Analysts Define Business Value and Imperatives for Cloud-Based B2B Ecommerce

Transcript of a BriefingsDirect podcast on the value of building and exploiting cloud-based communities for advanced ecommerce business processes.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: Ariba.

Dana Gardner: Hello, and welcome to a special sponsored BriefingsDirect podcast, coming to you on location from the Ariba LIVE 2010 conference in Orlando, Fla. I’m Dana Gardner, Principal Analyst at Interarbor Solutions. We’re here with a group of IT industry analysts and Ariba executives to explore the business implications for ecommerce in the cloud-computing era.

As more services, applications, and data are developed for, and delivered via, cloud models, how do business to business (B2B) commerce and procurement adapt? Or, perhaps we have the cart in front of the horse. Are the new requirements and expectations of modern, global business processes, in fact, driving the demand for IT solutions that can be best delivered via cloud models?

Either way, the promise of cloud aligns very well with the sophistication of modern B2B ecommerce and the pressing need for speed, agility, discovery, efficiency, and adaptability. Ecosystems of services are swiftly organizing around cloud models. How should businesses best respond?

Please join me in welcoming our distinguished panel to help answer these and other top ecommerce and cloud questions. We’re here with Robert Mahowald, Research Vice President at IDC. Welcome to the show.

Robert Mahowald: Thanks very much, Dana.

Gardner: We’re also here with Mickey North Rizza, Research Director at AMR Research, a Gartner company.

Mickey North Rizza: Hi, Dana.

Gardner: Tim Minahan, Chief Marketing Officer at Ariba.

Tim Minahan: Hey, Dana.

Gardner: Also, Chris Sawchuk, Managing Director at The Hackett Group.

Chris Sawchuk: Hi, Dana.

Gardner: Let me go to you first if you wouldn’t mind, Robert. I posed the question as to whether it is the technology that has made cloud computing possible, and now businesses are adapting to that. Or, is it the other way around? Are the business demands, in fact, making cloud computing more attractive? And why?

Mahowald: It’s a little bit of both. Actually, there is a lot more possibility now for collaborative commerce, when business applications have built a scenario where a lot of our data and application functionality exists outside of your organization. In that situation, it becomes far easier to source new partners and customers, leverage and trust data that lives in the cloud, and invite authenticated partners to enter into that kind of exchange.

So, it’s a little bit of both. It’s easy to see the way that the cloud has grown up and become more capable to support some of the business requirements that we have. At the same time, many of our business requirements are changing to adapt to a growing wealth of solutions in the cloud.

Gardner: Okay, Mickey, from your perspective, what’s going on with the IT enablement versus the needs and requirements in the field? As we’ve heard at this conference, wouldn't the notion of boundarylessness, the cross-organizational commerce, perhaps be better adapted to a cloud model?

Looking at the cloud

North Rizza: We’re actually finding companies are spending more time looking at the cloud. What happens is that you have your trading partners specifically around the sale side and the supply side of the organization. If you start looking just across your own businesses and internal stakeholders, you realize they can actually work together, get the information they need, and spend a lot of time on their business process, using just basic technology and automation components.

But, when they start looking at that extended network, into their trading partners, they realize we’re not getting everything we need. We need to pull everything together and we need to do it more quickly than what we’re doing. We can’t wait for on-premise, behind-the-firewall type applications. We need something that’s going to give us both the service and the technology and allow us to work in that trading-partner community in a collaborative environment.

In a recent study we just did, we found that 96 percent of the companies in that study are, or will be, using cloud applications. Within that, we see 46 percent are using hybrid cloud solution. That solution is really around the cloud technology, optimizing across their IT investment and on-premise, typically around enterprise resource planning (ERP), but there are many other instances as well. And then, they're tying that back in to the cloud services, where it’s actually extending the capabilities from their IT standpoint. And, that’s 46 percent out of the 96 percent within that.

The next bucket is 41 percent around the private cloud. That’s really around the aspect of just optimizing across IT with technology only from the cloud application standpoint, not putting those services in. The reality is that we’re actually missing the standpoint that could take it to the next step. We think there are some great opportunities here for companies to move forward.

Gardner: Tim Minahan, you've announced at Ariba LIVE the Ariba Commerce Cloud. Clearly, the technology is allowing new and different things, but I suspect there are some significant business drivers. What do you see as the business drivers enabling these cloud models for not just the IT people, but also the business side of the house?

Minahan: What we're seeing now is that we’ve really entered the state of new normal. We’ve just gone through a major recession. Companies have taken a lot of cost out of their operations. It's cost reduction in the form of laying off employees, and reducing infrastructure cost, including IT cost.

If you look at most of the studies out there, the CEOs, CFOs, and COs, are saying, "We're not hiring that back. We are looking for a new level of productivity, and more agility. To do so we're going to rely much more on external trading partners, which means we're going to need to collaborate with them much more.

"We're also going to look at alternative IT models to help support that collaboration outside of our enterprise, because our ERP investments do very well at automating information and process within the four walls. It stops at the edge of the enterprise and, at the end of the day, we do business. We buy, sell, and manage cash with our external trading partners and we need to automate and streamline those processes as well."

Gardner: Chris Sawchuk, some of your research has pointed up the need for doing things differently. Do you see these cloud models as repaving the cow paths, or are we entering into something that's a bit more transformative in terms of both how IT responds to business and also how business conducts itself?

Sawchuk: There are a couple of things. You said something about the repaving of cow paths. I think we are moving into an era where processes are becoming more and more commoditized. If you look at what's happening with process redesign, we're not where we need to be yet. But, if you look at the needs of where we're going, what the cloud does is provide an environment for more collaboration and more visibility.

Gardner: Let's look at this now from the perspective of how business applications are adapting. We're very much aware the business process has become an emphasis, but how does that change the notion of installing a business application versus subscribing to a service? What is different now between a business application and the business process, and aren't the business processes the more important of the two?

Different services

Mahowald: We're seeing a couple of different kinds of services develop around SaaS services. We're seeing tactical services that enable the application service to be delivered, and then domain services that actually consume the services and bring it to buying companies.

You might think of an accounting service that provides human capital skills on top of the software-as-a-service (SaaS) service. We call that software within a service, and it provides expertise that doesn't exist in the application. It helps some user companies actually offload and outsource that capability. It's a big dynamic and we see the combination of those people skills and the SaaS service coming together in a way that's very impactful for business.

Gardner: Mickey?

North Rizza: Let me just add something else. If you look back at the way business typically has been done, it's been across functions. You see functional areas coming together across an enterprise, and that's typically where the business processes have stopped.

You've also seen the applications come out even from the ERP standpoint in the different pieces that come together to marry that entire ERP system. What you see happen is that every function has a piece of that. You see the various markets that have developed supplier relationship management (SRM), customer relationship management (CRM), and what not, out there in the marketplace.

What's now evolved is that those business processes really go end to end into that trading partner network. What you are finding is that you can use those applications, but you don't necessarily have to use those applications. You can use the services that go with it.

What you're doing is driving value. At the end of the day, all you want to do is deliver a value, and that's what's happening.

The point is that you're actually making some cost-value trade-offs, lowering your overall cost and extending some of this into your partnerships and your trading partner community. What you're doing is driving value. At the end of the day, all you want to do is deliver a value, and that's what's happening.

Gardner: When we saw SaaS becoming popular, it was really taking a business application and putting it up on the Web. But now with cloud, we're thinking about ecosystems, multiple partners, looking at supply chains. So it seems to me, Tim, that the business process ecosystem is perhaps the killer application, if you will, of cloud computing. Why does that fit so well into the procurement function?

Minahan: That's absolutely right, Dana. Robert and Mickey hit on it as well. SaaS was all about a new delivery model for an existing business process. When you move into cloud, when you move into some of these collaborative processes around supply chain, and procurement, and the financial supply chain, it really involves multiple parties. It's really about business process transformation, a business process that's shared among multiple trading partners.

To do that, it’s not just the ability for everyone to share a common technology platform upon which they can collaborate around the process, but rather everyone needs to be digitally connected in a community, so that they can add new trading partners or remove old trading partners, as their needs change.

Finally, the really interesting thing as you blur the lines between applications and community, is the ability to drive capabilities, the ability to drive the right business process. When you register and log on to Amazon to place an order, you don’t think about the buying process. The buying process is already optimized for you end-to-end, from discovery and qualification, through getting feedback from community and expert opinion to make sure you’re making the right buying decision and then being able to actually execute the transaction. That's the same dynamic that's beginning to occur in the business world, as you look about these networked or cloud-based business process models.

