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What has the enterprise architect ever done for us?
A colleague recently had a problem explaining to the CEO of a UK listed company what Enterprise Architecture is for, other than burning a bit of the bottom line and generating impenetrable PowerPoint presentations. So we brainstormed how we might do better next time.
The first problem is that most CEOs don’t actually know what an enterprise application is. I had this problem at IBM in the late 80s. The IBM executives only ever interacted, using their green screens, with personal productivity and communication applications. They thought that was what computers were about. It led to the announcement (September 1987, a date scorched into my brain) of System Application Architecture, IBM’s attempt to unify computing across all its product ranges. This was an announcement in which CICS and IMS, which between them supported 80% of IBM’s business, were completely ignored. SAA eventually crashed and burned and directly led to IBM making the then largest loss in corporate history in 1993.
So we started by describing the difference between personal applications, group applications and enterprise applications. A personal application doesn’t have a database or any transactions, but rather reads its data into memory at the start and then writes the memory back out to a disk at the end. This is how Word, Excel, PowerPoint and Outlook work. Group applications allow for multiple users, so they tend to have a database and transactions, but they make a closed world assumption. That is how Exchange works for instance. To the extent that Exchange talks to the rest of the world, it is through SMTP and POP, application protocols. Enterprise applications have databases and transactions, but also make an open world assumption. They assume that it will be necessary to integrate with other applications for which there are no application protocols. These applications are used to do the record keeping and reporting of the enterprise whereas personal productivity and group applications are used for communications between people – email, document management and so on. Most CEOs never interact with such applications.
If you can get the CEO to recognise an enterprise application, you have a chance of explaining the role of enterprise architecture. This particular CEO has a problem that too much work has to be done by their people to make things happen in the enterprise. The reason for this is that their enterprise applications are not properly integrated. We see the same thing, for example, in banking where some banks achieve straight through processing for up to 96% of their transactions. That is, from the customer requesting the transaction to the transaction settling and clearing, only 4% needs human intervention. Some other banks, however, only achieve a 30% straight through processing rate, which means that they spend a lot more on people, take a lot longer to clear the transactions and make many more mistakes. So the next thing to explain to the CEO is the role the enterprise applications have in running the value chain. When a customer makes a request for something, that has to be recorded and then acted on. Typically, to act on the request, we first need to check the risk, usually by authorising funds from a credit card and by ensuring we have stock. Amazon used to act on requests while you waited (remember the screen saying ‘Please don’t press the back button while we check your credit card’) but, in order to scale, made this a separate operation. Finally, when the request is allowed, it is fulfilled by having a third system pick the goods and ship them. To get this to happen straight through the CEO first needs to have three enterprise applications: a customer facing one that takes orders (the Amazon Web site); a middle one that checks credit and stock; and a back office system that picks stock and ships it. These three enterprise applications then need to be integrated so that no people need to intervene to make things happen.
So what does enterprise architecture do for the CEO? In this case it puts together the enterprise applications so that they completely implement the value chain and maximise it straight through processing rate. This minimises cost, minimises re-work and maximises profit.