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Enterprise Architecture Metrics

Enterprise architecture metrics and reports are the only way to ensure EA brings value. Here are some tips on how to do it.

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Enterprise Architecture Metrics

Introduction

When organizations implement enterprise architecture, they are investing in the long-term health and future success of the business.

Enterprise architects align the IT landscape with the business strategy and create a set of standards that streamline processes and increase agility at all levels of the organization — key values of enterprise architecture.

But how do you report the success of EA to your stakeholders? What are the enterprise architecture metrics that can clearly define the success of the project?

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Common enterprise architecture metrics

Enterprise architecture metrics are a set of predetermined ways architects and stakeholders measure the success of EA. Metrics track the performance of how enterprise architecture and its strategy affect the alignment, agility, and effectiveness of business. These can range from short to long-term, depending on the reason EA was implemented. 

Measuring EA effectiveness is key to determining how efficiently new processes or services serve the customer, provide an opportunity for business/IT innovation, and allow actionable decision-making.

Here are a few of the most common examples you can start with.

Strategic

These metrics are important for monitoring the business and IT alignment and reporting to high-level stakeholders involved in the project. Therefore, strategic metrics can track overall IT costs and the involvement of EA with business objectives on a longer timescale. 

1. Total IT cost savings

One of the best indicators that your EA efforts are working is the total cost of money saved on IT services, applications, etc. Enterprise architecture is used to simplify the complex IT landscape. By evaluating capabilities, processes, applications, etc., enterprise architects are able to deliver cost savings on a regular basis.

Examples: Retiring legacy systems, consolidating licenses, modernizing and rationalizing applications, standardizing IT infrastructure, or migrating to the cloud.

2. IT portfolio Total Cost of Ownership

As previously mentioned, one way to lower costs is through application rationalization. IT application portfolios belonging to large organizations will consist of hundreds (or even thousands) of different intersecting applications, including SaaS, data storage, servers, hardware, etc.

Rationalizing these will reduce the IT complexity and consequently remove management, support, and training costs, as well as unnecessary communication to lower the total cost of ownership (TCO).

Examples: Lower TCO by eliminating unused apps, retiring redundant software, and standardizing common technology platforms.

3. Cost for annual IT projects

One of the important by-products of enterprise architecture is that the cost of annual IT projects will be reduced. The cost of each project will be lower as EA acts as a single, comprehensive view into the IT landscape which drastically reduces the time for project preparation.

Example: When business plans to invest in IT projects such as application rationalization, application modernization, post-merger integrations, or business transformations, it can use EA tools to gather affected IT components, visualize the IT roadmap, and manage changes.

4. Business objectives supported by IT roadmap

One way to measure the success of enterprise architecture is by creating IT roadmaps that support business objectives. The more objectives the IT roadmap supports, the better we can conclude the success of EA within the business, and the higher quality of the end result can be.

An IT roadmap is a visual way for a company to develop and share a strategy for IT initiatives. Such roadmaps are a key part of enterprise architecture to support the ongoing innovation and success of the business.

Examples: How many of the current business objectives are supported by the IT stack? How often is EA involved in business strategy?

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Operational

Some of the operational metric examples can be used as a key performance indicator (KPI) by enterprise architects. Operational metrics refer to data that’s measured in terms of specific IT projects and tracked on a shorter timescale.

CIOs, business architects, solution architects, and other IT architects will also monitor these to measure the success of their projects.

1. Number of rationalized applications

Application rationalization is the main operational metric for EA. When architects rationalize their applications, they will go through an organization’s portfolio and determine which applications need to be retired, upgraded, repurposed, or renegotiated.

By tracking the number of applications rationalized through EA efforts, stakeholders have a clear metric as to how the IT landscape has been improved.

2. Number of overlapping applications

Another operational metric enterprise architects can use is by identifying and removing the number of overlapping applications in their portfolio. Overlapping applications are applications that fit into the same category and provide the same or similar functions. An example of this would be using two similar apps within one business unit.

application-portfolio-management-assessment

Overlapping applications increase wasted budgets and create unnecessary complexity if not uncovered. The goal is to remove as many overlapping applications as possible, without impacting the value created.

This makes it easier for architects to upgrade application landscapes, integrate new software, improve efficiency, etc.

3. Number of functionally unfit applications

Functionally unfit applications tend to emerge during mergers and acquisitions. When this happens, two unique IT landscapes integrate with each other — this is a perfect opportunity to employ enterprise architecture.

There may be applications taken on that no longer serve the new version of the company. This is also the case through software upgrades and cloud migration.

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EA tools like the LeanIX EAM identify functionally unfit applications with surveys. The tool differentiates between Unreasonable, Insufficient, Appropriate, and Perfect. It can identify applications that need to be replaced or need to be worked on since they do not functionally fit their purpose.

