There is no doubt on the topic. If you want your organization to harvest the benefits of strategic planning and digitalization, then you will have to apply enterprise architecture, and your approach has to be top-down, or does it?
Strategic Management and Planning
Organizations of all sizes have some form of strategic planning even if they claim they do not, since not having a strategic plan is a choice on how to (or not to) plan and how to identify opportunities, e.g., this could ad-hoc. All organizations regardless of these are private, public or NGOs make choices regarding strategic planning and their strategies everyday and every year. Organizations who fail to do strategic planning on top-level (executive committee or board of directors) will experience that employees or middle managers will do some form of planning that can impact the ad-hoc strategy one way or the other.
Strategic planning and strategic management can have different results and outcomes depending on how the organization chooses to apply the different methods and tools in the different stages of the development of the strategic prioritization. On the one hand, organizations that invest time and resources in doing the strategic management and planning that involves the right stakeholders and the right level of activities will experience better outcomes than organizations that do not invest in their strategic planning capabilities. On the other hand, regardless if the individual strategic plan fails, then the ability to develop coherent plans are valuable in any situation and crisis management.
Strategic plans fail, some indications are up to 90 % or so, since the top-management or alike are not committed to implementing the strategic plans or the objectives have not been defined properly or the plan has not been defined in a way that takes the organization’s environment into consideration, and therefore is not valid for implementation, when time and resources have been allocated.
Schools and Planning
There are different schools for conducting strategic planning and strategic management. Mintzberg has identified 7+ schools for strategic management and strategic planning. These schools have different pros and consequences while conducting strategic planning and articulating strategies.
The different strategy schools is a broad theme that I will publish a blog post about later on, though the point in this particular context is that though strategic planning and strategic management has a tendency to fail, then there is a bright light at the end of the tunnel. Keep in mind that as long as a strategy and strategic plan provides multiple options for organization to make use of, then it is more likely to succeed, and if these options have been tested with different potential outcomes then it is more likely that the strategy and strategic planning can prove useful. The different outcomes can be based on different techniques such as scenario planning and roadmapping, which are tools that encourage involvement from different stakeholders in order to ensure the outcomes are done right.
The different schools and different paradigms that can be used to empower the strategic planning process, though in general it seems like the strategic plan has to be anchored in the top of the organization in order to make it possible to implement the strategic plan:
- The board of directors have to accept the strategic plan and its framework, and thereby allocate the budget for implementation.
- Members of the Executive Committee have to approve the plan and ensure resources are allocated.
- Vice presidents, managers and team leads have to ensure the right persons and the right time and other resources are available.
Bernard (2012, p. 33) defined enterprise architecture is the combination of strategy, business and technologies. As such enterprise architecture is an approach to ensure coherence of planning and implementation of future designs for enabling the defined objectives. One of the core perspectives of using enterprise architecture as a methodology for strategic planning is to differ between the As-Is situation for the organization and the To-Be situation for the organization. The process of defining the blueprint for the To-Be situation for the organization is usually described in enterprise architecture frameworks. Enterprise architecture frameworks includes the need to define the business strategy and thereafter define:
- Business Architecture (e.g., business processes, business rules, product features, principles for business development).
- Information Architecture (e.g., information processing, data dictionaries, data maps and mapping, GDPR processing overview etc).
- Technology Architecture. (e.g., system landscape, standards for software development, overview of infrastructure components).
The EA frameworks usually define a set of artefacts for each of the different types of architecture forms.
Sadly, in most organizations the enterprise architecture team is anchored in the information technology department and not in the business units, which means that in many organizations then the approach for enterprise architecture becomes too IT-centric, and consequently the organization will not be able to harvest the full potential of using enterprise architecture. The problem with IT-centric enterprise architecture is that technologies in itself is not particularly strategic, in fact, in most organizations technologies can at best be considered a theme that is dealt with on a tactical level.
Technologies and Digitalization
Enterprise architecture can empower organizations to get a higher return on investments of their use of information technologies. This will usually be done through a digitalization perspective, which means that the business practices and customer experiences are to be optimized by the use of information technologies. In this light it would say that the current practices are to be re-engineered to fit better in digital interactions with new tools and platforms to support the dialogues needed. Digitalization requires that business opportunities and problems are addressed and not as such new technologies that are identified for implementation.
Enterprise architecture that is too IT-centric will usually do this the other way around, meaning that the individual enterprise architects change their mindsets to identify how business problems either can be solved with existing technologies (in the organization) without scope on solving business problems, and over time it will become apparent that business stakeholders begin to avoid the enterprise architects since they will not provide the desired outcomes for them. To some extent then the too IT-centric enterprise architecture approach will lose its ability to impact the organization’s business strategy and thereby lose its ability to stay strategic, and as such the scope changes from a top-down approach for enterprise architecture (which ensures impact) to a bottom-up or at best middle-out. The middle-out approach would lead to more benefits across the organization, but as such it will not impact the overall strategy, and this approach cannot be considered strategic.
Enterprise architecture that leads to great impact on the organization has to be anchored in the top of the organization, as it would be, with strategic planning. This means enterprise architecture has to be business centric and to some extent be situated in the business unit and not in the IT-department. Enterprise architecture teams that are anchored in the IT-department have to work on staying business centric in order to avoid being too tactically oriented, and by that ensure their inputs can be implemented on a strategic level in the organization. In this light, it is possible to do enterprise architecture with a bottom-up approach or a middle-out approach, but the outcomes will not be as significant as with the truly top-down approach to enterprise architecture.
Bernard, S.A. (2012). An Introduction to Enterprise Architecture. Authourhouse.
Mintzberg, H., Ahlstrand, B. & Lampel, J. (2009). Strategy Safari. Prentice Hall: London.