Integrated Governance

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Is an approach to make your organization work better by creating a form of management that supports the various forms of governance and forms of planning. The literature review that you will be able to read by downloading the document from the provided link, deals with how Enterprise Architecture can enable an enterprise to achieve the vision of holistic management. Enterprise Architecture is therefore one of the major components of the paper and likewise is Coherency Management. The initial assumption is that by using Enterprise Architecture and Coherency Management that the enterprise is able to achieve competitive advantage since the executives, middle managers and employees will be able to get a better understanding of how the organization works and what it can do to align processes, resources and intelligence to achieve a sustainable competitive advantage.

The paper defines integrated governance, and introduces a framework that most enterprises will be able to make use of to implement integrated governance. It is obvious that more forms of governance can be incorporated into the framework; however since it has been an academic study, I had to delimitate what forms of governance I had to deal with (otherwise it could be a rather long paper on various forms of governance that would be more or less relevant to include).

It is notable that the enterprise needs to adapt the framework for its specific context; otherwise it is very likely that the enterprise will not be able to gain any of the benefits that integrated governance as a concept can provide the enterprise with.

One of the most important aspects of the framework is the quality assurance feedback channels that needs to be established, since this is the only official approach to collecting the data needed to understand how the changes influences the enterprise.

The findings of the paper and the paper itself is published under Creative Commons version 3 SA BY U.S. Edition. This means that you are able to make use of the paper in a commercial context and you are welcome to make derivatives as long you stay loyal to the license and you credit me (Peter Flemming Teunissen Sjoelin) as the author of the original paper.

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Challenges of Enterprise Architecture: A Focus on the Transformation!

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Barriers for Enterprise Architecture

When working with adaption of concepts and technology then the enterprises will face issues with to identify the proper solutions in the proper pace and adapt the solutions to the context that the enterprise is within. Likewise will the enterprise face the challenge of adoption. The adoption of the concept or technology.

The first outwards part (identification of potential technology or concepts) has to be diffused by networks that the enterprise linked to. This can be either through so called social networks or through meta-organizations that acts on behalf of many different organizations and sent out information to the different actors within their network. In many cases is the technology or for that matter the concept in some form generic, and the enterprise needs to alter it to make it work in their context. The adoption process (Rogers 2005) as it is called will have to impact various activities, processes and structures within the enterprise, and that will take time.

Usually semi-mature enterprises will be working with an assumption that they will have to make use of project and program management to implement the new concepts or technology. However it is quite clear that the transformation itself will not happen as a result of project management, but only as a result of organizational transformation. It is rather common that the various lines of businesses don’t adapt and incorporate the various projects right away which leads to the realization of the investments isn’t crystallized right away.

It can be concluded that it is the adaption process that fails when enterprises aren’t able to incorporate the projects into their activities.

The question then becomes if the concept of project or for that matter program management will be a particular good way of adapting the enterprise to change when the real focus should be on how to adapt to the organizational transformation, and thereby working with change management instead of project management.

Change management is usually a rather difficult discipline to work with, and many enterprises underestimate the resources needed to implement the resources. When working with adaption of concepts and technology, then the enterprises will face issues with identifying the proper solutions in the proper pace and adapt the solutions to the context that the enterprise is within. Likewise will the enterprise face the challenge of adoption the concept or technology.

The part is the outwards of the organizational barrier (identification of potential technology or concepts) has to be diffused by networks the enterprise is linked with either through so called social networks or through meta-organizations that acts on behalf of many different organizations and sent information to the different enterprises within their network. In many cases it is the technology or for that matter the concept in some form generic, and the enterprise needs to alter it to make it work in context of the enterprise. The adoption process as it is called will have to impact various activities, processes and structures within the enterprise, and that will take time.

Usually semi-mature enterprises will be working with an assumption that they will have to make use of project and program management to implement the new concepts or technologies. However it is quite clear that the transformation itself will not happen as a result of project management but only as a result of organizational transformation. It is rather common that the various lines of businesses don’t adapt and incorporate the various projects right away which leads to the realization of the investments isn’t crystallized right away.

