A Framework for Enterprise Architecture Effectiveness

Takaaki Kamogawa,* Hitoshi Okada

1

SAP Japan Co.,Ltd, Tokyo Sankei Bldg., 1-7-2, bhtemachi, Chiyoda-ku, Tokyo, Japan
2
National Institute of Informatics, 2-1-2 Hitotsubashi, Chiyoda-ku, Tokyo, Japan
I
takaaki.kamogawa@sap.com, okada@nii.ac.jp

Abstract- Since Japanese firms have recently been forced to

innovate their business models due to several factors, such as
global operations, e-business, and Merger & Acquisition, they
are need to have flexible business information systems to adapt
to their industry changes. HistoricaBy, the biggest ehaIIenge
facing to firms is adaptation to any environment. The
flexibility of business information systems to create business
values has been discussed for a long time as one of critical
problems among Information Technology (IT) communities.
One of potential solutions is Enterprise Architecture, which first
started with e-Government. However, the effectiveness of
Enterprise Architecture is stir1 highly uncertain and little
research evidence establishes the benefits of architecture or
helps firms asses their architecture. The purpose of this paper
is to clarify problems when firms confront ebusiness system
implementation from an Enterprise Architecture viewpoint, and
to propose an analytical framework in terms of Enterprise
Architecture effectiveness while discussing the relation with
Governance, and other relevant factors.
Keywords:
Enterprise
Architecture;
e-business;
@-Government;Governance

I. INTRODUCTION
Enterprise Architecture refers to how IT components fit
together to support business architecture. For instance, there is
no way to change automobiles or airplanes without the
products design sheets and descriptions. As seen in these
industries, the architecture for building them is mature.
Whereas, when establishing business models; it is
indispensable for firms to describe what they do, and how
they will do it using IT. Although firms have applied
Enterprise Architecture for nearly IO years, the Enterprise
Architecture effectiveness is still highly uncertain and little
research evidence establishes the benefits of architecture or
helps firms assess their architecture.
Although information system departments in Japanese
companies have developed information systems for
approximately 40 years in Japanese industries, they have been
focusing on maintenance of the existing information system,
ie. legacy systems which from management viewpoints are
already recognized to be hopelessly inadequate to satisfy
cument demand. In addition, even approximately 10 years
after implementing ERP (Enterprise Resource Planning) in
most Japanese top firms, the legacy systems still remain.
However, our interest is that we do not assert that the
remaining legacy systems are not good, but rather how firms
manage IT resources to innovate current business models
toward e-business models more easily and flexibly. To realize

this, there should be one business architecture which

describes the business rules by which the business is put
together, and includes the IT elements. Thus we call it
Enterprise Architecture. The reason why this is important is
that the rate of change in business environment is causing
organizations to have to synchronize these two activities to
reduce unnecessary delays and to do it cost-effectively. Fig.1.
shows this situation.
level-uphnovatian

TimJEvolution

Fig.1. Positioning of Enterprise Architecture

In this research we will seek to address the Following major

problems:
1. What critical success factors influence the application of
Enterprise Architecture.
2. #at business values does Enterprise Architecture bring.
The purpose of this paper is to propose an analytical
framework in terms of Enterprise Architecture effectiveness.
Section 2 discusses the related works in terms of Enterprise
Architecture Frameworks, and Enterprise Modeling to clarify
current problems from e-business pointof view. Thereafter,
section 3 addresses a framework to assess Enterprise
Architecture. Section 4 presents a framework to verify
Enterprise Architecture effectiveness by using business cases
in Japan and the United States. In conclusion section 5
concludes the paper and presents future directions with regard
to assessing Enterprise Architecture effectiveness.
11. RELATED WORKS
Certainly it is not a new concept for Japanese firms to
implement Enterprise Architecture. There is considerable
-doubt hodever, that not only business people including senior
executives,, Chief Executive Officer(CE0) and Chief

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Operation Officer(COO), but also for Chief Information