Gardner: Another thing we see in the market is that when the social networks gravitate to the cloud, suddenly collaboration takes on almost in accelerated pace, perhaps even a multiplier effect.

The collaboration aspect

North Rizza: What we’re finding from the AMR side of the equation is that we started looking at this from both the suppliers and the customer aspect and putting the clients where they actually sit within this collaboration aspect.

First, many of them are focused just on the transaction. They're looking at the order-to-cash cycle. They understand what the transactions are. They use their ERP system. They understand how the bills get paid.

There’s still paper process. A lot of money is sitting in there on the paper side of the equation, and they really aren’t connecting the dots. What they are recognizing, specifically over the last couple of years, is that they need to do a better job on managing order-to-cash.

They get a couple of things out of that. They actually get acceleration of working capital. They're able to work better with their trading partners and they start connecting the dots to say, "Gee, it isn’t just all about the transaction but also how we are managing that cash, the terms that we have with our particular suppliers and what that trading partner network looks like."

If they start to get that piece underway, they start looking at. "Wow. We’ve got other aspects we’re really doing business." From a sourcing aspect, we’ve got bidding events, auctions, performance, and score cards and we’re exchanging information and looking at 360-degree views.

It's all about, "This is win-win. This is how we’re going to get there. This is how we’re going to change the market."

We’re also sharing demand forecasts. We’re looking at contract manufacturers. We’re understanding the issues around them, and we become much more integrated and much more collaborative to share those pieces of information. So, we start building relationships with our trading partners.

It's not all about just collaborative practices, as we call it, in a transactional value, and "do as I say, not as I do." It's all about, "This is win-win. This is how we’re going to get there. This is how we’re going to change the market. And, this is what we need you to do as part of our extended enterprise and our trading partners to help us get to the next segment."

The reality is that the call-based applications are bringing that extended enterprise to the table, and companies are starting to rethink and refocus around those business processes.

Sawchuk: One benefit that we didn’t touch on during our discussion here is a benefit I call the democratization of collaboration. When you think about the past, it has always been the big companies who could collaborate. They had the tools, they had the investments, they had the dollars.

What you're now had seeing is an environment where anybody can participate. Small, large, etc. all become connected in this world. That just takes things to a different level than what we’ve experienced. Just economically, everyone is now connected across the board in a much more equal and level playing field.

And, there's some of the stuff that Mickey was talking about. We now have the opportunity, the focus on agility, and the focus on where we’re going. It's a much more volatile world. We’ve got to build more agility and more variabilization into our business models, not only our staffing, our people, the way we do business, and our technology tools, but also the more extended value chain. Where we draw the lines between what we do becomes much more transparent and it's easier to make those decisions than we have in the past.

Gardner: When you say democratization, do you mean we can be more inclusive? Are we talking about bringing small and medium businesses (SMBs) or maybe even smaller companies across the board? What do you mean by democratization?

Much more involvement

Sawchuk: It's much more involvement across the board, whether it's the small business, medium businesses, large enterprise, etc. We all now have the ability to collaborate in a new way. We’re moving from sort of the haves and have-nots type of world, from a technology standpoint, to a world where everyone has access. Now, we can all collaborate in this new community-type of environment.

Gardner: Robert, it seems like we’re moving from collaboration to community. How does community, perhaps with some social and discovery aspects, become transformative? This is something that's greater than the sum of the parts that we’ve had in the past?

Mahowald: It's a good point. As Mickey points out, what we really have when we have the element of community injected into commerce is that there is a tremendous amount of transparency. It means that partners know who they can work together with and optimize both sides of the equation, so that it suits the end result very, very well.

It also means that you can source new providers. You can actually change the terms of the contract and some of the ways in which you deal with certain suppliers in a way that's transparent to others, bring them in on the deal, and drive that transparency at a greater value for both organizations.

The idea of a community means that each can bring potentially the best terms, the best offer, and the best product to the table, so that at the end of the day, the buyer gets the most value. That means repeat business, and that helps everybody.

There is a massive movement afoot in the enterprise space that's beginning to blur the line between enterprise applications and the community.

Gardner: Tim Minahan, we have extended enterprise, business processes empowered by community and collaboration. Is there a name for that?

Minahan: There is a massive movement afoot in the enterprise space that's beginning to blur the line between enterprise applications and the community. As Robert and Mickey just said, what got in the way of business-to-business collaboration before was that there was no transparency. There was no efficient way to discover, qualify, and connect with your trading partners, before you could even collaborate with them.

There was a level of un-trust, a higher transaction cost that artificially inflated prices and costs that went around things. The ability to get rid of all the paper, connect digitally with everyone, and then open this up in a community environment, where you can collaborate in a host of different ways and not just around the transaction really is transformative.

As companies begin to look at particularly "extraprise" type applications, the community is going to become more and more important, whether that's the community of you and your trading partners, or a community of you and your peers, that can help you design the better process.

Gardner: Are these self-defining communities? It seems to me that we've broken down silos, and therefore have entered a more human and potentially innovative and creative way to construct relationships. Does that make sense, Chris?

Process enrichment

Sawchuk: Certainly, there's this whole collaboration that's occurring. What's interesting is that they made a comment earlier about the fact that processes become more commoditized over time, and where we really move from is this world of process enablement, which is where technology started, to a world of process enrichment.

When you think about these communities, over time, the communities themselves and the connections become more commoditized. The differentiation is that services and the intelligence is actually built within those communities themselves. The real question is how do you deal with all that, all of the various types of intelligence, because it becomes self-learning types of communities over time.

These clouds learn about the different behaviors. Look at what Google has been doing in terms of learning about the behaviors in the social media world. As you can learn more about that, you can provide that as services back to all the participants within that network.

Gardner: Perhaps the flip-side of that is also the ability to gather metadata about what's going on within the process, who the participants are, what works, and what doesn't work. There seems to be an opportunity to bring a higher level of analytics to bear on these extended processes in a cloud environment than you would be able to get in the traditional enterprise packaged-business applications approach. What do you think of that?

North Rizza: I'd agree with you. In fact, I'll tell you that there are some analysts within the Gartner community who are actually looking at pattern-based recognition strategies and helping companies understand what they're really getting using those analytical tools to understand how they then drive the right trends.

So, when you start looking at that community from a business aspect, power just keeps increasing, increasing, and increasing.

At AMR, we actually look at it from a demand-sensing, a demand shaping ability. So, what's going on? What are we sensing? Where do we need to shape it? If you look at, what you're seeing is the power of many coming together, versus single processes and single entities.

If you just think of the consumer side where you are trying to bring that in and change the way we're doing business, think of eBay. It used be that you go and sell something from your garage outside at a yard sale, or a tag sale depending on where you are.

The secondary aspect now is that I can sell it on eBay and have more individuals bidding on it. Maybe it's important to them, and I might hit those individuals with something that everybody else might have thrown out in the trash. It would only have meaning to a certain group of clientele. And, that particular clientele is going to come together in that community. Hopefully, you just raised the dollar that you're going to get from that.

So, when you start looking at that community from a business aspect, power just keeps increasing, increasing, and increasing.

Sawchuk: What's going to be key over time is think about the lives we live today and the informational overload that we have. As you can rate these communities, there is going to be all kinds of information intelligence created. How do we dissect that and make it smart, relevant, timely, and in bite-sized chunks that we can deal with?

Today, my wife uses Facebook. I don’t. I just don’t have the time. So the question is whether we're going to create all this community, all of this collaboration, all of this information in services, and then be able to dissect that and make it relevant for what we are trying to achieve. It's going to be a key differentiator.

Overload of information

We’ve always been in a time, where we try to get access to more information, more knowledge, and more intelligence. We're quickly moving into a period of time where it's going to be an overload of that kind of information.

Gardner: I suppose that’s one of the tasks of business intelligence (BI) then, to sift through all of the voluminous data and find the real gems. Back to you, Tim. How does BI, from your perspective, have a role to play in these extended commerce cloud activities?