It can be concluded that it is the adaption process that fails when enterprises aren’t able to incorporate the projects into their activities.

The question then becomes if the concept of project or for that matter program management will be a particular good way of adapting the enterprise to change when the real focus should be on how to adapt to the organizational transformation, and thereby working with change management instead of project management.

Change management is usually a rather difficult discipline to work with, and many enterprises underestimate the resources needed to implement the resources.

Win Over The Opposition

In most literature that has been written about how change management works with the assumption that an enterprise can be unfreezed, moved and freezed. The initial idea was proposed shortly after the second world war by Kurt Lewin. The assumption was based on that the organization was a tightly coupled social system where the actors thought and acted alike. However this might not be the case for most enterprises if they are slightly more complex than the average entrepreneurial organization. For this Karl Weick introduced the loosely coupled social system. In the paper Weick wrote together with Orton in 1990 they state that there are eight forms of loosely coupling among the various components of the enterprise:

  1. Individuals.

  2. Subunits.

  3. Organizations.

  4. Hierarchies.

  5. Organizations and Environments.

  6. Activities.

  7. Ideas.

  8. Intentions.

This means that it isn’t as easy as Kurt Lewin proposed it was to change enterprises. It is a rather complex processes where the influences of the various connections and couplings with the components of the enterprise. It is very likely that the various components will be influenced by their contexts and thereby by their domains.

It is notable that in every organization there will be different forms of coupling among the various components and some will be more tightly integrated than other. Therefore should the eight forms of coupling be understood as a stereotyped view that needs to be customized. In his book “managing the unexpected” that burning platforms aren’t the way forward if the enterprise has to transform for the better, since it is already to late when the burning platform is present.

The Burning Platform?

Therefore should the burning platform be a last solution. The concept of the burning platform was originally published in the Kotter’s (1995) article dealing with managing change. The first part of working this particular change approach is creating the burning platform and for that the executives needs to create a crisis so it is apparent that the enterprise needs to change or extinct.

When the burning platform has been established then Kotter works with a framework that contains eight steps that needs to be followed to implement change. All of the steps are useful but the primary problem is that the approach to change is based on Lewin’s eight steps for change.

It might make the framework for change useless but the rest of eight steps might be useful if it is combined with social networks theory and defining how to approach the loosely coupled systems. Likewise does the enterprise need to institutionalize a culture that accepts when the managers and employees makes mistakes and support them when they report when the mistakes happen so the damage of the mistakes are coped with.

In conclusion it is a necessity to handle the change approach by blending it with the views of Rogers, the views of Weick and the view of Kotter. As it is with all generic frameworks it has to be adapted to the individual enterprise otherwise will the benefits not be realized by the enterprise.

Enterprise Architecture and Organizational Transformation

It is needless to say when implementing an Enterprise Architecture program then it will lead to a need for change in the organization and it handles a lot of its activities for working with documentation, communicating and not to forget how to prioritize projects and organize them into programs. The changes in tasks will impact the organization structure, the people who have been employed, and the technology that has been implemented.

If the enterprise already has implemented a functional Enterprise Architecture program then it is likely that the enterprise will have to identify that the various problems that the Enterprise Architecture program has identified and the transformation phase of the critical business processes. The Enterprise Architecture program will lead to further change through iterations and eventually the program will have matured the Enterprise Architecture. When the Enterprise Architecture has matured then a lot of other elements of the enterprise will be influenced by the concept of Enterprise Architecture program.

Projects Don’t Transform the Enterprise

Projects alone aren’t contributing to change within the enterprise. Usually projects are groups that are established with members from the Line of Business or the Lines of Businesses and when the project has been delivered the project team is usually dissolved and the project is handled over to the line of business. It is in the line of business that the change needs to occur if the business processes have to be changed. Therefore it is the Lines of Business and their ability to adopt the project deliveries that is the key to a more agile enterprise.

Sources

Kotter, J.P., 1995. Leading Change: Why Transformation Efforts Fail. Harvard Business Review, (March – April 1995), 9.

Orton & Weick, 1990, Loosely Coupled Systems: A Reconceptulation.

Rogers, E.M., 2003. Diffusion of Innovations 5th ed., Simon & Schuster International.

