IT Governance & Economic EA

Besides implementing enterprise architecture, there are several ways can ensure business & IT alignment, it is called IT governance.


Before we go into these part, let us recall what enterprise architecture can bring to us. One important thing is that it makes the IT hardware and software with in this enterprise support and help the business activities to achieve a better performance and efficiency, so as to build up competitive advantages.There are 6 steps in IT governance[1] that can help achieve these goals:


Step 1: Identify all necessary IT resources that support your core business operation. Ensure that all functional areas are included for completeness

Step 2: Determine the best IS infrastructure for enterprise business needs. Take current system, operating model, supplier and customer interface, and financial platform etc. in to account.

Step 3： Set up measurement metrics for all software packages, systems and departments, which can help monitor and audit process for the performance management.

Step 4: Follow an up-to-down principle. That is from business needs to support software, to support hardware. After we decided the system and software we are going to use, we need to make sure that the configuration of hardware is suitable. Ensure the selected hardware is compatible with any existing legacy systems and new systems.

Step 5: Establish regular audit process to check IT performance, which can help enterprise identify in a very short time if the current IT systems no longer fit the company's new strategic goals or business process.

Step 6: Ensure the auditing package includes best practice guidelines and effective metrics that can cover all business objectives in IT governance.

These 6 steps tell us how to maintain IT and business alignment and how to choose new SW and HW in IT investment. In step 1, it mentioned that we need to identify all business needs within our enterprise. But in real world, we always have limited IT resources that most of the times can't fulfill all the requirements in business operation. In my research, I found another methodology in managing IT services to support business operation. It's called IT/Business alignment circle. The four phases of this circle are: Plan-Model-Manage-Measure. [2]

In brief, plan means translating business objectives to practical IT services.  Since most business people complain that they can never make those IT geeks understand what they need, this is very critical to B/I alignment. Without constant communication, IT may not be able to determine which IT services they need to offer, and to which extent the service need to achieve so as to wisely allocate IT resources to help create more business value. Furthermore, since business needs keep evolving, IT should adapt and update its service, reallocate IT resources according to it properly.

The model phase identifies resources needed by IT services to achieve a certain service level. It helps optimize the IT resource allocation by prioritizing the business needs. In order to manage this process, CIOs can set up a fixed location to collect all business needs. Then prioritize them based on pre-defined business priority. The measurement of these IT services should take its created business value into consideration.

All this method mentioned before is just a temporary or operational-level solution for business and IT alignment. To gain an holistic picture of all IT related services, systems, infrastructure, its inner relationship and connection with business need and enterprise strategy, we need to build up an enterprise architecture of the entity. However, to set up an enterprise architecture always need a considerable amount of investment including time and capital, which make EA always costly for entities. It is always when an enterprise need to update or change this current system that it turns to EA for help for making a wise decision in new IT investment. For these circumstances, entities always don't have time to wait until the entire EA sets up.

To achieve economic EA, entities should divide the whole enterprise to different segments, or lines of business. The EA team should go over these LOBs by priority. Considering the cost and return issue, we can better design the EA establishing process by determining the sequence and requirements of each segment.

Reference:
[1]How to Achieve & Sustain Business IT Alignment
[2]The Four Phases of IT/Business Alignment