Using Enterprise Architecture to Cope with Chaos in the Markets
The first few months of 2025 have seen an upheaval in the established political and economic landscape that would have seemed unthinkable not so long ago. Some commentators have characterised this as a rapid and radical shift from a rules-based to a power-based world order. Extreme volatility in the financial markets signals that there is no sign of a let-up in this change, nor of course in the consequential disruptive impacts on both business and life in general.
Business managers in many countries have responded to this emerging new reality by curtailing investment plans and focusing on urgent, short-term measures to protect their companies’ interests. For their part, many governments are now seeking ways of switching expenditure from social welfare and ‘green’ programmes to newly critical areas such as defence, security and transport infrastructure. Yesterday’s priorities no longer seem so relevant.
In the midst of all this upheaval, spending time and money on enterprise architecture (EA) may seem to be an unnecessary luxury – something to be put on the back burner until things settle down. In truth, the opposite is the case. It is exactly at times of crisis like this when judicious use of enterprise architecture can really make a difference. To understand why, we need to consider the typical concerns of senior executives in this situation:
- How viable and resilient is our current business operating model in the face of unpredictable, externally imposed measures such as swingeing tariffs?
- Is our business sufficiently well-protected against hostile acts by malicious agents, including damage to critical infrastructure or public services on which we rely?
- How can we best redeploy our existing assets to meet the new challenges?
Smart organisations will set up task forces, first to assess the vulnerability of their business operations to the potential impacts of the new trading realities, and then to recommend remedial actions that answer the points listed above. But the first challenge facing such a task force will be to assess the existing business and IT capabilities. If there is a lack of reliable knowledge of the business model, including the skills, processes, data and systems that underpin it, then the task force will be hugely disadvantaged. The measures they recommend are likely to be suboptimal, and at worst they could be inadvertently damaging to the business.
A well-crafted, comprehensive, up-to-date model of the current state of the enterprise will clearly address this problem. Unfortunately, most organisations will not have ready access to such an ideal model, and even if they had the resources, it is unlikely that they could conjure one up quickly enough to meet such an urgent set of needs.
The good news is that it should not be necessary to rely on having granular data on all aspects of the business to make progress. A top-down scan of the business should be enough to identify those areas of maximum vulnerability, and these are the aspects where a more detailed drill-down into the processes and systems will be warranted. Some of these areas may well have been covered by business change projects that are sufficiently recent for their documentation still to be relevant. Even if the required information has not been recorded in an enterprise architecture repository, it may exist in spreadsheets.
In short, what is needed is a rigorous enterprise architecture approach to the problem:
- Identify the areas of business vulnerability with the help of a cross-business team
- Find out what relevant information is already available and tidy it up as necessary
- Fill in the information gaps as far as possible
- Load the information into an EA repository, ensuring that critical linkages are captured
- Produce appropriate management reports to support remedial action programmes
Finally, organisations striving to survive and succeed in this turbulent business environment will be keen to rationalise their operations by cutting costs, avoiding unnecessary duplication and ditching unproductive initiatives:
- How can we give ourselves room to manoeuvre by taking x% out of our cost base at minimum risk to the business?
Such rationalisation exercises are of course a classic area for the use of EA, as they also require reliable knowledge of the current business operating model. Enterprise Architects: Your Business Needs You!
If you’d like to discuss how Essential can support your organisation to manage market chaos, contact us here.