Why IT Should Be on the CEO's Agenda

Enterprise architecture can provide the IT-enabled bridge that allows senior managers to convert strategic initiatives into value-adding actions.

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A USB device being inserted into a port on a laptop computer.
A USB device being inserted into a port on a laptop computer.

Thomas C. Lawton is a Visiting Professor of Business Administration at the Tuck School of Business at Dartmouth    

There is growing evidence across industries of the tendency to elevate information technology, known as IT, from the operational to the strategic level. Awareness of IT's organizational importance, together with management fear that underinvestment in IT will result in loss of competitiveness, causes many companies to over-invest in IT without having a clear understanding and expectation as to the intended outcomes. However, lack of an explicit and tangible business case, business focus, and business-driven approach in IT investment decisions and implementation is one of the main reasons that IT's contribution to improved organizational performance and productivity is still relatively limited. Despite this fact, a survey by the management consultancy firm, A.T. Kearney, indicated that insufficient IT support was recognized and pinpointed by senior executives as one of the top three growth barriers. At the same time and rather paradoxically, IT is not considered by senior executive as one of the top growth enablers. Less than 20 percent of growth initiatives involve IT in the early conceptual or strategic stages. To address this conundrum, I believe that enterprise architecture, coming from computer science/IT, can be co-opted into a more strategic role by CEOs, assisted by dedicated in-house enterprise architects, and used as a framework for strategy implementation.

Despite widely shared agreement among senior executives and IT professionals about the importance and necessity of putting IT on CEO agendas, research has proven that the opposite is the reality. The concerns of senior executives are heavily related to a variety of operational and strategic topics, such as managing cost drivers and finding new revenue sources. Few CEOs really understand the implications of new, rapidly changing and complex IT systems and processes for the current business model or perceive a strategic potential and value in new technology implementation. As a consequence, IT is frequently not a strategic priority, as illustrated by inadequate IT implementation and outcomes in many companies. We should also not forget that organizations are 'legacy systems' that have been structured in a sub-optimal and path-dependent manner. Therefore the implementation of new IT systems might contribute to additional sub-optimization and growth of overall organizational complexity—if IT is not taken as an enabler for organizational change and its overall optimization. The conundrum is that competitive pressures and the recent recession are calling for the clear strategic positioning of IT within competitive strategies and higher returns on investment from IT spend.

[See a collection of political cartoons on the economy.]

To tackle this dilemma, companies can reconsider their approach to IT through the lens of enterprise architecture () and the deployment of enterprise architects, who can facilitate IT's strategic value and potential. The Institute for Enterprise Architecture Developments defines enterprise architecture as a complete expression of the enterprise; a master plan which "acts as a collaboration force" between aspects of business planning such as goals, visions, strategies and governance principles; aspects of business operations such as business terms, organization structures, processes, and data; aspects of automation such as information systems and databases; and the enabling technological infrastructure of the business such as computers, operating systems, and networks. Therefore the role of enterprise architecture is to integrate and align strategic business imperatives with business operations and information technology. But enterprise architecture is more than an organizational blueprint that defines and formalizes key enterprise building blocks (artefacts) at required levels of formalization and granularity. Enterprise architecture can be understood as a change and transformation framework to provide open and flexible business architecture for change management under conditions of high uncertainty. 

Enterprise architecture thus shifts its traditional emphasis and impact from the IT silo to the organizational space. This master plan underpins and supports the choices of senior decision-makers and becomes the framework for delivering strategic objectives. It is the scientific component within the art of strategic management. Enterprise architecture can be understood as a full service delivery model to exploit a technology potential and deliver value via holistic business change and as an enterprise hub to align roles, interests, and contributions of different stakeholders in change processes.

[See 2012: The Year in Cartoons.]

The role of enterprise architects is to act as partners to senior executives, understand what is on the CEO's agenda and how IT fits into it. Enterprise architects are not another synonym for Chief Information Officer, nor a revival of the chief strategist role of the 1970s. Instead, they are enterprise designers who exploit IT efficiency, effectiveness and change potential and link it with strategic objectives and operational delivery. The process and practice of enterprise architecture is gaining increased attention as a conceptual and applied link between IT and business strategy.  As an organizational framework, enterprise architecture can serve to operationalize business models and improve the design quality and effectiveness of strategy implementation processes. This makes enterprise architecture worthy of attention, given the disconnect that so often occurs between strategy formulation and execution. enterprise architecture can provide the IT-enabled bridge that allows senior managers to convert strategic initiatives into value-adding actions.

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