GUIDE 5 Enterprise Architecture Trends

5 Enterprise Architecture Trends Trend 2 2. TREND IN ACTION Project to Product in Action By comparing the project-focused approach to the productfocused approach, you can see the different ways they manage change and better understand their core principles. In this section, we compare the project-focused approach to the product-focused approach, looking at mindset, teamwork and relationships, budgeting and investment and how they measure success. ardoq.com 15

5 Enterprise Architecture Trends Trend 2 Mindset Successfully dealing with continuous change requires a shift in mindset. When businesses transform from traditional methods of work, changes could include centering on projects, or ongoing work built around products. Reactive Mindset - Project Adaptive Mindset - Product The traditional project-led approach perpetuates the mindset that business is separate from IT. When companies accept operating in an environment of Volatility, Uncertainty, Complexity and Ambiguity (VUCAworld4), they require a product mindset. Business creates ideas, IT is the factory delivering changes When treated as a factory, IT becomes the delivery costcenter and a bottle-neck The project-focused mindset assumes a stable operating environment where differences are: Triggered Prioritized Funded Driven by a plan-build-run process ardoq.com The product-focused mindset helps them react to: Uncertain operating conditions Shifting customer needs Constantly changing competitive landscape Delivering continuously In this organization, the structure allows continuous business and IT expertise for teams to collaborate and improve the company. 16

5 Enterprise Architecture Trends Trend 2 Teamwork and Relationships The way you work and your relationship to others within the organization can change the effectiveness of a team. Teams Focused on Departments and Projects Teams Formed Around Products Project-focused companies organize departments around line functions or activities that directly impact an organization’s ability to deliver goods and services. Product-focused companies work towards thinking of the companies as products that can be independent of each other. Then teams can work autonomously to improve the products. Project-Based Teams: Product-Based Teams: Allocate members across multiple departments Keep members in the team, long-term Members are always part of the team Members collaborate, in parallel to various project teams and work Have a slower start, due to battles over personnelprioritization and time needed to onboard team members Dissolve when finished, losing the team’s deep domain knowledge, especially with projects delivered with outside resources ardoq.com Combine members’ cross-functional business and IT skills Have time and knowledge to continuously analyze and deliver business value Build domain knowledge over time and support the team, allowing them to effectively drive forward new ideas independently 17

5 Enterprise Architecture Trends Trend 2 Budgeting and Investment The way a team’s budgets are agreed upon and investments are made can affect a team’s productivity and shared knowledge. Set Budget and Task - Project Continuous Work, Continuous Investment - Product Typical Project-Based Teams: Typical Product-Based Teams: Begin with a business case, having a specific project scope and duration Have long-term goals with smaller deliverables rather than a fixed scope Have competing project proposals and vie for up-front investment Work on their own, not competing with others Base investments on features and requirements Base success on the benefit to a company rather than milestones of a project Renegotiate if the project fails to deliver within the agreed timeline and budget Measure the value a product gives customers, continuously adjusting that value Deal with prioritization tradeoffs between money and people-allocation during renegotiation Target investment in business outcomes and long-term, continuous business capability improvement Investments happen in discrete, project-specific decisions and stakeholders never know when the next project will be prioritized. As a result, stakeholders try to cram features into each project. While feature cramming may improve their capability, it increases the project’s risk and the likelihood of failure. The investments provide a direct, transparent link between business strategy and capability investment. As the result of continuous investment, teams experience long-lived stability. ardoq.com Investment can, and should, change as business strategies shift, but it’s easier to maintain the link between business strategy and continuous value-creation. 18

5 Enterprise Architecture Trends Trend 2 Measures of Success As the way people work changes so does the way success is measured. Success Based on Time and Budget - Project Business Value Showing Success - Product A Project team’s ability to deliver on time and within budget measures their success. Product-focused work bases success on measured business value delivered continuously over time. Project-focused teams: Product-focused teams: Usually deliver in significant milestones Have longevity Finish and are dissolved before long-term feedback from customers/users arrives Can work towards gradual delivery of features and adjust as they receive feedback It’s challenging to measure success and adjust projects over time because the end assessment is missing. This failure increases the risk of not meeting user expectations. ardoq.com Prioritize their work continuously, based on business outcomes and strategy Have a lower risk of failing to deliver on investments due to their flexibility 19

