Integrated Marketing Communications and Enterprise Architecture

There is a better way to showing customer love than inundating them with marketing and communications that are not coordinated, not focused, redundant, inconsistent, and not cost-effective.

This is the case of many organizations that have multiple, decentralized, lines of business (LOB) that have their own revenue and profitability targets. Typically LOBs, branches, and call centers solicit customers and their business independently, with distinct marketing campaigns, promotional offers, and customer surveys.

What’s the way to improve our customer interactions?

Integrated Marketing Communications (IMC) is “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.” (American Marketing Association)

In DM Review, May 2008, Lisa Loftis provides us a vision of IMC utopia, where customer contact are coordinated, targeted, is helpful to the customer, and profitable to the firm:

“Imagine being able to coordinate and prioritize your entire program of promotions and communications across all customer touchpoints. You could eliminate conflicting offers across channels. You could stop inundating you bet customers with multiple marketing campaigns, You could deliver a seamless dialog with customers where every interaction is relevant to the customer, delivered at exactly the right time and satisfies a significant customer needs. In this universe, the very act of communicating with your customer fosters a positive experience, facilitates trust and expands the relationship.”

Why is IMC important?

“Timely, relevant communications go a long way toward increasing satisfaction, and there is no question that satisfied customers add to the bottom line.”

How is IMC related to User-centric Enterprise Architecture?

User-centric EA relies on IMC to make the architecture end-users experience more satisfying and beneficial to them and thus more valuable to the organization’s decision making. As opposed to traditional EA that often is user/customer blind and develops esoteric and convoluted “artifacts”, User-centric EA seeks to provide end-users with IMC-style information products based on relevant information that is easy to understand and readily available.

What are the enterprise technical solutions that need to be architected in order to build the overall organizational IMC capability?

1. Customer Relationship Manager (CRM) systems—utilizing CRM system to manage customer contacts. This includes an organization “building a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth.” (www.techtarget.com)
2. Business Intelligence capabilities—“understanding customer behavior and preference through sophisticated predictive analytics, wading through myriad potential contacts to determine the highest-priority opportunities and tuning your data warehouse to work in conjunction with specific contact optimization applications.” (DM Review)
3. Organizational Culture—adopting a customer contact optimization strategy in an organization that is decentralized is a tough sell.

In the end, developing true IMC capabilities involves moving the organization towards a more centralized model of asset management. That does not mean losing your agility and nimbleness in the marketplace in terms of strategy and decision making, but rather using your consolidated organizational assets (such as data warehouses and business intelligence, CRM systems, and the breadth of depth of your product offerings) to your advantage. You want a unified brand and voice when talking with the customer.

Integrated Marketing Communications and Enterprise Architecture

Information Management and Enterprise Architecture

Information management is the key to any enterprise architecture.

Information is the nexus between the business and technical components of the EA:

• On one hand, we have the performance requirements and the business processes to achieve those.
  
• On the other hand, we have systems and technologies.
• In between is the information.

Information is required by the business to perform its functions and activities and it is served up by the systems and technologies that capture, process, transmit, store, and retrieve it for use by the business. (The information perspective is sandwiched in between the business and the services/technology perspectives.)

Recently, I synthesized a best practice for information management. This involves key values, goals for these, and underlying objectives. The values and objectives include the following:

1. Sharing –making information visible, understandable, and accessible.
2. Quality—information needs to be valid, consistent, and comprehensive.
3. Efficiency—information should be requirement-based (mission-driven), non-duplicative, timely, and delivered in a financially sound way.
4. Security—information must be assured in terms of confidentiality, integrity, and availability.
5. Compliance—information has to comply with requirements for privacy, Freedom of Information Act (FOIA), and records management.

The importance of information management to enterprise architecture was recently addressed in DM Review Magazine, May 2008. The magazine reports that in developing an architecture, you need to focus on the information requirements and managing these first and foremost!

“You need to first understand and agree on the information architecture that your business needs. Then determine the data you need, the condition of that data and what you need to do to cleanse, conform, and transform that data into business transformation.”

Only after you fully understand your information requirements, do you move on to develop technology solutions.

“Next, determine what technologies (not products) are required by the information and data architectures. Finally, almost as an afterthought, evaluate and select products.” [I don’t agree with the distinction between technologies and products, but I do agree that you first need your information requirements.]

Remember, business drives technology—and this is done through information requirements—rather than doing technology for technology’s sake.

“Let me also suggest …Do not chase the latest and greatest if your incumbent products can get the job done.”

In enterprise architecture, the customer/end-user is king and the information requirements are their edicts.

Information Management and Enterprise Architecture

Personalization and Enterprise Architecture

Everyone likes to have things personalized for them. Personalization appeals to our desire to be unique and distinct—special in our own ways.

Online, we have the ability to personalize our portals, like Yahoo, so that we get the information (content) that we are interested in and the look and feel for the layout (format) and navigation that we are comfortable with.

We also like to get personalized recommendations (advice and offers) for things we might be interested in, assuming that the suggestions are pretty darn solid and hit the mark.

MIT Technology Review, May/June 2008, reports that “people do buy more when you help them find what they need”

Generally, while advertising often gets bothersome and we tune it out, people do like “that internet companies have dedicated such ingenuity, memory, and processing power to offering me good suggestions.”

Hence, the ever growing amount of:

• “Customers who bought this item also bought…” (Amazon)
• “Just for you” (Apple iTunes)
• Pop-ups
• Context-sensitive advertisements

On Amazon, for example, “reviews, recommendations, and rankings become an essential part of browsing and shopping.”

And the larger the number of users that the recommendation engines can infer from (the “network effect”), the better the personalized suggestions become.

Where’s all this personalization going?

“Perhaps Google’s Gmail will tell you—to whom you should forward that urgent email to, or remind you to keep in touch with a friend you’ve inadvertently ignored…[or] imagine Facebook suggesting what information should be shared with whom—or who should be sharing more with you.”

Those companies and organizations that can architect personalization and recommendations right for their consumers and end users stand to profit hugely. For example, “Netflix is offering a million dollars to anyone who can improve the efficacy of its (exceptionally successful) recommendation engine. That’s a small price to pay for a company who future depends on its ability to compete with Blockbuster and the digital video companies of the future.”

Time is money, and both are scarce and valuable. Enterprises that are able to develop personalized recommendations that speed up the shopping experience and help us get better value for our dollars—and at the same time aren’t “in your face” and annoying--will have an architecture that will pay off in terms of strategic competitive advantage.

