Showing posts with label free market economics. Show all posts
Showing posts with label free market economics. Show all posts

September 12, 2007

Adam Smith and Enterprise Architecture

Adam Smith, known as “The Father of Economics”, is best known for his "laissez-faire" economic theory. Smith believed in the right to influence your own economic progress freely, without the puppet strings of guilds and/or the state. His theory caught on and changed much of Europe into a free trade domain, allowing the emergence of the entrepreneur. Smith's work helped to build the foundations of free market economics that includes:

  • Capitalism (an economic system in which the means of production—land, labor, and, capital—are privately owned and operated for profit, and in which production and distribution of goods and services are determined through the operation of a ‘market economy’—free markets and free pricing system)
  • Libertarianism (belief that all persons are the absolute owners of their own lives, and should be free to do whatever they wish with their persons or property)
  • Free Trade (trade in goods and services between or within countries flow unhindered by government) (Adapted from Wikipedia)

“Smith laid the intellectual framework that explained the free market and still holds true today. He is most often recognized for the expression "the invisible hand," which he used to demonstrate how self-interest guides the most efficient use of resources in a nation's economy, with public welfare coming as a by-product. To underscore his laissez-faire convictions, Smith argued that state and personal efforts, to promote social good are ineffectual compared to unbridled market forces.” (

Here’s the User-centric EA question…

Based on Adam Smith’s framework for an efficient free market unencumbered by the state, how are we to view enterprise architecture planning and governance “hindering” the organizational end-users from making the ‘best’ choices for what systems, products, and standards they want to purchase or use? Based on Smith’s notion of "laissez-faire", doesn’t the end-user know best? And won’t they make the most efficient use of corporate resources? Why does EA ‘interfere’?

The answer is…

The end-user does know best and we do need to let them ‘guide’ decision-making. However, there is a difference between letting them guide decisions and pursuing their own interests completely unimpeded. We do not have to use a great amount of imagination to recognize the wasteful spending on redundant solutions, stove-piped data and applications, and inefficient processes that would exist.

  • Taken to an extreme, if all users in the enterprise would purchase and implement whatever business and technology solutions they desire, without any form of governance what-so-ever, you would have total chaos!

So the User-centric EA view is that we put the user front and center in the decision process. We work diligently and ongoingly to understand user requirements. And as architects, we work to satisfy those requirements by rationalizing them, enforcing enterprise standards, developing enterprise solutions, and looking out for the greater good of the enterprise. This is the great EA balancing act!