The evolution of Enterprise Architecture in business transformation
Oct 2, 2024
Organizations of all sizes and industries face an increasingly complex and rapidly changing business environment that may hinder successful business transformation. The leading innovation author and speaker Peter Hinssen calls it the “Never Normal” – a world with more frequent ‘seismic shocks’ of technology innovation, geopolitical conflicts, and ecological challenges affecting the very fundamentals of business, and the ‘polycrises’ when multiple catastrophic events occur together.
This new reality presents a wickedly complex challenge for business leaders to understand and respond more quickly to this mix of threats and opportunities while simultaneously transforming their organizations to achieve business goals.
Organizations must embrace the uncertainty of not knowing what will happen next and methods that enable them to navigate this complexity early enough, or they risk going the way of Kodak, Blockbuster, and Nokia.
The original management guru Peter Drucker said, “The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.”
This evolving context demands a reevaluation of how organizations approach their strategic management. It calls for a more holistic and dynamic view of the enterprise – one that connects the dots across silos, be they organizational, functional, geographic, informational, or technological. An approach that enables analysis and insights that support strategic decision-making and transformation. At the same time, the pressure on business leaders to deliver faster change is only increasing.
While many organizations have a clear strategy, they often struggle to implement it effectively. Transformation activity quickly becomes bogged down in siloed thinking, vested interests, unexpected impacts, and unplanned costs and delays. We call this the strategy-to-execution gap.
This article’ll explore the key factors driving this new era of business complexity, its challenges, and how forward-thinking organizations adapt their approaches to enterprise architecture to bridge the strategy-to-execution gap. By understanding these dynamics, businesses can better position themselves to not only survive but thrive in an uncertain future.
The following primary forces are reshaping the business world:
Digital Transformation
It is obvious that digital technology is ubiquitous and pervasive in business today. Adoption is happening faster than ever – where it took Facebook 10 months to reach 1 million users, ChatGPT achieved the same milestone in 5 days.
However, we are still in the early stages of fundamentally reshaping how enterprises operate in a truly digital world with ever more powerful and accessible artificial intelligence, particularly Generative AI.
It’s not purely about technology adoption but how business capabilities can be radically reimagined with new digital products and services and increasingly intelligent automated operations. However, these opportunities come with risks, such as managing bias and hallucinations in AI models and managing privacy, confidentiality, authenticity, and copyright risks, where the provenance of generated content can be unclear.
Sustainability
We face an uncertain future. Climate change may be irreversible within the next decade, with impacts such as over 1 million species facing extinction, extreme weather creating a refugee crisis, and increasing costs and disruptions to commerce. As a result, consumers increasingly expect vendors to show a demonstrable commitment to sustainable practices.
This, in turn, means organizations increasingly require similar commitments from suppliers, resulting in the propagation of sustainability impact across the supply chain. Therefore, organizations must incorporate sustainability into their transformation planning and analysis to ensure their responses to business events and advance their sustainability goals at sufficient speed to meet their sustainability commitments.
Regulatory Compliance
Alongside these first two challenges, governments increasingly require organizations to meet regulatory standards around digital adoption. For example, the EU introduced GDPR for data privacy several years ago in response to online privacy concerns. In January 2025, the Digital Operational Resilience Act (DORA) will be applied to all financial institutions operating in the EU, reflecting the critical infrastructure-style importance of digital services.
In the aftermath of the Colonial Pipeline cyber-attack in May 2021, the US president signed an executive order shifting increasing responsibility for cybersecurity to private companies. This was followed in 2022 by new cybersecurity legislation for critical infrastructure organizations. Alongside these, individual countries and industry bodies are increasingly producing compliance and assurance standards.
Alongside these demands, there is a constant need to drive shareholder value in corporate entities and achieve policy and mission goals in government and non-corporate organizations.
Transformation leaders face a formidable task: making sense of myriad interdependencies across teams, business processes, data, applications, technologies, projects, and initiatives, both within their enterprise but also across partners, suppliers, and customers. This is all in a volatile, uncertain, complex, and ambiguous (VUCA) business environment. Success hinges on connecting the dots across these disparate elements to understand the cascading impacts and dependencies of change and make sense of this complexity to improve decision-making.
Moreover, this complexity manifests as a significant challenge to agility and adaptability. If a transformation initiative has to spend its first six months gathering and organizing information about the assets in scope and how they relate to each other, fast and effective change is impossible. Even worse, if the result of this information gathering shows a landscape littered with technical debt and/or a web of messy integrations between applications and systems, the chances of fast results are vanishingly small. This is sometimes called the ‘boat anchor of IT’ or the ‘below the waterline iceberg’ that either slows down or sinks transformation.
To add to the challenge, this picture is not static. Change is taking place constantly – if not as fast as leaders would like – meaning the ‘as is’ landscape is a moving baseline. In many organizations, the information gathered about the current state architecture is outdated before an initiative starts. If you don’t know where you’re starting from, you have no chance of reaching your desired destination.
The crux of the challenge is not to avoid this complexity but to embrace it.
Complexity is inherent in large organizations, and digitalization only increases it. But it also comes with the means to see it, understand it, make sense of it, and manage it so stakeholders can get the insights they need when they need it in a meaningful form.
The key is to change the approach.
