Saturday, January 5, 2013

EA as Innovation Enthusiast


Innovation is light every business is pursuing now. Today's innovation also goes beyond just disruptive products or services; it has broader scope including innovative process, business model, culture, communication. etc. or it can be categorized into empowered innovation, efficiency innovation and sustainable innovation.

The business world we are facing is becoming increasingly volatile, uncertain, complex and ambiguous, thus, Enterprise Architecture turns to be more relevant and even crucial to leverage multitude Point of View, effective communication and governance enforcement.

But, how can enterprise architecture support innovation? EA and Innovation can be a match made in heaven if you manage the critical success factors and other contextual issues correctly,  but if you don’t, you will end up in a turf war and either bureaucracy or structural anarchy creating technical debt of disastrous magnitude. Innovation really don’t have to be on a product level, it can be on a platform level, in the value flow/value chain or in the eco system – all of these changes that comes with innovation requires EA to be part of it before it gets go and the sustaining/evolution part of it holds important tasks for EA. 

1. Customer Need -A Common Thread that links Innovation and EA

  • What is the purpose and scope of innovation? Is it Innovation of the disruptive kind that will set the company up on the bolder, higher risk / return path or is it incremental innovation which may aggregate multiple smaller innovations into significant enhancements to services, operational processes, products, etc. Is it inward facing or customer focused. It seems highly desirable that it will be encompassing of both disruptive and incremental innovation and it must be customer focused, but some enterprises may have a different opinion.
  • From an operational point of view where the customer need is to have a sustainable increase in effectiveness: Once decide what innovation is, then it would seem worthwhile to develop enterprise and business unit policy, procedure, organizational accountabilities and measures of effectiveness to support and evaluate it with the balance between autonomy, discovery, efficiency and customer value 
  • Organizational Structure Perspective: Then the mission is to change the way organizations work internally as well across organizational boundaries in order to create a more business oriented value flow throughout to organizations support functions delivering business solutions with measurable and sustainable increase in effectiveness and customer value creation. This will not come without innovation in way of organizing, of planning/executing governance processes, of better tools supporting a whole change portfolio approach etc. All of this requires changes in business architecture and IT architecture in a joint fashion across organizational boundaries, etc, it requires an agile EA that can move at the speed of innovation.

2. The Axis of EA Through Innovation Lenses

  • The Easy Axis describes as “Opportunities”:  Innovation lets you uncover the new from a technological perspective but also vitally, from a business process or organizational point of view as well. This axis is easier as it describes 'opportunity'. The small word “always” in the EA definition may be very important. That means EA must not only be fit for purpose today, but be prepared for future known or unknown changes in vision, mission and strategies. This may have a very fundamental impact on EA.
  • The innovation is for Renewal. Innovation is equivalent to sustainability and resilience for an increasing number of hyper-connected enterprises and industries, the world becomes more dynamic,  EA's contextual problem space is that of a complex adaptive system that exhibits emergent behavior, made up of customers, products and services, cash-flows etc In the face of such wicked problems, innovation is equivalent to sustainability and resilience, not just for recovery but more importantly renewal. Enterprise architecture can support such innovation only if it undergoes a paradigm shift.
  • The Tough Axis which describes 'constraint'.  EA allows one to describe a target state and conform change in the enterprise towards this aspirational end-state, while at the same time addressing complexity, ever greening and technical-debt remediation. Those who say "EA rules constrain my innovation" should be treated with caution.
  • The other key element of Innovative business is flexibility - Flexibility and ability to respond to changing demands from the business have been very powerful. Equally, where this hasn't been protected, then it’s been surprising how quickly the architecture can become a blocker to progress, and how expensive it can be to recover.  This may be seen as heretical but any effort to embark on an Innovation Strategy with the fundamental aim of measuring it's bottom-line, P&L impact is doomed to failure. There are positive outcomes that can arise as the result of a determined drive towards 'becoming a more innovative organization' however it's not a logical 'cause and effect' 

3. How can EA Steer an Innovation Strategy?


  • One of the aspects of innovation is that if requires an open culture in the organization to allow ideas to be voiced and accepted rather than being a focus of criticism. So EA cannot really influence that without an open culture being in place. This brings the question:  Can EA encourage this open culture? Yes and no,  in the end,  it requires senior support and living the mantra to initiate changes. Enabling a culture of technology foresight is an approach EA groups can adopt with some success. This recognizes that much of the innovation may happen outside a corporate boundary. By bringing in a foresight driven thinking, EA can help their businesses be pioneers or  “fast followers”.
  • EA may support the innovation by developing the Structural Capital and ensures that the enterprise is always fit for purpose of achieving its vision, mission and strategies. Look to the edge-cases of roadmaps and transitional architectures and attempt to find the intersections between those incremental steps and disruptive leaps in technology or business strategy innovation activities are championing and that's a powerful convergence of drivers.      
        