The target enterprise architecture here is increased sales and profitability (performance); focused sales and marketing (business); greater personalization and useful recommendations (information); systems processing automated suggestion algorithms (services and technology), all done securely and with privacy assured (security).

Personalization and Enterprise Architecture

Obstacles to Information Sharing and Enterprise Architecture

Here is the target architecture for information sharing:

An interesting document I read presented these five steps to architecting data and making it into useful and usable information for the organizations and its end users:

1. “Request the dots”—identifying and requesting data from the producers of data
2. “Get the dots”—capturing data through manual and automated systems
3. “Find the dots”—discovering needed data and having access to it
4. “Connect the dots”—processing the data into information by aggregating, processing, and integrating it
5. “Use the dots”—utilize information for enhanced decision making

And here are the major obstacles to finding, connecting, and using the dots, a.k.a. information sharing in our organizations:

According to the Association for Enterprise Integration (AFEI), Information Sharing Working Group, 15 January 2008, “There is a human predilection to guard what is ours. The information we hold and the resources we use to create it are no exception…[moreover], individual agencies/organizations are not motivated to treat information as a shared asset.”

Here are some other disincentives to information-sharing from a program manager’s perspective:

1. “Charity work”—“First, to a program manager, information sharing looks like ‘charity work.’ Sharing information beyond the scope of the program costs money, but is not directly accretive to the mission of the program.”
2. Elevated risk—“Information sharing poses a risk in the sense that it creates the prospect of uninvited critique, review, evidence for litigation, and so on.”
3. Standards cost time and money—Building to common standards for information sharing can be costly to a program; the standards may be more complex to implement, may require additional level of testing, and certification of compliance.

Perhaps, this statement sums up best the information sharing problem at the project level: “Remember, a program manager is incentivized to deliver on time and on budget per customer requirements. His/her tenure may be two to five years [for a project]. The fact that the systems they manage may last 20 years and may be difficult to integrate in the last 15 of those years is not a compelling argument for a program manager to change his/her behavior.”

The way to overcome information hoarding is to develop rock solid Information Governance, so that the decision making and management of information is taken out of the hands of the program and project manager and is put into the hands of Information governance boards, communities of interest, and information stewards.

“The governance framework must articulate the accountability and authority promote standards and guidelines; ensure a consistent well-defined approach, processes and procedures; adjudicate disconnects; establish legal and policy enforcement; and use performance measures to ensure progress towards achieving information sharing goals.” (DoD Information Sharing Strategy, May 2007)

Information is an enterprise and national asset. Shared information is valuable because it is captured once, but is “used any number of times, by any number of users.” (AFEI)

To maintain its value, information must be kept current, accurate, complete, be easy to understand, and readily accessible; this is quality information and it is valuable to our decision makers and enhances our ability to deliver on mission.

Only through active information governance will we be able to achieve this end state. It will start with changing the culture and mindset that currently dictates that information is power and information is currency, and questions why share it. And information sharing will be realized when everyone in the organization, from the top executives to the hourly workers on the front lines, understand, advocate, promote and demand that information sharing be the new norm; that it is the only acceptable and rational behavior for achieving mission success!

Obstacles to Information Sharing and Enterprise Architecture

Virtualization and Enterprise Architecture

"[Virtualization is] a technique for hiding the physical characteristics of computing resources from the way in which other systems, applications, or end users interact with those resources. This includes making a single physical resource (such as a server, an operating system, an application, or storage device) appear to function as multiple logical resources; or it can include making multiple physical resources (such as storage devices or servers) appear as a single logical resource." (Mann, Andi, Virtualization 101, Enterprise Management Associates (EMA), Retrieved on 29 October 2007 according to Wikipedia)

Virtualization places an intermediary between consumers and providers; it is an interface between the two. The interface allows a multiplicity of consumers to interact with one provider, or one consumer to interact with a multiplicity of providers, or both, with only the intermediary being aware of multiplicities. (adapted from Wikipedia)

ComputerWorld, 24 September 2007, reports in “Virtual Machines deployed on the Sly” that according to an InfoPro survey “28% of the respondents said they expect that half of all new servers installed at their companies this year will host virtual applications. And about 50% said that, by 2010, at least half of their new servers will likely host virtual software.”

What are the major concerns in going virtual?

• Service levels—users are concerned that performance will suffer without having dedicated hardware to run their applications.
• Security—there is concern that application and information security will be compromised in a virtual environment.
• Vendor support—“some vendors won’t support their software at all if it’s run on virtual machines.”
• Pricing—pricing for software licensing utilized in a virtual environment can be higher due to added complexity of support.

From a User-centric Enterprise Architecture perspective, plan on moving to virtual machines. There is potential for significant cost savings from consolidating IT infrastructure that includes reducing the number of servers, reducing related facility costs, as well as increasing overall utilization rates of machines and balancing loads to achieve greater efficiency. Soon there is no need for a dedicated server to host applications anymore.

Virtualization and Enterprise Architecture

Executive Dashboards and Enterprise Architecture

Enterprise architecture makes information visible to enable better decision making in the organization. One tool to help do this is the executive dashboard.

In management information systems, a dashboard is a executive information system user interface that (similar to an automobile's dashboard) is designed to be easy to read. For example, a product might obtain information from the local operating system in a computer, from one or more applications that may be running, and from one or more remote sites on the Web and present it as though it all came from the same source. (Wikipedia)

Dashboards help manage information overload:

• “After three decades of aggressive computerization, companies are drowning in data and information. People produced about five exabytes of new information in 2002, twice the amount created just two years earlier” (Trend: The New Rules of Information Management by Jeffrey Rothfeder)
• Dashboard are a way to take the fire hose flood of information that we get every day and make it more actionable by structuring it, focusing it, and making it more understandable often through visual displays. Note, this is similar to User-centric Enterprise Architecture’s use of principles of communications and design, such as information visualization to effectively communicate the baseline, target, and transition plan in the organization.

Dashboards provide business intelligence:

• Dashboards, like enterprise architecture itself, contribute to translating data into business intelligence. EA does this by capturing, analyzing, cataloging, and serving up information in useful and usable ways to enhance decision making by the end-users. Dashboards do this by capturing and aggregating performance metrics, and displaying them in easy-to-read and often, customizable formats.

Dashboards generally focus on performance:

• Dashboards generally are used for displaying, monitoring, and managing an organization’s performance metrics. Note, “performance” is one of the perspectives of the enterprise architecture, so dashboards are a nifty way to make that EA perspective really come alive!
• According to DM Review, 15 April 2008, “Dashboards Help Drive and Improve Performance Metrics…Presented in highly visual charts and graphs, this data can provide each level of the organization with the information it needs to best perform…Dashboards also can be a key driver of performance improvement initiatives, offering a simple and graphical way to make key performance indicators (KPIs) visible throughout the enterprise.”
  

