>Home Depot and User-Centric Enterprise Architecture

>Operational efficiency can be the downfall of customer service.

Home Depot, with approximately $80 billion in sales is #22 on the Fortune 500. They are the world’s largest home improvement specialty retailer with over 2200 retail stores, and after Wal-Mart, they are the second largest retailer in the U.S.

Yet, Home Depot has been on a slide, according to Fortune Magazine, 29 September 2008.

“Over the past several years a trip to the big orange box has so often ended in frustration that the company once famous for its helpful employees became fodder for late-night TV jokes and home to hundreds of blog rants about bad experiences and disengaged or scarce employees.”

How has this affected business?

“On the University of Michigan’s American Customer Satisfaction Index, Home Depot fell eight points in seven years, to 67 at the end of 2007. It was the largest drop for any retailer in the index, while rival Lowe’s remained steady at 75…In this third year of decline, Home Depot’s same-store sales dropped 7.9% in 2008 second fiscal quarter; rival Lowe’s posted a 5.3% drop.”

What went wrong at Home Depot?

In 2000, Robert Nardelli of GE took over as CEO, acquired 30 companies and nearly doubled revenues, but he also imposed the rigorous GE style “systems- and data-culture, to help centralize purchasing and merchandising…[focusing] on growth and efficiency” and assessing store managers on 30 metrics, but “none related to customer service.”

Can you believe that Home Depot used 30 measures and NOT ONE had to do with customer service???

Unfortunately, says Ken Langone, one of the founders of Home Depot, Nardelli “didn’t appreciate the importance of a kid on the floor with an apron on.”

“The focus was on the metrics below the sales line, but not sales itself,” says a regional manager. “Stores became dirty, employees, surely or scarce. The result a company that looked better on paper, felt much unhappier in person. And in the retail business, where the customer experience is what matters most, that unhappiness eventually showed up at the cash register.”

Back to customer basics:

Now, under new CEO Frank Blake, Home Depot is returning to its customer-driven roots, and as a result they are closing the same-store sales gap with Lowes and stopping the slide in customer satisfaction. But regaining the trust of their customers will certainly be a challenge and a road to recovery.

As I read this story in Fortune about Home Depot and internalized it, I came to appreciate more than ever the duality and criticality of User-centric Enterprise Architecture (UCEA).

UCEA is not just developing the enterprise architecture with our users in mind (i.e. providing critical strategic information and governance services to the executive decision makers, line of business program and project managers, and IT professionals)—that is only one part. Perhaps the more critical element of User-centric EA is focusing the enterprise’s architecture on its customers. The way to continuously move the organization into the future is to always to focus and refocus on the organizations’ customers—on their needs, tastes, and continuous satisfaction.

The key is to align the business and technical architecture with customer needs. The organization will only succeed if its users are getting what they need and that is the architecture that must be developed and refined over time.

>IT Portfolio Management and Enterprise Architecture


“IT portfolio management is the application of systematic management to large classes of items managed by enterprise information technology (IT) capabilities. Examples of IT portfolios would be planned initiatives, projects, and ongoing IT services (such as application support). The promise of IT portfolio management is the quantification of previously mysterious IT efforts, enabling measurement and objective evaluation of investment scenarios.” (Wikipedial)

IT portfolio management is a way of categorizing IT investments and analyzing them to ensure sound IT investment decisions. IT portfolios are frequently evaluated in terms of their return, risk, alignment to strategy, technical merit, and diversification.

Why do we need IT portfolio management—why not just assess each project/investment on its own merit?

The added value of developing and evaluating IT portfolios is that you can ensure the diversification of your investments across applications and infrastructure; new systems/major enhancement to existing systems and operations and maintenance; new R&D, proof of concepts, prototypes, and pilots; between strategic, tactical, and operational needs, and across business functions.