Minahan: There are three aspects of it. If you have the community, you have the network or transactional environment where businesses are actually doing business. So, you have the transactional information in aggregate that can be a bellwether for economic indicators or even around particular commodities -- what folks are doing, whether it's a good time to buy or not a good time to buy. Or, if it is a good time to buy, if you are a seller, how aggressive should you be in that bidding? That’s the transactional information.

Then, there is the community information that you mentioned before. We've used a lot of consumer examples here today, but what makes eBay so great and make these examples earlier is the fact that I am a seller and I have no idea who that buyer is. But, I now gain a degree of confidence, thanks to the community that has rated that buyer.

I know that they pay on time and that they’ve done business with 20 other sellers on there. So, I get a degree of confidence. On top of that, it provides utility that allows me to secure a payment, even if the buyer turns out to be not so good.

The third component, which is important, and which Chris is talking about, is taking that intelligence and putting in context of the business process. The reason we have information overload today, or one of the reasons, is because of the information that’s out there. We’ve aggregated all this information. I'm doing business process over here, and, oh God, I go over there to get that information. It's the ability to aggregate information and put it right within context with other business process.

The reason we have information overload today, or one of the reasons, is because of the information that’s out there.

So, I've gone out and aggregated my spend. I know where my spend leverage is. Guess what! I now have this market intelligence on what's going on, pricing in the season that I'm supplying the market, and what other buyers are experiencing in the market.

It might not be such a good time to go out and source that, so maybe I will go my second largest category of spend and source that first. That’s the type of the analytic that you need, which is in context with the business process.

Gardner: And, that’s where we move to intelligent sourcing, rather than perhaps just accelerated sourcing?

Minahan: Yes.

Gardner: Robert, we've talked about how a vibrant, collaborative environment can be very rich and rewarding. We've talked of how BI in a sea of data can be exploited for analytic insights. And, we've talked about how extended applications as business processes could be very rich.

One of the things we haven’t talked about is how to keep a lid on this. If we have too much collaboration, too much data, too many processes, then the folks who are very comfortable in a locked-down ERP environment might have their way again.

So, how do we prevent falling back into old patterns of being a bit risk-averse, but at the same time, applying the right security, governance, and management that enterprises insist on?

Managing governance

Mahowald: It's a good question. One of the things we're going to see in the next handful of years, and we're already starting to see at the largest organizations that are using SaaS services, is essentially a czar to manage governance across multiple locations.

It's important, as we start to put more-and-more business activities into these communities -- and more-and-more of our data and transactions happen outside the organization on SaaS services -- that we understand exactly what that means for organizations, where customer data and our own data actually resides and how we can find it during an audit in a way that guarantees that we've met our business requirements.

We don’t want to restrict ourselves and say don’t participate in this community. I think it's healthy and it ultimately drives tremendous value for us. What we do want to say is that we have to apply the same kind of governance and rules that help us manage our processes that are now onsite in this new world, where we are participating in communities and SaaS services. The same thing should apply.

Gardner: Mickey, this idea of finding a balance between openness, innovation -- and on the other hand -- control and governance -- are you familiar with any examples of people who are already practicing this balance well?

North Rizza: What we’re finding, to the point that Robert just made, is that the bulk of the companies we work with are spending more time around the governance structure. But, they’re also spending more time around master data management (MDM), understanding what that really means and how those pieces come together.

What are the pieces of information you need to actually do your job, and then what does that job look like?

This comes back to the point that both Tim and Chris had made around what you need to really worry about, what does that mean to the business processes, and what’s important.

Because we’re on this information overload, you have data everywhere. What are the pieces of information you need to actually do your job, and then what does that job look like? What is the business process that you need to do within a certain parameter and timeframe that you need to get done, and where does that go? Where does it stop and start?

And then supply chain: Does it go out into the extended partner network? What do the collaboration aspects look like and what are the rules around that?

So, from the aspects of the types of the companies we’re seeing and supply chain companies we look at that are using these, anywhere from sourcing and procurement, all the way into supply chain execution, supply chain planning -- we see some even in the inventory -- they're having some issues around this. It's really about putting the focus and the emphasis on those areas and understanding what that means as my business changes.

Gardner: Tim, we have more members in the network. It seems to me that Metcalfe’s Law says the network then gets more valuable that way. Is that how you all see it?

New ways to collaborate

Minahan: Yeah. It’s absolutely true. First, going back to earlier comments, you need to connect folks. Then, you need to provide new ways for them to collaborate. In fact, in appropriate network, they will force new ways to collaborate. They’ll discover new ways to not just execute transactions with known trading partners, but discover new trading partners, and leverage the network by the community information to qualify those trading partners, so they can be more secure.

They want to collaborate on new business processes, well beyond the transaction too. Should we establish supply chain financing programs or receivables financing programs, or should we work to out-task a certain portion of the process to someone else in the value chain?

Gardner: Let’s go to the question about getting started, but without getting overloaded and overwhelmed. To you, Robert, what’s your advice to folks as to how to approach this in a manageable way?

Mahowald: If I’m an IT organization, one of the first things I want to understand is my constituency. The organization I want to serve are my internal users. I want to understand what their requirements are and how they may or may not be using staff services now to get the job done, and for what reasons.

I want to build a strategy based on the recognition that substantial number of organizations do have business units that use SaaS services, and I want to find a way to build it into my long-term IT strategy, because at the end of the day my goal was not to be a cost center at the organization. My goal is to be a service center and that’s a transformation I need to build into my business plan.

The bottom line is that if you don’t do it, there isn’t even a ton of money on the table. You’re not able to take out the cost that you want to take out.

Gardner: Mickey, closing thoughts on getting started?

North Rizza: Basically, what we see the best companies doing is that they start to understand what their overall business objectives are. Then, they peel that back and say, "What am I looking at in my different functions across the business and what does that mean, if I want to improve the process and I want to get those end results."

As they starting peeling that back, they soon discover that it’s usually around revenue cost savings. It’s also about improving the business process and reducing cycle time. When you put all those together and you look at a recent study that we just did, you recognize that there are very large gaps between those that have already deployed cloud-based technologies and solutions.

Then, you step back to those that are even considering or using them as part of their overall extended enterprise. What we’re finding is that the gap is so large and its benefits are so great that there is no reason you wouldn’t want to take all that and put it in there.

The bottom line is that if you don’t do it, there isn’t even a ton of money on the table. You’re not able to take out the cost that you want to take out. You can’t get the products in there and teach the individuals the business process and cut down your cycle time that you’re going for. And most importantly, you’re not getting your revenue. You’re leaving it on the table.

Gardner: I’m afraid we have to leave it there. Thanks for joining us for this special sponsored BriefingsDirect podcast. We’re coming to you on-location from the Ariba LIVE 2010 conference in Orlando on May 25, 2010. We’ve been discussing the business implications and multiplier effects for value in using cloud computing to conduct ecommerce.

Please join me in thanking our panel. We’ve been here by Robert Mahowald, Research Vice President at IDC. Thanks.

Mahowald: Thanks very much, Dana.

Gardner: We’ve also been joined by Mickey North Rizza, Research Director at AMR Research, a Gartner company. Thank you.

North Rizza: Thank you.

Gardner: And Tim Minahan, Chief Marketing Officer at Ariba.

Minahan: Thanks, Dana. It’s been a pleasure.

Gardner: And last, Chris Sawchuk, Managing Director at The Hackett Group. Thank you.

Sawchuk: Thanks, Dana.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks for listening to this BriefingsDirect podcast, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: Ariba.

Transcript of a BriefingsDirect podcast on the value of building and exploiting cloud-based communities for advanced ecommerce business processes. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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Business Trends in Global IT Markets Provide New Traction and Value for Enterprise Architecture

Transcript of a sponsored podcast discussion on the global adoption of enterprise architecture in response to regional business trends.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect. Today, we present a sponsored podcast discussion, coming to you from The Open Group Conference in Boston, the week of July 19, 2010.

We've assembled a panel to examine the key market trends impacting enterprise architecture (EA) in different regions of the world. We'll evaluate how the use and value of EA is emerging and progressing worldwide, and how the expanding use of EA offers a unique window into global business trends as well.

Our guests will share their knowledge on several developing and mature markets, as well as present a focus on China. We'll hear about the cultural barriers and/or accelerants for EA adoption from region to region.

Here to help better understand the role of EA as it bestrides the globe is our panel. Please join me in welcoming Allen Brown, President and CEO of The Open Group. Welcome, Allen.

Allen Brown: Thank you.

