Enterprise Architecture - Creating Value by Informed Governance

A couple of weeks ago our book about Enterprise Architecture was published by Springer. The book has been written in close collaboration between Capgemini and the Radboud University and it was quite some experience to write such a book. I'm Claudia Steghuis and a guest writer on this blog. Of course, I would like to convince you all to read this book, but I'm also interested in professionalizing the Enterprise Architecture field and I hope that we succeeded just a bit in that by publicizing this book. In our book we also indicate many research opportunities within enterprise architecture, like principles, competences and tasks, etc. I would like to encourage everyone to participate in researching these opportunities.

Summary:
Twenty years after the first publications and books on enterprise architecture, the domain is evolving from a technology-driven towards a more business-driven approach, thus empowering decision makers to adapt and transform an enterprise in order to keep up with changing business needs. The authors aim to provide an overview of enterprise architecture including the process of creating, applying and maintaining it, taking into account the perspectives of CxOs, business managers, enterprise architects, solution architects, designers and engineers. Covering both theoretical foundations and practical use, and written in close collaboration between industry professionals and academic lecturers, Enterprise Architecture offers an ideal introduction for students in areas like business information systems or management science, as well as guidance and background for professionals.

Do you want more information? Please visit http://www.springer.com/business/business+information+systems/book/978-3-540-85231-5 or email me at claudia.steghuis [at] capgemini.com

All about Google

It seems that the economic crisis will impact many companies. Thinking you can escape seems naive. Or is it? The following interespting presentation on Google's strategy does have something to say about this interesting subject.

All about Google

View SlideShare presentation or Upload your own. (tags: google strategy)

Trouble in Redmond paradise?

A little while ago I read an interesting article that suggested that Microsoft should give windows 7 away for free, which lead to a rather heated (technical) debate in the comments section. In this post I'm trying to make some sense of what's going on.

Industry analysis

First let's look at the industry Microsoft is in: the software industry. This industry has several big players in key segments. Some are more traditional (IBM, SAP, Microsoft, Apple) and some are relatively new (Yahoo, Google). Then there's a bunch of smaller companies who 've found a comfortable niche. Sounds like healthy competition. 

In the past Microsoft was definately a rule maker in this industry. However, with the rise Web this advantage slowly faded. First there was the infamous browser war, now there is the battle around search and advertisements. It also seems that the old growth strategy of buying companies doesn't seem to work anymore (the most prominent example, in my opinion, is the fact that Yahoo tried to rush into Google's arms to be able to stay away from Microsoft). 

Another interesting aspect is the fact that these days there is much more software to chose from, both for consumers and for firms. Microsoft made a smart move in the 1980's : ship as much new PC's with MS-DOS (later Windows). This gave them a huge market share and made it hard for competitors to get onto the desktop. Once you had windows, it was only a matter of time before you also started using Office (rather than good old WP). Some 20 years later, we do have a choice. The Mac seems more popular than ever (it's even considered to be a fashion accessory) and Linux is also growing on the desktop. Micorosft's Office suit is also available on the Mac, but OpenOffice is a true cross-platform office suit. Even more, it seems that cloud computing has the future which makes GoogleDocs an interesting contender.

Synergies

Let's look at this from another perspective. Ignoring some of its lesser activities (such as it's new initiative with respect to telephony), Microsoft seems to be in two businesses: the business of 

selling software licenses and the business relating to online activities (where the revenue model mostly hinges on selling advertisements). 

The figure shows some of the product offerings that go with each business. It seems that Microsoft is able to leverage considerable synergies at the resource base level (i.e., human capital!). To a lesser extent this also holds for its activity system and product offerings. An example of the latter is the fact that once you use Internet Explorer - the default browser on your freshly installed PC - it immediately prompts you with a question whether you would like to make MSN Live Search your default search provider.  These synergies are a good thing, they make life more pleasant as they account for a lot of added value.

Should windows 7 be free?

