Enterprise-architecture teams can play an integral role in transforming companies with technologies. New survey findings and firsthand experience highlight the practices that matter most.
What does it take for traditional companies to create value with digital technology? McKinsey research suggests that successful digital reinventors—digital natives and digitally transformed incumbents—employ a range of approaches, such as investing boldly and adopting cutting-edge technologies at scale. Efforts like these can run into various difficulties, though. In our experience, a push to launch more digital applications can make a company’s technology landscape increasingly complex and difficult to manage, to the point that it impedes transformation programs.
Stay current on your favorite topicsThings don’t have to be this way. A new survey by McKinsey and Henley Business School highlights the need for enterprise architects to facilitate digital transformations by managing technological complexity and setting a course for the development of their companies’ IT landscape. These responsibilities fall within the typical enterprise-architecture (EA) team’s remit, which is to manage the way that all of the company’s IT systems work together to enable business processes. But not all EA teams carry out their responsibilities in the same manner. Survey respondents who described their companies as “digital leaders” indicated that their EA teams adhere to several best practices (see sidebar, “About the survey”). These teams engage senior executives and boards and spend extra time on long-term planning. They track their accomplishments in terms of how many business capabilities are deployed, while implementing more services. And they attract talent primarily by offering people appealing assignments, ample training opportunities, and well-structured career paths. Below, we take a closer look at these best practices and their benefits.
A number of EA teams we know have helped accelerate their companies’ digital transformations by participating in discussions of business strategy, which deal increasingly with technology. When we asked survey respondents about their involvement with various stakeholder groups, 60 percent of those at digital leaders named C-suite executives and strategy departments as the stakeholders they interact with most. By comparison, just 24 percent of respondents from other companies said they interact most with C-suite executives and strategy departments.
About the surveyMcKinsey has conducted a survey on enterprise architecture in collaboration with Henley Business School since 2015. 1 To participate in the survey, please visit easurvey.org. Participation is free, and results will be shared with all respondents. Respondents come from a number of countries and a variety of industries. The findings presented in this article are drawn from more than 150 responses collected in 2017. (Respondents are not required to submit answers to every survey question, so the number of respondents can vary from one question to another.) The findings are based on a two-sided t-test with an error value of p≤0.05. Respondents are asked to identify their companies as “digital leaders,” and these choices form the basis for our comparative analysis of digital leaders and other companies.
Survey respondents who say their companies are not digital leaders indicated that it’s common for their executive teams and boards to discuss enterprise architecture only when significant issues arise, such as spending decisions, while CIOs alone usually oversee the enterprise architecture.
While few if any EA groups would claim not to be focused on the business, effective teams truly invest their time in understanding business needs and convince senior leaders to invest time in enterprise architecture. Our experience suggests that digital transformations are more likely to succeed when board members understand the importance of technology for their business model and commit their time to making decisions that seem technical but ultimately influence the success or failure of the company’s business aims.
The survey results also indicate that EA teams at digital leaders maintain a clearer orientation toward the future than teams at other companies. One hundred percent of respondents from digital leaders said their architecture teams develop and update models of what the business’s IT architecture should look like in the future; just 58 percent of respondents from other companies said they adhere to this best practice.
Would you like to learn more about our Digital Practice?Another key difference emerged when we asked respondents how much time their companies devote to strategic planning. Respondents who said their companies’ EA teams devote a higher-than-average proportion of their capacity to strategic planning were also more likely to say they create added value for their organizations. (On average, respondents said strategic planning takes up about one-fifth of the EA team’s working capacity.) Teams that spend more capacity than average on strategic planning were more likely to report delivering sustainable business solutions, making greater contributions to the benefits of projects, and gaining wider recognition within the enterprise (Exhibit 1).
Given the versatility of enterprise architects, leaders may be tempted to assign them to help resolve urgent problems of various kinds. However, this can cause the architecture team to spend most of its time solving problems and little or no time on advance planning. As a result, the drive to quickly fulfill demand for particular applications takes precedence over the thoughtful design process that is required to maintain a cost effective, flexible, and resilient IT environment.
At a high level, digital transformation involves reshaping business models with advanced technology solutions. This puts a premium on collaboration between business functions and IT. In our experience, a lack of coordination between business and IT hinders large transformations. We have seen that such disconnects sometimes originate in the posture of IT functions: instead of concentrating on the enablement of business priorities, they focus excessively on the delivery of technology solutions as an end in itself.
According to our survey, EA teams at digital leaders appear to avoid this trap. Respondents from digital leaders were more likely to say that EA teams contribute “high” or “very high” benefits to business and IT (Exhibit 2).
We’ve seen that an EA team can better align the IT function’s priorities with the business’s priorities by tracking its accomplishments with respect to the business capabilities that it delivers, rather than the sheer number of technology applications that it implements. Capabilities are self-contained business activities, usually belonging to an end-to-end business process, that result in discrete outcomes: for example, predicting a customer’s next purchase so that a website or a call-center representative can make suggestions.
This use of capabilities stood out in the survey. Respondents from digital leaders were more likely to say that their EA teams use capabilities as their primary grouping for the delivery of milestones toward their target architecture (Exhibit 3). Further grouping capabilities into business domains (which generally correspond to business functionalities such as finance or customer management) can have the additional benefit of allowing an EA team to shape the IT landscape according to the business strategy.
The survey results show that digital leaders are also distinguished by how they structure their IT landscape. Digital leaders have implemented three times as many services as other companies. When it comes to integrating applications, a smaller proportion of their integrations consist of point-to-point connections between two applications (56 percent versus 76 percent at other companies), which lessens their “technical debt.” Respondents from digital leaders were twice as likely as respondents from other companies to say that their companies are piloting architectures based on microservices, which are independent components that developers assemble into software applications.
Because EA departments play an important role in digital transformations, we’ve seen that IT leaders do well to staff them with motivated, highly skilled professionals. Yet our experience also suggests that enterprise architecture’s long-held reputation as a mundane field with limited room for advancement can create challenges when it comes to attracting top talent.
The good news is that prospective hires appear to be drawn toward exciting work that offers opportunities to learn and grow. Our survey results indicate that enterprise architects generally seek interesting challenges, recognition from their peers, learning opportunities, and structured career paths. Respondents from digital leaders were more likely to cite peer recognition, education, and well-defined career paths as features that appeal to their employees (Exhibit 4). They were also more likely to say that they offer enterprise architects the chance to pursue career paths in departments other than enterprise architecture.
For EA teams, supporting successful digital transformations involves more than implementing well-chosen technology solutions. It requires an operating model that aligns governance, processes, and talent models with the business’s needs and promotes effective collaboration between business and IT. The survey findings, along with our experience in enterprise architecture, suggests that four moves can help EA teams advance their companies’ digital transformations:
With these tactics, EA teams can build stronger working relationships with senior executives and managers—and thereby position themselves as strategic partners in their companies’ digital transformations.
Stay current on your favorite topicsSven Blumberg is a partner in McKinsey’s Düsseldorf office, Oliver Bossert is a senior expert in the Frankfurt office, and Jan Sokalski is a specialist in the Wroclaw office.
The authors wish to thank Sharm Manwani of Henley Business School for his contributions to this article.