Officers(CIO), and system people understand the difference
between Enterprise Architecture approach and traditional
standardization approaches by using modeling framework, or
techniques which are $milar to Architecture Frameworks we
will discuss later. Moreover, it is often challenging enough for
them to recognize their own existing business system
architecture due to more increasing complexity of current
business information systems, heterogeneous business
information system environments, and lack of integrated
Enterprise Architecture models.
Is the Enterprise Modeling Framework a new discipline as
one of techniques for developing Enterprise Architecture? We
have discussed how we should establish enterprise modeling
for over 10 years both from the viewpoint of business domain
and from the viewpoint of business information system
domain. Enterprise Modeling technology was first shown in
an international conference in 1992[1]. The IFIP' and WAC2
Working Conferences were to address problems regarding
enterprise integration [2]. From the process oriented
presentation aspects, several enterprise modeling
methodologies have been proposed for a decade: CIMOSA3,
IEM4, and PERA'. Process oriented presentation has many
advantages relative to other solutions based on comparative
study among the three models mentioned above [3]. As seen
in the mid 1990's, virtual corporation was discussed [4], the
concern with the Enterprise Modeling for e-business or
e-commerce has been growing recently. In particular for
e-business communities, an e-business reference process
model has been proposed by MIT [5]. It can provide a
standard model for start-ups, which will conduct e-business
entirely in the virtual world. Enterprise'representation, which
is standard for designing and creating new enterprise, is
essential for virtual enterprise through using Internet
technologies. On the other hand, from the data oriented
presentation aspect, which is beneficid for IS communities,
the Entity Relationship Diagram (ER) q d the Data Flow
Diagram (DFD)have been very useful to describe corporate
data structure for business information system domains for
decades. In Japanese industries some firms have been trying
t o m e these data and process modeling from points of view
regarding business infomation system domains rather than
points of view regarding business domain, but other firms
have not. As we stated above, although Enterprise Modeling
is very close to Enterprise Architecture, it is clear that the
modeling itself will not bring the effectiveness of Enterprise
Architecture.
On the other hand, the Enterprise Architectural initiative in
the United States is emerging as a significant
business-technology trend in the government sector. This
trend is visible at the federal, state, and local government
'

I International Federation for Information Processing

2 International Federation of Automatic Control
3 Open System Architecture for CIM
4 Integrated enterprise modeling
5 Purdue Enterprise Reference Architecture

levels due to the Clinger-Cohen Act 6 which requires USA

Federal Agency Chief Information Officers to develop,
maintain, and facilitate integrated systems architecture. In the
European Union the community is supporting and
participating in several initiatives and projects, however, they
are not responsible for the result of projects [6].With regard to
Enterprise Architecture framework.points of view, Zachman
Framework was originated in 1987 171. Mainly for business
use, TOGAF, The Open Group Architecture Framework, was
produced by commercial standard consortium, The Open
Group in 1995. When we discuss Enterprise Architecture, it is
essential to address some frameworks for e-Government, in
which its services are co-produced with the customers, i.e.
citizens, since it is said that Enterprise Architecture
implementation in government has spread in Japanese firms.
In 1999, FEFA, The Federal Enterprise Architecture
Framework was produced by the CIO Council. In summary
we present the main frameworks h a p Schekkeman described
in his book [6] in Table 1. Due to Japanese industry
background (METI) Ministry of Economy, Trade and
Industry had surveyed Enterprise Architecture Frameworks
noted above which US government was trying to use. METI
planed to promote an Enterprise Architectural initiative to
Japanese industries in 2002, which was originally based on
the E F A model. Even though several Enterprise Architecture
Frameworks have been introduced all over the world and we
only focused on the research regarding the well-know
frameworks on this section, there are very few research
reports and thesis which give scientific support how to assess
the effectiveness of Enterprise Architecture.
Enterprise Architecture as noted above is playing a critical
role in innovating a firm's business model toward e-business
model. In general, business model means a realized business
design to create business value based on business vision and
strategy to deal with related concerned parties. On the other
hand, e-business means business conducted by utilizing
methods brought by IT, mainly the Internet. When we
consider Enterprise Architecture, we should focus on business
domain as a high priority. In almost all e-business concerns,
we have to deal not only with intra-organizational business
architecture but also inter-organizational business vchitecture.
Thus we should seek to identify the scope to discyss business
architecture including the relation between firms like banking,
vendors, suppliers, and customers. Based upon this meaning,
we consider business models beyond f m s , in other words
extended enterprise.
From the potential benefits of e-business conducted by
extended enterprise, we address requirements of Enterprise
Architecture effectiveness for organizationswhich result from I
cost and time savings to bring competitive advantage and to
support organizational change. At first e-business lowers the:
cots of inventories, product customizations, communications,
and telecommunications. In addition to that, e-business
lowers the costs of processing, distributing, storing, and
the Information Technology Management Reform Act also known as the
Clinger-Cohen Act of 1996