So far this post has been about Microsoft as a company. I will now circle back to the question of whether windows 7 should be free or not. Giving away Windows for free would be radical to say the least. After all, Microsoft has made a lot of money by selling licences for Windows (and other software) over the last decades. However, the present situation does call for drastic measures. Some facts:

• Microsoft is under heavy attack from all sides. It is still the dominant player in terms of desktop software, but that seems to be eroding slowly. Windows is being attacked by Apple and the Linux community, and the flagship Office suite is being attacked by Star Office, it's free sibbling Open Office and several cloud computing initiatives such as Google Docs.
• Microsoft has had a lousy reputation where it comes to the Web. Sure, Internet Explorer is pretty big (see the browser statistics pages by the W3C) its market share is decreasing steadily. Firefox/mozilla is a big competitor and Google's new browser (Chrome) is gaining market share slowly.
• Microsoft has fought many lawsuits over the last few years, many of which evolved around the question whether or not Microsoft is a monopolist and whether it can ship certain products together or not. Several (if not most) of these cases were lost. 
• Most companies don't like being locked into a single vender. Government's seem to like it even less as several have announced recently that they are migrating to an open source platform. Usually this follows the lines of migrating to an office suit that adopts a an open standard (e.g. ODF) followed by a subsequent switch to Linux. In the Netherlands, the reference architecture for government institutions (NORA) also favors open standards.

So yes, Microsoft is under attack. There is reason to be concerned. It seems that Microsoft is definately experiencing strategic drift; it is seems out of touch with demands by its markets. It's old revenue model of selling licences doesn't seem to work anymore so in my opinion the question for Microsoft boils down to competitive advantage. What is Microsoft good at, better than anyone else? And will this still work under the new rules of the game? I doubt it. Giving away windows 7 for free, and making money from advertisements, is definately a bald move. It implies that Microsoft is taking on Google head on. Risky, but interesting. As SteveBallmer has put it, Microsoft has reinvented itself many times before so there may be hope for the guys in Redmond yet.

Group Strategy

Last week dr. Casper van der Veen launched a new blog called Group Strategy. The central theme of the blog is as follows:

Group strategy, or corporate-level strategy, deals with the way a corporation manages its set of businesses. Key areas are corporate synergies, roles of the HQ, the strategic logic behind M&As and strategic portfolio management. 

Casper posted a short announcement of his dissertation called "where you sit is where you stand". This is one of the first dissertations in the field of strategic management that I've read in over 5 years (I read a few while I was studying at the University of Tilburg) and is definately a good read. 

Architecture in Action @ LAC 2008

Over the last few days I have been at the LAC 2008 which proved to be very interesting and inspiring. The LAC conference is 10 years old this year which resulted in several gifts (books!) for the participants.

Day 1 started with a very interesting talk by Daan Rijsenbrij, presenting his perspective on (the history and future of) enterprise architecture. What struck me particularly was the fact that he argued the case for distinguishing architects from engineers. I couldn't agree more. I also followed a series of 3 presentations on the value of architecture. No big news there, yet interesting to see the case studies that were presented. Unfortunately I missed the last plenary session due to other obligations.

On day 2 we saw several interesting presentations  by Jan Truijens and Frank Baldinger. I rather liked the critical attitude they have towards what architecture is, what the value of architecture is, and how we should teach architecture to students and practitioners. My persional opinion is that architecture is still in its infancy and that it will take a few more years before we as a community have shared understanding of our field. After that it will take another while before people in the boardroom understand what we're up to. A lot of challengies lie ahead us.

It was interesting to see that many LAC-participants share this idea. There was a lot of talk about the relation between architecture and strategy, the value of architecture for business and so on. Hopefully the debate on this topics will make it to the architecture community at large and therefore lead to interesting publications on the web and in print.

Dimensions of (enterprise) architecture

One of the issues that keep popping up when discussing (enterprise) architecture is the question: what is it? Unfortunately it seems necessary to keep discussing / refining / extending definitions, not only when two architects converse, but also when starting a new architecture project in a firm. I've seen situations where it took several months to agree on a definition of EA in one department of an organization when we found out that other departments had an entirely different approach. This is pretty much regrettable. As Hans Bot puts it eloquently at the Weblog of Erik Proper:

It's amazing the debate is still going on … Why is it, that in IT, we tend to hijack a word from another industry, and give it an altogether different meaning? … The IEEE working group did a very good job in defining those terms back in 2000. Architecture is a property of a system reflecting its internal cohesion; its harmony with its surroundings and its design principles … If only IT people would accept (and practice) the difference between an architecture description, a view as part of the architecture description (either made during the design of the system or afterwards) and the architecture itself, much confusion and mystification would be prevented.