Dashboards typically provide activity monitoring and drilldown capability:

• “The most effective dashboards allow users to drill down into the KPIs to find root cause or areas likely to cause problems. Some can even be configured to alert maintenance or support personnel when performance drops” or dangerous thresholds are crossed. Dashboard also help “make comparisons of multiple data sources” over time. These functions are called business activity monitoring, and when applied to the organization’s network, for example, is referred to a network monitoring.
• The ability to monitor and manage performance using the dashboard is similar to ability to monitor and manage the organization’s track along it roadmap using EA!
• The most effective dashboards, like the most effective enterprise architectures, are those that provide information in multiple layers of detail, so that the executives can get the high-level summary, the mid-level managers can understand the relationships between the information, and the analysts can drill down and get the detail.

Dashboards—an effective human-machine interface:

• Dashboards done right, are an effective EA tool, and serve as a window into the organization’s performance; they provides real-time, summary and granular information for making quick and specific decisions to positively affect performance.

Executive Dashboards and Enterprise Architecture

Cyber Warfare and Enterprise Architecture

Security is a cross-cutting perspective in Enterprise Architecture, but I treat it as its own EA perspective because of its importance. And this is especially true in a law enforcement and defense readiness organization.

While security in EA is generally of a defensive nature, we must remember that as a nation, we must be ready to not only defend ourselves, but also to launch offensive operations and take out the enemy.

According to Military Information Technology Magazine, 9 April 2008, in an interview with Major General William T. Lord, the Department of Defense is standing up a new Cyberspace Command in the U.S. Air Force.

Why do we need this new Cyberspace Command?

There are many threats to us that emanate from cyberspace that include:

• Cyber-criminals—looking to steal your identity or your money
• Cyber-terrorists—“wants to disrupt, dissuade, or deter us from doing something
• Nation States—“some of which are out to interrupt U.S. interests anywhere in the world.”

Cyberspace is a dangerous place, especially if you’re DoD; they “get about 3 million attempted penetrations” a day!

This is why defense in depth is so important, so that if an enemy manages to get through the perimeter of our network security, we can still stop them at the second or third tiers of our defensive capabilities.

In terms of offensive capabilities, sometimes you have to take the battle to the enemy. At times, it is necessary to “disrupt an enemy prior to the conduct of kinetic combat operations, [so] that the enemy could not figure out what its command and control system was, had false data, could not see an attacking force, and was making decisions based on information systems that been manipulated in advance of combat operations.”

To architect the defensive and offensive cyberspace capabilities necessary to combat our enemies, it is imperative to continuously build information sharing and partnership between the parties involved, such as the Departments of Defense, Homeland Security, Justice and the Director of National Intelligence. This is a core tenet of user-centric EA.

Just as we invest in the latest and greatest kinetic weapons to defeat our enemies, we must also invest in non-kinetic weapons including “our electronic warfare, space systems, and cyber-systems. As Major General Lord, stated: “it’s not always about destroying things, but about changing behavior, so that an enemy concludes that the costs of whatever they had in mind is too great and will stop. [Then again,] sometimes you have to be able to whack somebody in the nose.”

Cyber Warfare and Enterprise Architecture

“Glocalization” and Enterprise Architecture

Glocal is a combination of the words global and local. It is a best practice in business where organizations conducts business operations globally, but tailor their offerings to meet local tastes and needs.

Essentially doing business glocally means that you are architecting your business to perform operations both effectively and efficiently—i.e. your business is doing the right thing by growing without geopolitical constraints and you’re doing it the right way, by being sensitive to the customers’ specific needs wherever they are located.

The Wall Street Journal, 1 May 2008, reports that “Kraft became the No. 1 biscuit maker in China by tailoring the Oreo to local tastes.”

“The Oreo has long been the top-selling cookie in the U.S. Market. But Kraft Foods, Inc. had to reinvent the Oreo to make it sell well in the world’s most populous nation.”

“Unlike its iconic American counterpart, the Oreo sold in China is frequently long, thin, four-layered and coated in chocolate. But both kinds of cookies have one thing in common: They are now best sellers.”

40% of Kraft’s revenue is internationally-based, so their strategy to go glocal is critical to improving their market share and profitability.

To increase growth at Kraft, the CEO “has been putting more power in the hands of Kraft’s various business units around the globe, telling employees that decisions about Kraft products shouldn’t all be made by the people at the Northfield, Ill. headquarters.”

Similarly, to market the Chinese Oreo’s, one of innovative things Kraft did was to have Chinese university students ride around on bicycles outfitted with wheel covers resembling Oreos and handing out cookies.

The CEO stated this was “a stroke of genius that only could have come from local managers. The more opportunity our local managers have to deal with local conditions will be a source of competitive advantage for us.”

Glocalization, the customization to local markets, is far removed from the original Ford Model T (the most influential car of the twentieth century according to Wikipedia) set in 1908 that was based on standardization and assembly-line production, rather than individually hand-crafted.

From an enterprise architecture perspective, going glocal and customizing (or tailoring) business products and services to local tastes is also quite the opposite of what most enterprise architects try to do, which is to standardize their products and services to increase interoperability, simplify the infrastructure and operations, and achieve cost-efficiencies.

So what is more important, standardization or customization?

I suppose it depends on your perspective. If you’re in operations, then standardization is the dominant factor in order to streamline business processes and achieve cost-efficiencies. However, if you’re in sales and marketing, then customization is key to market penetration and customer satisfaction.

This leads me to the role of the enterprise architect, which is to balance the conflicting needs of the organization and simultaneously drive standardization in business processes and technologies, but customization to local requirements for sales and marketing. So EA serves Oreos to everyone!

“Glocalization” and Enterprise Architecture

Customer Experience Management and Enterprise Architecture

Customer service is so important. We need to architect it in every fiber of the organization. Good customer service is a critical differentiator for organizations and it offers a strategic competitive advantage to those enterprises that embrace it and make it central to their product offering.

DM Review, 25 April 2008, reports that “companies are under unprecedented pressure to optimize the customer experience.”

“Customer Experience Management (CEM) is emerging as an increasingly important tool. CEM is the practice of actively listening to customers, analyzing what they are saying to make better business decisions and measuring the impact of those decisions to drive organizational performance and loyalty.”