Weick, K.E. & Sutcliffe, K.M., 2007. Managing the Unexpected: Resilient Performance in an Age of Uncertainty 2nd ed., Jossey Bass.

Loosely Coupled Systems: A Reconceptulation.

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The Future of Enterprise Architecture: Approaching the Next Generation Enterprise Architecture.

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What Enterprise Architecture is Today

Enterprise Architecture origins from the Information Systems world as a form of documentation. The initial idea was known as Enterprise Information Architecture and was presented by John Zachman as way to make a blueprint of the IT usage in an enterprise. He claimed when working with a blueprint then it would be easier to make some form of coherent decisions.

This particular approach developed from what was seen as the Zachman checklist (typically a jargon applied by theorists within the TOGAF-framework.

What Enterprise Architecture Should Become

The question then becomes what Enterprise Architecture should become. There is potential in working with integrated governance. This means that enterprise architecture needs to evolve from being an IT centric approach to articulate and initiate projects that create alignment between IT and the business.

The most widely used generic framework is TOGAF that is developed and maintained by the OpenGroup, and it is only recently in version nine of the TOGAF-framework that the element of organization was added. This is a clear indicator that slowly but surely the concept of Enterprise Architecture starts to address other parts of the enterprise than IT.

In other words Enterprise Architecture should emphasize more on integrated governance that ensures that the enterprise is able to execute the strategy that has been articulated. The execution process will have to entail components of the enterprise like corporate capital planning, workforce planning,, security planning, IT planning & governance, supply chain management and innovation management. During the process of developing Enterprise Architecture there will probably come new issues the organizational aspect while the change is taking place, and therefore will have to become an evolutionary process that develops over time. This particular topic will be dealt with in the next section, and since it is a focus on persons, then it is very likely that the community that practice Enterprise Architecture would have to adjust and change their idea.

When speaking of organizational aspect and then the next generation of Enterprise Architecture has to address managing of virtual enterprises as well as the concept of Enterprise 2.0 .

How Enterprise Architecture Becomes Holistic

To enable enterprise architecture to move away from the IT-centric to become a holistic approach to integrated governance, then the progress will deal with embed management, organization and strategic approach into the enterprise architecture frameworks.

My definition of framework is a method that leads to integrated governance. The progress towards integrated governance is dealt with through enabling a holistic understanding of how the enterprise adapts to the understanding of how the enterprise works. The understanding can only be achieved if the enterprise organizes its findings in an enterprise wide repository that is visible for all actors in the enterprise.

The holistic management approach needs to address something that is classically been associated with change management and it is in many ways dealing with feelings and attitudes on collaboration among the various factors in the enterprise.

Enterprise Architecture is performed through a community of Enterprise professionals (in major complex enterprises), consultants who are loosely mingle with many different clients and not to forget academics and students who study and develops on enterprise architecture, and it is essentially these people who have to change their mindsets to address Enterprise Architecture in new ways and thereby develop the concept of Enterprise Architecture. As it is with science and theory so it is with diffusion of science and technology so it is with the diffusion of Enterprise Architecture. It rarely comes in revolutions and therefore it most likely will become an evolutionary process where case studies needs to be done and communicated.

Conclusion

In conclusion it is a necessity to go from IT centric designs as the primary approach has to be dealt with since it doesn’t lead to a particular competitive advantage, and since most problems the enterprise faces are systemic and not particular within the field of IT. Enterprise Architecture as a concept is compatible with thinking in systems and sense making and therefore is it likely that the future of Enterprise Architecture will be working with sense making and enterprise wide problems in the corporate strategy.

The transformation process is a hugh process with many obstacles, and it is for sure it will take time to handle the problems of change since it is an entire community that changes its mindset. The way to make the community change its mindset is through the various educational programs and through changes the ideas within the networks for Enterprise Architecture.

The primary problem will be changing the culture and the mindset of the practitioners of Enterprise Architecture, but the challenge is not impossible to cope with.

Appendix

Doucet, G. et al., 2009. Coherency Management: Architecting the Enterprise for Alignment, Agility and Assurance, International Enterprise Architecture Institute.