Gardner: We're also here with Eric Boulay, president and CEO of Arismore and also CEO of The Open Group, France. Welcome, Eric.

Eric Boulay: Good morning, Dana.

Gardner: Chris Forde, vice president of Enterprise Architecture & Membership Capabilities of The Open Group, also joins us. Welcome, Chris.

Chris Forde: Good afternoon.

Gardner: And Mats Gejnevall, a Certified Enterprise Architect with Capgemini, Sweden. Welcome.

Mats Gejnevall: Thank you very much.

Gardner: We are also here with Stuart Macgregor, CEO of Real IRM and CEO of The Open Group, South Africa. Welcome, Stuart.

Stuart Macgregor: Good afternoon. Glad to be here.

Gardner: Allen, let's start with you. Tell us a little bit about what's happening globally. Why is EA so popular now? We'll get into the regions in a moment, about why it's happening here and there, but are there any general perceptions as to why EA is such an important aspect of IT and business development at this time?

Brown: Thank you, Dana. A trend over a number of years now is that the barriers within enterprises; the silos, the departments, the stovepipes, have been broken down.

Organizations are working cross-functionally. They're bringing people together. They're working with their business partners, and they have their IT infrastructure integrated with their business partners. That has caused a requirement for people to be able to look across the entire organization and think about how IT impacts different parts of the organization and how it integrates together.

Many parts of the organization have had applications built for the stovepipes that now need to work together in ways that they were never intended, when those legacy applications were put in, because we never intended those legacy applications to last this long. But, they did, and you can't just replace them.

What's happened with what we call boundaryless information flow, or the requirement for access to integrated information under security issues, is that we're now having to deal with something called "EA" on a number of different levels.

Different aspects

Many people have tried to define EA, and I don't think anyone has come up with a satisfactory overarching definition yet. But, there are a number of different aspects to it. At the moment, EA is focused on the IT element, although it has ambition to look at the architecture of an entire enterprise at some stage.

People are looking at the entire enterprise from an IT perspective, like a city planner would. So you've got that kind of EA. Then you have got other folks that are more focused on specific solutions, and that's also EA.

EA is an umbrella term that relates to an awful lot of activity that flows further down, whether it's business IT architecture, data architecture, and so on. There are many things, but the driving force in many organizations is this need to integrate and share information.

In governments, you're seeing joined-up government and citizen-centric government. To deliver those services, and to do so economically, requires this boundaryless information flow concept, and that requires the discipline of EA.

Gardner: Of course we are in an environment where not only are the technology trends unfolding at different rates, but we have a different economic environment from region to region. Some regions are struggling, and others are growing quite well.

There are more organizations that are saying that this is the time to invest, to rationalize, and to really drive out value from their IT investment.

Being based in the UK, being familiar with Europe and North America where the economies are still struggling, do you see anything about the economy and the position of budget pressures that is accelerating or having impact on the adoption of EA?

Brown: It varies from enterprise to enterprise. We're seeing continued growth in the adoption of EA in general and TOGAF in particular -- and it's continuing to grow. There are organizations that are saying that EA isn’t delivering near-term bottom lines, so they're going to cut the cost.

There are more organizations that are saying that this is the time to invest, to rationalize, and to really drive out value from their IT investment. So, you're starting to see a mix of things. But, generally speaking, my experience in the developed or struggling economies is that there are more people focused on EA than not.

Gardner: Eric Boulay in France, tell me what the market for EA is there, and what are some of the drivers?

Boulay: Key drivers are the necessity to move forward for big and small enterprises. Because of the downturn, the future of the enterprise is to roll out in an international, standard view. In order to roll out -- for example, for big banks on a European or worldwide basis -- they have to welcome big transformation, and this kind of big transformation can be helped by EA.

Huge opportunity

It's an architecture issue to transform local enterprise to a worldwide or a European enterprise. This is a huge opportunity for enterprise architects and for EA to help in this big change. So, there is no downturn for EA, because if we use it and build a new EA practice in order to better address this kind of job, it's a huge opportunity for us. There is no downturn for us. It's only a matter of finding the right skills in order to help enterprise go abroad.

Gardner: Mats, based in Sweden with experience in Northern Europe, is transformation a real driver here regardless of the economy?

Gejnevall: Transformation has always been a big driver in the enterprise Architecture Forum, but what we see these days is that getting your IT under control has been a major factor for going into the EA side of things. Slowly the companies now are connecting the IT structures they have with the business.

It was a struggle in the beginning, and most of the EA projects were IT-based projects, but now, business is starting to understand the full impact and understand that the IT solutions that we create should really be aligned with the long-term strategies and objectives of the organizations.

Gardner: Do you perceive any difference between the public sector and private sector in terms of the adoptions markets are familiar with?

Gejnevall: In the past, public sector has been pretty slow on the uptake, but recently we're doing a lot of business with healthcare services and so on. They're really large organizations, with 30,000, 40,000, or 50,000 people, and they have lots of different divisions. They need to work together in a collaborative fashion and fulfill the long term goals that the politicians have set up for them.

Gardner: Stuart Macgregor in South Africa, are there certain trends afoot that you can identify that are prominent in your market, but might also represent other emerging markets?

Macgregor: South Africa is slightly different, because EA is from the business side, rather than from technology. A lot of organizations have spent a lot of money working on business processes, and that business process architecture across the business domain is now being linked to the technology domains. So, we are probably the opposite.

In fact, we're coming from the top down, instead of from the technology side upward. South Africa currently has roughly 10 percent of the Architecture Forum membership, all South Africans, and there is a big adoption of TOGAF in South Africa. If you look at our GDP in comparison, it’s quite exceptional.

That’s really been because of The Open Group's presence in South Africa, organizing events, a lot of TOGAF training, a lot of certification, a lot of press articles, and really driving the business value and the business understanding of what EA is about.

We have had for example, SASOL which is one of the larger petrochemical organizations, adopt TOGAF, working it into their governance standard. What their enterprise architect did, is he bought Enterprise Architecture as Strategy, the Jeanne Ross book, and distributed to senior executives. Given that it is written in business-speak, it really led to the adoption and understanding of what EA is about, and was quite serious for the uptake within the business.

Key focus area

We differ across business sectors as well, in that our financial services sector -- again, a big focus on the business process area -- are lagging in the technology domain, and that’s now a key focus area bringing that up to speed.

Across the natural resources sector, for example, we have an Open Group Standard called EMMMv, which stands for Exploration Mining Metals and Minerals, where we're working on putting together reference architectures for the sector, and that’s also driving global adoption of TOGAF. So, it really differs across sectors and across organizations. There's no one size fits all.

Gardner: It seems a credit to TOGAF, Allen Brown, that it can be playing a role in so many different markets with so many different variables at work. Perhaps you could, from your perch, tell us about certain markets in the world that have seen the most impact, adoption, or uptake of TOGAF and/or enterprise architecture.

Brown: We're seeing it pretty broadly across the planet, really. Obviously the US and UK were leading, but the amount of uptake in the Asia-Pacific region right now is quite dramatic and we're starting to see that take off. But, it's really difficult to isolate any particular region.

We’ve now got something like 15,000 members of our professional body, the Association of The Open Group Enterprise Architects. They are, in some way or another, connected with TOGAF for our IT architect certification. Those people are distributed across 116 different countries. So, it's really quite difficult to say which is growing the most.

Gardner: Let's go to the Asia-Pac region and Chris Forde in China. What are some of the elements of TOGAF’s growth and adoption that you can identify that might be specific to China?

Forde: The Chinese market is really very interesting. There's an opportunity there for the EA practice to grow massively. For the most part, larger enterprises in the China region are relying on the brand name western companies to do strategy and planning, and there is very limited internal capability, knowledge, and experience around EA.

I've been hearing from folks in various organizations, both state-owned companies and others, that they're reluctant to step away from these brand-name companies, because there is a certain degree of security around the planning and activities that go on there, but there is also a degree of dissatisfaction that they aren’t feeling in control of their own fate.

Over the next several years, I anticipate the development of internal architecture practices and an up-scaling of staff. The universities already have in place CIO forums and executive MBA activities that explicitly deal with EA as a set of concepts. Over time, I think that it's going to find it's place in the Chinese organizations.

At the moment, they're still continuing with this kind of organic growth of the IT approach to things, which is something that the Western markets dealt with 15 years ago, and found the need for a more planful approach to doing things.