CEM information should be considered an essential component of the business perspective of the enterprise architecture. CEM should be incorporated into EA planning and governance to accelerate and improve enterprise decision making such as “tailoring products to customer desires to save investment in unwanted innovations.” The overall goal is to provide the customer with world-class service and an overall high satisfaction interaction.

How are organizations achieving CEM?

1. Chief Customer Officer (CCO)—establishing executive positions that are focused on the customer experience and on earning high marks for customer satisfaction.
2. Measurement—“putting tools in place that measure the customer experience” and provide feedback to the organization. These tools include customer satisfactions surveys, focus groups, blogs, point-of-sale data/trends, and customer relationship management (CRM) systems that “hold valuable comments from emails, support cases, and online conversations between contact centers and customers.”
3. Process improvement—using customer feedback and measurement to tune processes, streamline them, and eliminate defects.

Unfortunately, “still at many companies today, the potential of CEM remains untapped.” It behooves the enterprise architects to help drive CEM as a major source of business intelligence and for use in enterprise architecture planning and governance for new investments.

Ultimately, just like the EA end-user is the final arbiter for driving the development of the EA information products (so they are useful and usable), so too the customer is king when it comes to influencing the organizations’ future direction for product, process, technology, and service. If we’re not satisfying our customers, they will find a better supplier to give their business to.

Customer Experience Management and Enterprise Architecture

Organizational Culture and Enterprise Architecture

Enterprise architecture is about managing change and complexity in the organization. EA establishes the roadmap to evolve, transform and remain competitive in an ever changing world. Part of change involves continually going out there and simply trying—trying to climb the next rung on the ladder; trying to innovate and do something that hasn’t been done before; and generally speaking, trying to do things better, faster, cheaper.

As children, we all learned the old saying, “if at first you don’t succeed, try, try, try again.” This lesson can apply to both individuals and organizations.

In EA, we set targets that are ambitious. If the targets are too easy to achieve, then they are not challenging us to be our best. So we set the bar high—not too high, so that we fall on our face and break our nose—but high enough, so that we don’t necessarily achieve the target the first time around. We set stretch targets, so that we really are transforming the organization.

How do we keep the organizations focused on the goals and continuously trying to achieve the next big thing?

Well, people like organizations, need to sincerely believe that they indeed can succeed, and they must be dedicated and determined to succeed and achieve their goals.

The Wall Street Journal, 29 April 2008 reports that “‘self-efficacy’ [is] the unshakable belief that some people have that they have what it takes to succeed.”

This is the differentiator between “what makes some people [and organizations] rebound from defeats and go on to greatness while others throw in the towel.”

Is self-efficacy the same as self-esteem?

No. Self-efficacy is “a judgment of specific capabilities, rather than a general feeling of self-worth…there are people with high self-efficacy who ‘drive themselves hard but have low self-esteem because their performance always falls short of their high standards. Still such people succeed because they believe that persistent effort will let them beat the odds.”

“Where does such determination come from?”

Well, there is both nature and nurture involved. “In some cases it’s inborn optimism—akin to the kind of resilience that enables some children to emerge unscathed from extreme poverty, tragedy, or abuse. Self-efficacy can also be built by mastering a task; by modeling the behavior of others who have succeeded; and from…getting effective encouragement, distinct from empty praise.”

Organizations are like people. In fact, organizations are made up of people focused on and working towards a common cause in a structured environment.

Like people, organizations need to believe in their goals and be determined to achieve them. The whole organization needs to come together and rally around the goals and be of one mind, convinced that they can and will achieve success.

Of course, neither people nor organizations succeed the first time around every time. We can’t get discouraged or be afraid to make mistakes. Our organizations need to encourage and promote self-efficacy among their employees so that they will engage in reasonable risk taking in order to innovate and transform.

“It took Thomas Edison 1,000 tries before he invented the light bulb. (‘I didn’t fall 1,000 times, he told a reporter. ‘The light bulb was an invention with 1,000 steps’).”

Organizational Culture and Enterprise Architecture

Creative Destruction and Enterprise Architecture

“The notion of creative destruction is found in the writings of Mikhail Bakunin, Friedrich Nietzsche and in Werner Sombart's Krieg und Kapitalismus (War and Capitalism) (1913, p. 207), where he wrote: "again out of destruction a new spirit of creativity arises". The economist Joseph Schumpeter popularized and used the term to describe the process of transformation that accompanies radical innovation. In Schumpeter's vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power.” (Wikipedia)

From an enterprise architecture perspective, I find the concept of creative destruction an enlightening concept, in a number of ways:

1. Two steps backwards—enterprise architecture is not just a forward planning endeavor. Sometimes, to move forward on the roadmap, you actually may have to take a couple of step back. To build new processes or introduce new technologies, you may first have to scrap the old ones or at least stop investing in them. Just like with a physical blueprint, sometimes you can build unto an existing house or modify it, and other times, you need to bring in the wrecking ball (take a few steps back) and build fresh from the ground up. (Of course, at other times you may have to change the wings on the airplane while it’s still flying.) It is on a fresh palette that a painter can create a new masterpiece.
2. Creativity is the future—enterprise architects should not fear bringing in new ideas, innovation, and creative approaches. Just because something has been done a certain way in the past, does not mean that it always has to be done that way in the future. In fact, stagnation by definition means that the existing processes are doomed to be obsolete and surpassed by others who are adapting to an ever changing environment. Indeed, those enamored with the past can and often are a roadblock to doing things a new way. The old guard will stand up and say, we’ve been doing it this way or that way for so many years; who are you to come in here and try and change it; we know better; you don’t understand our environment. And sometimes, they may be right. But more often than not, the naysayers are fearful of and resistant to change. With ample research, planning, and testing we can develop better, faster, and cheaper ways of doing things.
3. Change can be radical—Much of EA change will be evolutionary, a planned sequence of steps in process improvement and technology enablement. However, some change will be more radical and revolutionary. Some organizational change requires selling off, closing down, merging, acquiring, or otherwise “destroying the value of established companies” in order to innovate and create something new and better. Like the process of evolution and the survival of the fittest, those companies and processes that are not “making the grade” need to be shut down, discontinued, or otherwise morphed into value-add forces of long-term economic growth.
   

