Mastering Customer Data: The Next EA Opportunity – And Challenge

Several recent Forrester reports home in on what we call “The Age Of The Customer” in which firms must seek to become customer-obsessed to build differentiation and loyalty. Those firms that embrace this will ramp up investment in four priority areas: 1) real-time customer intelligence; 2) customer experience and customer service; 3) sales channels that deliver customer intelligence; and 4) useful content and interactive marketing. All these needs are technology-infused – wholly dependent on technology and in categories where technology is evolving rapidly. Underlying these investments is the need to master the flow of data about customers: capturing/collecting data about them, analyzing it, distributing to those points of engagement, and, finally, integrating the insights into the customer experience. 

Companies can’t succeed at doing this without a close partnership between the business areas leading the charge and IT. The rate of change of your customers, markets, business opportunities, and technology is simply too fast. Forrester is exploring this theme in our first CIO/CMO joint forum

The reality, though, is companies flounder at this marketing-IT partnership. They flounder because of:

  • More ideas than capacity. A plethora of desired initiatives are constantly being surfaced – beyond the limits of available budget and with no mechanism to sort them into an achievable plan that IT can deliver on.   
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Follow The Conversation From Forrester's IT Forum 2011

Today we’re kicking off Forrester's IT Forum 2011 at The Palazzo in Las Vegas. Prepare for three exciting days of keynote presentations and track sessions focused on business and technology alignment. Use the Twitter widget below to follow the Forum conversation by tracking our event hashtag #ITF11 on Twitter. Attendees are encouraged to tweet throughout the Forum and to tweet any questions for our keynote presenters to #ITF11.

Is Your EA Program Making A Difference?

Several recent reports on Forrester.com start with the sentence: "EA organizations often toil out of the limelight . . . " There are fewer and fewer reasons why this should be the case. 

InfoWorld Enterprise Architecture AwardWe hear fewer stories of EA teams as purely "the standards police" or with "their heads in the clouds, not producing anything useful." We hear more and more stories of EA teams changing how business and IT plan, taking the lead in application simplification and rationalization, or being the broker for innovation. Infoworld and Forrester want to recognize these success stories with the 2011 Enterprise Architecture Award.

Our 2010 Award winners show the range of ways EA teams are making a difference:

  • Discover Financial created an EA repository that aggregates information from its Service Catalog, Fixed Asset, PPM, and Business Goals to provide decision-making insights that saved more than $1M of avoided costs.
  • Aetna used its Business Capability Map to combine more than 30 business unit strategies and road maps, highlighting common opportunities and gaps that it then used for its annual planning.
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Architect Angst On Their Readiness For Empowered Business

Forrester sees business empowerment — where business areas seek greater autonomy to address their own technology needs — as an inevitable trend. We’ve seen this before: New technology brings business areas new opportunities to improve their performance — from finance (PCs and spreadsheets) to marketing (web and eCommerce) to sales (PDAs). When this occurred, IT was unconnected to the frontlines of the business; IT’s technology was viewed as hard to use, and the result was business-initiated “shadow IT.”

At the recent Forrester Enterprise Architecture Forum in San Francisco, we offered attendees a copy of the new book Empowered, by Forrester analysts Josh Bernoff and Ted Schadler. To get a copy, attendees had to complete a two-question survey. The questions directly related to their readiness to support this round of business empowerment:

“On a scale of 1-5, where 1 = ‘This doesn’t sound like my company at all’ and 5 = ‘This sounds exactly like my company,’ please rate the following questions about your organization:

  1. The EA function has close ties with business management.
  2. Our technology strategy and standards allow for rapidly changing technologies.”
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Best Practices For Influencing Business? Tips For Revitalizing IT Standards? Join Our Community Discussions!

Architects frequently tell us how much they value insights from practitioners like themselves. We at Forrester equally value these insights, as they are the foundation of our research. To serve you and us, we've launched The Forrester Community For Enterprise Architecture Professionals.

The community is open to all, whether you're a Forrester client or not. Check out the community, and you'll see conversations focused on the key challenges that you face – from influencing the thinking of your business execs to revitalizing an IT standards program to asking if application portfolio management (APM) is a responsibility of EA or the IT function supporting apps. Participating architects and Forrester analysts are sharing their perspectives – on these questions, plus other questions like the use of Wikis for architecture standards.

You can use these discussions to get better at your role – plus you'll be able to shape our research agenda by posting your questions or highlighting a topic you think demands further investigation. Our leading analysts – like Jeff Scott, Randy Heffner, Henry Peyret, Galen Schreck, and Gene Leganza – will also post the topics they are working on to get your input on them. 

Here's what you’ll find in The Forrester Community For Enterprise Architecture Professionals:

  • A simple platform on which you can pose your questions and get advice from peers who face the same business challenges.
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Forrester EA Forum Keynotes Map EA’s Shift From IT To Business

When I started as an architect, I was part of the team called “IT Architecture.” It was clear what we did and who we did it for – we standardized technology and designs so that IT would be more reliable, deliver business solutions more quickly, and cost less. We were an IT-centric function. Then the term “Enterprise Architecture” came in – and spurred debates as to “isn’t EA about the business?,” “what’s the right scope for EA?,” and “should EA report to the CEO?” We debated it, published books and blogs about it – but it didn’t change what most architects did; they did some flavor of IT Architecture.

