined in a linear and functional type (the most used model).
• Linear and staff – separate functional groups (staffs), conducting work independently with departments or organizations. As an example, a group of companies in the holding.
• Divisional is characterized by central coordination with decentralized management. The key figures in this case are not the heads of functional units, but the managers of individual branches, factories, and so on.
• Organic (adaptive) – the structure formation is based on the need to adapt to changes. Relationships are based not on the structure, but on the nature of the objectives set.
• Project – organized during project management.
• Matrix (program-targeted) – the principle of dual reporting, direct reporting to the manager and project manager
• Brigade (cross functional) – work in separate groups with independent management and decision-making (contrary to breakdown).
Organizational structure may depend on a number of factors:
•Specificity and diversity of operations;
•Geographical location;
• The centralization level of the organization;
• Organization strategy;
• Number and range of services provided.
IT role in the organization
One of the main criteria of building an Enterprise Architecture is to identify the IT role within the organization. If we ignore articles and recommendations about the importance of IT in the modern world given by consultants and other small talks, we have to rigidly fix the role of IT in the organization, the objectives, rights, opportunities and degree of responsibility. To understand the IT role in a particular organization, one needs to answer the following questions:
How is IT involved in business? How much does business depends on IT? Many business processes and functions are tied to complex, centralized or specific IT solutions. Business development is impossible without rapid and quality IT work. There are entire industries that depend on IT such as banks, insurance companies, other financiers, service companies, Public agencies, technology and power companies, etc. (as an example, two-thirds of the bank employees work in one way or another with a centralized banking program, while only a few rural organizations use mostly autonomous IT solutions, where majority the employees work on the field or the computerization of the company is low).
Whether your organization can be attributed to large or medium-scale business. In my opinion, as long as all the technologies of the company are stored in one head, and the CIO communicates directly with the management it is too early to think about the enterprise architecture. For small-scale businesses, enterprise architecture is superfluous.
Whether your company is actively developing IT. The company has several IT projects per year, or at least one project on implementing ERP, CRM or other complex solution. Enterprise Architecture will help to make a decision save from most alterations, errors, inconsistencies, delays and other problems. There must be one person, or groups of people