One final thought. Destruction is a darn scary thing. No one wants to see their handiwork taken apart, brought down, and be forced to start again. In fact, it is hard enough in life to have to build something, but to see it destroyed and have to start again can be maddening. The mere fact of seeing something destroyed is destabilizing and demoralizing. The organization and person asks themselves: who’s to say the next build will be more stable, more everlasting, more productive? Who wants to feel that their time has been wasted on something that is now gone? Who can be so confident that their efforts will ever come again to a substantive and meaningful accomplishment, and one that compares or surpasses to what was? However, this is the clincher of creative destruction—while destruction is enormously painful and undermining to self-confidence, “out of destruction a new spirit of creativity arises.” With a fresh start, an organization or person can build anew and perhaps from the lessons of the past, from the pain of building and destruction, from the processes of working something through and evolving it, a better future can be created. And there is hope for a new enterprise or personal life architecture.

Creative Destruction and Enterprise Architecture

Self-Determination and Enterprise Architecture

There is an age old question whether we make our own fate or whether it is predetermined.

For thousands of years, people have turned to prophets, fortune tellers, mystics, and star gazing to try and divine their futures. Yet, at the same time, we are taught that every child has the opportunity to become the President of the United States or an astronaut, or whatever their hearts desire; that laser-like focus, discipline, repetition and determination breeds success. Haven’t we always been taught to always try our best?

Surely, this is one of the irresolvable conflicts that philosophically can never be truly resolved: If the future is already predetermined, then how can we affect it? Further, if our actions can impact the future, then how the future be predetermined?

The way ahead is to work to influence our future, knowing full well that many things are indeed beyond our control.

From an organization perspective, there are no guarantees for the future, so we must take the reins of change, plan and manage it: one way we do this is through enterprise architecture.

In Fortune Magazine, 5 May 2008, in an article entitled, “The Secret of Enduring Greatness,” it states that “the best corporate leaders never point out the window to blame external conditions; they look in the mirror and say, ‘We are responsible for the results.’”

The future of our organizations are not static and so our leadership cannot rest on its laurels, rather we must continually plan for and execute innovation and transformation.

If we look at the largest corporations in America, the Fortune 500, we see that companies rise and fall to/from prominence with almost unbelievable speed. Here are some examples:

• “The vast majority of those on the list 50 years ago are nowhere to be found on the current list” (only 71 of the original 500 companies from 1955 are still on the list today).
• “Nearly 2000 companies have appeared on the list since its inception.”
• “Some of the most powerful companies on today’s list—businesses like Intel, Microsoft, Apple, Dell, and Google” didn’t even exist in 1955 and conversely, “some of the most celebrated companies in history no longer even appear on the 500, having fallen from great to good to gone.”
  

So if the tides start to turn down for a company, what are they to do—simply accept their fate, and perish like so many of those that came before them or do they fight to survive, knowing full well that they may not or will likely not succeed?

I say we fight to survive—we plan and execute change—we transform, and we live to fight another day.

“Just because a company stumbles—or gets smacked upside the head by an unexpected event or a new challenge—does not mean that it must continue to decline. Companies do not fall primarily because of what the world does to them or because of how the world changes around them; they fall first and foremost because of what they do to themselves.”

One example is IBM that stumbled in the late 1980’s in relying on what was becoming commoditized hardware, but transformed themselves in the early 1990’s to a software and services juggernaut. Similarly, Apple transformed from a niche computer manufacturer to a consumer electronics dynamo with their innovations such as the iPod and iPhone.

Essentially it comes down to the ability of the organization to manage change and complexity (as John Zachman stated) to adapt and transform, and we do this through enterprise architecture

Self-Determination and Enterprise Architecture

Implementing IT Governance

IT governance is often implemented with the establishment of an IT Investment Review Board (IRB) and Enterprise Architecture Board (EAB); but to get these to really be effective you have to win the hearts and minds of the stakeholders.

Here are some critical success factors to making IT governance work:

• Management buy-in and commitment—this is sort of a no-brainer, but it’s got to be said; without senior management standing firmly behind IT governance, it won’t take root and IT projects will continue to fly under the radar.
• Prioritizatuion and resourcing—EA, IT Strategic Planning, and IT governance compete with IT operations for resources, management attention, and prioritization. More often than not, many not so savvy CIOs value putting some new technology in the hands of the end-user over creating strategic IT plans, developing transition architectures, and implementing sound IT governance (they do this at risk to their careers and good names!)
• Policy and procedures—IT governance needs a firm policy to mandate compliance to the user community; further the procedures for users to follow need to be clear and simple. IT governance procedures should integrate and streamline the governance processes for authorizing the project, allocating funding, conducting architectural reviews, following the systems development life cycle, managing the acquisition, and controlling the project. End-users should have a clear path to follow to get from initiating the project all the way through to close-out. If the governance mechanism are developed and implemented in silos, the end users have every reason in the world to find ways to work around the governance processes—they are a burden and impede timely project delivery.
  
• Accessibility—Information on IT governance services including the process, user guides, templates, and job aids needs to be readily available to project managers and other end users. If they have to search for it or stick the pieces together, then they have another reason to bypass it all together.
• Enforcement—there are two major ways to enforce the governance. On the front end is the CIO or IRB controlling the IT funding for the enterprise and having the authority to review, approve, prioritize, fund, monitor, and close down IT projects. At the back-end, is procurement; no acquisitions should pass without having demonstrated compliance with the IT governance processes. Moreover, language should be included in contracting to enforce EA alignment and compliance.
• Cultural change-Organizations need to value planning and governance functions. If operations always supersede IT planning and governance, then both business and technical stakeholders will feel that they have a green light to ignore those functions and do what they want to do without regard to overall strategy. Further, if the culture is decentralized and governance is managed in silos (one manager for SDLC, another for EA, yet another for requirements management), then the processes will remain stove-piped, redundant, and not useable by the user community.
• Communication plan—the governance process and procedures need to be clearly communicated to the end users, and it must address the what’s in it for me (WIIFM) question. Users need to understand that their projects will be more successful if they follow the IT plan and governance processes. Those are in place to guide the user through important and necessary project requirements. Further, users are competing for resources with other important IT projects, and user will benefit their projects by making the best business and technical case for them and following the guidelines for implementing them.

Implementing IT Governance

Enterprise Information Architecture

We all know that enterprise architecture is a strategic-level synthesis of business and technology information to drive enhanced decision-making. To develop the EA we must build out the individual perspectives, such as performance, business, information, services, technology, security, and human capital. This blog focuses on one of those, enterprise information architecture.

Enterprise Information Architecture (EIA) is the strategic-level information architecture for the organization.

Note: Information refers to both information (processed data) and data.

GOAL:

The overall goal of EIA is to provide the right information to the right people anytime, anywhere.