This is the opportunity for us in EA in that particular market. The issue is that at the leadership level in these companies there isn’t a perception that they need to do anything, because the problem hasn’t actually arrived broadly inside China, from what I’m seeing.

Gardner: I’m going to guess that in some of the more mature markets they wished they had had an opportunity to invoke some of these practices, before there was a problem. Is there an opportunity in China for them to gain a lesson from the rest of the world?

Body of knowledge

Forde: I think there is, and this is one of the things for the emerging markets, similar to cellphones. The learning that has occurred in the Western markets have produced a body of knowledge in TOGAF that can accelerate for other companies the way they adopt and improve their ability to deliver on strategy, planning, and execution.

Once the recognition is there inside companies, when the need arrives, those companies in that market that have planned for this will start to really accelerate in terms of their global position.

Gardner: Is it your understanding -- or anybody else's on our panel -- that the other so-called BRIC countries, Brazil, Russia and India, are facing similar situation as China?

Forde: I wouldn’t comment directly on the other BRIC countries. I have a sense that that’s the case, but I don’t have any specific information of those markets.

Gardner: Another set of variables we can bring to this picture are some of the technology trends: mobile, cloud, data explosion, complexity, and then, of course, due to the economy in most regions, an emphasis on efficiency. Can we look to any of these trends and find a relationship between EA adoption in a particular market? Why don’t we try with you, Mats, in Swede?.

In cloud, it always comes into the discussion, even though people don’t quite know how to use it yet. I think The Open Group’s effort around cloud computing can actually help that to a large extent.

Gejnevall: Capgemini has put together a number of service offerings
worldwide that we are adapting to the conditions of each one of the countries. We can see that things like boundaryless information -- being able to use information in new ways -- is something that every company wants to do.

In cloud, it always comes into the discussion, even though people don’t quite know how to use it yet. I think The Open Group’s effort around cloud computing can actually help that to a large extent. The ROI paper on cloud computing, for instance, will be a tremendous help for a lot of companies to have a look at and see what can they do. But, everything is moving very, very slowly. In countries like Sweden, the bigger companies might try these out, but the smaller ones are not ready yet.

Gardner: How about Eric Boulay in France? Are there some technology trends or adoption trends in business that are spurring some of this adoption of an EA perspective?

Boulay: Sometimes, it makes sense to have an engineer's analysis of the situation. We used to consider what is behind the word, and sometimes we have many questions about hype words, such as cloud. What is cloud? I've heard that many of CIOs here in France used to say that we have been doing cloud computing for a while. What’s the difference between private cloud and internal data centers with shared services application or infrastructure?

To go back to EA, we spent a lot of time to move from IT EA to real EA. Now, I think we're mature enough to take the new capability brought by the new technologies. Cloud should be one of them. And now, once more we're ready to move from the old-fashioned way of sharing resources to better practices brought by new technology.

So, it’s not a big deal. Once more, it’s obvious that EA is a way to transform, so you can transform the business, but you also can transform the way to consume IT.

Gardner: Very good. Does anyone else have any perspectives on technology? How about South Africa from your perspective, Stuart?

Modeling and defining

Macgregor: Not technology, specifically, but it's probably more in the domain of information architecture that we’re seeing greater focus on modeling and defining information architecture. We're understanding the difference between information architecture and data architecture and using that as a way of bridging the gap between business and technology, while tackling the information architecture domain.

Gardner: Now, because we’re in such a globally connected environment, I’m wondering if there isn’t a benefit down the road, as more of these regions and more of the large organizations -- public and private -- standardize and adopt enterprise and architecture?

Doesn’t it offer more of a opportunity for these disparate markets to work more in concert, reduce the friction of trade, reduce the friction of services, goods, even perhaps as cloud computing unfolds? We don’t know how it’s going to happen, the opportunities to share cloud computing resources across great distances and boundaries.

Back to you Allen Brown. Is there an opportunity for us to consider a unifying influence of EA that would have a growth and/or efficiency benefit, as more and more markets start approaching their business problems in a similar fashion architecturally?

Brown: Absolutely. I think it’s worth also bringing in Chris to see his experiences, but everything I hear says that organizations that are involved in EA in general, and TOGAF in particular, are finding it much easier to integrate with business partners. Mergers and acquisitions are enabled more effectively. So, in working with other organizations, as we get more and more connected, EA is a positive force in that.

Depending on the maturity of the company and of the region, you might be talking anywhere from six-month payback on an EA activity to a three-year payback.

Gardner: Chris Forde, your perspective on that, the notion that the more EA adoption around the world, then perhaps the more easily business can be conducted at a global scale?

Forde: I'd say that the long-term point around that is valid. I'd also say that there is a certain learning curve to be gotten up in terms of EA, and that, depending on the maturity of the company and of the region, you might be talking anywhere from six-month payback on an EA activity to a three-year payback.

The body of work that we have available to us in TOGAF is that, if you look at it as a tool in the context of the problem you’re trying to solve, you can drive immediate value. If you look at it as some sort of massive program that you’re going to implement, you’re looking at a longer term payback.

So, it’s very important for individuals and companies to approach EA with a specific problem in mind, not just some sort of generic goodness thing that they’re looking at.

Gardner: Fair enough. As we think about the tactical, and the potential strategic benefits, people who are engaged, understanding what they need to do, but not sure how to start, can we point them in any specific directions? Where do you go to get started on learning more about EA, learning more about TOGAF, finding the tactical, and then perhaps ultimately the strategic values? Chris?

Architecture Forum

Forde: There are a number of places. The first and foremost one will be the membership of The Open Group, and particularly the Architecture Forum. You’ve got people sitting around this microphone right now that can help, and you’ve got people out at the conference who have an enormous background and this capability.

Then, in the member companies, either on the supplier side, on the customer side, or in academia, you also have resources available. Those are the places to go to find out what you need to do, and what the approaches can be used, and in a practical sense, what the barriers and the pitfalls are in the approaches. People here have been there, done that, and that’s where you need to go, to the experience.

Gardner: Mats?

Gejnevall: In the past, we as consultants used to go out and do architectures with companies. We came out and we delivered a folder saying, "Here’s your EA. Go ahead and implement it." Of course, that didn’t work.

These days, we actually encourage companies to work with us, to work with experts in the field, and teach them and work and produce these EAs together, because EA is not just a project. It’s got a lifecycle and it needs to be maintained. If companies don’t get that knowledge themselves, the EA will die.

They're trying to educate enterprise architects inside their company. They understand that they need these kind of people in order to make the company be successful and to move forward.

Gardner: Any thoughts, Stuart Macgregor, on this journey of beginning it, perhaps regardless of where you’re starting from?

Macgregor: I certainly support what Mats and Chris have just said. To me organization change leadership is an absolute essential component of getting EA to work, the mechanics of modeling etc. It’s not really that difficult. It's the stuff that we have mastered and we’ve been doing for years. It’s how to drive positive business-appropriate and sustainable EA practices that are run like businesses with a very clearly defined offering that understands who the customers are, and can really deliver more value than they cost.

Gardner: And, Eric Boulay?

Boulay: In France, we had a long journey to capture EA practice. Right now, we consider that we moved from IT EA to enterprise, to real business EA, and this is a big shift. Now, CxOs aren't chasing enterprise architects. They're trying to educate enterprise architects inside their company. They understand that they need these kind of people in order to make the company be successful and to move forward.

So, it’s a big challenge and a big recognition for us. They need our body of knowledge as TOGAF and the EA body of knowledge. They need us to train, coach, and to help their inside employees to become leaders. Enterprise architects are definitely, as many of you mentioned, people who are ready to talk with different groups in order to ensure there are no more stovepipe in these companies.

Gardner: Allen, the last word to you. Do you have any thoughts about getting started and how companies and/or countries and regions that haven’t taken this journey too deeply could avail themselves of the many years' worth of experience that others have traveled through?

Brown: Yes, the first one is, if you can get to one of the conferences and share experiences with other members. That's the key area to start. But, if you can’t do that, then there is an awful lot of available information. At the minimum, TOGAF itself is available freely online for people to read, look at, and use within their own organization.

You can buy the book, if it’s easier to have that. If you want to go to the next state, there are many trainee organizations that can train your people in TOGAF. If you can’t avail yourself of that -- there are some countries where that’s not possible -- then there is a study guide that you can get from The Open Group to work your way through.