5 Enterprise Architecture Trends Trend 2 3. USING IT Organizational Design Outcomes, Good and Bad When you design an organization around semi-independent product areas there’s a reduced need for centralized control and decision-making. The reduction delivers a greater change throughput (improved rate of production or processing). Similarly you’ll find some organizational needs and design decisions common to all areas, rather than only productfeatures, i.e. security, stability, and robustness. Organizations need architects to take responsibility for these crossdomain design issues because optimizing for one set of outcomes can potentially de-optimise another. That’s why EA plays a crucial role in agile change. You can dig further into the consequences in the Democratization of Enterprise Architecture section. (See page 22) However, like all decisions, this enterprise design decision comes with a tradeoff. Project to Product aims to change the organizational model so that business units can work independently, needing less direction and not competing with each other. In a perfect world, this would work with every value stream. However, issues go across enterprise areas, and these issues must be coordinated and prioritized. ardoq.com 20

5 Enterprise Architecture Trends Trend 2 4. KEY TAKEAWAYS Key Takeaways for Project to Product In Project-focused teams: Business and IT are separate Members come from departments across the company Various projects vie for investments Work towards the goal of completion within a budget The team dissolves when the project finishes In Product-focused teams: Business and IT collaborate to improve the company Members remain part of the team Investments are based on long-term business outcomes The team works towards continuous delivery Teams are long-term and grow a knowledge base over time ardoq.com 21

5 Enterprise Architecture Trends Trend 3 Trend 3: The Democratization of Enterprise Architecture Team Responsibility Organizations can become more agile when teams become independent and more effective - saving money, time and improving engagement. A key tool for this is the Democratization of Enterprise Architecture which drives outcomes through a power-shift in how a company’s enterprise architecture is developed and consumed. ardoq.com 22

5 Enterprise Architecture Trends Trend 3 1. WHAT IS IT? What is the Democratization of Enterprise Architecture? The Democratization of Enterprise Architecture is happening due to the influence of other trends - as discussed in the Project to Product shift. It’s also in the wider background trends that we don’t address in this guide, including composable business models, agile enterprises, and the move to a value-stream-based organization. Democratization significantly impacts the enterprise, changing how they operate and the types of tooling needed for success. Some changes include: having each team be responsible for the design, operation, realization, and futurestate direction of their semi-independent business area. In addition, when companies use crowdsourcing, everyone contributes to building the architecture. As these changes occur, enterprise architects find their job shifting more to facilitator and coordinator roles. ardoq.com 23

5 Enterprise Architecture Trends Trend 3 Organizational Design Principles The democratization of EA follows a shift described in Organization Theory - the study of how companies organize themselves to achieve the most effective work for both the enterprise and its people. The following organizational design principles, developed by Fred Emery5, take a closer look at the distribution of decision making. As mentioned in the beginning, there’s considerable overlap in the trends, and you’ll see this fitting into the Project to Product Trend as well. Design Principle 1: the organization is designed so each part - including the people - is so simple that it can easily and cheaply be replaced. This principle continues to be the prevailing design principle in most companies, resulting in the classic bureaucratic hierarchy with the maximum division of labor. Each person or role needs to be coordinated or supervised to complete a whole task. Design Principle 2: the organization creates teams with cross-functional skills. Each part, including the people, do many things. Here people fill in for any missing parts, with the group taking responsibility for the coordination and control, forming a team that makes its own decisions and direction. The team has a minimum division of labor, and the group self-manages. These teams have varying levels of autonomy, from very little freedom to almost complete independence. Emery’s System Design Principles (Hjorteland2021) Responsibility for coordination and control is the critical feature of Design Principle 1. It is always located at least one level above where the work is being performed. DP1 ardoq.com New DP2 24

5 Enterprise Architecture Trends Trend 3 2. TREND IN ACTION Democratization in Action The shift towards organizations based on the flatter hierarchy of Design Principle 2 doesn’t remove the need for EA. However, it does impact EA’s purpose and its production. Compared to traditional centralized EA, democratized EA looks at who does what and where it happens. Now EA can be created and consumed by anyone, not just a centralized enterprise architect team. For example, governance processes triggered by Company X’s security business area are approved by a network of domain specialists and distributed across multiple teams or units. It’s a shift from ‘inside-out EA,’ where the EA team creates the architecture for the broader organization to consume, to ‘outside-out EA.’ In outside-out EA, anyone can make or view EA processes and artifacts (application or data-object), providing the EA team with descriptions of an organization from different perspectives to help decision-making. The enterprise architect can give permissions for making and consuming this information based on merit rather than a formal role. ardoq.com Semi-independent teams need to know where they fit into the enterprise model as a whole. The knowledge gives them the scope within which they should decide on their own, where to collaborate with others, and with whom they need to collaborate. 25

5 Enterprise Architecture Trends Trend 3 3. USING IT Three Results of Democratization Processes Processes to create, approve or update architecture may be ‘outside-out,’ initiated in one business team and terminated in another. In this case, the architect monitors and solves problems between teams. With democratized EA, the enterprise architect has a primary role, providing structure to collaborations similar to providing structure to systems. There are three ways this can play out: Stakeholders The architect’s role changes the primary emphasis from a formal architect, governor, or auditor; towards working as a facilitator, broker, or influencer. The architect takes responsibility for coordinating and facilitating multiple semi-independent teams. Models and Artifacts The architecture itself changes from formally defined and centrally managed to mass-consumable and self-service. People outside of the central EA team learn to self-serve and create. User Experience (UX) and agility have become just as important as frameworks and formal notation. ardoq.com 26

