Information Technology Reference
In-Depth Information
strategy is not well defined, therefore insufficient
data are available to proceed. Likewise, too many
models are produced, which are inconsistent and
incompatible. Finally, some models are completely
unusable and poor tools often hinder completion
of enterprise architecture.
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 metric:
Deine
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 mis-
takes are failing to define metrics, defining
qualitative ones, or defining far too many
metrics.
Continuously measure the payback:
Mea-
sure 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
is 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 is no sense
in having to master all of the latest payback
formulas or designating a return on invest-
ment manager. Instead, collect payback data
automatically and have the computer system
help you along.
Standardize ROI reporting:
Create a sys-
tem for measuring and reporting measures
for the return on investment of enterprise
architecture. It is virtually impossible to do
so with so many local, state, federal, and in-
ternational enterprise architecture initiatives
in existence. It is just too difficult to measure
payback after the fact without a standard
system in place.
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prinCiples For suCCessFul
return on investment
Return on investment principles go hand in hand
with the tips, tricks, and techniques for enterprise
architecture. Some people feel measuring payback
is a principle for the industrial age and some be-
lieve it is path towards the 21st century. Some say
return on investment is irrelevant in lieu of net
present value, the plethora of payback algorithms,
or concepts in real options. The bottom line is
that return on investment is a strategic approach
to measuring the value of any activity, especially
enterprise architecture. And, real options are a
key to unlocking its benefits.
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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 real-
ize from enterprise architecture. Establish
measurable goals for operating efficiency,
cost reductions, staff reductions, customer
satisfaction, computing budgets, and eco-
nomic growth. Monetize the benefits early
(e.g., convert improvements into money),
which many do not do.
Establish early ROI objectives:
Establish
ambitious return on investment objectives
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