Architecture is the discipline that deals with complexity and balances many factors into coherent decision-making. The obvious analogy is with designing a building, where the architect needs to factor in the purpose of the building (e.g., is it a family home or an exhibition center), key requirements (e.g. lots of natural light, plenty of collaboration space, or maximum affordability), constraints (e.g. budget, timescales, regulatory compliance), risks (e.g. what are the areas of uncertainty, or where might things go wrong) and key dependencies (e.g. you don’t tile the bathrooms before the plumbing work is complete).
Enterprise architects do the same thing but with less tangible, more conceptual assets like strategic goals, business threats and opportunities, business capabilities, organization structure, business processes, data, and technology.
In the same way a traditional architect models a building (maybe with blueprints on a page), an enterprise architect models an enterprise – or some meaningful subset(s) of it.
The power of models is that they can be queried to produce analysis and insights. The superpower of architecture models is that they contain semantic meaning about the things in the models that can provide rich insights for a huge variety of stakeholders, from C-level executives in the boardroom to technical practitioners in the ‘engine room’ of change.
The emergence of easily accessible Generative AI means these insights can be more dynamic, automated, accessible, and intelligent than ever.
Digitalized models also bring the possibility of sharing this information and these insights with other systems, increasing integration and interoperability across the toolchains in the enterprise. For example, a digital architecture model of a solution can be shared with adjacent tools for tasks like threat modeling or controls compliance assessment, avoiding the need to recreate the model – with the associated risk of human error – and providing the information where it is needed when it is needed.
The added benefit is that specialists in adjacent disciplines can benefit from the greater business context that enterprise architecture models can provide, enabling them to see how their work contributes to enterprise goals and to help prioritize their workload. Similarly, metadata from these specialist adjacent disciplines can then be populated back into the enterprise architecture models to enrich them, adding value to stakeholders who can better understand their enterprise.
However, given the continuously changing nature of the enterprise, these models must be dynamic, not static. This means they must be data-driven, not hand-crafted. The data must be sourced from existing systems of record wherever possible, leveraging the existing data ecosystem in the enterprise.
So, enterprise architecture practices must evolve to include new ways of working.
We see three key trends shaping the future of Enterprise Architecture:
Democratization of Enterprise Architecture
The days of enterprise architects being the ivory tower experts with all the answers and the ‘no police’ of governance are long gone, if they were ever there in the first place. Digital transformation has ushered in an era of business and technology being closely intertwined, fostering the need for co-creation involving a more diverse set of stakeholders – business, data, and technology specialists – together with enterprise architects who can facilitate and coordinate this innovation in line with strategic goals and existing reference architectures.
With the adoption of more Agile ways of working, teams need to move fast and with the autonomy to make their own decisions without being slowed down by heavyweight governance processes while having visibility of the wider, longer-term enterprise perspective. Thus, the role of enterprise architecture is transforming to be more of an enabler of this more ‘democratized’ approach. Enterprise architecture provides the information and guidelines for these teams (of specialists and non-specialists alike) to make the right decisions and be more adaptive in providing the right governance models to fit any specific scenario (control-based versus outcome/value-based versus autonomous).
Consumerization of IT
We all use apps and digital services that are simple and intuitive in our daily lives and require no training. They are designed around us users and the specific tasks we need to accomplish (e.g., find new music that we will like, make a payment to someone we know, etc.). We increasingly expect similar ‘low effort’ user experiences in the enterprise IT we use to get our jobs done at work. This is what we call the consumerization of IT.
The consumerization of IT involves an intuitive experience designed around the user, guiding them to the outcomes they need for rapid value creation. This requires a clear understanding of targeted user personas, what constitutes value for them, and out-of-the-box, pre-packaged assets that make it easy and accessible for them to achieve it.
Increasing interconnectedness
As digitalization becomes ever more pervasive, we see an increasing number of APIs and integrations between systems, resulting in a profound increase in IT landscape complexity. Even though platforms and digital products aspire to consolidate data and business logic, the number of interdependencies is often increasing exponentially. This creates an urgent and important need for visibility, transparency, and traceability of dependencies and impacts, as well as an end-to-end line of sight between strategic goals and the assets and workstreams they depend on.
At Bizzdesign, when we think about the value that enterprise architecture can bring to transformation, we anchor it in the context of strategy-to-execution. Our goal is to bridge the strategy-to-execution gap.
We frame it in terms of three key value streams that together support end-to-end transformation value creation:
As businesses navigate an increasingly volatile business environment with more frequent disruption, enterprise architecture has become a linchpin enabler to make sense of the complexity and improve strategic management of change. The future of business transformation lies not in simplifying our complex world but in embracing and managing that complexity to cut through the noise and provide focus and clarity for decision-making, accelerate innovation, improve efficiency, and deliver sustainable growth.
By elevating enterprise architecture to an agile and intelligent collaboration enabler that supports a broad spectrum of stakeholders in engaging in transformation, organizations can drive alignment and focus around their investments to close the strategy-to-execution gap. This results in faster decision-making and accelerated adaptation to responding to emerging threats and opportunities.
At Bizzdesign, we’re committed to developing offerings and methodologies that address these challenges. Our product roadmap is formulated to support our vision of the future of enterprise architecture, where AI-powered intelligent insights support a broad range of stakeholders in their transformation collaboration, providing intuitive and accessible user experiences with the flexibility and extensibility to meet the most demanding requirements.
Nick Reed
Chief Strategy Officer at Bizzdesign
Nick is responsible for value proposition development, building strategic partnerships, and driving innovation topics, including executing Bizzdesign’s ‘buy & build’ acquisition strategy. He has over 25 years of experience in B2B enterprise software and SaaS, dedicating 15 years to enterprise architecture and portfolio management.