  • EA Provides Structure to Manage Innovation Life Cycle: innovation has been misunderstood as mysterious or unmanageable sometimes, in fact, innovation is about how to manage creative/novel ideas to achieve its business value, there’s scientific discipline underneath it, for those top business innovators, “either need seeker, market reader or technology driver”, the collaborative business nature and agile methodology will enable innovation life cycle management, which is also areas EA framework can make contribution, for better communication, governance or knowledge management. For example, the Business Innovation Canvas developed by Alexander Osterwalder is one of good ways to structure innovation in a way that makes it easy to relate to the Enterprise Architecture.
  • You can only innovate within your foundation for execution. Ross/Weill/ Robertson’s thoughts on EA as a strategy. Their principal research hypothesis/stipulate - that in order to have better long term execution you need to have a “Foundation for execution”. And in order to build one, you need to master three key disciplines: Operating model, Enterprise architecture, IT engagement model.They really don’t elaborate much on Product/service architecture being part of EA but they conclude that you can only innovate within your foundation for execution. So innovation is (among other) about understanding and ability to switch from exploitation (stepwise refinement change) to disruption and obviously knowing when this disruption fits your foundation for execution – if it doesn’t you have to let it go or create a new foundation for execution.
  • Building trusting relationships with business is required for innovation:
      -First: EA can touch either disruptive change or efficiency innovation,
      -Second: Do EA encompass both intra- and interprise architecture?
      If  don’t let EA assume the full role of intraprise architecture encompassing product/service line/platform architecture – it can’t help with Product/Service Innovation; If don’t let EA assume the full role of interprise architecture encompassing at least some interface of the current/target eco-system – it can’t help with Business model/Value Innovation. So EA has to encompass both in order to be helpful regarding Innovation.
-After building a trusted relationship, a healthy yin-yang can occur to help discover innovation.

  • EA Enables Process Innovation: As far as enterprises and business processes are concerned, innovation is about the distribution of basic tasks (decide, execute, monitor) between human agents, symbolic systems, and devices. For that purpose all relevant knowledge (business contexts on one hand, enterprise assets and organization on the other hand) must be managed comprehensively and consistently. And that is what EA is supposed to do. 
  • Three-Step Scenario: EA can best help by first selling the idea that innovation risk is worth supporting, both with time and budget. Second, EA can work to provide a framework that fosters innovation through education and reduction in stringent rules within that framework. Finally, listening to the folks in the trenches and being willing to toss old prejudices aside to actually evaluate new ideas based on merit as well as helping to solve unforeseen issues.  

4. How can one support innovation in the *absence* of EA?  


  • Such counter question is even more thought-provoking: Without EA or a poor designed EA with "spaghetti integration", even being a reliable "follower" is impossible,  let alone an innovator. Example: Poor EA, Complex legacy systems (read spaghetti integration) may leave an organization with 3-5 times the duration and 4-6 times the cost of their competitors to bring a feature to market. Good EA focused on the simplification and modularization of the enterprise was an enabler. 
  • Reuse and Adapt to Change: Bad-designed EA stifles changes. When you have good EA (not just EITA), then the organizational capability is easier to change. How to combine the economics of reuse with the ability to adapt. And there is no silver bullet: architectures deal with the former, as they regroup shared assets and mechanisms, and their purpose is to best support processes, which deal with the latter. 
  • Art of Discovery. Efficient corporations are designed to execute on the science of delivery — not engage in the art of discovery. They're bad at innovation by design: All the pressures and processes that drive them toward a profitable, efficient operation tend to get in the way of developing the innovations that can actually transform the business. EA with higher maturity will go from functioning, to firm, then, delight (design maturity).      
        
  • Business Resilience: Innovation represents risk and opportunity for both success and failure. Most organizations and people are naturally more comfortable maintaining the security they have than pursuing opportunities that lie in the ether of ambiguity, hard work and risk. Enterprise Architects, like their corporate colleagues may subscribe to risk taking culture in their organization; which in many companies is generally skewed towards risk avoidance or mitigation. As EA is in the business of positioning the enterprise for minimal risk and minimal failure (within boundaries, of course), the challenge becomes one of providing a framework for acceptance of risk and failure resilient design - the ability to recover and renew itself from frequent disruption in everything an enterprise does. The predominate risk of course is failure. Drivers like cost reduction, improved operational efficiency, and so on have a poor appetite for failure. Failure has the potential to affect net profit, whilst innovation has the potential to grow revenues.
  • A good EA framework may just also need be innovative itself, many companies love the idea of innovation, but are unwilling to invest the resources needed to allow innovation to flourish, whether those resources include people, time, EA or partitioned test systems, a innovative EA can support effective communication to not only connect innovative dots, but multiply them and help capture insight through them; amplify collective human capabilities, filter voice from noise, order from chaos. 
EA as a servant oriented leader needs to get Innovation on to the corporate agenda in a meaningful way. This meaning is supported by Innovation Principles, Policy, Defined Processes, allocated resources, Innovation Management and Innovation measures of effectiveness, which are supported by the organizational people, process and technology. 





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