High inflation and a looming recession are causing large companies to tighten their purse strings and cut costs. The cost-cutting is often indiscriminate and results in adverse outcomes far beyond expectations. Companies can leverage enterprise architecture during economic turbulence. Here are ten ideas on how to rely on enterprise architecture during economic turbulence.

Enterprise Architecture during Economic Turbulence

1. Strategic Planning: Enterprise Architecture (EA) can enable strategic planning by aligning business objectives with IT strategies. The rationale here is to ensure that the IT infrastructure evolves in sync with business requirements, reducing the wastage of resources. The first step is to identify key business objectives and the current state of IT. Then, create an EA blueprint detailing the roadmap. For instance, when Nordstrom wanted to transition from a traditional retailer to a digital platform, it used EA to align its IT capabilities with its strategic goal, leading to streamlined operations and cost savings.
2. Rationalization of IT Assets: EA can help manage the IT portfolio and rationalization, eliminating redundancy and lowering costs. This involves analyzing all IT assets (hardware, software, and services) to identify areas of overlap or underuse. In the late 2000s, Procter & Gamble used EA to rationalize their global IT landscape, which led to significant savings.
3. Risk Management: EA assists in understanding and managing risks associated with technology changes, which is particularly important in uncertain times. It can identify potential threats to business continuity and provide strategic response plans. In 2012, Bank of America used EA to create a new risk framework, which improved risk management efficiency.
4. Innovation Management: EA can foster innovation by identifying and prioritizing potential technology investment areas. The idea is to align innovative technologies with business objectives. Companies can use EA to identify areas where AI or IoT could create value. IBM has been using EA to manage its technology innovation for years, maintaining its position as a technology leader.
5. Operational Efficiency: EA can enhance operational efficiency by streamlining processes and systems. It involves identifying bottlenecks in existing operations and mapping out efficient alternatives. For example, FedEx used EA to redesign its package tracking system, making it more efficient and customer-friendly.
6. Vendor Management: EA can improve vendor management by establishing standardized procurement processes. It can help identify which vendor services are essential or redundant and how contracts can be negotiated for better value. A leading telecom provider used EA to manage hundreds of vendors, saving millions in vendor costs.
7. Business Process Reengineering: EA can lead to significant cost savings through business process reengineering (BPR). It involves analyzing the current state of business processes, identifying areas for improvement, and redesigning them for optimization. Ford Motor Company used EA in the 1980s to reengineer its procurement process, saving billions in cost.
8. Data Governance: EA can provide a framework for data governance, ensuring the quality and security of data while reducing redundancy. Companies can start by creating a data architecture, including policies and procedures for data management. A healthcare company used EA for data governance, resulting in better patient data management and regulatory compliance.
9. Customer Experience Management: EA can improve the customer experience by integrating customer touchpoints across the enterprise. This involves mapping the customer journey and identifying ways to enhance the experience at each touchpoint. Starbucks used EA to integrate its customer experience across physical and digital touchpoints, increasing customer satisfaction and loyalty.
10. Resource Optimization: Lastly, EA can optimize the allocation of resources, both human and technological, ensuring that the right resources are deployed for the right tasks. This involves creating a resource allocation plan aligned with the business strategy. A global manufacturing company used EA to optimize its resources, improving productivity and cost savings.