Enterprise Architecture

A Pragmatic Approach Using PEAF

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The work undertaken in any project can be thought of consisting of three fundamental types:

¨      Compliant Work - Work that complies with Guidance. Generally the most effective, most efficient and least risky manner of achieving an end.

¨      Non-Compliant Work - Work that contravenes Guidance. Generally less effective, less efficient and more risky manner of achieving an end.

¨      Remedial Work - Work that exists to correct previous Tactical Work (i.e. changing previous Tactical work into Strategic Work)

Guidance here refers to the Structural (MACE) and Transformational (MAGMA) information dependant on the phase of the Transformation cascade we are in.

Here we see the Transformation Debt Ratio™ (TDR) for the projects in the currently executing Project Portfolio. TDR is the ratio (adding up to 1.0 or 100%) of Compliant vs Non-Compliant vs Remedial work in any project. Each project has a different ratio of Compliant vs Non-Compliant vs Remedial work.

Non-Compliant  work is essentially a shortcut, and while a dictionary definition of a shortcut sounds quite positive and inviting:

1 :  a route more direct than the one ordinarily taken

2 :  a method or means of doing something more directly and quickly than and often not so thoroughly as by ordinary procedure <a shortcut to success>

- Merriam-Webster

In the business world the following is more true:

“A shortcut is the longest distance between two points.”

- Issawi's Law of the Path of Progress

Add to this the following…

“Nothing is permanent, except for temporary solutions.”

- Jeroen van de Kamp

…and you can perhaps begin to see why Enterprises not only naturally decay into entropy over time but how uninformed management decisions actively encourage and hasten it.

If the work in a project complies with all Guidance (aka is Compliant) then we have no problems. If not and some work does not comply with some Guidance (aka is Non-Compliant) then a Transformation Debt™ Agreement (TDA) is created. The TDA details three things:

¨      Cost of Compliance - What is preventing the project from complying with the guidance and what does the project need to be given to allow the project to comply and therefore convert the work from Non-Compliant to Compliant.

¨      Cost of Non-Compliance - What issues and risks going forward will this Non-Compliance create for the Enterprise.

¨      Cost of Remediation - What will it cost the Enterprise to become Compliant in the future (assuming the project is not allowed to do what is required now to become Compliant).

In simple terms:

¨      The Cost of Compliance - What will it cost the project to do the right things now.

If the project is not granted the Cost of Compliance:

¨      The Cost of Non-Compliance - What pain will the Enterprise have to endure going forward, until we incur

¨      The Cost of Remediation - What will it cost the Enterprise later to fix it.

But why is it called an “Agreement” rather than an “Assessment” or “Waiver” or something else?

Originally Pragmatic call it a “Waiver”, but that word did not truly reflect what it was. The reason we call it a Transformation Debt™ Agreement, is because it really is an agreement! An agreement by management that they agree to provide the resources required to satisfy the guidance, or that they agree to accept the recurring cost of non-compliance and potentially the future cost of remediation. Another way to think about it, since it is possibly incurring debt, it is similar to a loan agreement, where you detail the loan amount, what the interest is, and what it will cost to pay off the loan in the future.

Having defined this information, a business decision can then be made to either provide what is required now or accept the pain we will have to endure going forward AND the costs of fixing it later. This is what sits at the heart of Governance and Lobbying.

Since a project that is Non-Compliant with guidance while the project is executing could become Compliant at any time before the project ends, only when a project completes will we know how many TDAs have been issued and the Transformation Debt™ being created in the form of the Cost of Non-Compliance that the Tactical work created and the Cost of Remediation to correct that Tactical work in the future.

At that point in time the Cost of Non-Compliance that the Non-Compliant work created and the Cost of Remediation to correct that Non-Compliant work in the future can be added to the Transformation Debt™ for the whole Enterprise.

In effect the Cost of Non-Compliance is akin to paying interest on the Debt we have incurred, while the Cost of Remediation (if spent) is akin to paying off the Debt.

When you incur Transformation Debt™, you are selling tomorrow, to get through today.

 

Questions to ponder...

Does your Enterprise think about how Transformation work is carried out in terms of Compliant vs Non-Compliant vs Remedial?

When projects currently do not comply with guidance, what happens?

Does your Enterprise keep track of how much Transformation Debt™ your Transformation projects are creating?

When projects currently do not comply with guidance, is some kind of Transformation Debt Agreement (TDA) issued?

If not, how are valid and sound business decisions made?

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