The Value Landscape

The key to successful IT and EA

There is a shift afoot in the Information Technology (IT) and Enterprise Architecture (EA) worlds towards portfolio based thinking. Organizations are keying in on the cost savings they can achieve by using a solution, like that put forward by Troux, (www.troux.com) in order to realize what is in some cases extraordinary cost savings and efficiencies. As stories of these savings and their associated enormous return on investment begin to trickle out into the public eye, momentum is growing in the market place to leverage these solutions. The associated use of the portfolio approach and tools as a mechanism to save on costs has grown as well, with many organizations pushing very specific cost saving agendas and projects forward.

Before I say another word, let me be clear. Cost savings are good. It was part of the promise of EA from its inception. The idea that we would gain real insight into how the resources of the organization should be configured, in order to support the mission of the organization in as efficient and effective manner as possible, has always included the idea of cost savings. What I want to discuss today is ensuring that you get maximum value from this effort in the longer term. Remember that the cost savings we are talking about in these cases are almost always the product of a system that was not capable of optimizing in order to deliver this level of efficiency and effectiveness previously.

The problems of yesterday won’t disappear because you’ve gathered the information necessary to eliminate them now. You need to fix the systemic issues that led to those problems and optimize the system as a whole. Without that, you either won’t achieve a maximum return or in the worst case, you will have to re-cleanse your system periodically because your processes keep leading you to the same problems. The right approach is to ensure that the right people in the organization leverage this new information on an ongoing basis and ensure that as many decisions as possible are being made based on the best information the organization has to offer.

In order to do this several things have to occur, the first of which is the recognition that this is not a one-time fix. The enlightenment your organization gets by evaluating its application portfolio etc. for cost savings doesn’t solve the decision-making problem that gave you the mess you have today. You truly need to look across the stakeholder landscape within your organization as a whole and begin to categorize the roles and decisions that should be made using this new information. For example, if the current process for evaluating technology buys within the organization does not include referencing organizational standards, you will never gain the benefit of having standardized on anything.

By embedding this process into an automated workflow, you can be assured that the right information will be in front of the right person when the buy decision is made. You also need to ensure that if you have spent the time and money to develop a repository that has “one version of the truth,” that it doesn’t simply present one face to every stakeholder. One of the biggest complaints I’ve heard from people who are customers of EA products is that they are cumbersome and hard to use. A procurement officer shouldn’t have to be an EA specialist to buy the right technologies for their organization. A simple list of approved vs. not should be available with enough information to make informed decisions. It is worth understanding your stakeholders well enough to deliver tailored reporting because this will drive adoption, which will drive an ongoing return on investment.

You need to develop a mechanism or framework for calculating the benefit each of these stakeholders receives from their information as well as the benefit the organization is receiving. This value framework is critical to achieving long-term success for the organization. You simply cannot maintain this type of effort, generate the type of buy in needed to succeed, or maintain the necessary funding levels without developing this type of valuation framework. Specifically the value framework should enable benefit calculation across factors like risk, agility, cost, alignment, etc., and enable executives to understand the specific value that is being gained across the organization as a whole and on a stakeholder by stakeholder basis.

This is critical because you hear all of the time from people that EA should be relevant across every person in the organization, but when it comes time to pay for it they balk at what would essentially amount to a miniscule percentage of funding on a per person basis. I fervently believe that this is because they have no mechanism for measuring the value it is bringing on anything other than the cost avoidance basis outlined above. In fact, in order to maximize the return on investment, an organization should invest in order to understand the complete value landscape being delivered as part of the portfolio approach. Essentially, this is the combination of a stakeholder landscape that defines specific stakeholder types, the decisions they make, and the impact/benefit the organizations receive in aggregate from having the right information, at the right time, to make the right decisions. To me, the value landscape should enable executives to understand the specific value of information that is being developed and maintained as it relates to specific stakeholders, decisions, organizations and the enterprise as a whole. Without this information the organization will only have anecdotal insight into the value of these programs. Some people think that this is enough; that as long as executives understand intuitively that this information is useful it doesn’t really matter if it is quantified and that the cost to quantify is therefore useless. This is wrong-headed and will eventually lead to under utilization, under funding, and the degradation of the capability as a whole. On some level, EA and the portfolio-based approach to enterprise management is about understanding value in order to manage resources. If the program cannot effectively advocate and measure its own value, do you really believe executives will trust it to measure theirs?