ComputerWorld Magazine, 7 April 2008, reports that Hess Corp., a leading global independent energy company, developed creative IT portfolios based on three types of initiatives:

  1. Bs—“business applications or business process improvement effort that’s aimed at increasing revenue or generating cost savings.”
  2. Es—“enablers” or projects to support business applications such as business intelligence, analytical systems, master data management, systems integration.
  3. Ps—“process improvement within the IT organization itself” such as standardizing the approach to applications development (systems development life cycle), project management, performance management, IT governance, and so on.

From an enterprise architecture perspective, we develop the target architecture and transition plan and assess IT investments against that. Again, rather than develop targets and plans and conduct assessments based solely on individual investment alone, EA should look at the aggregate investments by IT portfolios to ensure that the EA plan and subsequent investments are properly diversified. An EA plan that is overweighted or underweighted in particular IT investment categories can have a negative to disastrous effect on the organization.

IT investments represent significant expenditures to organizations and IT is a strategic enabler to mission, so messing up the IT plan with poor investment targets and decisions is costly to the enterprise.

>Leadership, Change, and Enterprise Architecture


Enterprise architecture is about planning, managing, and measuring change in an organization. To effect change requires true leadership, and this requires multiple skills.

In the book, The Leadership Triad by Dale Zand, three essential forces of leadership are presented—knowledge, trust, and power. These leadership forces guide constructive organizational change.

“Like three horses pulling a chariot, these forces, if coordinated and working together, provide a swift and exhilarating ride. But if one force is mismanaged or pulls against the others, the ride is bumpy and can end in disaster.”

Effective leaders integrate the three forces of knowledge, trust, and power to drive effective change and maintain efficient operations in their organizations: “They know what should be done, they have the trust of their people, and they use power appropriately:

  1. Knowledge—“leaders know or can find out what should be done…they have vision and they know how to fulfill that vision. They set clear, challenging goals, and they know what needs to be done to reach the goals…they know how to gain access to the knowledge of others, and they know how to work with people to convert that knowledge into action.”
  2. Trust—“people trust effective…leaders, giving them loyalty and commitment… [They] earn trust by disclosing relevant information, sharing influence, and competently using knowledge. They earn trust by fairness in their dealings with others—fulfilling the spirit of their agreements, sharing rewards and hard times and not abusing their power.”
  3. Power—“leaders use their power appropriately. They know how to be directive or to delegate. They know how to review and evaluate constructively. They know how to be consultants, providing guidance rather than issuing commands.”

Why not just lead in a command and control fashion like in the military or law enforcement organization?

“The heroic fantasy of one person at the head of a column and followers shouting ‘charge’ as they mount the battlements is outdated. Instead leaders need to learn to use the sensing, searching, and thinking ability of all people within the organization.”

How are these leadership skills similar to those necessary for implementing enterprise architecture?

Knowledge, trust, and power are the cornerstones of an enterprise architecture program.

1. EA makes information transparent and provides information products to distribute knowledge and enable better decision-making. EA information is critical to decision-making, particularly in terms of ensuring sound IT investment management decisions, IT planning, analysis of problem areas—uncovering gaps, redundancies, inefficiencies, and opportunities–driving business process improvement, reengineering, and the introduction of new technologies to the organization.

“In the twentieth century society crossed…into the information age, marked by the emergence of the knowledge organization.”

“Competitive advantage in the information age is in constant jeopardy—knowledge is fluid, and creative thinkers leapfrog over existing knowledge.”

“Knowledge travels with the speed of thought, but can be blocked by the smallest emotional barrier. It can enlighten the entire organization’s operation, yet it can easily be concealed if people do not want leaders to see it. People throughout organizations continually acquire and create important, critical knowledge about customers, [suppliers], products, technology, costs, and competitors. But that knowledge can remain hidden and inaccessible to leaders. In the new world leaders need to liberate knowledge and creative thinking at all levels and in all corners of the organization. To compete, leaders need to move knowledge from where it is to where it can be used to define and achieve appropriate goals.”

