Showing posts with label Guns versus Butter Model. Show all posts
Showing posts with label Guns versus Butter Model. Show all posts

October 10, 2007

Guns versus Butter Model and Enterprise Architecture

“In economics, the guns versus butter model is the classic example of the production possibility frontier. It models the relationship between a nation's investment in defense and civilian goods. In this model, a nation has to choose between two options when spending its finite resources. It can buy either guns or butter, or a combination of both. This can be seen as an analogy for choices between defense and civilian spending in more complex economies.” (Wikipedia)

The guns versus butter model teaches us that you cannot have it all! There are clear limitations to resources, and it is not possible to produce or spend beyond that.

Yes, of course, our resources can be extended by increasing the limits of production through for example, advances in technology that make us more efficient (like advances in automation or agricultural production). Similarly, we can spend more than we have on both guns and butter, through deficit spending, although this is a temporary phenomenon where we borrow to spend now, and this must be repaid in the future.

The point is that as society, organizations, or individuals with finite resources, we must make choices, since we can’t have it all. Even Bill Gates and Warren Buffet with their billions of dollars, have to make choices too (although their choices may be a little bit larger than ours—should I buy this mega-company or that one).

From a User-centric Enterprise Architecture perspective, the lesson of the guns versus butter economic model is very important. As we baseline the architecture of the organization and see all that is wrong with it (gaps, redundancies, inefficiencies, and opportunities), we are tempted to want to fix everything, right away. In other words, the target architecture becomes an unrealistic wish list and one that seeks to solve all that is wrong in the enterprise. One of my associates calls this the feed the world solution, which he promptly points out are those initiatives that never really go everywhere, because you can’t “swallow an elephant in one bite.”

In EA, we have to develop a target architecture and transition plan that is realistic: one that takes into account the limitations of resources as well as the limitations of the organization to rapidly undergo change. It becomes an issue of priorities. A good architect not only helps the organization identify the possibilities for improvement, but also works with leadership and stakeholders to prioritize those and phase them in. realistically, through the transition plan.