There are examination centers everywhere. Working through that gives you a good understanding of TOGAF. It doesn’t necessarily make you an enterprise architect. You’ve got to have the abilities to go with that, and you’ve got to have the experience.

Again, you can work with some of the folks either at conferences or local chapters. We've got chapters in many different countries now. You can share with them, correspond with them or our other members. This is the way that you actually get the experience of how to do it, what people have done, and what pitfalls there are.

Gardner: Great, thank you. We’ve been discussing key market trends impacting EA in different regions of the world and how folks are using EA and gaining value from it, in both emerging and more mature markets.

This sponsored podcast discussion is coming to you from The Open Group Conference in Boston, the week of July 19, 2010. I’d like to thank our guests; we’ve been here with Allen Brown, president and CEO of The Open Group, thank you, Allen.

Brown: Thank you very much, Dana.

Gardner: We also have here Eric Boulay, president and CEO of Arismore and also CEO of The Open Group, France.

Boulay: Thank you, Dana.

Gardner: Mats Gejnevall, Certified Enterprise Architect at Capgemini, Sweden. Thank you.

Gejnevall: Thank you, Dana.

Gardner: We’re also been joined by Chris Forde, Vice President of Enterprise Architecture and Membership Capabilities of The Open Group, based in Shanghai. Thank you.

Forde: It’s been a pleasure, thanks.

Gardner: And last, Stuart Macgregor, the CEO of Real IRM in South Africa, as well as the CEO of The Open Group in South Africa. Thank you.

Macgregor: Thank you very much, Dana.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect Podcast. Thanks for joining, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group.

Transcript of a sponsored podcast discussion on the global adoption of enterprise architecture in response to regional business trends. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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• The State of Enterprise Architecture: Vast Promise or Lost Opportunity?

The State of Enterprise Architecture: Vast Promise or Lost Opportunity?

Transcript of a sponsored podcast on the potential of enterprise architecture, resistance in the business community, and finding common ground.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect. Today, we present a sponsored podcast discussion, coming to you from The Open Group Conference in Boston, the week of July 19, 2010.

We’ve assembled a panel to delve into the advancing role and powerful potential for enterprise architecture (EA). The need for EA seems to be more pressing than ever, yet efforts to professionalize EA do not necessarily lead to increased credibility and adoption, at least not yet.

We’ll examine the shift of IT from mysterious art to more engineered science and how enterprise architects face the unique opportunity to usher in the concept of business architecture and increased business agility.

The economy’s grip on budgets and the fast changing sourcing models like cloud computing are pointing to a reckoning for EA -- of now defining a vast new promise for IT business alignment improvement or, conversely, a potentially costly lost opportunity.

Please join me in better understanding the dynamic role of EA by welcoming our guests. We are here with Jeanne Ross, Director and Principal Research Scientist at the MIT Center for Information Systems Research and noted author. Welcome to BriefingsDirect.

Jeanne Ross: Thank you. It’s nice to be here.

Gardner: We are also here with Dave Hornford, an architecture practice principal at Integritas Solutions, as well as the Chairman of The Open Group Architecture Forum. Welcome Dave.

Dave Hornford: Thank you. It’s good to be here.

Gardner: We're also here with Len Fehskens, Vice President for Skills and Capabilities at The Open Group. Welcome, Len.

Len Fehskens: Hi, Dana. Glad to be here.

Gardner: Let me start with looking at this inflection point or opportunity. Many have discussed here at the conference that there's a lot to be done and gained by proper EA. But the stakes are high, because not all of these organizations seem to be rallying around this concept. So why are the stakes high, and why haven’t people gravitated to EA?

Ross: The stakes are high, because organizations are becoming more digital out of necessity. It’s a more digital economy. Thus, IT is more strategic. I think people see that, but outside of people who have already embraced architecture, there is some reluctance to think that the way we get more value from IT is basically by taming it, by establishing a vision and building to standards and understanding how that relates back to new ways of doing business, and actually developing standards around business processes and around data.

Exciting stuff

There is a piece of it that’s just not appealing. Besides, we feel like this should all be about innovation, which should be all exciting stuff. Architecture just doesn’t have the right feel for a lot of businesspeople, who are saying, "Oh sure, the digital economy is very exciting."

Gardner: We’ve also been hearing here at the conference that there is this delayed gratification effect, whereby a lot of the structure and discipline that you might bring to architecture can have a long-term and strategic benefit, but most people are focused on the here and the now.

A recurring theme for me here has been, "How we accommodate both?" How do we present something to our executives and across the organization that they can work with now, but that also will put us in a strong long-term position? Jeanne?

Ross: This is where there is a certain art in architecture. We’ve learned a lot about methodologies, disciplines, and tools, but there is an art to be able to take the long-term vision for an organization and not just say, "It’ll come guys, be patient," but rather, "I understand that starting tomorrow, we need to begin generating value from more disciplined processes."

Great organizations actually learn how to do something in the near-term that builds toward the long-term, but also delivers on some new value to the organization today.

Gardner: Len, we're looking at quite a bit of change. We're asking the organization to change how they use and perceive of IT, and to elevate the way in which they process the logic of the business itself to an architectural level. Then, we're also asking these architects, the individuals, to put on many hats and be multi-disciplined.

The question to you is, in examining the state of EA, this concept of a professional category or definition of EA, where is it at this time?

Fehskens: It’s really just a gleam in many people’s eye at this point. If you look at the discipline of EA and compare it to mature professions like law and medicine, we’re back 200-300 years ago. We’ve been doing a lot of research recently into the professionalization of other disciplines.

Most of the people studying the subject come up with a fairly short list of characteristics of professions. They usually include things like a well-defined body of knowledge, and well-defined educational program and particular degree programs, often offered by schools that are specifically focused on the discipline, not just the department within a larger organization.

There's some kind of professional certification or vetting process and often even some kind of legal sanction, a right to practice or right to bear the title. We don’t have any of those things right now for EA.

Proprietary knowledge

The body of knowledge is widely distributed and is largely proprietary. We’re at a state similar to going to a lawyer, and the lawyers try to sell themselves based on secret processes that only they had that would allow you to get a fair shake before a judge. Or similar thing with a doctor, who would say, "Come to this hospital, because we’re the only people who know how to do this particular kind of procedure."

So, we’ve got a long way to go. The big thing we’ve got going for us is that, as Jeanne pointed out, the stakes are high and so many organizations are becoming dependent upon the competent practice of EA as a discipline.

There's a lot of energy in the system to move forward very quickly on the professionalization of the discipline, and in addition to take advantage of what we’ve learned from watching the professionalization of disciplines like law, medicine, engineering, civil architecture, etc. We’ve got long ways to go, but we are running really hard to make some progress.

Gardner: Dave, we have high stakes. We have a great opportunity. This is a cake that hasn’t been baked yet, so folks can work with this. As a practitioner and someone who’s involved with the Forum, tell us where you see the current traction. Where are people who are doing this doing it well, and what is it about them that makes make prepared for this?

Hornford: Where people are doing it well is where they are focused on business value. The question of what is business value is highly dependent. People will mention a term, “agility.” I work with a mining company. They define agility as the ability to disassemble their business. They have a mine. Someone buys the mine. We need to remove the mine from the business. A different organization will define agility a different way, but underpinning all of that is what is the business trying to achieve? What is their vision and what is their goal?

Practitioners who are pursuing this have to be very clear on what is the end state, what is the goal, what is the business transformation, and how will the digital assets of the corporation the IT asset actually enable where they’re going, so that they’re able to move themselves to a target more effectively than their competition.

The stakes are high in the sense that should someone in your industry figure this out, they will change the game on you, and you will now be in a serious trouble. As long as all of your competition is struggling as long as you are, you’re okay. It’s when someone figures it out that they will change the game.

Gardner: Jeanne, through your research and publishing, you’ve identified some steps -- four that we heard about earlier today. Two of these seem to be very focused on IT, but then progress beyond IT. It’s this transition that seems to get people a little tripped up.

We often talk about the platforms that the IT people are focused on. I have project. I have a set of requirements. I’m going to install, manage, and optimize a platform, but at some point, that needs to work toward the business agility. Help us understand the role of the enterprise architect today in making that transition?

Ross: Right now, the enterprise architect would help design the platforms, but the critical thing to recognize about platforms is they represent the underpinnings of processes, which would be data, technology and applications.

