Information Technology Reference
In-Depth Information
The goal of enterprise architecture is to en-
able 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. The problem is that few people
apply return on investment, and few apply it in
a consistent manner. 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.
choosing measures of return on investment, but
rather identifying, measuring, and monetizing its
benefits. A critical element of this chapter was to
broach the subject of how to identify the benefits
of enterprise architecture, which is why there was
a short, but important discussion of its benefits.
With enterprise architecture costs and benefits as
a foundation, we quickly solved the dilemma of
how to illustrate the return on investment of eight
federal-level enterprise architecture initiatives.
Finally, we showed how real options may be used
to optimize the ROI of enterprise architecture.
This chapter went beyond introducing a frame-
work of metrics and models for measuring the
return on investment of enterprise architecture.
It identified tangible principles for successful
enterprise architecture and return on investment
itself. Successfully applying enterprise architec-
ture is necessary to achieve return on investment,
establishing measurable goals and objectives is
necessary for measuring return on investment,
and contemporary measures of return on invest-
ment such as real options may the key to getting
payback from enterprise architecture.
summary
The goal of this chapter was to introduce a suite of
simple metrics for estimating the return on invest-
ment of enterprise architecture. This chapter was
designed to feature a simple metric for applying
contemporary measures of return on investment,
such as real options. Traditional measures of
payback are considered obsolete in some circles
and net present value is often suggested as the
most realistic measure of return on investment.
Still others say all of these measures are simply
obsolete in lieu of real options. Therefore, this
chapter introduced a simple model of real op-
tions to show practitioners how to easily apply
contemporary measures of ROI.
The goal of enterprise architecture is to im-
prove organizational efficiency and effectiveness
and return on investment is an excellent way to
measure the business value of enterprise architec-
ture. The goals and objectives of enterprise archi-
tecture were introduced because they are closely
related to the principles of measuring payback.
Metrics came next to show how to measure the
return on investment of enterprise architecture.
From this, we observed that the basic elements
of payback are costs and benefits, and return on
investment measures flow naturally from these.
The most challenging aspect of measuring
the payback of enterprise architecture is not
reFerenCes
Hite, R. C. (2002).
Enterprise architecture use
across the federal government can be improved
(GAO-02-6). Washington, DC: U.S. Government
Accounting Office (GAO).
Kodukula, P. (2006).
Project valuation using real
options
. Ft. Lauderdale, FL: J. Ross Publishing.
Meskell, D. (2003).
High payoff in electronic
government: Measuring the return on e-govern-
ment investment
. Washington, DC: U.S. General
Services Administration (GSA).
Rico, D. F. (2004).
ROI of software process im-
provement: Metrics for project managers and
software engineers
. Boca Raton, FL: J. Ross
Publishing.
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