I couldn't agree more. In teaching EA, though, I've found that it makes sense to distinguish three dimensions of enterprise architecture to guide the course, the discussion of the subjects et cetera. In the course "Enterprise Archtiecture in Practice" I used the following slide to introduce these perspectives:

The first dimension deals with the question "What is enterprise architecture?". As Hans put it, architecture is a property of a system. In the case of EA, the system under consideration is an enterprise (thus assuming that architects have a systemic view of enterprises). Paraphfrasing the FRISCO report, it can be argued that since each architect has a unique perception of the enterprise under consideration, each architect sees the architect of this enterprise differently (in FRISCO terms, an architecture is a special model which exists in the mind of a human actor). Therefore, it is essential to communicate about architectures. This is also argued in e.g.  the Archimate approach. 

This brings us to the second dimension: documentation. This dimension deals with the question "How are architectures documented?". In my opinion, this is where most of the big architecture frameworks and architecture languages come on. Think IAF, Zachman, Archimate et cetera. It appears that there are two main aspects of architecture documentation. First of all, there is the style of architecture blueprints in the form of (semi) formal models. This is what most people expect from architects: walking around with A0 sized plots of e.g. the application landscape. The second style pertains to architecture principles (ignoring the distinction that is sometimes made between 'principles' and other types of regulations such as 'rules', 'guidlines' etcetera). Neither style is right or wrong, in my opinion. Both are equally valuable, depending on what one wants to achieve. For example, the blueperints tend to provide a lot of information and insights which may be used for decision making whereas principles may be used in Project Start Architectures to guide projects within the enterprise.

This brings us to the last dimension which pertains to the question: "What is an architecture used for?". This refers back to the comment by Hans Bot. In my experience, more and more organizations start working under architecture. This means that they use the EA way of thinking  for governing the enterprise with a strong focus on brining together the worlds of what traditionally is called 'business' and 'IT'. Probably the most succesful and widespread use of EA is the Project Start Architecture. 

Splitting up these dimensions and discussing them seperately has worked well in practice, at least in a teaching setting. As long as there is no widely agreed upon feel for what EA is, especially outside the architecture community, it may be necessary to continue to discuss these dimensions with each new architecture initiative. This is unfortunate, as it is more important to get the work done.

LAC 2008

The LAC 2008 event (Landelijk Architectuur Congres) event will be next week. On the 26th and 27th of November to be precise. This is the 10th edition of the LAC so it will be special. I'm looking forward to attending the event and hooking up with old and new friends. The general program can be found at the LAC 2008 website. As for the different tracks, I intend to go to:

• wednesday: the role of enterprise architecture in business transformations
• thursday: enterprise architecture, strategic specialism for informed governance 

Please send me an E-mail if you want to get in touch during the event.

Enterprise Architecture as Strategy

A while ago I read the book Enterprise Architecture as Strategy (by J. Ross, P. Well, and D. C. Robertson. See the book's website for more information). This book presents an interesting perspective on Enterprise Architecture provides useful tools for "doing EA" in practice. 

The basis for the books is the foundation for execution which is defined to be the IT infrastructure and digitized business processes automating a firm's core capabilities. Three steps in defining this foundation for execution are:

1. Operating model: the necessary level of business process integration and standardization
   
2. Enterprise Architecture: organizing logic for business processes and IT infrastructure, reflecting the operating model
   
3. IT engagement model: system of governance mechanisms that alignment with strategic objectives
   

The following figure outlines the general approach

The operating model is characterized using two dimensions: the level of business process integration and the level of business process standardisation. This leaves room for four types of operating model, most notably:

		standardisation
		low	high
integration	high	coordination seamless access to shared data	unification standardized integrated processes
	low	diversification independence with shared services	replication standardized independence

Each cell (i.e., each type of operating model) has unique characteristics. For example, for replication it holds that there are few shared customers between businesses,  business units are operationally similar, and there is centralized control over business process design, etcetera.