Mcafee, A., 2009. Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges, Harvard Business School Press.

Pasternack, B.A. & Viscio, A.J., 1998. The Centerless Corporation: Transforming Your Organization for Growth and Prosperity in the New Millennium, Simon & Schuster Ltd.

IT Strategy Paradigms: Ways to understand and develop IT strategies in a Coherency Management Context.

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What is an IT strategy

I have been able to identify two major approaches to articulate IT strategies.

The first major approach is the typical MIT Sloan School of Management approach that support the issues of a some how detached IT strategy from the corporate strategy. The strategy is build upon the assumption that IT is complex, and needed to compete with other organizations on particular issues. IT is a vital component and can’t be ignored in the ever changing competitive environment that most enterprises are in.

The notable theoreticians within the paradigm of the MIT Sloan School of Management are Erik Brynjofsson, Jeanne Ross and Peter Weill.

I title this approach the separated IT approach.

I have likewise been able to identify an opposing approach. The opposing approach deals with that IT is that dominant that the executives have to include IT in their corporate strategy. IT can’t be seen as a unique form of investment since IT is equal to many other forms of technology e.g., machines, cars, boats etc.

There are so far rather few theoreticians who commit openly to this approach to IT strategy, the most notable is properly Chris Potts and Scott Bernard (who indirectly support this approach through his views on Enterprise Architecture).

The later approach seems promising since it promotes that the various actors within the enterprise should work along side in a coherent fashion which is in the spirit of Enterprise Architecture.

The two approaches do share some common features e.g., the time frame, the focus on technology and principles needs to be addressed and that IT is a necessity to compete in the modern economy.

IT-strategy paradigms.

IT-strategy paradigms.

The Integrated Strategy Approach

The executives have to understand IT when they work with strategy and they have to understand the impact of applying Information Technology to e.g., Information Systems such as ERP systems, CRM systems or similar. McKeen & Smith (2004) that Information Technology is in nearly all aspects of an enterprise today. That means that the enterprise and the management of the enterprise needs to adjust to the new situation. McKeen & Smith argues that the IT department needs to be proactive to cope with the changes in the industry and the social conditions of the enterprise.

The IT managers don’t necessarily understand the future work with the business and it might lead that they develop assumptions that are out of touch with reality. Neither can we expect that IT persons (or for that matter other persons) knows everything or equally good at anything.

What is important in tis particular approach Potts argues that the need for governing the enterprise as a coherent entity and therefore should the enterprise avoid the detached IT department.

Chris Potts works with the assumption that any kind of modern and Western economies have to include IT in some way. Therefore should the executives (or other strategists) include IT in the articulation process of the corporate strategy. Potts argue that the IT department shouldn’t be separating from “the business” will lead to that the IT department, and the services the IT department provides the business will be seen as an external entity and therefore can’t the IT department have any influence on the corporate strategy.

This leads to the separated strategy approach that have some opposing views on how the enterprise should be dealing with IT in the strategy planning session.

The Separated Strategy Approach

The operating model is what the enterprise should be working with. This particular model maps how the enterprise works. Ross & Weill”s approach is that there are four different generic approaches that the enterprise can make use of (Ross & Weill 2009).

The operating models are then deal with through the needs of the business; but the assumption that Ross & Weill works with is that IT is complex and that executives from the business don’t understand how IT works.

Along side McKeen & Smith they claim that IT needs to become a proactive force but yet IT is that complex that it needs to be governed and dealt with by specialists or generalists who have an understanding of how IT works and how the various implementation approaches of IT works.

What The Approaches Share

Both approaches share features from one another e.g., the both approaches defines IT as a complex form of investments that needs to be governed. Likewise does both approaches suggests that the articulation of the strategy isn’t enough. The strategy needs to be embodied in the actions of the executives.

Both approaches suggests that IT is a corner stone in how the enterprises do business now a days. Both approaches argues that “the business” and the IT department needs to understand one another to make the necessary decisions to create synergy and through that make the business perform as it had more resources at hand.

