Why Enterprise Architecture Matters

What can enterprise architecture do for today's insurance operations?

The Open Group, an advocacy and learning organization for enterprise architects, just wrapped up one of its annual confabs in San Francisco, and in this era in which companies are leaning heavily on IT to deliver competitive advantage, enterprise architects form the bridge between business and IT. Actually, up until a few years ago, most organizations did not have enterprise architects.

Open Group executives say enterprise architecture will be front and center this year. Kevin Daley of IBM and vice-chair of The Open Group Business Forum, says EA will guide efforts to bring together the cloud, consumer IT, the Internet of Things, Big Data and the ERP resurgence. “Cloud will help increase the speed of development and change,” says Daley. “The business architect will be called upon to ensure the strategic relevancy of transformation in a repeatable fashion as cycle times and rollouts happen faster.” As for consumer IT trends such as social networking and mobile computing, “the business architect will help develop new strategies as organizations strive for new markets and broader demographic reach.”

There will also be less reliance on core IT services, Open Group predicts. This will bring an increased expectation of “I’ll buy the services, you show me know to knit them in” as the prevalent user approach to IT, observes Dave Lounsbury, CTO. This will require “increased attention to use of standards conformance.” IT departments will change from being “the only service providers within organizations to being a guiding force when it comes to core business processes, with IT budgets being impacted.”

EA best practices are already a part of some leading insurance organizations. Madeline Weiss, director of the Advanced Practices Council, a research-based forum for senior IT executives sponsored by the Society for Information Management (SIM), recently published details about the enterprise architecture initiative at Chubb Insurance.

“Chubb’s 10-year journey towards comprehensive EA that enables the firm to move confidently into a world of rapidly changing markets and technologies is not completed,” Weiss relates. “But it serves as an excellent example of the benefits of investing in EA, especially in a federated organization with multiple lines of business accustomed to operating independently.”

Patrick Sullivan, Chubb’s chief architect, points out that Chubb's EA “mirrors its federated business structure.” Chubb's EA strategy is based on a technology rationalization road map, “which provides a long range view of the technology portfolio to reduce redundant, obsolete or deficient technologies, and targets emerging technologies in a consistent manner.” In addition the company's EA includes an application rationalization roadmap and project portfolio analysis.

Chubb has seen some impressive benefits as a result of its EA efforts, including “opportunities to share common tools and processes across lines of business, thereby reducing costs.” In one example, EA saved Chubb $600,000 in 2010 by redistributing unused site licenses for software, says Sullivan. Even more importantly, Chubb now has an investment roadmap that provides transparency into IT decisions across the company.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

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