The next step is the definition of an enterprise architecture, which is defined to be the organizing logic for business processes and IT infrastructure reflecting the integration and standardization requirements of the companies operating model. The key to defining an effective EA is presumed to be the identification of process, data, technologies and customer interfaces that take the operating model from vision to reality. An EA is documented using a core diagram in a semi-formal language. This diagram is a one-page overview of process, data, and technologies constituting the desired foundation for execution. For example:

This diagram is intended to show the "operational pipeline" of Delta at the top. This maps, to some extent, to the notion of a value chain. The middle part of the diagram shows  the supporting "nervous system" which consists mainly of the databases that Delta uses. It also shows some of the interfaces to this data. Finaly, the bottom part of the figure shows different aspects of the "customer experience". I like this type of picture, as it is easy to make and easy to understand. However, since it is so informal it may also lead to confusion (this is where tools like Archimate come in handy).

One of the more interesting aspects of the book are the EA maturity models which are defined as follows:

• Business silos: maximize individual business unit needs or functional needs
• Standardized technology: provide IT efficiencies throgh technology standardization and centralization of IT management
• Optimized core: companywide data and process standardization
• Business modularity: manage and reuse loosely coupled, IT-enabled business process components while enabling local differences

The underlying assumption is that firms will go through these different stages as follows

For each of these levels / stages, learning requirements are defined. I'm all for maturity models, as it gives managers and architects some guidance in figuring out how to let the organization evolve in a natural way. In this case, however, I'm not convinced that this will actually work for all/most companies. On the upside, the authors acknowledge that companies ought to think out a maturity strategy for themselves. E.g., some companies belong in the diversification quadrant of the above table. Others will want to grow from diversification via replication to unification, whereas others will want to grow via coordination to unification. It all depends on the unique situation of a firm. 

Last but not least, the engagement model is discussed. A very useful section as it is nice to have a good theory, but more interesting to actually implement it in practice. The engagement model is outlined in the following figure:

The nice thing of this engagement model is that it relates business and IT on the horizontal axis, while distinguishing between the project / business / enterprise level on the vertical axis. As such, it paves the way for a enterprise-wide governance model for IT. IT governance encompasses major decision areas related to the management and use of IT in a firm and should be driven by the operating model.

In my opinion, the good aspects of this book are:

• the authors have combined their extensive theoretical knowledge with their experiences from practice 
• there is a strong focus on governance
• the book leaves plenty of room for adaptation to the individual situation in firms

Somewhat less positive points of this book are:

• the book is written solely from the IT-perspective / discusses IT-related topics
• the book but seems to miss the point about strategy (in the sense of strategic management) at times. For example, discussions on synergy, competitive advantage etc. are missing. 
  

PRET'09

An interesting challenge for practitioners and academics is to maintain a good balance between academic rigor and practical relevance. An often heard claim is that academic research is hardly relevant (especially in CS), and that consulting lacks academic rigor.

Next year's CAISE conference (Computer Aided Information Systems Engineering) will be held in Amsterdam. CAISE is one of the conferences that has always maintained a very high standard in terms of academic rigor. This year's CAISE conference will also host the PRET workshop (Practice-driven Research on Enterprise Transformation). The list of accepted papers / chapters should be published soon. It promises to be an interesting workshop! 

Google - more than just search

The Google search engine has had a turbulent life since its inception in the late 1990’s. Having started as a PhD project of Brin and Page, the Google search engine now handles about 70% of all search requests on the Web. Even more, with revenues exceeding USD 16 mln in 2007 Google has become a Web giant indeed. 

Products and activities

It is hard to think of areas related to the Web that Google is not active in. Its product portfolio is huge. Google Search is the infamous search engine that has specialized sections for searching news, images and more. Google News collects and groups news from a wide variety of news sources, both nationally and internationally. Google Mail, Google Calendar and Google Docs of-fer office functionalities and run completely online (with ‘Google Gears’ most of these tools are also available offline). Even more, Blogger, YouTube and Picasa allow users to share their thoughts, movies and photos online. 

Most of these services are free to the public as Google earns most of its revenues by selling ‘clicks’^[1] by means of its advertisement programs AdWords and AdSense. These programs aim to to provide advertisements that are ‘relevant’ to website visitors. Subscriptions for businesses to its online office software form a second stream of revenues. Since 2003, the revenues from advertising account for 99% of Google’s total revenues. Interestingly, though, growth rates for advertising are slowly decreasing whereas growth rates for licensing and other activities are slowly increasing. 