MANDATE:

Legislative:

The federal mandate in law enforcement is the Intelligence Reform and Prevention Act (IRTPA) of 2004. Further, The Office of the Director of National Intelligence (ODNI) has developed the Information Sharing Environment (ISE) Implementation Plan in 2006 and the Department of Defense created the Net-centric Data Strategy in 2001.

Common Sense:

We need information to perform our mission/business function and processes: we can’t do without it! Moreover, in an information economy, information is power and information is currency.

PROCESS:

Developing the enterprise information architecture is an outgrowth of developing the business, data, and system models to understand the business processes, the information required to perform those, and the systems that serve up the information.

According to the Federal Enterprise Architecture, Data Reference Model, there are three parts to developing your information architecture.

1. Data Descriptions—identify what your information needs are.
2. Data Context—determining how the information is related.
3. Data Sharing—developing the mechanisms for discovering and exchanging information.

Data Descriptions is the semantics and syntax. It involves developing your “data asset catalogue” and the metadata. This includes developing a lexicon or data dictionary with harmonized terms and schemas to describe them, as well as tagging the data. This helps define what the terms mean and identifies the rules for arranging them.

Data Context is the relationships. It includes categorizing the information using taxonomies and ontologies. It includes developing models, such as entity relationship diagrams (ERDs) to identify entities or information objects (and their attributes or properties) and associating them.

Data Sharing is the transactional processes. It entails the decomposition of information exchanges (in an Information Exchange Matrix or in a Information Exchange Package Description, IEPD) to determine the provider, the consumer, the trigger, the frequency, the media, the security, and so forth for each type of transaction. This phases also includes developing information repositories/registries, information sharing access agreements, and other mechanisms for sharing the information, such as portals, web services, enterprise service bus (ESB), and so on.

In the end, EIA is about transforming the organization: Culturally, from information hoarding to information sharing; from a business process perspective, optimizing information flows and usage, and in terms of governance, managing information as an enterprise asset.

Enterprise Information Architecture

Customer Service and Enterprise Architecture

Good customer service is worth its weight in gold and indeed, many people are willing to pay extra for this.

In fact, I would venture to say that most of us are usually willing to pay extra if we know that the customer service will be there to protect our purchase or investment.

The Wall Street Journal, 25 April 2008, introduces a new book called “The Best Service is No Service” by Bill Price and Dave Jaffe that discusses what real customer service is all about.

How bad is customer service these days (despite all the technology)?

“When calling an 800 number, we expect to find ourselves in voice-response hell. We dutifully follow instructions to key in a 10-digit policy number—only to be asked by the customer-service rep for the same darn number. Waiting on hold for 25 minutes? Well, that’s what speakerphones are for.”

How have companies responded to calls for better customer service?

“There is more to helping customers than picking up the phone within three rings or emailing within 24 hours.” And these measures are often gamed; here are some examples:

• “At one company, where managers imposed a target ‘average handle time (call time) of 12minutes, phone calls miraculously shortened to just under 12 minutes: As the 12-minute mark approached, agents simply said whatever it took to get the caller of the phone.
• The call center at another company hit on the idea of reducing the number of phone lines so that the excess callers simply got a busy signal-and went unmeasured.”

“In other words: don’t just ask how long it took to help the customer, ask how often the customer needed help and why. The goal is to avoid the need for a customer to contact the company [about problems] in the first place.”

The authors contend that the goal for good customer service is for there to be no need for customer service—i.e. the customer is happy with the product or service being provided and there are no problems and therefore, no complaints. This to me sounds akin to Six Sigma and the quest for zero defects.

And if zero (or close to zero) defects are not the reality, then good customer service is about finding out the “root causes” of the problems and solving them, not just appearing responsive to the complaints, but doing nothing to ensure they don’t happen again.

Good customer service is a strategic competitive advantage, and organizations should include improvements to this area as a goal in their plans.

From a User-centric EA perspective, good customer service is like a sister to User-centricity. We put the user/customer/stakeholder at the center of the organization’s value proposition.

We are here to serve the user and that should mean more than just paying lip service to them. It must mean that we continuously improve processes, products, and service and make the end-user experience zero-defect, problem and hassle free.

Customer Service and Enterprise Architecture

IT Roles Are Changing and Enterprise Architecture

These days, everyone likes to think that they are an architect and the ways things are going, soon this may become a reality.

ComputerWorld, 7 April 2008 reports that “New IT titles portend a revolution in IT roles.”

“Don’t expect to be part of an IT department. As a 21^st century technology professional, your future—and most likely your desk—will be on the business side, and your title will likely be scrubbed of any hint of computers, databases, software, or data networks.”

Technology is being down-played and business requirements are in focus. This is good EA and common sense.

“IT is no longer a subset specialty. It is integrated into whatever work you’re trying to get done…IT is being disintermediated, but in a good way. It is being pushed farther up the food chain.”

IT is no longer being viewed as a mere utility to keep the network up, email running, and the dial tone on. Rather, IT folks are being seen as full partners with the business to solve problems. YES!

“No one know s exactly what to call these positions, but they definitely include more than pure technical skills. ‘If you’re a heads-down programmer, you’re at a terrible disadvantage.’”

The CTO of Animas, a web hosting company stated: “Outsourcing, globalization and the cost reduction for WAN technology all work to eliminate the need for systems administrators, help desk people, or developers. We don’t want developers on our staff for all of these technologies. We pretty much have kept only business-savvy people who we expect to be partners in each department and to come up with solutions.”

Solving business problems requires the ability to synthesize business and technology and let business drive technology. Hence, the new glorification and proliferation of architects in today’s organizations.

David McCue, the CIO of Computer Sciences Corp. says “You’ll see titles like ‘solutions architect’ and ‘product architect’ that convey involvement in providing the product or service to a purchaser.” Similarly, the CIO of TNS, a large market research company, stated: “everyone is either an architect or an engineer.”

“Although job titles for all of these emerging roles have yet to be standardized, the overall career-focus seems pretty clear: It’s all about business.”

Wise CIOs are changing their focus from day-to-day technology operations to strategic business issues. That’s the sweet spot where value can be added by the CIO.

Enterprise architecture and IT governance are the CIO’s levers to partner with the business and plan their IT more effectively and to govern it more soundly, so that IT investments are going to get the business side, the biggest bang for their buck.

IT Roles Are Changing and Enterprise Architecture

Activity Monitoring and Enterprise Architecture

When you log on at work, many of you probably—know it or not--click on an acknowledgement that you consent to monitoring of your activities.

When you are working, your time and your “privacy” are not really your own!

Organizations routinely conduct various sorts of monitoring include network monitoring, intrusion detection monitoring, and now more and more, monitoring of employee activities online. This is an important part of the organization’s technical and security architecture.