Coherency Management

In a context of Coherency Management IT plays a decisive role in the foundation architecture, and the ideas presented in Ross & Weill (2006 & 2009) and FruITion both appeal to the usage of Enterprise Architecture to combine business and IT to create competitive advantages. The foundation architecture is characterized by the CIO and the IT department is the driver for enabling an Enterprise Architecture program. It is essential for any enterprise that pursues assurance, alignment and agility to establish an understanding of how the enterprise works and then apply the tools to elevate the Enterprise Architecture program to embrace more than just the IT department.

In conclusion an IT strategy should be tightly coupled to the corporate strategy to make any kind of benefit from working and governing IT.

Appendix

McKeen, J.D. & Smith, H.A., 2003. Making IT Happen: Critical Issues in Managing Information Technology, John Wiley & Sons.

Potts, C., 2008. fruITion: Creating the Ultimate Corporate Strategy for Information Technology illustrated edition., Technics Publications, LLC.

Ross, J.W., Weill, P. & Robertson, D.C., 2006. Enterprise Architecture as Strategy: Creating a Foundation for Business Execution illustrated edition., Harvard Business School Press.

Download the paper here .

Integrated Governance: A Presentation of a Literature Review.

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The Basics of the Review

The review is dealing with Integrated Integrated Governance. Integrated Governance is defined as how corporate strategy, IT strategy, IT governance and Enterprise Architecture are aligned and dealt with.

I have chosen to limit the amount of topics to cope with my limited resources. Therefor I selected what I assumed were the most relevant topics of the literature.

Corporate Strategy

In brief I worked with Mintzberg and his work titled “Strategy Safari” that basically deals with 10 different schools of strategy. The work is one of the few master pieces produced on strategy in the beginning of the 21st century and I added some of the views he expressed in his work titled “The Raise and Fall of Strategic Planning”. I chose to deal with three schools of importance, and then add a systemic approach by using the work “Breakout Strategy” by Finkelstein et al (2007).

I could conclude that corporate strategy is of no importance if it isn’t embodied in the actions of the executives, managers and employees. Likewise could I define some advantages and disadvantages from each of the schools and summed up the ideal approach to strategy development.

My initial assumption was that all other forms of strategy had to be aligned with the corporate strategy, and therefore I worked with an analysis of IT strategy and works within that particular field of strategies.

IT Strategy

I have been able to define two major schools (more likely trends) within the articulation of IT strategy. I have named them “The Integrated Strategy Approach” and the opposing view for “The Separated Strategy Approach”. When you go through the slides you will see that the two approaches do share some characteristics.

The characteristics are that IT is complex compared to the machines of the ‘old days’ and that the executives of the enterprise needs to understand how IT works to really be able to apply Information Technology in a way that achieves the benefits of using IT.

The separated strategy approach is based on the views that are represented by Ross & Weill (2009) in their work titled “IT-savvy”. They state that the IT is so complex that there is a need for an entity to administrate and develop the IT architecture, called the IT department. The IT department is almost a magical place that knows how the enterprise can develop new features and gear the enterprise to do so if only the executives form the “business” listened. For this the operating model of the enterprise has to be uncovered and defined. Through this the decision makers are able to handle the issues. One thing is for sure that the operating model has to be explicit in a document (strategy document) that is articulated after the corporate strategy has been articulated.

“The Integrated Strategy Approach” is based on the assumption that IT can’t be separated from doing business in the modern economy. The corporate strategy has to embed the IT strategy, and that dictates that the “business” and the IT-department needs to be tightly coupled. The approach promotes the view of that sub-optimization and monarchies needs to be undermined. The organization has to view IT as something similar to all other forms of investment and that can be done through abolishing the traditional title of the CIO and replace it with a new form of executive that according to Potts (who wrote the book “Fruition” that is serving as the platform of this particular view of IT strategy).

One particular view the two opposing views of IT strategies shares is that strategy means nothing if it is embodied in the actions of executives, management and employees.

That leads to the findings on IT governance.

