In the last blog, we discussed how CIOs should build their organizations to align with the business and we specifically discussed "Cost Pressures of CIO and Variabalization"
We concluded that a CIO needs to fine tune his priorities and decisions based on these three dimensions in addition to other aspects:
- Financial Risk Appetite and cultural acceptance index of the organization
- Business rhythm - what is the topline and bottom line predictively; whether the organization can afford to have captive units or need to variabilize costs
- Lifecycle - determining the phase the business is in: planning, expanding, rationalizing, optimizing, etc; whether a major M&A is planned; whether there is a push to comply with a new regulation etc.
But the success and business appreciation or business value of any IT initiative is a complex function which involves thousands of variables in the Enterprise. So, in order to develop the ability to assess the DNA of the organization, one needs to know how to scientifically simulate the Enterprise and create a scalable model which will allow addition of any variable within the Enterprise.
The Science of modeling and simulating the organization is called - Enterprise Architecture. All of us know Enterprise Architecture, but most of the organizations use EA to model Applications and Infrastructure Portfolio. Unfortunately that is NOT EA!
The reason I did mention simulating along with modeling is simple. Modeling alone is capable of deriving very limited benefits. With just modeling, one may know the current state of the Enterprise or do some impact analysis. However, if you want to predict the future of an Enterprise, you need to simulate it.
Also to derive the true benefits from EA, one needs to implement EA end-to-end - from Business to Application and Information to Infrastructure, so that the correlation between any Business and IT entity can be established.
Will discuss more in the next blog!