THE ENTERPRISE ARCHITECTURE INFLUENCE ON THE DIGITALIZATION OF BUSINESS MODELS UNDER THE SOCIOMATERIALITY LENSES
Status: Accepted and presented in 10th Organizations, Artifacts & Practices (OAP) workshop 2020
Keywords: Enterprise Architecture; Digital Economy; Sociomateriality; TOGAF.
For at least two decades an accelerated evolution in business models can be observed, and one of the main channels that allowed this progress is the so called “digitalization phenomenon” in the economy, as recently described by Medvedkina and Medvedkin (2019); Trotta and Garengo (2018); Neumeier, Wolf and Oesterle (2017), among others. Digitalization phenomenon is understood as a change in the business environment driven by the advances convergence in human communication, computing and content. This leads us to rethink the traditional economics definitions, wealth creation, business organizations and other institutional structures, based on a scenario that makes access to information and flexible environments breath and ease, as an opportunity to boost creativity and, consequently, establishing new contribution to wealth creation and social development (Tapscott, 1996).
The first challenge to be considered when some business model undergoes a digital transformation is the need to express ontologies in an organized and structured way, and, for that, some software and processes can be the key to succeed. In this context, the “Enterprise Architecture” stands out, as it makes possible to identify and communicate “components structure, their interrelations and the principles and guidelines that govern their design and evolution over time” (The Open Group, 2018). One of the Open Group goals is to create a unified and established Information Technology (IT) environment relying on standardized hardware and software systems as defining governance principles to guide business strategies. These guidelines represent best practices in business, budget and strategy areas, whose determination becomes the main objective of a whole business architects’ community, through the TOGAF framework (The Open Group Architecture Framework) - an open platform for development and improvement all interested parties.
In Information Technology (IT) research area, the phenomenon of business models digitalization has been studied by the Digital Economy, which encompasses economic and social activities that are activated by platforms as the internet, mobile and sensor networks, including e-commerce., and also other technologies groups that have supported the revolution in electrical, chemical, energy, pharmaceutical, IT, transportation and telecommunications sectors (Valenduc & Vendramin, 2016).
From this perspective, the results identified aim to improve activities and processes through the Business Architecture, offering high-level language requirements and details for formulating libraries and defining communication flows. Thus, in this work, under the theoretical of sociomateriality lens, we propose an alternative to social determinism while literature and theoretical framework allow us to discuss about organizational strategies without resorting to technological determinism.
Although Information and Communication Technologies (ICTs) are often associated with "intangible" assets (social media, cloud, etc.), they are not considered immaterial, as they alter the material reality that involves people, organizations and society (Orlikowski, 2007). This work is based on the assumption that the greater the alignment of an organization with Enterprise Architecture practices, the greater the level of digitalization when delivering products and services.
Our empirical strategy is based on the Enterprise Architecture Maturity levels model (Hite, 2002; Périe, 2014; The Open Group, 2018) and the Digital Economy model (Gill & VanBoskirk, 2016).
We then applied two complementary strategies to address the level of sociomaterialization process, as a result of the interaction of people action, available technologies and the social context in which these processes occur Orlikowski, 2007; Orlikowski & Iacono, 2001; Orlikowski & Scott, 2008).
Our research took place between the months of April and May 2019. We first defined a sample of 1,300 professionals through LinkedIn, of which 92 specialists contributed to the survey, featuring a 7% response rate. The survey responses were analyzed using multivariate analysis techniques (ANOVA), and we found no statistical significance in the correlation between higher levels of maturity in the corporate architecture and the high level of maturity in the digital economy.
We then used a second approach based on the data obtained in the survey and the theoretical model previously developed. We run a Focus Group, lasting approximately 1h30, with 8 professionals (directors, managers and senior specialists) who use corporate architecture and are involved in digitalization of products and services. The Focus Group started from the premise that Information and Communication Technologies, despite being associated with "intangible" assets, are capable of influencing material reality by involving people, organizations and society, considering that sociomateriality would be the channel that explains a positive correlation between EA Maturity and Digital Maturity.
Regarding EA Maturity, the factors that influence the use of EA were investigated. Evidence presented by the Focus Group participants suggests that the biggest barrier to the implementation of EA is culture. It was also identified that organizational beliefs and values, which are important elements for such an influence to occur, may be affected by the beliefs and values from the leaders in each organization, especially those with a higher degree of specialization, whether associated with the use of EA or of Digital Maturity. It is also important to consider the relevance of material resources, so that these levels rise in the sociomaterial context.
The perception of the Focus Group participants is that EA may have a significant influence on the digitalization of products and services, however, in order for this to happen, more sponsorship from top management is demanded during the process. This finding is consistent to Pickering (1993) who states that the technology is not ready, but shaped by human beings located in a network of relationships and artifacts. It is also aligned with the work of Schneider et al. (1998), who considers that values of the precursor, and culture, influence the entire organization and lead to relative isonomy in the profiles of the organization's members. The lack of investments in communication and more efficient ways of establishing a holistic approach to transmit the message between departments are also considered points that can lead to a lack of proper implementation.
In summary, we can conclude that the material agency emerges through dynamics that are “situated within a space of human purposes, objectives and plans” (Pickering, 1993, p. 20), which leads to reflect on the importance of living with several technological variables in a complex context, including the software failures themselves. Also, the Enterprise Architecture can contribute to an efficient adoption of digital business models, however, the involvement of top management is essential for the process to be successful, improve communication and reduce the existence of organizational silos (human agency) (Orlikowski, 2007; Orlikowski & Iacono, 2001; Orlikowski & Scott, 2008).
Limitations of this study can be considered: the short period of time in which the research was carried out (approximately 60 days), the establishment of the sample for convenience, and some limitations arising from the use of a social network (LinkedIn) to establish the target population.
We suggest conducting further studies that deepen the central issue addressed in this article and clarify other issues related to the theme, as: applications in specific sectors of the economy, comparison between companies of different levels of maturity, cultures, governance and share control.
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