IT Governance

IT governance is the IT strategy that is embodied. According to Ross & Weill (2004) claims it deals with defining principles, standards, investments and management of IT and Information Systems. When working with this particular form of governance then Ross & Weill argues that the top performers (40 case-studies they have worked with through their research on the topic) have made use of governance forms that makes includes both the IT department and the executives form “the business”. Two forms are known as duopoly and federation and they can take different forms when it comes to the rights of input and the rights of decision making.

But why should IT be governed in the first place? According to McKeen and Smith published the work “Making IT Happen” (2003) then IT is the foundation of any of the operations that any modern enterprise has. IT will change over time and the costs related to IT will be embedded in close to any kind of asset that can be found in a modern enterprise. Carr (2004) published his article and later his book “Why IT Doesn’t Matter” that basically states that doesn’t contribute to any kind of sustainable competitive advantages since IT is easily coped with. Porter (1998) claims that sustainable competitive advantages can’t come from a single process (or thing) that the enterprise does well, and likewise should the enterprise work with to position itself on the market and that uncovers that Porter belongs to the positioning school within the field of Corporate Strategy.

How can Integrated governance then be applied in an enterprise? My opinion is that Enterprise Architecture can be the glue that makes Integrated Governance work. First of all because it documents how the architecture is working and second of all that when used properly the executives, managers and employees are able to work with realizing the vision.

This leads to a discussion of Workforce planning.

Workforce Planning

I have worked with Gary Hamel’s approach to how management has been done through the early beginning of large social structures to the present. It is worth to mention that Hamel (2007) argues that the old fashioned management paradigm that has been founded on the basics of Frederick W. Taylor’s views on management and responsibilities. Taylorism works with the idea that the corporate management is based on that management demands and control. Hamel argues the role of management needs to be changed to a role where the managers facilitate and supports the employees with achieving goals of the enterprise.

I then approached the ideas of tightly coupled and loosely coupled organizational systems. These two particular approaches have different needs when it comes to transformation.

The tightly coupled organization can be handled through an approach that is tightly coupled to the theories that Kurt Lewin worked with (unfreezing, moving, freezing). The loosely coupled approach has to be dealt with in a different way since the various components of the organization works within various contexts and dominos that all in all moves them back and forward. In other words the enterprise can’t be freezed. Most complex organizations are loosely coupled to be able to give the various departments the autonomy that is needed to cope with the changes in the domino of the enterprise.

In cases where a complex enterprise needs to be transformed then it can be argued that a combined approach has to be applied. The approach can be a combination of Kotter’s (1995) 8-step approach for change with social networks theory that is proposed by Rogers.

This leads to the discussion of the concept of Enterprise Architecture.

Enterprise Architecture

The concept of Enterprise Architecture is defined by Bernard (2005) as the combination of Business, Strategy and Technology. Likewise does he argue that the Enterprise Architecture can be both a form of documentation and a form of management. He states that Enterprise Architecture is a program (many individual projects) that moves the enterprise from one particular state to another (desired) state.

The question becomes how Enterprise Architecture (and the next generation of Enterprise Architecture) can handle the obstacles of organizational barriers and organization culture.

Coherency Management is theoretical addition to the concept of Enterprise Architecture and the paradigm operates with that Enterprise Architecture can address the elements of culture and overcome the human barriers to enrich the enterprise.

This leads to the concept of Coherency Management.

Coherency Management

The concept or perhaps the initial start of a new paradigm deals with that Enterprise Architecture has been too IT centric and that has minimized the positive outcome of Enterprise Architecture. Doucet et al. (2009) published the work “Coherency Management: Architecting the firm for Assurance, Alignment and Agility”. In the book it is expressed that every enterprise has an architecture; however not all enterprises have taken charge of their architecture.

To kick start the approach on how to make use of Enterprise Architecture to achieve assurance, agility and alignment then it the CIO has to be replaced with one who really supports the EA program and the change from the IT centric approach. A radical approach could be to replace the CIO role with the role of the CIIO (Chief Internal Investments Officer) to move away from the IT centric approach.

The CEO role needs also to be re-defined in the sense that it needs to support the EA program to make it embrace the Enterprise Architecture program.

Appendix

Finkelstein, S., Harvey, C. & Lawton, T., 2006. Breakout Strategy: Meeting the Challenge of Double-Digit Growth, McGraw-Hill Professional.