Process vision

The architect is working very closely in designing these platforms with people who have a vision of how a process ought to be performed. It might be in terms of an end-to-end process. It might be in terms of a process that’s done repeatedly in different parts of an organization.

But, the architect’s role is to make sure that there is a vision. You may have to help provide that vision as to what that process is, and how it fits into the bigger vision that Dave was talking about. So there is a lot of negotiation and envisioning that becomes part of an architect’s role that is above and beyond just the technology piece and the methodology that we’ve worked so hard at in terms of developing the discipline.

Gardner: Len, when you go out and hear the requirements in the field and you see the need for a professional category, it seems that things are moving so fast that it's almost perhaps a benefit to have this as a loose concept.

So, the question for you is, if business processes are dynamic and continue to be accelerating in how quickly people need to adapt, isn’t the role of the enterprise architect in actually managing adaptability, rather than actually being a category like a lawyer or a doctor?

Fehskens: Yes, but I don’t think that changes the fact that the skills associated with doing architecture are largely independent of the domain that you're working in.

There is a set of capabilities that an architect has to have that are largely independent of where they are working.

There is a set of capabilities that an architect has to have that are largely independent of where they are working. While Dave and Jeanne were talking, I was thinking that, despite the fact that the discipline is so immature as a profession, we're still doing surprisingly well.

In terms of its maturity as a profession, it may be 100 or 200 years back, compared to law or medicine, but on the other hand, the quality of the practice is much more like where medicine and law were 50 year, 25 years ago.

So, there is a disparity between the capability, the quality of the services that enterprise architects are providing, and the maturity of the profession. That's a characteristic of architects. Architects have to be inherently adaptable.

In a lot of cases, we make a big deal about the technical expertise of architects, but in a lot of architectural engagements that I have been involved in, I didn’t actually know anything at all about the subject matter that I was being asked to architect.

What I did know how to do was ask the right questions, find the people who knew the answers to those, and help the people who actually had the information orchestrate, arrange, and understand it in a way that allowed them to solve the problem that they really had.

Dynamic environment

I agree that there is something fundamentally different about the kind of work that architects do, compared to say lawyers and doctors. It is a much more dynamic environment, but the skills to deal with that dynamism are not really dynamic themselves. They're pretty stable in terms of the ability of architects to face a whole host of different kinds of problems and apply the same skills to them in a way that produces successful results.

Gardner: Dave, we heard the need for architects to be evangelists, to rally the troops, to get people on the same page, to hasten transformation, all of which is inherently difficult. So how about leadership? We haven’t heard that word, but it seems that the role of the architect is to really be a leader above many other activities within the organization. What is it about the leadership capability that you think can make or break the enterprise architect?

Hornford: The fundamental with leadership in EA is that architects don’t own things. They are not responsible for the business processes. They are not responsible for the sales results. They are responsible for leading a group of people to that transformation, to that happy place, or to the end-state that you're trying to achieve.

If you don't have good leadership skills, the rest of it fundamentally doesn’t matter. You’ll be sitting back and saying, "Well, if I only had a hammer. If I only had authority, I could make people do things." Well, if you have that authority, you would be the general manager. You’d be the COO. They're looking for someone to assist them in areas of the business at times that they can't be there.

I learned far more about doing EA in an 18-month period, when I was a general manager of a subsidiary for a telephone company. My job was to integrate that into the telephone company. I got that role as the enterprise architect for the integration, but through transformations I became the general manager of the subsidiary.

If you do not lead and do not take the risk to lead, the transformation won’t occur.

I learned more there, because I had the balance between having authority and not having to do some of the softer leadership, and coaching myself into doing the changes that were necessary. Seeing that transformation was a great learning experience, because it highlighted that you must lead as an architect. If you do not lead and do not take the risk to lead, the transformation won’t occur. One of the barriers for the profession today is that many architects are not prepared to take the risk of leadership.

Gardner: Jeanne, what about this issue of authority? Just because the enterprise architect has the vision -- and maybe has a very good plan as to what should take place in a particular way for that particular company -- at this particular time they don’t have the budget and the authority. If they can’t marshal those people who do have the budget and authority to cooperate -- wow, lost opportunity. Let’s discuss the issue of authority, and the role of the enterprise architect.

Ross: That’s quite a dilemma. In an environment where the architect can see the possibilities and can’t get the commitment of other people, it’s really not possible to win that. One of two things has to happen. Either the architect is successful in spreading the word and getting commitment or the architect should go somewhere where that’s possible, because I just don’t think you can successfully pursue architecture alone. You can’t just go off in a corner and be a successful architect, as we’ve been discussing here.

The first thing you do, because you are in an environment where you get it and you see it and you know what needs to be done, is that you do everything you can to get commitment across managers who can make things happen. But, there are situations where that’s not going to happen, and you're better off finding an organization that’s longing for good architecture talent -- and they're out there. There are plenty of organizations looking for architects to help them down that path.

Hornford: A key point that Jeanne made this morning in her presentation was the fundamental for commitments. If those commitments aren’t there, the organization will not absorb, consume, or benefit from EA.

Compelling value proposition

Fehskens: A phrase that you’ll hear architects use a lot is "compelling value proposition." The authority of an architect ultimately comes from their ability to articulate a compelling value proposition for architecture in general, for specific architect in a specific situation. Jeanne is absolutely right. Even if you have a compelling value proposition and it falls on deaf ears, for whatever reason, that’s the end of the road.

There isn’t any place you can go, because the only leverage an architect has is the ability to articulate a compelling value proposition that says, "I’ve recognized this. I acknowledge this is promise, but here’s why you have reason to believe that I can actually deliver on this and that when I have delivered on this, this thing itself will deliver these promised benefits."

But, you have to be able to make that argument and you have to be able to do it in the language of the audience that you're speaking to. This is probably one of the biggest problems that architects coming from a technical background have. They'll tell you about features and functions but never get around talking about benefits.

My experience with businesspeople is they don’t really care how you do something. All they care is what results you're going to produce. What you do is just a black box. All they care about is whether or not the black box delivers all the promises that it made.

To convince somebody that you can actually do this, that the black box will actually solve this problem without going into the details of the intricacies and sort of trying to prove that if I just show you how it works then you’ll obviously come to the conclusion that it will do what I promise, you can’t do that that. For most audiences that just doesn’t work. That’s probably one of the most fundamental skills that architects need in order to work through this problem -- getting people to buy into what they are trying to sell.

The thing to recognize about business agility is that it’s a journey. You don’t want to start making your compelling business values something you can't deliver for three years.

Gardner: Based on what we’ve been hearing here at the conference, the metric of success and perhaps even the lever to get the authority and commitment is this notion of business agility. As Dave pointed out, business agility can be very different for different companies at different times. It could be a divestiture. It could be growing into a new market. It could be acquiring, or what have you.

So, if we need to get to business agility with our focus on the short-term as well the long-term strategy, what is it that an enterprise architect needs to do in order to assess and project business agility? Perhaps the more technical folks are not used to something like that?

Ross: The thing to recognize about business agility is that it’s a journey. You don’t want to start making your compelling business values something you can't deliver for three years. Many times the path to agility is through risk management, where you can demonstrate the ability of the IT unit to reduce downtime to increase security or lower cost. The IT unit can often find ways to lower IT cost or to lower operational cost through IT.

So, many times, the compelling value proposition for agility is down the road. We've already learned how to save money. Then, it’s an easier sell to say, "Oh, you know, we haven’t used IT all that well in the past, but now we can make you more agile." I just don’t think anybody is going to buy it.

It’s a matter of taking it a step at a time, showing the organization what IT can help them do, and then, over time, there's this natural transition. In fact, I'm guessing a lot of organizations say, "Look, we're more agile than we used to be." It wasn’t because they said they were going to be agile, but rather because they said they were going to keep doing things better day after day.

Common ground

Gardner: Because the economy remains difficult, because budgets are under pressure, this notion of cost could be really a good common ground to bind areas that perhaps have been disparate in -- in terms of IT, business, and so forth.

Len, what about that -- enterprise architects as cost-cutters or cost-optimizers? Is this a short-term, let’s do this because the economy requires it, or is that really a key fundamental point of successful architects?