EA helps to synthesize information and liberate knowledge to meet strategic goals.

2. EA is based on the trust of business and technical leaders and staff across the enterprise. EA synthesizes business and technology information. It relies on the trust of divisions, departments, and subject matter experts (SMEs) throughout the organization to share (and not hoard) information and build a results-driven, process-oriented, interoperable, standardized, cost-effective organization, rather than a siloed, ineffective one. In an EA-directed organization, siloed functions and management relinquish their own personal interests and perhaps, selfish motives and instead plan for the good of the overall organization. For example, decisions on IT investments are made based on enterprise priorities and cost-benefit-risk-architecture considerations, rather than who has the money to spend.

“Trust regulates the disclosure of information—how open people are with relevant information…trust regulates mutual influence—how receptive people are to each other’s goals and concerns, and trust regulates control—the intention to fulfill the spirit of a decision and willingness to rely on another person to implement her part of the decision.”

“Mistrust causes people to censor, delay, and distort relevant information. Social uncertainty compounds ambiguity, masks difficulties and deprives leaders of the opportunity to make high-quality decisions

3. The EA Board (chaired by the chief enterprise architect) ensures that proposed new IT projects, products, and standards align to and comply with the enterprise architecture. EA must have the power to mandate and enforce alignment and compliance or else the target architecture and transition plan is just a sham that will not yield enterprise results and achieve stated goals. Additionally, EA must have the ability to require SMEs to contribute regularly to the development, maintenance, and use of the EA. The business and technical SMEs are the owners of the EA content and must be partners with the EA team in ensuring that the architecture is kept current, accurate, and complete.

“Power is the ability to influence others so that they do or do not do something.”

“Leaders have legitimate power to determine the process by which decisions will be made.”

Knowledge, trust, and power are three dimensions of leadership that are the foundation for an effective EA program. EA ensures that the information needs of the organization are met in terms of business and technical baseline and target architectures and transition plans. EA relies on the trust of its organizational partners in the business and technical domains to share information and adhere to architectural decision and standards that are in the best interests of the overall organization, rather than any one individual, group, or function. And finally, EA requires the power to ensure alignment to and compliance with the architecture and the decisions of the architecture board or else EA is just a paper tiger and will fail.

>“Sacred Cows” and Enterprise Architecture


Enterprise architecture develops the organization’s baseline and target architecture and transition plan. EA is an endeavor of change and transformation from current state to future state. To achieve organizational change successfully, the “sacred cows” must be made change-ready.

In the book, Sacred Cows Make The Best Burgers, by Kriegel and Brandt, the authors explain that the greatest inhibitor to organizational change is people’s resistance—people are the gatekeepers of change and people are the enterprise’s most stubborn of sacred cows!

“Sacred Cow—An outmoded belief, assumption, practice, policy, system, or strategy generally invisible, that inhibits change and prevents responsiveness to new opportunities.”

What’s with this analogy to cows?

“Cows trample creative, innovative thinking. They inhibit quick response to change, and cost money and time. They roam everywhere…yet many organizations continue to worship their sacred cattle. They’re afraid to abandon what once made them successful, and they extract a heavy fine from those cow hunters who would ‘pasteur-ize’ them.”

What’s the imperative for change now?

“It’s hurricane season for American business. Winds of change are barreling in from all directions. Competition is tougher than ever and coming from places you least expected. The customer is more sophisticated and demanding. Technological change is incessant. Government regulations are tougher. And everyone is restructuring, reorganizing, reinventing, downsizing, outsourcing—all at ultrasonic pace.”

What are we doing about it?

“New programs, processes, and strategies have been introduced to help you keep ahead of these changes and eliminate sacred cows. In fact, they’re emerging almost as fast as the changes themselves…reengineering, total quality, virtual teams, ‘horizontal’ corporate structures…”

What are the results of these change efforts?