Hamel, G., 2007. The Future of Management, Harvard Business School Press.

Mintzberg, H., 2000. The Rise and Fall of Strategic Planning, Financial Times/ Prentice Hall.

Mintzberg, H., Ahlstrand, P.B. & Lampel, J.B., 2008. Strategy Safari: The Complete Guide Through the Wilds of Strategic Management 2nd ed., Financial Times/ Prentice Hall.

Newell, S. et al., 2007. Managing Knowledge Work 1st ed., New York: Palgrave MacMillan.

Porter, M.E., 1985. Competitive Advantage: Creating and Sustaining Superior Performance, New York: Free Press.

Orton & Weick, 1990. Loosely Coupled Systems: A Conceptualization. Academy of Management Review.

Porter, M.E., 1996. What Is Strategy? Harvard Business Review, 74(6), 61-78. Available at: http://esc-web.lib.cbs.dk/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9611187954&site=ehost-live&scope=site [Accessed January 26, 2010].

Sjoelin, P. F. T, 2010. The IT Strategy: An Articulation of the IT Strategy from a Coherency Architect’s Point of View.

Weill, P. & Ross, J.W., 2004. IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Harvard Business School Press.

Weill, P. & Ross, J., 2009. IT Savvy: What Top Executives Must Know to Go from Pain to Gain, Harvard Business School Press.

Download the Slides here.

Can IT Make a Competitive Difference: From a Coherency Architect’s Point of View.

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The Introduction

Erik Brynjolfsson and Andrew McAfee has written the paper “Investing in the IT That Makes a Competitive Difference” that was published in 2007 in by Harvard Business Review. The paper deals with how enterprises deals with competition in the United States. McAfee & Brynjolfsson argues that most enterprises are in state of hard competition and it will increasingly become more difficult to deal with the competition. They claim that they have found a collaboration between the investment in IT and the way enterprises are able to manage competition.

Premises of the Paper

The first premise of investing in IT that makes a competitive advantage is that the authors claims that the enterprise can gain a competitive advantage through investing in IT. The authors are of the opinion, that they can conclude that investments in IT can create competitive advantages from statistics.
McAfee & Brynjolfsson concludes that many industries experience though (almost perfect) competition. This form of competition has lead to a focus on operational efficiency where IT has become a key factor to achieve operational efficiency. This argument can be supported by Ross & Weill and their research into achieving competitive advantages through IT governance and IT strategies. McAfee & Brynjolfsson works with data that suggest that IT intensive companies can generate more value through governing their IT assets and applying IT to re-build their business processes.

“The firm with the best processes will win in most of the all markets. At the same time, competitors will be able to strike back much more quickly: Instead of simply copying the first mover, they will introduce further IT-based innovations [...]”

- McAfee & Brynjolfsson (2007), p. 6.

The authors suggest that there are six elements of the successful IT – enabled process. The first element is that it cover a wide span, the process produce results immediately, the process is precise, the process is consistent, the process makes monitoring easy and last but not least the process has embedded enforceability.
The three companies that McAfee and Brynjolfsson put their attention is on Cisco Systems, Otis (the elevator company), and CVS.
What is the common key for the three companies is that they make use of enterprise wide systems to somehow revolutionize and optimize their business processes. I believe that Harmon entitled this “obliteration of processes” which suggests that the business processes could be re-invented along side the addition of Information Technology. This would lead to that the true benefits of Enterprise Architecture can be reached.
The two authors then discuss two different approaches to enabling the IT processes. The first one is the “Top Down approach” and the second approach is the “Bottom Up approach”.
According to McAfee & Brynjolfsson then the authors makes use of the CVS as a case. They claim that while the enterprise made use of highly centralized systems then some discontent employees (they where discontent with the service the IT department provided for their Macs). The employees created a Wikipedia where they wrote articles on how to overcome the obstacles they experienced when they made use of their macs in the enterprise.
The later example was an example of a decentralized service.