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retrieving paper-based information. It also further reduces

telecommunication costs since it is supported by the Internet
technology itself, which provides services cheaper than vdue
added networks like Electronic Data Exchange (EDI). Besides,
e-business is able to reduce inventories and also allow product
customization costs and indirect sales costs to decrease
through online business. Secondly, e-business facilitates
organization responsiveness to changing business models by
supporting business process engineering efforts. Finally,
e-business results in a competitive advantage by contributing
not only to cost efficiency but also to customer focus and
product differentiation. Since e-business has become the
standard in our society and business world, firms have to
innovate their business models adapting to external
environments like laws, competitors, and supplier relationship
more quickly and flexibly in order to evolve their models
more quickly than before. When we do that, it is essential to
recognize not only business structure but also business
information system structure. Our current interest for our
research is how Enterprise Architecture affects business
vdues, and what results occur when applying Enterprise
Architecture. Kamogawa and Okada raised problems when
we innovate enterprise model to adapt to e-business once
firms introduce Enterprise Architecture regarding this
argument [SI.
In the next section, based on our interest and related work
we discussed to this point, we will discuss a framework to
assess Enterprise Architecture.

WhanmllaLET-rIW,

nrdfhmFEWioD4

IiI. DEVELOP A FRAMEWORK TO ASSESS

ENTERPRISE ARCITECTURE
As we discussed in an earlier section, firms do not have to
develop Enterprise Architecture by themselves from the
beginning. Instead, firms can refer to the Enterprise
Architecture Frameworks. However, the framework itself
cannot impact on anything directly though it will guide
architecture development. Based on the outcome of the
survey regarding Enterprise Architecture trend 2004[9], the
following assumptions can be made:
1) Methodologies and tools for Enterprise Architecture
will be effective for developing and maintaining
Enterprise Architecture.
2) The more Governance that is established and
penetrated into the TT community, including the IT
Department, the more beneficial Enterprise
Architecture will be to Enterprise Architecture
development and maintenance.
3) If the top management of a f m improves cognition
with regard to Enterprise Architecture, the effect and
benefits of Enterprise Architecture will be higher.

Ai first, we will focus on what influential factors accelerate

Enterprise Architecture application based on these
assumptions. During this analysis, the following perspectives
will also be addressed:
-Enterprise Architecture Development Power (EADP).
-Enterprise Architecture Cognition (EAC).
-Enterprise Architecture with Governance (EAWG).
EADP shows that the roles and skills of those involved
when applying Enterprise Architecture are a key success
factor. EAC means that it is critical for senior executives to be
aware of the benefits of Enterprise Architecture. This includes
not only the CIO and IT managers but also the CEO, COO,
and line of business managers.
EAWG presents that Governance means control processes,
rules, standards, roles and organization structure, which are
needed to drive the Enterprise Architectural initiative. Even if
f m s have established Enterprise Architecture, they would
not have maintained it without a Governance mechanism for a
long time. In the internet era, firms have to anticipate where
and how they will alter the cohesion and boundaries of the
enterprises. It is necessary that Enterprise Architecture
reflects the latest developments and supports collaboration
and communication in which all stakeholders are involved.
From Enterprise Architectural initiative points of view,
Governance should take into consideration that it consists of
IT principle, IT architecture, TT investment management
framework, and prioritization.
Secondly, we will focus on what business values are
brought by Enterprise Architectural initiative. From the
business information system point of view, we can only
assume from the related works noted above in Section 2 that
the benefits of Enterprise kchitecture are as follows:
1)
Improve visibility or business processes and
information system.
2) Exclude the engineers own skills and techniques
when developing business information system.
3) Accelerate productivity for developing business
4)
information system.
From the business point of view, we can also assume from
the survey [lo] that the following business benefits should be
brought as an analytical dimensions:
1) Business
Process
Excellence,
low
cost-consciousness, efficient and productive
business operations.
2) Customer Oriented, Extraordinary customer
service, responsiveness, and relationship, based on
deep customer information (familiarity) and
knowledge (research).
3) Innovation, First to market with innovative
products and services, usually dependent on rapid
R&D commercialization processes.
4) Strategic A&pbi&y, the ability to respond
rapidly to competitor initiatives and new market
penetration opportunities.
Thirdly, we will focus on how both the influential factors
and the strategic business values should be related to present

