Monday, November 02, 2009

Enterprise Architecture and Economics

@jpmorgenthal lays out the reason why enterprise architects should study economics.

But he is not talking about your grandmother's economics. He is particularly impressed by the precise evidence-based insights of the Freakonomics project, and points out the failures of established "best practice" in the economics field.

"Stephen Levitt undermines what many other Economists, experts and pundits before him rolled out as proven facts and only due to his keen mind and his approach to formulating the problem domain was he able to uncover that which his peers could not."

JP also points out the need for evidence-based decisions to be grounded in the specifics of the problem domain.

"It is the Enterprise Architect's role to ensure that the selection and approaches toward development of systems are sound relative to their business, not just other businesses. Moreover, where decisions are based on the work of other businesses' success, those successes need to be properly vetted to ensure that there is enough commonality between efforts, such that you could make the leap that your business will see similar results. Finally, assumptions and theories need to be tested by properly identifying the variables that need to remain static and then comparing; in essence normalizing the question to be homogenous in all situations."
"You cannot demonstrate the value of Enterprise Architecture if you cannot monetize or enumerate the value of all possible choices relative to the choices that are being recommended or those that have been made. Moreover, it's critical that these analyses are carried out over enough time that short-term wins don't supersede long-term potential gains."

I completely agree with JP's demands, but I wonder how many economics courses you could learn these skills from.

JP concludes

"It is here that Enterprise Architects, especially those we call Chief Architects, truly show their mettle. It is their experience, coupled with the ability to focus on the right set of variables, understanding the impact of change of those variables and being able to communicate that in a way that allows the business to make effective business decisions, which sets top notch practioners apart from Sr. Software Engineers that the organization placated with a title to keep them happy so they wouldn't leave."

So what is the combined market share of EAs with these skills? A tiny fraction of a percent? And what would be the implications of this percentage on IT decisions?

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