Criticism

The article suggests that IT savvy enterprises do often perform better than enterprises that aren’t. This is in line with the MIT approach to IT strategy that McAfee, Brynjolfsson, Ross & Weill are working with. The role of IT needs to be addressed compared to organizational culture, the employees and their capabilities and their focus on adding value for the enterprise.
The classical anti-thesis to the MIT approach is Carr’s view of investments in Information Technology. Carr is of the impression that the investment in IT often leads to quite an opposite of what the intention was. Carr argues that when enterprises invest in IT then they often over emphasize the cost reduction.
The reductions are then re-invested into lower prices which is easily matched by a company that are in an industry that experience perfect competition.
Carr suggests that enterprises should follow other enterprises when it comes to the usage and investment in IT, likewise should the enterprises focus on risk instead of potential (innovate when the risks are low) and last should the enterprise invest less in IT.

Competitive Advantage

When it comes to competitive advantage then Porter (1998) suggests that the enterprise can’t achieve competitive advantages through focusing on operational efficiency. The enterprise has to focus on innovation to enable positioning the products the enterprise produces in a different way. Through positioning then competitive advantage should be enabled.
Likewise does Porter (1998) suggest that the enterprise has to be enable several processes to enable a sustainable competitive advantage.
Carr (2004) argues that Information Technology only leads to short term competitive advantages and is therefore not desirable to invest in. Instead should the enterprise focus its attention to work with several non-IT related competencies and eventually apply IT support them or re-invent them.
Patrick Turner (2010) suggests that IT needs a strong governance to become an enabler.

“When giving a high profile IT project to a junior project manager is like giving a teenager a rather powerful racing car, he will eventually crash it into a tree.”

- Patrick Turner

Ross & Weill (2009) suggests that Information Technology is only good for two specific things. Standardization that deals with the standardization of data and then integration which deals with information sharing through the entire process.

Reflection

McAfee & Brynjolfsson suggests that IT can make a strategic advantage (competitive advantage), if the enterprise understands to invest in the right IT and re-thinking its processes(the IT that makes a competitive advantage). However many other theoreticians suggest that operational efficiency which investments in IT can be identified as isn’t a strategy or for that matter a strategic enabler. The enterprise needs to invest in business processes and re-invent the processes when it makes sense for the enterprise to do so. McAfee & Brynjolfsson suggests that the schumpeterian competition that many enterprises have experienced in the U.S.
IT might become an enabler for most enterprises if they re-think their business processes by adding IT when it makes sense. McAfee & Brynjolfsson suggests that IT can be an innovation enabler since the enterprise IT can give technical assistance to support the employees.

Appendix

Carr, N.G., 2004. Does IT Matter?: Information Technology and the Corrosion of Competitive Advantage, Harvard Business School Press.
McAfee & Brynjolfsson, 2007, Harvard Business Review.
Porter, M.E., On Competition, Harvard Business Review, Boston, 1998, p.40-42.
Turner, P., 2010, On IT strategies, Enterprise Architecture Summer Camp.
Weill, P. & Ross, J., 2009. IT Savvy: What Top Executives Must Know to Go from Pain to Gain, Harvard Business School Press.

Download the paper here.

Enterprise Architecture Summer Camp: Preparing for Week 31.

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Logistics

In week 31 I will be attending the summer school dealing with Enterprise Architecture, Enterprise 2.0, Government 2.0 and organizational development. The summer school is a part of the IT University’s approach to developing an elite program dealing Enterprise Architecture and Coherency Management.

The summer school will be taking place in Sweden (about a 12 hour drive from the southern part of Sweden) in a ski resort located near of the Norwegian border. The summer school has been sponsored by companies like Accenture, Qualiware and not to mention Gotze Consulting (a company owned by John Gotze).

Program

I plan to make use of the time up there to write some notes on the topic of Enterprise 2.0, Coherency Management and Government 2.0 and write on a couple of new blog posts for the CoherencyArchitect.com . I plan also to be working with a presentation of some of the findings that have been working with in one of the literature reviews I have made during the summer holiday. The literature review will be published in its full length when I have had the time to improve it and made it ready for publishing.

Blogs

I plan to make vlogs (Video Blogs) up from the summer camp; however these will not be published while I am attending the summer camp (due to the cost of data roaming within the European Union).