Fehskens: No, it’s a long-term requirement. It goes back to what the essence of architecture is about. Architects are ultimately charged with making sure that whatever it is that they're architecting is fit for purpose. Fitness for purpose involves not doing any more than you absolutely have to.

The notion of engineering efficiency is built into the architectural concept. It goes back to an idea that that was developed in the 1980s in the business process re-engineering movement which was the best way to make things simpler is to get rid of stuff. And, the stuff that you need to get rid of is the stuff that’s not essential or doesn’t really address the specific mission that you're trying to achieve.

Architects don’t cut costs for the sake of cutting costs. They cut costs by removing unnecessary cruft from whatever it is that they're responsible for architecting and focusing in on the stuff that really matters and the stuff that’s actually going to deliver the value, not stuff that’s there because it looks keen or because it’s the latest technology widget or whatever. Again, that’s an inherent property of what it is that architects do.

Cost cutting itself is not the goal. The goal is ultimately efficiency and making sure that you're not wasting time doing stuff.

Just as agility is, in some respects, a side-effect of what architects do, we need to keep in mind that agility is a means to the end of alignment. You can have a lot of agility if you never achieve alignment. Then, you're just continuously misaligned.

Similarly, the cost-cutting itself is not the goal. The goal is ultimately efficiency and making sure that you're not wasting time doing stuff. That doesn’t matter, because you are not only wasting time, but you are obviously wasting money, and you're committing resources that are necessary to solve this problem. Actually, those additional resources sometimes just get in the way, they make things worse, rather than making things better.

The architect’s approach to dealing with the architectural way of problem solving means that agility and cost cutting sort of are not short-term focuses. They are just built into the idea of why we do architecture in the first place.

Hornford: And that cost isn’t necessary. A lot of people focus on IT cost. It is cost to the business.

Gardner: Total cost?

Hornford: Total cost, and it’s not agility of your IT infrastructure, but agility of your business. If you lose that linkage, you lose the alignment that Len mentioned. Then, you're not able to deliver the compelling value preposition.

Gardner: We talked earlier about the notion of moving from a platform mentality to a business process and agility mentality. We hear a lot from the vendors and suppliers. They have a role in this as well. The architects are beavering away in these companies, trying to change culture and transform the business, but we hear marketing from the vendors, "If you do this product, this platform, or this technology, it will solve your problems."

Is there a message to the enterprise architects that they should be taking to their organization about the role of the vendors, and is that changing from what we’ve perceived in the past as the role of a vendor or a supplier? Len?

Limit to leverage

Fehskens: Big question. The short answer is, yes. I often joke that every architect will answer the question "yes ... but." So, here comes the but. There is a limit to the leverage you have over suppliers, and the architects have to work with the material that’s available to them. Hopefully, the vendors are listening to the needs of their customers and doing the same kind of thing on their side that architects are trying to do.

Gardner: Don’t the suppliers have to adjust too?

Fehskens: Yeah. It’s a big ecosystem. If you’re selling something that nobody needs or wants, you’re going to go out of business. Suppliers have to be adaptable to the needs of the customers, who are changing. We’re all in this big dance, and everybody is trying to avoid stepping on somebody else’s feet or tripping up and falling over their own.

How does that sort itself out? That’s a difficult question to answer, because there are time-lags and some organizations misread the environment in the current business climate, and they go out of business. Other organizations are very good at anticipating future needs by looking at the trends. They happen to be in the right place at the right time, when somebody needs something they’ve got and it’s available, and they end up winning the battle.

So, yes, we all have to learn how to cooperate. One of the goals of professionalizing the discipline is making it possible for architects on both sides of that relationship to communicate with one another in language that they both understand and recognize that you can’t optimize your side at the expense of other side, because at some point that’s going to come back and bite you. We have to make it possible for architects to have those conversations and to make it apparent to the businesspeople on both sides what the business value is.

A big part of architecture work has been around the development of standards that facilitate interoperability. In many respects, conforming to interoperability standard is counter intuitive to a business, because you basically give away whatever proprietary advantage you have by locking in the customer doing it your own way.

On the other hand, the same mechanism that allows you to lock a customer in also allows the customer to lock you out.

On the other hand, the same mechanism that allows you to lock a customer in also allows the customer to lock you out -- if they decide that they get better payoff from taking advantage of interoperability amongst multiple or other vendors who’ve agreed to collaborate and adopt a particular standard. It’s all about reading the environment and responding appropriately. This ultimately goes back to the idea of fitness for purpose.

Gardner: Jeanne, the relationship between the enterprise architect, the business, and the supplier -- is this an evolving dance? What are some of the new choreography steps?

Ross: I'm not sure I know the dance yet! One benefit we get from good architecture is that we understand the process components and the underlying technology and application from data components, which allows us to take advantage of what’s on the market.

If there is a good component, we can grab it, and if there is not, then we don’t need to take it. What architecture is doing -- and I think we’re seeing vendors start to respond to this, but have a long way to go -- is spur a real developing marketplace for the components that many organizations need. I look out there and I say, "Now pretty much everyone gets it that they don’t have to provide any benefits internally to their employees, because you can outsource that." We get that component. It’s a plug and play.

Core to the business

There are things that are more core to the business that we’ll see more available. I don’t think the architects are going to also become the vendor managers. They're the ones who are going to design the components and recognize the interfaces, but they’ll be working closely with the vendors to make sure the pieces come together.

Gardner: It does seem that the vendors are appreciating that they’re elevating their role inside their enterprises. The notion of EA is elevating beyond platforms. The vendor response seems to be that, "We’ll provide everything -- we’ll merge, acquire, and provide everything at an architectural level." Do you think that’s the right way?

Ross: I should note that I use the term “platform” differently from you. There is technology platform, which I think is what you are referring to, but there are digitized process platforms that are really valuable, and many times vendors can provide the whole thing. Software as a service (SaaS) is a partial example, but actual business process outsourcing really accomplishes that. I think of these as potential platforms for organizations.

But, there is a fine line between a platform and an outsourced process, and organizations are trying to piece that together. What's our platform? What are the components for plugging into and taking out of that platform? That’s the architectural challenge. I feel like I just didn’t answer your question, but it is the thought that came to my mind.

Gardner: It occurs to me that this is another point of variability, and that the architect needs to not only consider the variables internally, but suppliers are redefining themselves, and cloud computing is pushing the envelope on what you would consider as sourcing options.

Different organizations will have different things that matter to them.

So, Dave, last question before we close up. This notion of a dynamic environment for sourcing and vendors redefining their role, perhaps trying to expand their role, sounds to me like the enterprise architect’s role becomes more critical as a result.

Hornford: I'd agree with that. If we're going to look at our sourcing options, using the word "component" as opposed to "platform," I can acquire a benefit. I can acquire a benefits engine as a service or I can build my own and manage my own processes, whether fully manual or digitized. Those choices come down to my value in the business.

Different organizations will have different things that matter to them. They will structure and compose their businesses for a different value chain for a different value proposition to their customers.

If we get back to the core of what an architect has to deliver, it’s understanding what is the business’s value, where are we delivering value to my customers? How that organization is structured, how it succeeds, how it gets its agility, and how it gets its cost may be different for different organizations. We have a larger collection of tools available to us without a clear, "This is the right answer. Everyone does it this way."

Gardner: Well, we’ll have to wrap it up there. It’s obviously a deep and interesting subject, and we will be revisiting it often, I'm sure. We've been discussing the advancing role and powerful potential for EA, and how practitioners and leaders face a vast new promise for IT business alignment improvement. But there are also quite a few missing parts, and perhaps even a lost opportunity, if you don’t do this and your competitor does.

This sponsored podcast discussion is coming to you from The Open Group Conference in Boston. We're here in the week of July 19, 2010. Please join me in thanking our guests, Jeanne Ross, Director and Principal Research Scientist for the MIT Center for Information Systems Research. Thank you.

Ross: Thank you so much, Dana.

Gardner: We are also here with Dave Hornford, Architecture Practice Principal at Integritas Solutions, as well as the Chairman of The Open Group’s Architecture Forum. Thank you, Dave.

Hornford: Thank you, Dana.

Gardner: And also Len Fehskens, Vice President of Skills and Capabilities at The Open Group. Thanks, Len.

Fehskens: Thank you, Dana.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’ve been listening to BriefingsDirect. Thanks for joining, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group.

Transcript of a sponsored podcast on the potential of enterprise architecture, resistance in the business community, and finding common ground. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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