RESOURCE PORTFOLIO OPTIMIZATION

“The extent to which an organisation leverages its existing resources, invests in resources that target performance gaps, and minimises unnecessary investments in duplicated resources” (Tamm et al., 2011).

The definition refers to organizational resources, which is an ambiguous term. For EA, the most important resources are human resources, IT and organizational processes. Optimization might therefore refer to the removal of non-value-adding human or technology resources and/or replacing them with resources that suit the achievement of organizational goals better (Tamm et al., 2011).

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The mentioned optimizations may be realized in a number of areas. Firstly, the analysis of the baseline state of the organization may lead to the identification of redundant or suboptimal resources. Literature suggests that EA solution implementation projects contribute to optimization through the unification and integration of such resources (Boh & Yellin, 2007; Brown, 2004; Espinosa, Boh, & DeLone, 2011; Ross et al., 2006; Shah & Kourdi, 2007; Spewak & Hill, 1993; van Steenbergen et al., 2011). Additionally, the use of principles, standards, rules and guidelines promotes the use of standards which contributes to the unification and integration of resources (Boh & Yellin, 2007; Spewak & Hill, 1993). Van Steenbergen et al. (2011) showed that such standardization and integration is also supported by EA knowledge management and Compliancy Verification activities. Secondly, because EA staff documents many aspects of their work as well as aspects of the organization, the risk of missing information due to replacement of personnel is significantly decreased (Iyer & Gottlieb, 2004). EA also helps in structuring resources in a way which promotes and facilitates reuse of components (Espinosa et al., 2011). This makes removing redundancy, automation and/or replacement of individual components easier and speeds up solution delivery time (Brown, 2004; Espinosa et al., 2011; Ross et al., 2006). Finally, EA improves the IT landscape by providing a higher visibility of legacy components as well as a clear view of the target architecture. (Espinosa et al., 2011; van Steenbergen et al., 2011).

The relationships as identified above are visualised in Figure 14.

THE IMPACT OF ENTERPRISE ARCHITECTURE ON BUSINESS PERFORMANCE by ERIK BOOKHOLT PAGE 25 RESOURCE COMPLEMENTARITY

“The extent to which the organisation‘s resources synergistically support the pursuit of its strategic goals” (Tamm et al., 2011).

This last category of benefit enablers is seemingly similar to the previous one. However, where the previous category refers to optimising resources by removing redundancy, this category refers to combining these resources in new and unique ways. Such unique combinations are claimed to provide a company with a competitive advantage according to the theory of the Resource-Based- View (Amit & Schoemaker, 1993). This is caused by two aspects: first, the difficulty to imitate complex configurations of resources due to causal ambiguity (Lippman & Rumelt, 1982) and second, the reinforcing nature of complementary resources (Porter, 1996).

The Role of EA

EA helps in this regard first and foremost by identifying possible synergies and providing a roadmap to accomplish these (Prahalad & Hamel, 1990). Similar to the previous category, this originates from the holistic view of the enterprise which EA takes and the resulting insights into the relations of its resources. This insight results mainly from the EA Development activities in which the current and target state are examined (Bernard, 2012; Gregor et al., 2007). Furthermore, EAs involvement across many projects allows further synergies to be identified and realized (Espinosa et al., 2011). This refers to the EA Realization activities in which EA staff consults projects as well as the Compliancy Verification and exception handling activities.

Identifying and realizing such synergies results in what Henderson & Clark (1990) called an ‘architectural innovation’: an improvement in a system caused by an enhanced reconfiguration of components. EA helps to realize these improvements which eventually supports a firm’s innovation (Lange & Mendling, 2011). The relationships as identified above are visualised in Figure 15.

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2.4

EA Contribution to Business Performance

This section discusses the benefits of EA which have an impact on business performance. This includes how the benefit enablers influence business performance.

The impact of EA on business performance can be defined in different ways. This thesis has derived its structure from the semantically similar concept of business objectives. A well- known approach to structuring business objectives is the Balanced Score Card (BSC) of Kaplan and Norton (Kaplan & Norton, 1996). They propose four perspectives that group similar business objectives. A business objective is a goal which an organization strives to attain because it will positively impact business performance (for example “reduce operational costs by 5 %”). A benefit of EA is semantically similar as it is also a desirable organizational result (for example: cost reduction as a result of process optimizations). Although syntactically different, the underlying effect on the organization is similar: it takes less money to operate the business. This example illustrates the similarity of the ‘business objectives’ and ‘EA Contribution to Business Performance’ concepts. Therefore the BSC structure is deemed to be appropriate to structure EA benefits. This notion is supported by Boucharas et al. (2010) and Plessius, Slot, & Pruijt (2012), which both used a similar approach. Each of the following sections first introduces the BSC perspective and then continues with an explanation of the corresponding EA benefits which have impact on Business Performance. Figure 16 presents an overview of all benefits. Every section ends with a visual model of the identified relationships. The notation of these models is identical to the notation used in the previous section. The numbers in the circles and ovals refer to references in Table 6 on page 32, which presents an overview of all relationships and the corresponding research. A circle concerns exactly one relationship, while an oval indicates that the source(s) describe multiple relationships. Arrows without a number denote a relationship for which indications were found in literature but not enough evidence was found to attribute it to specific authors. They are included in the figures to provide a complete overview, but they are not included in Table 6 and not used any further in this thesis.