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Expenses on Building IT Systems ?

By SiliconIndia   |   Wednesday, January 4, 2012
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Market study on value derived from Information Technology

A recent survey (sponsored by a leading research analyst firm in conjunction with Financial Executives International) of 344 CFOs at North American companies involved in manufacturing, financial services, healthcare, energy, transportation and other fields seems to indicate that CFOs don't think much of the information technology in their companies and the people who provide it.

As per the survey only 25 percent see the CIO as a key player in determining the business strategy while less than a quarter of the CFOs felt the IT department delivers the technology innovation needed by the business. Not only this; only 18 percent of the CFOs thought that their IT service levels meets or exceeds business expectations.

Business Perception of IT and challenges faced by IT

IT departments in various organizations are perceived poorly by business. All the IT projects undertaken to implement business change are perceived as expensive IT Projects, which deliver less value than expected. The return on investment and value for money from IT is also perceived as relatively low. Another challenge that they face is from IT systems which have become unmanageably complex and increasingly costly to maintain. One of the biggest challenges which has always surfaced is that IT is hindering the organization's ability to respond to current, and future, market conditions in a timely and cost-effective manner.

Case for Enterprise Architecture Assessments

IT Executive Management and the CIO's office is increasingly under pressure to justify IT spends and can no longer afford to ignore the perception that IT does not deliver Business value. More and more CIOs are now using Enterprise Architecture (EA) assessments as a medium to build a case of how IT investments are being aligned with business goals and to present a big picture to the management that combines IT strategy, information systems and technology domains with the business architecture. Enterprise Architecture (EA) describes enterprise goals, business process, roles, organizational structures, organizational behaviors, business information, software applications and computer systems in a comprehensive manner.

An Enterprise Architecture Assessment is a vendor- neutral assessment focused on validating the current Enterprise Architecture to help an Organization document existing architecture and create a strategy and road map for target architecture based on organizational business drivers and prioritization of IT goals.

EA Assessment Approach, Benefits & Outcomes

Most of the EA assessments are conducted using popular EA frameworks like Zachmann, TOGAF, Federal Enterprise Architecture or Gartner Model. At Fulcrum, based on our experiences of conducting EA assessments for various organizations,we feel that the best choice is a blend of all of these methodologies, in a way that works well within that organization's context and constraints.

Fulcrum's approach to assessment of the EnterpriseArchitecture is to establish transparency around the current maturity level of the organization's "AS IS" Enterprise Architecture in terms of its ability and agility to scale up to business demand.

One of the main outcomes of the EA assessment is measurement of the overall maturity level of the organization's EAby using level statements that can be used as benchmarks as given below:

Level 0: Undefined: No IT architecture program. No IT architecture to speak of.

Level 1: Initial: Informal IT architecture process underway.

Level 2: Under Development: IT architecture process is under development.

Level 3: Defined: Defined IT architecture with written procedures & Tech Reference Model.

Level 4: Managed: Managed and measured IT architecture process.

Level 5: Optimizing: Continuous improvement of IT architecture process.

Measurement is done in individual categories like Business Architecture, Data Architecture, Governance, Planning, Process Framework, Architecture Blueprint, Communication, Compliance, Integrated EA Program, Performance, IT Implementation etc. and then the total aggregated score is calculated to determine the overall EA maturity level. A reference diagram is provided below.

Along with that we try to avoid gaps in business/technology patterns which may be detrimental in the short and long term delivery capabilities to customers. We promote adoption to the voice of customer and creating a re-alignment strategy through clearly documented future state architecture and IT strategy that aligns with business goals & vision. One of our responsibilities lies in preparing informed business cases to invest into technology enablers that help expedite turnaround time to the customers. We ensure that IT is process driven and not people driven through process enablers and governance strategy. Along with that we also provide cost optimization and investment roadmap (people, process and technology) with an actionable 3-5 year plan that best suits your organization's vision and justifies every dollar of IT spend.


The starting point for any enterprise architecture is self-introspection. There are two vital questions which will always arise in the minds of the entrepreneur: is your organization spending too much money building IT systems that deliver inadequate business value; is your organization truly committed to solving these problems, and does that commitment come from the highest levels of the organization? If the answer to the above two questions is yes then enterprise architecture is your path towards helping IT deliver business values.

The article is authored by Digant Shah, Practice Director for Portal & EA, Fulcrum Worldwide.

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