Key Enterprise Architecture Measurements

Enterprise Architecture is still an emerging field. We need to closely work with our stakeholder (customer, enterprise organization ) as part of EA programme and understand the KPI that we need to measure.

Here are a few metrics that might work:

Strategic

1. IT Total Cost of Ownership (TCO) as a Percentage of Revenue

One of EA's value propositions is reducing costs by leveraging common solutions and rationalizing processes, technology and data. This metric is key to the business value achieved by the IT stack. It has appeal to business stakeholders and allows IT costs to be compared with industry or regional averages. Example: The total cost of ownership of IT is 4.8% of revenue.

2. Total Cost Savings (TCS)

Often EA is able to achieve cost savings by: - retiring a legacy system - consolidating licensing - introducing common shared services - rationalizing infrastructure investment

Retiring legacy systems, consolidating licenses, modernizing and rationalizing applications, standardizing IT infrastructure, or migrating to the cloud. etc... If the EA team can deliver cost savings on a regular basis — Total Cost Savings is a meaningful metric for EA. Example: EA initiatives saved the organization 5.2 million dollars this quarter.

3. Common Services Compliance Rate (CSCR)

Enterprise Architecture often defines common services such as ESB, BPM, Infrastructure platforms etc... The CSCR measures the percentage of new projects that are fully compliant with the common service roadmap. Example: 67% of projects complied with EA's common service strategy this year.

4. Architectural Due Diligence Rate (ADDR)

The percentage of projects that are fully compliant with the EA governance process. A EA governance process involves steps such as updating EA blueprints, architectural reviews and macro design. ADDR is a good metric for reporting violations of the EA process. It is often helpful to report ADDR by business unit, technology silo or project manager — to highlight problem areas. Example: 78% of operations department projects complied with EA governance but only 12% of sales department projects were in compliance.

6. Sunset Technology (ST)

Percentage of the technology stack that is considered sunset by EA. Measures IT's ability to introduce strategic technology and retire legacy systems. Example: At the end of the year 54% of production systems were deemed sunset technologies. This compares with 62% last year.

7. Business Specific

Manage EA with specific metrics aligned with your business strategy and goals. Examples include: - reducing time to market for launching new products - reducing human error rates - speeding up order delivery - reducing IT costs - reducing severity and frequency of security incidents Example: average time to market for introducing a new product decreased from 5.8 months last year to 4.9 months this year.

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.

See the LeanIX EAM calculator for an estimate of how much EA could save your organization with faster IT project starts.

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.

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?

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.

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.

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.

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.

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.

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