The BasICs

acquired companies. “We do rip and replace,” he says. That way, he says, platform heterogeneity can’t get a toehold in the organization.

 

Collaboration Time

As an organization gets its platforms standardized, the next logical place to look for efficiencies is business and IT processes. For example, chemical manufacturer Celanese saved about 40 percent of its IT costs through its four-year standardization and consolidation effort, notes CIO Karl Wachs, in which the company rolled seven data centers into one and 13 ERP systems into one. The consolidation began in Stage 2 as a platform effort and was completed in Stage 3, when the company could begin the business-process standardization needed to run the company on one ERP system.

Understanding business processes sufficiently to standardize them is no small feat, says Wachs. It requires intense collaboration between IT and the business. But the effort helps both groups understand that different business units use many of the same core processes. “Our base chemicals unit works differently than our plastics groups, for instance, so they have different sales processes and thus different implementations of CRM,” Wachs says. “But, in reality, they are different flavors of the same functionality, so we could put all the functions in one system and make them configurable for each of the business lines.”

To do the deep analysis required to come to these realiza-tions, you need ongoing metrics, Wachs says. Without them, you can’t assure proper governance of your services, much less of your business processes. ZapThink’s Schmelzer points out that governance in this case means both the policies for specific business and IT processes and the system by which the enterprise decides how it creates and deploys its business and IT systems, such as architectural review requirements and funding priorities.

Moving from the second stage to the third can produce subtle benefits. At TD Banknorth, the business units needed more sophisticated products to compete. That required IT to keep improving its abilities and levels of sophistication. At the same time, cost pressures require the CIO to deliver these more sophisticated tools with the same level of resources. This pressure leads to an optimization approach, bringing the enterprise into the third architecture stage.

It is at this third stage that architecture begins to mean more than IT infrastructure. Data architecture, IT governance, Six Sigma process optimization and business-I T alignment become critical aspects of the enterprise architecture, with the focus of I T shifting from simply managing the technology plumbing efficiently to contributing to the business’s operational excellence. Efficiency remains important, but its goal has changed from saving money for the sake of reducing costs to freeing up resources that can be used to grow the business, says Petrey.

For example, TD Banknorth began paying much more

attention to data architecture as it entered Stage 3. “You need to put real resources into evolving and planning it,” says Petrey. That involves ensuring standard definitions of data to make it easier for multiple systems to work with the same data and interpret it correctly, as well as to be able to glean patterns that help better serve customers.

TD Banknorth has designated IT staff who entrench themselves in the lines of business and act as relationship managers with their business colleagues to ensure true I T-business alignment.

Although TD Banknorth has standardized its technology platforms, it didn’t always enforce its architectural standards on the applications it bought or created. “It happened because of the rapid growth—we were most concerned with just getting something in,” recalls Petrey. “We’ve recognized that we committed these sins in the past and that it reduced our service levels and interfered with our ability to move the company forward.” Petrey is now working to make those architecturally deviant systems fit his new I T architecture, so TD Banknorth can continue to mature into Stage 4. And stricter governance is now in place to make sure it doesn’t happen again.

A focus on architecture can also lay the groundwork for future benefit, says Joe Solfaro, executive director of information management at pharmaceutical maker Merck. Much of the company’s IT efforts are focused on standardizing its platforms, but it’s also mapping its business processes and data architecture so it can be more agile once it has a more cost-effective platform on which to operate. The company began two separate data-standardization efforts several years ago but more recently brought in enterprise architects to develop a common data architecture to underlie both. “Even if the systems have tactical differences, they’ll still support the same strategic direction,” he says. That means easier data management that will ultimately support a full-blown, Stage 4 SOA.

Culturally, Stage 3 requires both IT and business staff to let go. “You have to stop being tactical. You need to trust others to manage the details,” Petrey says. Some of that shift occurs in moving from Stage 1 to Stage 2, but in Stage 3 the letting go is more difficult because now very different types of people—IT and business—must depend on and trust each other. And as with the change from Stage 1 to Stage 2, the shift to Stage 3 happens over time as the organization sees the ROI of the new approach and buys into the transformation.

 

Business Modularity

Very few enterprises are at Stage 4. They account for just 6 percent of the roughly 450 companies CISR surveyed.

Still, CIOs in the latter part of Stage 3 can already see how Stage 4 might look. At Celanese, CIO Wachs says parts of his organization are in Stage 4, focusing on modular processes that can be easily managed within an enterprise-