• Network focused--“Network monitoring describes the use of a system that constantly monitors a computer network for slow or failing systems and that notifies the network administrator in case of outages via email, pager or other alarms. It is a subset of the functions involved in network management.”
• External focused--“An intrusion detection system (IDS) is used to detect several types of malicious behaviors that can compromise the security and trust of a computer system. This includes network attacks against vulnerable services, data driven attacks on applications, host based attacks such as privilege escalation, unauthorized logins and access to sensitive files, and malware (viruses, trojan horses, and worms).” (Wikipedia)
• Internal-focused--An activity monitoring tool, according to ComputerWorld Magazine, 7 April 2007, “monitors all activities on an end-user’s system to make sure that no data or computer usage policies are violated. If a violation does occur, the agent issues an alert to the company’s security team and begins collecting data for further review.”

While we all can understand the need for network monitoring and intrusion detection systems, many find internally-focused activity monitoring, a put-off, a display of lack of trust in the employees, or a violation of our privacy.

However, companies do actually have much to fear from their employees—especially the disgruntled or corrupt ones:

CyberDefense Magazine, August 2004, reports in “Beware of Insider Threats to Your Security” as follows: “Gartner estimates that 70% of security incidents that cause monetary loss to enterprises involve insiders…[that] recent FBI statistics show that 59% of computer hackings are done internally…[and that] a source inside the United states intelligence community stated that more than 85% of all incidents involving the attempted theft or corruption of classified data involved an individual who had already been thoroughly vetted and been given legal access to the data.”

According to ComputerWorld, activity monitoring tools “features a video-like playback feature that lets security administrators view precisely what a user was doing before, during and after a policy violation was flagged. That can help the admins determine almost instantly whether the violation was an accident or the result of deliberate action…[Additionally, other tools] keeps an eye on all internal network traffic for sensitive or inappropriate material…[or] monitor database activity and check for improper access and other abuses.”

“Because the software [tools] can quickly correlate log even from practically every IT system, it also serve as both a “real-time alerting system and an after-the-fact forensic tool.”

Related products can actually be set up to quarantine a computer, when a policy violation is detected.

The architecture for monitoring the network and internal and external threats is becoming ever more sophisticated. While according to ComputerWorld, Gartner estimates that “less than 30% of Fortune 5,000 companies have installed such [activity monitoring] tools,” we can expect many more to adopt these in the near future.

These tools are vital in today’s information-rich environment where confidentiality, availability, and integrity are the backbone for our enterprise decision-making.

Activity Monitoring and Enterprise Architecture

“Consumerized” IT and Enterprise Architecture

“Ergonomics (or human factors) is the application of scientific information concerning objects, systems and environment for human use…Ergonomics is commonly thought of as how companies design tasks and work areas to maximize the efficiency and quality of their employees’ work. However, ergonomics comes into everything which involves people. Work systems, sports and leisure, health and safety should all embody ergonomics principles if well designed. The goal of ergonomics and human factors is to make the interaction of humans with machines as smooth as possible, enhancing performance, reducing error, and increasing user satisfaction through comfort and aesthetics. It is the applied science of equipment design intended to maximize productivity by reducing operator fatigue and discomfort. The field is also called biotechnology, human engineering, and human factors engineering.”

“In the 19th century, Frederick Winslow Taylor pioneered the "Scientific Management" method, which proposed a way to find the optimum method for carrying out a given task… The dawn of the Information Age has resulted in the new ergonomics field of human-computer interaction (HCI). Likewise, the growing demand for and competition among consumer goods and electronics has resulted in more companies including human factors in product design. (Wikipedia)

Despite all the talk of ergonomics, we’ve all had the experience of getting a new IT gadget or using a new IT application that necessitated that we go through reams of instructions, user-guides, manuals (some 3-4 inches thick), and online tutorials, and still often we end up with having to call in to some IT support center (often in India these days) for walking through the “technical difficulties”.

Not a very user-centric architecture.

Well finally companies are waking up and factoring in (and designing in) ergonomics and a more user-centric approach.

The Wall Street Journal, 22 April 2008, reports “Business Software’s Easy Feeling: Programs are Made Simpler to Learn, Navigate.”

“Many vendors have ‘consumerized’ their corporate software and online services making them easier to learn and navigate by borrowing heavily from sites such as Facebook or Amazon.com. They have also tried to make their products more intuitive by shying from extraneous features—a lesson learned from simple consumer products such as Apple Inc.’s iPod.”

Other vendors are developing products using “user experience teams” in order to build products that are user-friendly and require minimal to “no formal training to use.”

David Whorton, one of the backers of SuccessFactors, an online software company, stated: “We’ve moved into an environment where no one will tolerate manuals or training.”

Similarly, Donna Van Gundy, the human resources director for Belkin, a maker of electronic equipment said: “Employees just don’t want to be bothered with training courses.”

The bar has been raised and consumers expect a an intuitive, user-friendly experience and a simple user interface.

Go User-centric!!

“Consumerized” IT and Enterprise Architecture

10 Obstacles to Enterprise Architecture

Here is an interesting list of 10 obstacles to the enterprise architecture from a colleague and friend, Andy Wasser, Associate Dean, Carnegie Mellon University School of Information Systems Management:

1. “Lack of Senior Management [Commitment] Support
2. Inability to obtain necessary resources (funds, personnel, time)
3. Business partner alienation
4. Internal IT conflicts and turf issues (no centralized authority)
5. Lack of credibility of the EA team
6. Inexperience with enterprise architecture planning or inexperience with the organization
7. Entrenched IT team [operational focus versus strategic]
8. Focus on EAP methodologies and tools [rather than on outputs and outcomes]
9. Uncertain payback and ROI
10. Disharmony between sharing data vs. protecting data

This is a good list for the chief enterprise architect to work with and develop strategies for addressing these. If I may, here are some thoughts on overcoming them:

1-4,7,9: Obtain Senior management commitment/support, resources, and business/IT partnership by articulating a powerful vision for the EA; identify the benefits (and mandates); preparing an EA program assessment, including lessons learned and what you need to do to make things “right”; developing an EA program plan with milestones that shows you have a clear way ahead. Providing program metrics of how you intend to evaluate and demonstrate progress and value for the business/IT.