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a framework in Fig.2. From an e-business point of view,

business processes engineering has to be a key issue with
connection to not only intra-organizational business
architecturebut also inter-organizationalbusiness architecture.
How it is developed and by whom are important factors.
Governance methodology to develop and maintain Enterprise
Architecture, which is relevant with management processes, is
also one of critical success factors. If the management
processes go well when Enterprise Architecture is applied, the
cost and time frame of business operations will be more
affected. In addition to the guiding principles, prioritizing IT
investment to get the competitive advantage, creating new
services and products, and focusing on customer service are
key issues. Finally, senior management must recognize
Enterprise Architecture initiative to be a strategic adaptability
option to best competitors.

Infiucntial factors

This pattern shows that the key to Enterprise Architecture

effectiveness is governance, and also its development power.
Thus Enterprise Architecture effectiveness could be
accelerated if both factors influence Enterprise Architectural
initiative,
Pattem#2: Correlation bemeen governance and EA
cognition.
This pattern shows that the key to Enterprise Architecture
effectiveness is governance, and its cognition. Thus
Enterprise Architecture effectiveness could be accelerated if
both govemance and cognition for Enterprise Architecture
influence Enterprise Architectural initiative.
Pattern#3: Correlation between EA Cognition and EA
Development Power.
This pattern shows that the key to Enterprise Architecture
effectivenessis its development power, and also its cognition.
Thus Enterprise Architecture effectiveness could be
accelerated if both development power and cognition for
Enterprise Architecture influence Enterprise Architectural
initiative.
IV. BUSINESS CASES
We explore case studies regarding several firms' Enterprise
Architecture of which there are very few cases in Japan at this
moment, and also show a bench mark in a Japanese case and
American case respectively to verify the framework we
presented in the previous section.

(1)Japanesefir-mcases
10 Japanese firm cases are surveyed [ 1I], and as a result,
we see the significant success factors, namely, standardization,
modeling, principles, and transition planning (from previous
architecture to new architecture). Thus Japanese firms have a
tendency to focus on standarhzation (See Table 2.).

F i g 2 An analysis pattem far Enterprise Architecture effectiveness

When the effectiveness of Enterprise Architecture is

analyzed using three influential factors noted in this section, TABLE2. JAPANESEFIRM CASES FOR AWLYING ENTERPRISEARCIilTEcTUTU3.
three analysis patterns can be raised. (See Fig.3.)
EA (7
Development

If we assume that EAWG and EAC work interactively and

simultaneously with the standardization initiative, we can say
that in the case of pattern #2, Enterprise Architecture
effectiveness could be accelerated. Based on the Japanese
fm cases noted earlier, standardization is critically involved
in Governance and Cognition factor than other factors (See
Fig.4.). As a result, we can bring about the following
relationship:

EA Effectivcmss

,...-.

.*a

.*.f

&V"E

Pattem#l
EA

EA Effectiveness

Cognition

.,.....*

,/

Pattern%

EA

EA Effectiveness

*
*./'

Govemance

+,*.

Pattern#3

EA
Cognition

1')

Enraprbs
ArchiloctM

Fig.3. Analysis pittems for Enterprise Archilecture effectiveness

Pattem#l: Correlation between govemnce

Enterprise Architeetun. (EA) development power.

and

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EAWG+EAC > EADP+EAC.

EAWG+EAC > EADP+EAWG.

I...

EA Effectiveness

+...-.
;w*v

*&crnance

Pattern# 1
EA
Cognition

EA

EA Effectiveness

Devtlopmcnt

y .1

Govemmce

Pattem#2
PI

..-.