5 Enterprise Architecture Trends Trend 3 4. KEY TAKEAWAYS Key Takeaways for Democratization of Enterprise Architecture This trend results from using the other trends - decision-making becomes decentralized and democratized. Architecture becomes more self-service, and enterprise architects take on the role of facilitating these semi-independent teams. Everyone uses EA to see the whole company and the connections for decision-making, teams, etc. When using Democratization of Enterprise Architecture, organizations tend to Change their hierarchy into a flatter structure Shift from Project to Product Have semi-independent teams with responsibility for business areas Can make faster decisions and become more agile and adaptable to change ardoq.com 27

5 Enterprise Architecture Trends Trend 4 Trend 4: Continuous Improvement of Way-of-Working People Never Stop Improving Agile methods of adjusting work allow your organization to adapt to more fluid planning. This makes it easier to target long-term goals rather than rigid plans. ardoq.com 28

5 Enterprise Architecture Trends Trend 4 1. WHAT IS IT? What is Continuous Improvement of Way-of-Working? Continuous improvement forms a cornerstone of agile EA. In the past, organizations tended to focus on people, processes, and applications that realized business capabilities. Progressive enterprise architects adjust the enterprise design to constantly improve change delivery. It is rarely perfect the first time, hence the need for ‘continuous.’ Fortunately, enterprise architects can adapt and see where to improve by tracking the history of change initiatives and their impact across affected capabilities, including the applications, processes, and information. Enterprise architects constantly work to build capabilities, especially IT solutions. They adjust the system, designing and refactoring the way-of-working. Keep in mind; you can consider the way-of-working as a system - its design and architecture provide qualities similar to traditional architecture design. For instance, it has a throughput of change, quality of its operation, resilience from unexpected events, and scaling in terms of numbers of people and geographical distribution. ardoq.com 29

5 Enterprise Architecture Trends Trend 4 By continuously improving ways-of-working enterprises can: Design and refactor the way-of-working to meet their changing workplace Constantly adjust the system that builds the system Re-work parts of the organization responsible for building capabilities, especially IT solutions Ardoq suggests taking a pragmatic, outcome-driven approach to EA, and working towards continuously improving a company’s way-of-working - especially for companies that develop their own IT. This maximizes the benefit of trends mentioned in this article. For instance, continuous value delivery and EA democratization. However, remember that it’s impossible to design the perfect approach up-front. Continuous improvement always involves the same process: try, learn, adjust - rinse and repeat. Ways-of-working are tied to the relationships between an organization and its architecture. A company’s architecture reflects its organization and communication structure.6 Companies that want to improve their ways-of-working often adjust the organizational model to match the architecture model.7 ardoq.com 30

5 Enterprise Architecture Trends Trend 4 2. TREND IN ACTION Continuous Improvement of Way-of-Working in Action To utilize this trend add input to your EA to redefine your wayof-working. When combined with tracking information about change, you can improve the enterprise design to enable better time-to-value. ardoq.com 31

5 Enterprise Architecture Trends Trend 4 Below you can see the value of adding new components into your EA. Input Output People Visualize the alignment between these aspects Teams Adjust and align the aspects as needed Departments Operational aspects of your business - the basis of the Digital Twin of the Organization (See page 35) Identify the events around delivering and prioritizing change initiatives including, lead time, ideation Provide metrics to improve while continuously developing your way-of-working Use techniques such as organizational network analysis to identify the flow of information in your organization ardoq.com Assess the efficacy of cross-team knowledge-sharing; this can be time-consuming and costly when time-to-market is important 32

5 Enterprise Architecture Trends Trend 4 3. USING IT Creating Stronger Teams The industry techniques used to improve way-of-working require modeling people as part of the architecture. Having people and teams in EA provides the information you need to rearrange team responsibilities so that some members can prioritize delivering customer value. In contrast, others concentrate on IT platform enablement - this continuously improves your way-of-working. By putting continuous improvement in your way-of-working into practice, you can create teams with more au

Architecture Trend 2: Project to Product Trend 3: The Democratization of Enterprise Architecture Trend 4: Continuous Improvement of Way-of-Working Trend 5: Enterprise Architecture as a Digital Twin of the Organization Summary of Enterprise Architecture Trends p. 3 - 6 p. 7 - 12 p. 13 - 21 p. 28 - 34 p. 35 - 41 p. 42 - 46 p. 22 - 27 Reference .