Enterprise Architecture – ROI

As I noted in my previous post, before an organization starts spending a penny for EA, it should identify the real needs of EA from various perspectives and figure out subjectively the impact of having or not having EA and ways how EA can be sustained on a long run. Think about this: are there too many systems running to fulfill the business needs? If yes, then there are chances of inconsistencies among those systems and spending lot of budget on maintaining them. What is the justification for their existence? Perhaps an integrated solution such as ERP or CRM could replace many of those applications and save cost quickly – a critical output that can come from EA (there wouldn’t have been so many systems and move to an integrated suite after spending lot of money on maintaining for so long, had there been EA in the first place!).

  1. EA is a multipronged approach to optimize business operations with the help of IT and it is a transformational work, hence the business is likely to realize the EA ROI only after months or years.
  2. Let alone the immature and yet evolving state, unless EA is accepted and owned totally, ROI is hard to realize even after months and years – better stick to the rules!
  3. Identify all the benefits EA adoption/implementation will bring in and assess each of its values, which will ultimately tell you how successful your EA is. Example:
    1. Reduced manual work/optimized workflow/automated processes all saving employee time translating to per hour cost saving or quicker time-to-market
    2. Removing or linking redundant systems, saving associated hardware, software & maintenance cost
    3. Consolidation of business units to remove duplicate business processes, services, work force, etc.
    4. Buy/build a new system (additional cost) but will show the cumulative benefits (better ROI) in future
    5. Processes/tools/models for improved service quality/better customer satisfaction resulting in more revenue
    6. Risk avoidance, regulatory compliance for improved corporate governance
    7. System integration for real-time data/reports/analyses in order to enable the business to make strategic decisions on time before the competition gets there (strategic agility)
  4. Success criteria vary for each core organization dimension (business/strategy, IT, finance, operations, compliance, sales/marketing) because each one’s priorities, objectives and definition of success are different. ROI can be effectively measured only if the framework includes all stakeholder metrics/parameters.
  5. Determine when to measure the EA maturity in the adoption lifecycle and the depth of measure (project level Vs. function level Vs. division) for accurate depiction of the reality

Measuring EA’s success and validating ROI is not possible if its decisions do not result in tangible business benefits and measurable impact.

category: Enterprise Architecture    

Comments are closed.