EA Effecriveness

EA

Pattem#3

FatoT&c

Arrhileclwe

Fig.4. An analysis pattem for Enterprise Architecture effectiveness with

standardizationinitiative

To discuss further in depth, we will investigate two

business cases as a benchmark to valid the effect of proposed
framework.
(2) A firm case in Japan as a benchmark case
Tokyo Mitsubishi Bank (TMB) is one of the major banks
in Japan. TMB started to implement Enterprise Architecture
in 2002. The purpose of this implementation was to keep
integration between business strategy and system structure,
and to realize system optimization [ 121. The point in case of
TMB is that every knowledge asset, including intangible
assets stored in a single database, was triggered by senior
management awareness (Strategic adaptability and EAC). The
purpose of this is that TMB considered this approach one of
methods to realize total optimization from dependent personal

(3) A firm case in United States as a benchtnurk case

Cisco Systems, a high-tech company strongly stresses that
the standardization can bring- a lot of benefits from Ciscos
experiences as follows7 (Business Process Excellence and
EAWG):
-Training and education cost can bereduced.
-Development cycle time can be reduced.
-TCO can be reduced.
-System integration time can be rquced.
Ciscos architecture had been constructed like a silos
situation which results in many redundant business rules,
many adjustment work, and many architecture levels. Cisco
changed this architecture to a new Enterprise Architecture
based on web portal services for customers, employee,
suppliers and partners. Ciscos business process became
almost completely automated and standardized (Business
Process Excellence and EADP). Cisco IT Governance
focuses on searching for a best value return (Customer
Oriented, Innovation and EAWG), the outcome of business
returns in the short run, and strict standardization. In addition
to,that, the business information system and business levels
have to be aligned strictly among every organization
(Strategic adaptability and EAC). As a result, we can map
these patterns into the framework to show the result, which is
presented by arrows (See Fig.5.).

skills. At first TMB developed a principle which defines

; hipk
; &.i

system development and maintenance, and EA policy which

describes the statements that presented the integrity between
business strategy and system design policy to valid
implementation for business requirements (Customer
Oriented and EAWG). TMB also developed three level
architecture models (Innovation and EADP). The level-1
describes six main system groups just for management. The
level-:! describes 5 subsystems to be broken down from
level-] to show application logic and data and relation with
other subsystems for business users. The level-3 describes a
detailed design for applications which are over 200 for system
people. In addition, TMB defined a technology standard
which specifies its own technology standard and technology
trends, and also specifies assessment criteria which shows the
criteria for selecting packages and products (Innovation and
EAWG). Moreover TMB defined Enterprise Architecture
management process, which is conducted by several reviews
to keep the quality (Business Process Excellence and EAWG).
As a result, we can map these.pattems into the framework.
Fig.5 shows the result of this, which is presented by dotted
arrows.

Fig.5. A proposed framework for Enterprise Architecture effectiveness

V, CONCLUSION

Thus we can see that EADP can bring business process

excellence and innovation, and EAWG can also bring
business process excellence, customer orientation, and
innovation. Moreover, EAC can bring strategic adaptability.
These results are validated based on the two cases noted above
and by applying cases to proposed analytical framework
described in section 3. As we can analyze that pattem#2 is the
most effective, Enterprise Architecture Governance and
cognition are the most influential factors to bring about values
(See Fig.5.).
We may, therefore, through analysis of the relationship
Data Sburce:ERPResearch foyum,2005.02.09

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between proposed framework and business cases, propose an

analytical framework in conclusion of this paper. We stress
that it is essential that assessing Enterprise Architecture
effectiveness based on this studys approach be key to the
development and enhancement of business service systems
for e-business. Thus Enterprise Architecture effectiveness
concerning e-business depends upon the following
perspectives:
1. Creating a Governance model is a central success factor
since not only in-house enterprise but also inter-enterprises
should maintain the integrity of their business processes with
each other.
2. Developing flexible architecture for business
information architecture is necessary since e-business
requires high performance and ability to process high data
volumes. Enterprise Architect would be highly recommended
for most firms heading toward e-business.
3. Driving Enterprise Architecture cognition for senior
management level is a high priority. Taking into account the
perspectives noted above is essential since activities for
developing Enterprise Architecture are conducted thorough
inter-enterprises as wet1 as in-house enterprise, and since it is
hard to communicate with the related parties, including
corporate executives like CEO, COO, and CIO.
Although this study has been made on Enterprise
Architecture effectiveness, there is little agreement as to how
critical success factors will affect applying Enterprise
Architecture more in depth. Our final objective for our
research is to assess Enterprise Architecture effectiveness
based on quantitative analysis more in depth, and also to

develop an Ekerprise Architecture effectiveness model for

firms to use in their business model innovation using the
Enterprise Architecture initiative.

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lv