Ironically, while working on their dissertation still, the Google founders wrote in their seminal paper the anatomy of a large-scale hypertextual web search engine that they expect that “advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers” and subsequently argue that “from the consumer point of view that the better the search engine is, the fewer advertisements will be needed for the consumer to find what they want”. The authors conclude that the business model of advertisement based search will erode and that, therefore, it is crucial to have a competitive search engine that is transparent and academically solid.

Google is also increasingly active outside the digital realm of the Web. For example, Google re-cently announced a partnership with General Electric, focusing on technology and policy with respect to new, eco-friendly energy grids. This initiative appears totally unrelated to Google’s current activities, but does seem to fit with its efforts for greener data centers. Another interesting development is the fact that Google has recently announced a new browser (Chrome) to speed up developments on the Web, and the fact that it is getting in the cell phone business with its An-droid application platform. 

Working for Google

To make all this happen, Google recruits ‘the best of the best’. Despite the competition for top talent, Google managed to attract over 6.000 new employees in 2007, while 

there are rumors that the number applicants exceed 1.000.000 per year. It appears that Google is in a paradoxical situa-tion where it can’t find enough qualified people, while at the same time many people are applying for a job. 

The fact that so many people want to work for Google is partly due to the ‘coolness factor’. An-other important aspect in this respect is that Google recognizes that it can only do what it does because of its highly skilled employees. These top professionals get to work on some of the toughest technical problems around these days such as managing the huge amounts of traffic that Google’s data centers around the world have to serve every minute of the day.

In recognition of its first class workforce, Google invests heavily into the well-being of its employees, e.g. by giving them free access to food, making sure the office building has plenty of places to relax and giving staff a USD 5.000 allowance to invest in a hybrid car. On top of this all, Google recognizes that if it wants to attract the best employees it must challenge them. This was clearly shown when Google posted tough (math) problems on large billboards, suggesting that if you enjoy solving these puzzles then it is probably a good idea to apply for a position at Google. 

Challenges

Google’s heavy reliance on advertisement poses some interesting challenges for the Web giant. The first challenge has to do with the revenue model. As Brin and Page wrote a decade ago: ad-vertisement based search is heavily biased towards advertisers, not consumers. Given the current popularity of Google, it appears that consumers are willing to put up with the advertisements. This is, however, a very thin line. A second issue has to do with a phenomenon called ‘click fraud’^[2]. As click fraud becomes a tool in the battle between companies, Google’s revenue stream could be hampered. To counter this threat, Google recently announced a partnership with Click Forensics Inc, a click-fraud-detection company in an effort to continue to leverage its dominant position on the Web to sell advertisements.

Even more, a battle between several big companies is raging for the consumer’s attention, even though the Web is said to be big enough for everybody. These players include Google, Microsoft and Yahoo, but also include renowned news sites such as CNN and BBC World. In this battle, parties form ever-changing coalitions to stay ahead of the competition. For example, Google and Yahoo recently announced that their advertisements efforts will be bundled. This, in turn, caused concern with the US government who is currently preparing an anti-trust lawsuit with respect to this joint venture. Google’s dominance resembles the monopolist situation that Microsoft has on the desktop. The public is increasingly concerned about Google’s dominance as Google “knows everything about everybody”. It knows what we search, which newsgroups we visit, which we-blogs we follow, which products we’re interested in and so on. To some people this is a scary thought, despite Google’s motto “don’t do evil”.

Finally, several analysts and trend watchers suggest that Google is spreading itself too thin as it is active in so many unrelated activities, thus suggesting that Google insufficiently leverages syner-gies between its activities. They may have a point, even though it is hard to argue with success.  Google can indeed be seen as a ‘big brother’ that knows all, and is active in almost all aspects of life on the Web. Even though competitors, some parts of the public as well as government are concerned with respect to this status, Google is still doing incredibly well. It is said that on the Web, the only constant is change. Google’s biggest challenge is, and will be, to keep up with change. 

Sources:

• S. Brin and L. Page. The anatomy of a large-scale hypertextual web search engine. Computer Networks and ISDN Systems, 30(1–7):107–117, 1998.
  
• Google. Annual report 2007.  
  
