Enterprises have evolved from simple one-person operations performing single product design and development at one location for a local market of tens or maybe a few hundred customers to complex enterprises designing complex products produced at multiple geographically dispersed operations. As this evolution progressed, the ability to know and understand what was happening in the offices, factories, warehouses, and sales offices became a management challenge.
In the early stage of this evolution, the proprietor practiced line-of-sight management. Each day the proprietor, and maybe a few employees went to work, always working to produce a product, engaging with customers, continually being in a position to know, in real-time, the inventory of materials needed to make the product, who the customers were, how many orders they had and when the product deliveries were due. At the end of each day, it was relatively easy to determine if there was an excess of revenue over costs.
As enterprises grew and became more complex, increasing amounts of resources were required to support the ability of enterprises to produce their products and services. Initially, the way for enterprises to increase its output and sales was to increase the numbers of people required to perform the business processes to produce more products and services.
During the last half of the 20th century the advances in automation technology dramatically began to change the equation between enterprise human resources and the work that needed to be performed. Not only could these advances in technology perform office and factory business processes faster, but error free. An enterprise could also vary the output without adding a full complement of resources to add another hour of work without the additional cost of another person. Theoretically, they could add an entire eight-hour shift without adding another person to their payroll. The tradeoff was between capital expenditures and labor expense. The introduction of the concept of depreciation of assets made the capital expenditures the preferred choice. When the depreciation expense per hour or unit produced was less than the cost of human labor per hour or per unit produced, automation technology became the path to lower cost, perhaps better quality, and increased efficiency. This led to phenomenal growth in the factory automation.
As enterprises grew and became larger and more complex, management’s ability to practice line-of-sight management became impossible. It also became harder for a group of people performing one process to communicate with another group of people performing preceding or succeeding processes.
People working in complex enterprises need a robust enterprise universe of discourse, data that is, to be a surrogate for their ability to practice line-of-sight- management. That universe of data needs to be collected, recorded, preserved, available, and accessible. The universe of discourse consists of the data that records the existence and actions of the enterprise because it is the raw material for enterprise information and knowledge!
Enterprise changes have often been incremental, piecemeal, reactions to changes and problems, often by trial-and-error, unnecessarily costly, and disruptive to other parts of the enterprise. In other words, change has not always been achieved effectively and efficiently. Fundamentally, there was no structure. Without a structure for managing change, it is difficult to manage change!
Significant progress has been achieved by applying automation technology in the production of products and services and in the administration of an enterprise. However, significant issues such as alignment, integration, flexibility, and responsiveness have accompanied this progress.
More specifically, these issues are expressed as:
required data not available or accessible
high maintenance costs and time
too often fails to meet requirements
takes too long,
costs too much,
difficult to change
Why, after decades of advances in automation technology and IT practices, do the issues of alignment, integration, flexibility, responsiveness, cost, and lead time persist.
Enterprise Architecture can, if done well, provide solutions to these issues!