5,6,8: Build credibility for EA planning, governance, and organizational awareness by hiring the best and the brightest and train, train, train; getting out of the ivory tower and working hand-in-hand in concert with business partners; building information products and governance services that are useful and usable to the organization (no shelfware!); using a three-tier metamodel (profiles, models, and inventories) to provide information in multiple levels of details that makes it valuable and actionable from everyone from the analyst to the chief executive officer; looking for opportunities (those that value EA and want to participate) and build incrementally (“one success at a time”).

10: Harmonize information sharing and security by developing an information governance board (that includes the chief information security officer) to vet information sharing and security issues; establishing data stewards to manage day-to-day issues including metadata development, information exchange package descriptions, discovery, accessibility, and security; creating a culture that values and promotes information sharing, but also protects information from inappropriate access and modification.

10 Obstacles to Enterprise Architecture

Disaster Preparedness and Enterprise Architecture

There are several disaster preparedness exercises that test and train our government and private sector partners’ ability to respond to incidents that could have catastrophic consequences. These exercises can be supported by a robust enterprise architecture; here is a brief description followed by a sketch of how EA can support disaster preparedness.

TOPOFF

“Top Officials (TOPOFF) is the nation’s premier terrorism preparedness exercise, involving top officials at every level of government, as well as representatives from the international community and private sector. Thousands of federal, state, territorial, and local officials engage in various activities as part of a robust, full-scale simulated response to a multi-faceted threat.” [Exercises have tested responses to chemical, biological, and radiological attacks.]

(http://www.dhs.gov/xprepresp/training/gc_1179350946764.shtm)

Cyber Storm

“The U.S. Department of Homeland Security’s (DHS) National Cyber Security Division (NCSD) successfully executed Cyber Storm, the first national cyber exercise Feb. 6 thru Feb. 10, 2006 [and a second biennial exercise was conducted in March 2008]. The exercise was the first government-led, full-scale cyber security exercise of its kind…Cyber Storm was designed to test communications, policies and procedures in response to various cyber attacks and to identify where further planning and process improvements are needed.”

(http://www.dhs.gov/xnews/releases/pr_1158340980371.shtm)

Government Computer News, 14 April 2008 reports on the Cyber Storm II exercise in which DHS “hosted federal, state, local, and international government agencies along with more than 40 private-sector companies” in these “high-stakes war games.”

Carl Banzhoff, the vice president and chief technology evangelist at McAfee summed it up as follows: “when the internet burns to the ground, how are you going to get updates?”

“The goal was to test communication coordination and partnerships across sectors.”

Bob Dix, the vice president of government affairs at Juniper Networks said that “the greatest impediment to sharing information still is trust.”

Whether the preparedness tests are for terrorism or cyber security, the essence is to test our ability in preparing, preventing, responding, and recovering from security incidents. This involves building capability for uninterrupted communications, information sharing, and coordinated response.

How can enterprise architecture support disaster preparedness?

1. Requirements—EA can capture strategic, high-level requirements from mission areas across the many functional areas of homeland security and weave these into a core map of capabilities to build to. For example, we have a requirement for system security that is mandated by law and policy, and securing our communications and infrastructure is a core capability for our information systems that must be executed. The weakest link in security has the potential to jeopardize all components and their response capability.
2. Planning—EA analyzes problem areas and uncovers gaps, redundancies, inefficiencies, and opportunities and uses these to drive business process improvement, reengineering, and the introduction of new technologies. Improved business processes and enabling technologies can enable integration, interoperability, standardization, modernization, and information sharing that can enable a better prepared homeland security infrastructure. For example, identifying shared mission communities and building information sharing and collaboration among stakeholders in these improves our preparedness abilities.
3. Governance—EA brings the various stakeholders to the table to vet decisions and ensure sound business process improvement and IT investments. Governance involves sharing information, building trust, and making decisions towards a unified way forward. For example, through the DHS Enterprise Architecture Board (EAB), the CIOs of all components can collaborate and engage in developing targets that will lead to implementation of best practices and standards across the Department that will improve overall efficiency of all components.

Of course, EA is not the be-all and end-all for preparedness, but it provides critical elements of requirements management, planning, and governance that contributes to disaster preparedness.

Disaster Preparedness and Enterprise Architecture

Fear, Greed and Enterprise Architecture

Fear and greed can have a huge influence on our decision making processes. Rather than making rational, informed decisions, we are driven by fear and greed and herd mentality to do stupid things.

Irrational decisions driven by fear and greed are the antithesis of rational, well-thought out decisions driven by enterprise architecture planning and governance.

In an interview with Fortune Magazine 28 April 2008 (and on a day of teaching students from the University of Pennsylvania’s Wharton School of Business), Warren Buffet stated: “when people panic, when fear takes over, or when greed takes over, people react just as irrationally as they have in the past.”

Similarly, in The Wall Street Journal 18 April 2008, an MIT financial economist, Andrew Lo, stated: “You have to understand the mechanism of how fear and greed impact market decisions.”

Fear and greed are affected by our endocrine system. According to Andrew Lo, “for better or for worse, biochemistry makes money go to our heads. ‘We need to understand that physiological aspects of brain behavior really impact financial decisions.”

Testosterone is the hormone that makes us irrationally exuberant, confident and greedy, and another hormone, cortisol, causes us to feel fear and gloom.

Do these hormones and the resulting emotions we feel impact our decisions and behavior?

Your bet!

“Among males and females, testosterone is a natural component in the chemistry of competition…it enhances persistence, fearlessness, and a willingness to take risks. Among athletes it rises in victory, and falls in defeat. “

Endocrinologists have identified “the ‘winners’ effect,’ in which successive victories boost levels of testosterone higher and higher, until the winner is drunk with success—so overconfident that he can no longer think clearly, assess risk properly or make sound decisions.” On the opposite side of the spectrum, “too much cortisol, secreted in response to stress, might in turn make them overly shy of risk.”

In the face of fear and greed, decision making is impaired and becomes irrational. Decisions are no longer driven by the facts on the ground or by judicious planning or sound governance that comes with disciplines like enterprise architecture. Instead, people become slaves to their hormones and emotional effects.

In Fortune Magazine, Warren Buffet warned against falling into the fear/greed trap of decision making. He stated: “I always say you should get greedy when other are fearful and fearful when others are greedy. But that’s too much to expect. Of course [at a minimum] you shouldn’t get greedy when others get greedy and fearful when others get fearful.”

Rather than optimizing decision making, our fears and greed destabilize our ability to think clearly and rationally. When this happens, we need to rely more than ever on our enterprise architecture target and plans and on our governance processes, so that we stay focused on our goals and path to them and not be sidetracked by, as Alan Greenspan stated, “irrational exuberance” or irrational fears.

Fear, Greed and Enterprise Architecture