4. Number of technically unfit applications

Technically unfit applications refer to applications in the end-of-life lifecycle stage and applications which do not satisfy your technical requirements.

It might be the application does not support SSO when IT requires it or that the application's underlying technology is outdated or not supported anymore. In this case, tracking these applications will tell which ones need to be replaced to support the roadmap.

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LeanIX EAM differentiates between Inappropriate, Unreasonable, Adequate, and Fully Appropriate technical fit. 

5. Number of tech obsolescence candidates

By monitoring tech obsolescence applications, enterprise architects can plan the replacements for obsolete technology before its lifecycle ends. Through this, EAs protect business processes from IT problems and mitigate the organization's security from any outdated tech.

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This means architects can effectively monitor and manage risk related to their application portfolios.

Extras

1. Time to integrate new technology after a company merger

A good time to integrate enterprise architecture is during a company merger. During post-merger integration, enterprise architects are ideally positioned to collaborate and assess, rationalize, and blend technology landscapes in a best-fit manner for the future of the combined enterprise.

The time it takes to achieve the post-merger integration of applications is a good metric of the success of EA. Enterprise architecture maps business capabilities and creates insight into the health and function of all applications, speeding up the entire integration process.

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How to set EA metrics?

Setting and using EA metrics will be specific to each business and the purpose of its EA activities. How they measure the success of the project can range from very specific to very broad, depending on stakeholders and business cases. 

However, there are some important enterprise architecture metrics KPIs that EAs can manage prior to and during the start of a project which will better help them measure success as it continues.

  1. Develop a statement of purpose: This is essentially outlining the reason for EA activities — what do you want to achieve and why? This will help key stakeholders get on board and uncover KPIs.

  2. List the metrics that have the most impact/visibility in the organization’s success: These could be the metrics listed above; such as cost savings, increased agility, and decreased complexity between business and IT landscapes. These will be directly tied to the statement of purpose.

  3. Sort by priority: What’s the most important outcome of your business's enterprise architecture activities? How will you measure that KPI?

  4. Define intervals to match your business activity cycle: How often will you measure the success of the project? Align this with your business activity cycle to regular check-in with your enterprise architecture scorecard — ie. at the end of each quarter.

  5. Set up metrics in your EA tool: Choosing the right EA tool is vital to helping architects track and report on EA metrics. LeanIX EAM's metrics, for example, display KPIs and their development over time in the context of the Fact Sheets. Business useful data can be visualized with dashboards, reports, diagrams, and charts.

  6. Share results with your stakeholders: The last step is to share your findings with the stakeholders to regularly assess the ongoing value of EA to a business.

How to Answer the Top Questions of Enterprise Architecture Stakeholders [Poster]: Align business and IT and learn how to support each of their needs. »

Challenges in measuring EA

Because EA is such a broad and ongoing process, it’s not always easy to measure KPIs and the project's success. Some challenges in measuring enterprise architecture include:

  • No industry-standard metrics for EA: EA activities are unique to each business and it's technological needs. This means there is a standardized way to measure the success of EA. Most of the time, success is shown through meeting clearly defined outcomes.
  • Stakeholders in different areas of business: As EA has the most overarching view of business structures, processes, and roles, it tends to involve many different stakeholders from various different areas. This can cause challenges in communication and getting everyone up to speed and on the same page.
  • Easier to measure EA in IT terms rather than business terms: It’s much easier to measure enterprise architecture in terms of IT (application rationalization, TCO, etc.) than it is in business terms (improved operational efficiency, increased agility) because a business-centric approach is more abstract.
  • EA differs across businesses or within business units: Enterprise architecture will be different across the business landscape. This can make metrics difficult to track consistently.
  • Changing metrics: Due to the evolving and holistic nature of EA, metrics originally specific to the business case can change multiple times after implementation.
    📚 Related: Enterprise Architecture Challenges

 

Conclusion

While there can be challenges when setting up enterprise architecture metrics that are beyond the quantifiable ones within EA tools, it’s a vital part of making sure EA achieves its full potential.

Tracking metrics and creating reports is the only way to share the value of EA with stakeholders. Having access to clear data and being able to answer direct questions will make an EA an essential part of any business transformation.

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FAQs

What are the KPIs for enterprise architecture?

KPIs (Key Performance Indicators) are ways to set and achieve business goals. In EA, KPIs can be defined at all levels of an enterprise architecture model. These include increased application transparency, decreased spending, improved compliance, and value contribution.

What are the Enterprise Architecture best practices?

Best practices in Enterprise Architecture are:
1. Engage top executives and key decisions,
2. Emphasize strategic planning,
3. Focus on business outcomes,
4. Use capabilities to connect business and IT, and
5. Develop and retain high-caliber talent.
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