What insurers need from enterprise architecture teams

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The enterprise architecture function in large organizations can take many forms and serve many purposes. In the insurance and financial services industries, the need to preserve and secure existing enterprise technology investments must be balanced with ever-shifting consumer expectations to offer new products and services.

The effective application of an Enterprise Architecture organization can help to achieve this balance in many ways. I have spent a couple of decades working both within and with enterprise architecture organizations. After some roundtable discussions with peers at a recent conference, I reflected on the types of business value that EA organizations provide, as well as the risks experienced by each type.

Regardless of their charter or foundational intent, I have found that the benefits that EA organizations provide to the business fall into three categories:

Strategic. These EA teams are truly looking across the enterprise and into the future. They constantly examine the dynamics of the business environment to determine how those opportunities can be combined with changes in technology to drive the future of the company. They are partnered with business development teams and are often responsible for "innovation" projects in which new technologies' application to new business models are prototyped or explored via limited Proofs of Concept. One risk associated with this type of EA organization is that they can spend so much time looking into the future that they fail to contribute to the company’s immediate business needs.

Governing & Guiding. EAs of this sort establish standards and guidelines for how the organization will acquire and implement business technology. This includes activities such as developing IT product/tooling evaluation procedures, establishing standards for the use of 3rd party technologies, and fostering centers of excellence to aid in the implementation of new technology investments. Unlike the Strategic team mentioned above, they focus more on developments in the technology space and spend less time examining business trends. These organizations run the risk of being perceived as “ivory towers” that produce a lot of process, opinions, academic artifacts, and guidance; but can be completely ignored by the business in favor of more rapid (although less strategic and less “enterprise”) solutions.

Tactical. This EA organization may begin as one of the other two types. At some point pragmatic leadership dispersed this team of experienced professionals across the organization into IT units responsible for specific elements of the enterprise's businesses. They provide departmental or divisional application development/evolution and business technology leadership to their respective units. They often constitute a leadership body of sorts that leads or mediates technology decisions and how new techniques or investments can be applied in the enterprise. This type of organization runs the risk of being relegated to the sidelines when it comes to strategic decisions due to their focus on the technical leadership of day to day projects.

Naturally, a hybrid of these may also exist, but I have found that most EA functions generally settle into one of these three. Regardless of the type of value, it is important to keep in mind that each type does in fact serve an important function and therefore provides value to the business. This keeps them from becoming the fourth kind of EA organization that I have encountered far too often - ones that are disbanded for providing no perceived business value to the company.

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Data architecture