Business Value of EA
Reducing Costs is a major concern for many organizations. On the other hand, one of the major objectives of governance in organizations is to optimize the created Value. An accurate evaluation of the created Value is therefore a crucial metric in measuring Governance efficiency.
Value and Costs are therefore key elements in monitoring organization performance.
Since Enterprise Transformation decisions (corresponding to projects) are mainly based on a comparison between the expected future revenue and the investment plus future operation costs, many organizations have set up project assessment approaches.
During the last years, all CEISAR sponsors have rolled out such approaches mainly relying on “business cases” assessing the projects' revenue and costs.
However, these approaches are often just limited to the estimation of costs and value of projects, providing a dynamic point of View of the value created. But, the value of an Enterprise System must also be analyzed from a static perspective and an Assets point of View: the real value of an Enterprise System at a given time, regardless of any project, which is clearly related to the concept of Enterprise Intellectual Capital.
These two points of View, “static” / “dynamic”, match the “operate” / “transform” Activities of an Enterprise System. Furthermore, the projects, from the dynamic point of View, also have an impact on the future value of assets, from the static point of View.
Because they are often aimed at managing investments by prioritizing among various projects, approaches for the dynamic point of View have been much more developed than for the static point of View.
Nevertheless, the static point of View is currently gaining momentum as confirmed, for example, by the creation of the “Intellectual Capital Observatory” (Observatoire de l’Immatériel) in France.
This document gives an overview of the various approaches allowing assessment of the costs and values of projects from the dynamic point of View, and the costs and values of assets from the static point of View.
It also underlines the importance of assessing the Costs/ Value of Enterprise Architecture as well as the Costs / Value of Solutions. Enterprise Architecture value must also be analyzed beyond the value of IT. Indeed, Enterprise Architecture embraces business Processes, organization and IT systems supporting these Processes and focuses on what is reusable or what can be shared.
As described later in this document, the maturity level for assessing project Costs and Value is much higher than that for assessing the value of assets. Proposing a structured assessment approach and Model for the latter could be the subject of a new White Paper bringing together the valuable contributions of the CEISAR sponsors.
Most of the concepts developped on this website are further developped in our white papers. You can download any white paper freely. Please do not re-use without explicit permission.
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