• J. C. Perez. Google allies with click-fraud-detection firm Click Forensics. Computerworld website, October 10, 2008. 
  
• D. Bartz. Yahoo-Google antitrust bar higher than Microsoft. Reuters website, April 13, 2008
  
• B. Moriati. Google: everybody’s big brother? The Daily Collegian website, September 28, 2008. 
  
• B. Lunn. Is Google spreading itself too thin? The Read Write the Web website, September 23, 2008.
  
• T. Claburn. Google, General Electric push renewable energy, grid technology. Information week website, September 17, 2008.
  
• E. Zeman. Google: Android Market Will Be More Open Than iPhone Apps Store. Informa-tion week website, Ocotober 3, 2008.
  

Notes

[1] The AdWords and AdSense programs pertain to advertisments that are placed next to search results or on third party websites. The advertiser pays Google a fee each time someone clicks on the advertisement.

[2] Click fraud happens when someone clicks on an ad with malicious intent. For example, a competitor may click on a rival's pay-per-click ads in order to drive up its ad spending. Or a publisher may click on pay-per-click ads on its site to trigger more commissions.

Strategic Architecture: Strategic Management meets Enterprise Archiiecture

Introduction

The adage the only constant is change seems to be an appropriate description of the status quo for modern organizations. Strategic management is mostly concerned with the alignment of the firm with its environment. Many different issues can be identified in this field, such as the issue of competitive advantage, the issue of corporate configuration, the issue of international configuration, et cetera. Different authors / thinkers have different belief systems, leading to different perspectives on these issues, some of which are diametrically opposed (Mintzberg et. all, 1998). When studied in isolation, each perspective seemingly provides the ‘right’ answer to the strategic issue at hand. However, for the strategizing manager they form a paradox: how to deal with the tension between these diametrically opposed perspectives that both seem ‘right’. The strategy tensions pertain to the organizational purpose, the strategy processes, the strategic content itself or the context surrounding strategic activities (de Wit and Meyer, 2006).

On the other hand, enterprise architecture is mostly concerned with the management of changes in organizations and evolved from the (more traditional field) of business / IT alignment (e.g. (Parker & Benson, 1989)). Enterprise architecture is, thus, seen as a means to an end and deals with issues such as the alignment of processes and underlying IT systems, regulating the behavior or (computer / human) actors within the enterprise and the optimization of processes, IT, infrastructure and human behavior with respect to some predetermined boundaries (e.g. (Op ‘t Land et al., 2008)). In practice a distinction is made between architecture as a prescriptive instrument and a way of documenting the desired state of the enterprise (e.g. (Lankhorst et al., 2005)). 

This weblog is about the relation between these worlds. The goal is to publish thoughs on:

•  strategic management
• enterprise architecture 
• the relationship between these worlds
• research results
• case studies 
• experiences in practice
  
• references to interesting materials (such as weblogs, books, and articles)

About the author(s)

This weblog was started by Dr. Bas van Gils. Bas received his Masters degree in information management and technology from the University of Tilburg (the Netherlands) in 2002. In 2006 he received his PhD at the Radoud University (Nijmegen, the Netherlands) on the subject of Aptness on the Web. He has worked as IT architect / Enterprise architect for a few years, and presently works as consultant and lecturer at strategy works / strategy academy.

On occasion guest editors will be invited to post to this Weblog (if you're interested, please contact me via E-mail).

References

• Op ‘t Land et al.. Enterprise Architecture – Creating value by informed governance. The Enterprise Engineering Series. Springer Verlag, 2008. ISBN: 978-3-540-85231-5
  
• Lankhorst, M. (ed.) Enterprise Architecture at Work: Modeling, Communication and Analysis. Springer, 2005. ISBN: 3540243712
  
• M. Parker & R. Benson. Enterprise wide Information Management: State-of-the-art StrategicPlanning. Journal of Information Systems Management, 1989, 14-23
  
• B. Wit & R. Meyer. Strategy Synthesis, Revolving Strategy Paradoxes to Create Competitive Advantage - Concise version. Thomson, 2006. ISBN: 1-84480-192-6
  
• Mintzberg, Henri, Bruce Ahlstrand & Joseph Lampl. Strategy Safari: a guided tour through the wilds of strategic management. The Free Press 1998 ISBN 0-684-84743-4