Enterprise architecture tends to be misunderstood and marginalized. Yet, any organizations that wants to adopt lean principles and move successfully into the digital era needs enterprise architecture and architects to provide the essential guidance and governance to make the right technology choices.
McKinsey recently published a report that points out that EA tends to be shoved off into a corner, often discounted as another branch of IT. Companies tend not to provide EAs the leverage to influence overall IT or business strategy. "Companies should give EA departments more responsibility for certain big-picture decisions -- for instance, approving new IT-related projects or changes to the technology landscape," the report advocates. To overcome organizational inertia, EA proponents need to identify executives or professionals who can step up to leadership roles and challenge the business to develop a greater vision and cohesion for its information technology strategy.
The good news is that some insurance companies get it, and are leading examples for others, both within and outside the industry. One such company is The Chubb Group of Insurance Companies, which has taken enterprise architecture to a whole new level. In an MIS Quarterly article co-authored by Heather A. Smith of Queens University and Richard T. Watson of the University of Georgia, the role of EA in Chubb is explored.
At Chubb, EA plays a highly elevated role. “EA is integrated into almost every aspect of IT work and is at the forefront of every major new strategic initiative at Chubb,” Smith and Watson observe. “Its mission is nothing less than revolutionary, bringing coherence and structure to the formerly piecemeal approach to delivering technology and engaging the company’s most senior leaders in planning IT work.”
Chubb has always had a strong EA, but was recently transformed its approach – what they called a “target architecture” -- to provide more cohesiveness and a “bigger picture” to the organization’s various business lines. “Chubb’s historical, siloed approach to IT investment inhibited agility for several reasons, including misaligned IT and enterprise strategy, IT solutions built based on technology trends rather than desired business outcomes, duplication, and lack of coordination across individual business units,” Smith and Watson state. “EA was originally conceived as a federated function, drawing architects from Chubb’s seven lines of business.” However, the federated model made it difficult to get all business units on the same page.
The newer, more highly integrated approach to EA is providing Chubb a number of reported advantages. “First, it helps business with envisioning what they want to accomplish,” Smith and Watson point out. This involves working more closely with the business to recommend appropriate solutions. “For example, one line of business wanted an online function for agents to access some underwriting information, but [EAs] recognized a broader need to have a complete client account file.” Also, Chubb now has a stronger analytics capability that it has been able to build out with EA guidance. Chubb’s chief analytics officer “works with the enterprise architecture teams to help them understand the business need and incorporate an analytical way of thinking into their work.”
Enterprise architecture is critical to today’s increasingly digital insurer, as large technology investments will need to be continued to be made, and the business needs to drive these investments. EA is the bridge between business and technology.
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