Meanwhile, the interplay of business and technology changed . . . Technology became embedded and central to business results, and business leaders became technology advocates. The locus of technology innovation moved from the “heavy lifting” of core system implementations to the edges of the business, where business staff see opportunities and demand more autonomy to seize them. For enterprise architects, this means that regardless of what EA has been, in the future it must become a business-focused and embedded discipline. Mapping this shift is a key theme of Forrester’s Enterprise Architecture Forum 2011

Gene Leganza, who will be presenting the opening keynote “EA In The Year 2020: Strategic Nexus Or Oblivion?,” states it this way:

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Business Technology 2020 – Questions And Answers

What will business and technology be like in 2020 – and what’s IT’s place in this new world? This is the subject of a teleconference that James Staten and I held for our clients yesterday and also the subject of an upcoming Forrester report.

In this teleconference, we painted a picture of the impact of business-ready, self-service technology, a tech-savvy and self-sufficient workforce, and a business world in which today’s emerging economies dwarf the established ones, bringing a billion new consumers with a radically different view of products and services, as well as in which surging resource costs – especially energy costs – crush today’s global business models. 

In the past, when new waves of technology swept into our businesses – everything from the 1980s’ PCs to today’s empowered technologies – the reaction was the swinging pendulum of “decentralized/embedded IT” followed by “centralized/industrialized IT.” These tired old reactions won’t work in the world 2020. Instead, businesses must move to a model we call Empowered BT.

Empowered BT empowers business to pursue opportunities at the edge and the grassroots – but to balance this empowerment with enterprise concerns. Key to this balance is the interplay between four new “meta roles” – visionaries, consultants, integrators, and sustainability experts – combined with a new operating model based on guidelines, mentoring, and inspection. Also key is IT changing from a mindset in which it needs to control technology to one in which it embraces business ownership of technology decisions.

The teleconference chat window was busy as James and I presented our research. Here are the questions we weren’t able to answer due to time.

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How Should EA Be Funded – And What Impact Does That Have On EA Value?

Recently I participated in a roundtable discussion by members of Forrester’s EA Council on “Getting Strategic In A Tactical World.” Members talked through the challenge of maintaining a strategic focus when the IT (or business) organization was very tactical and of getting the enterprise architecture function to have the right balance of tactical and strategic activities. “Strategic/Tactical Focus” is one of the dimensions of the Archetypes of EA that Forrester has written about, including in this blog, and the balance between tactical and strategic is a key factor in how the larger organization views EA’s relevance as well as the support it provides to EA. 

One of the participants, who headed a team of more than 50 architects, asked the others, “How is your department funded – as overhead operations or as part of the project investment budget?” The person who asked this question said that his organization is more than 70% funded out of the project budget. Others responded with a range of 100% operations to 100% project-based. The comments around these different funding mixes were very interesting (all comments paraphrased):

“It’s easier to justify the size of my team if the funding is tied to the amount of project investments we are making.”

“Investment funding levels are too variable – two years ago we cut way back, now we’ve ramped way up. If my team size was a factor of investment funding, we wouldn’t be prepared for the amount of investment we are making now.”

“EA funding as part of ongoing operations budget makes us look like overhead. I don’t want architecture to look like some sort of overhead.”

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Who Should Lead Strategic Investment Planning?

Mike Gilpin poses this question in the most recent post to his blog.  This question was sparked at Forrester’s Business Process & Application Delivery Forum during a conversation during the session “Using The Next Generation PMO To Promote Innovation.” What’s interesting is that the question came from an attendee -- presumably aligned with their firm’s PMO -- who said that in their firm, strategic investment planning is led by their enterprise architecture team, which is responsible for the strategic planning and business architecture processes. 

There are multiple ways to come up with the “best answer” to this question. Nigel Fenwick discusses the answer in terms of the CIO’s responsibility to own strategy development -- and the coordination of functions necessary to carry out strategy. I’d like to answer this from the perspective of “what does it take to have an effective strategic investment planning process?”, examining the value the EA function and the PMO can provide. 

My colleague Craig Symons, who is Forrester’s expert on IT governance, defines effective governance as ensuring the best answers to these questions:

Effective governance answers the "4 Ares"

 

 

 

What EA can provide

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Vote For Forrester's IT Forum 2011 Theme

Are you ready for Forrester's IT Forum 2011? Mark your calendars for May 25-27 in Las Vegas and June 8-10 in Barcelona — and help us design an event that is as relevant and productive for you as possible. We've come up with three potential draft themes and need your vote for the best IT Forum 2011 theme:

1. Unleash your empowered enterprise.

As technology becomes more accessible through mediums beyond IT's control, you have but one choice: Get proactive by empowering employees, or swim against the current. Successful BT leaders will react not by blocking access but by lending their expertise to increase the chances of technology success and empowering the users to solve customer and business problems. This year's IT Forum will provide a blueprint for reaping the benefits of your empowered organization — complete with case studies, methodologies, and step-by-step advice tailored to each IT role.

2. Capitalize on the intersection of business and technology.

IT leaders have long struggled to deliver business and technology alignment.  But alignment implies a waterfall process: decide on a business strategy, and then build your technology on that foundation. Today, our businesses move too fast for the traditional IT model. Instead, Business Technology leaders must join the leaders of their lines of business to create business and technology strategy simultaneously.  That means working with new business partners inside and outside your organization, operationalizing innovation through standards, and above all, saying, "yes, and..." instead of "yes, but..." This year, we'll dedicate IT Forum to building bridges to new business partners, scaling innovative solutions, and co-creating business and technology strategy.

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