Week 9

The goal of enterprise architecture is to improve organizational efficiency and effectiveness and return on investment is an excellent way to measure the business value of enterprise architecture.Return on investment principles go hand in hand with the tips, tricks, and techniques for enterprise architecture.

There are several principles to make EA more economic with successful ROI:

• Use ROI as a success factor. Use return on investment to drive enterprise architecture. By definition, the goal of enterprise architecture is to align an organization’s strategy with its information technology. By implication, a strategy cannot be realized without this alignment.

Set out to measure the costs and benefits of using enterprise architecture for this alignment.

• Etch the desired benefits in stone. Identify a core set of benefits that you wish to realize from enterprise architecture. Establish measurable goals for operating efficiency, cost reductions, staff reductions, customer satisfaction, computing budgets, and economic growth.

• Establish early ROI objectives. Establish ambitious return on investment objectives for enterprise architecture based on tangible measures of costs and benefits. Use return on investment to establish safety margins. That is, given the risk of any project or initiative, ensure the payoff far exceeds the cost of enterprise architecture, lest you end up with none.

• Operationalize a core set of metrics. Define a set of clear, measurable, and quantitative economic benefits for enterprise architecture. Examples include people, time, budgets, customers, throughput, volume, bandwidth, computers, and maintenance. Common mistakes are failing to define metrics, defining qualitative ones, or defining far too many metrics.

• Continuously measure the payback. Measure the return on investment of enterprise architecture early and frequently. Measure the payback at regular intervals along with normal project management activities, such as cost, time, and earned value reporting. Payback can be estimated similarly to cost and schedule performance indices before it’s too late.

• Use automated tools to do the work. Use an integrated project management reporting system with built-in return on investment tracking and reporting. There’s no sense in having to master all of the latest payback formulas or designating a return on investment manager.Instead, collect payback data automatically and have the computer system help you along.

• Standardize ROI reporting. Create a system for measuring and reporting measures for the return on investment of enterprise architecture. It’s virtually impossible to do so with so many local, state, federal, and international enterprise architecture initiatives in existence. It’s just too difficult to measure payback after the fact without a standard system in place.

The goal of enterprise architecture is to enable an organization to realize its strategic goals and objectives by streamlining its information technology infrastructure. And, strategic plans are simply a means of ensuring the operational efficiency and effectiveness of organizations and firms alike. However the process always face a risk of unexpected cost.  The way to avoid this is to elevate return on investment to center stage, identify measurable goals and objectives, and strive to achieve them in every way.


Reference: http://davidfrico.com/rico07a-s.pdf