  • “Though it’s predicted that U.S corporations will spend $34 billion on reengineering, most efforts will flop.”
  • “Some statistics say seven out of ten reengineering initiatives fail.”
  • A McKinsey study found that “a majority of companies researched achieved less than a 5 percent change due to reengineering.”
  • Two-thirds of American managers think TQM has failed in their companies.”
  • “The number of applicants vying for the Malcolm Baldridge Award…has fallen since its peak year in 1991.”

In short, “The ’Q’ [quality] word has become cheap currency.”

Why do these change efforts fail?

  • “People’s resistance to change is ‘the most perplexing, annoying, distressing, and confusing part’ of reengineering.”
  • People resist change because “change is uncomfortable, unpredictable, and often seems unsafe. It’s fraught with uncertainty and always looks harder than it is….change brings us face-to-face with the unknown, and that evokes our worst imagined fears: We’ll be fired, humiliated, criticized. So we dig in our heels.”
  • “We’ve seen workers fight change for months and years because they didn’t understand it, were afraid of it, or didn’t see it being in their self interest. It’s naïve to assume that the bulk of the workforce will come around. Even when resistance seems to disappear, most often it’s just gone underground, and will resurface when you least expect it.”
  • “Management consultants who deal with companies in transition know that the ‘people’ part of change is critical. And that it is most often overlooked and undervalued.

The reason that three fourths of reengineering efforts fail…is that the focus of change is on work processes, new technology…and decentralized services rather than on the people who must implement change.”

From a User-centric EA perspective, this last point is critical. Enterprise architecture efforts, by definition, are focused on business, technology, and the alignment of the two. EA looks at business process improvement and reengineering and the introduction of new technologies to enable mission success. Traditionally, EA did not look at the human element—the people factor. The necessity of measuring people’s change readiness and assisting people in transitioning to new ways of doing things is one of the most important elements of any change initiative. As I’ve written previously, Human Capital is the missing performance reference model in the Federal Enterprise Architecture. All this points to the importance of transitioning from traditional EA to User-centric EA, where the end-users and stakeholders (i.e. people) are the most important element of the enterprise architecture. How would my kids phrase this, “in the end it’s not the business process or the technology, but the people, stupid!”

What happens if we don’t recognize the centrality of people to the change process?

Plain and simple, change efforts will continue to fail. Money and time will be wasted. Our competition will continue to gain on us and overtake us. Our organizations will be made obsolete by our own inattention to our most important asset—our people!



User-centric EA seeks to align the various life cycle IT system processes to help users understand, navigate, and complete these as simply and smoothly as possible.

Below is an alignment of the processes for System Development Life Cycle (SDLC), Capital Planning and Investment Control (CPIC), Enterprise Architecture (EA), and the Project Management Book of Knowledge (PMBOK).





Conceptual Planning


Business Alignment


Planning & Requirements


Technical Alignment




Development & Testing


Operations & Maintenance


Architecture Assessment



The graphic demonstrates that the various IT system processes align quite nicely, and that user seeking to stand up a new system or make major changes to existing systems can follow the basic 7 steps of the SDLC and complete the requirements of CPIC, EA, and PMBOK along the way (the touch points are all identified).

The way to read this graphic is as follows:

For example, in the first phase of the SDLC, the conceptual planning stage, the user does the following: 1) defines their need (SDLC process) 2) develop their business justification and seek to obtain approval and funding from the IT Investment Review Board (CPIC process) 3) develops their business alignment and seeks approval from the Enterprise Architecture Board (EA process), and 4) define their project and seek authorization to proceed (PMBOK process).

For CPIC, users identify the following:

  • Select—How does the investment meet business decision criteria?
  • Control—Is the investment being managed with the planned cost, schedule, and performance criteria?
  • Evaluate—Did the investment meet the promised performance goals?

For EA, users demonstrate the following:

  • Business Alignment—Does the investment support the agency mission?
  • Technical Alignment—Does the investment interoperate within the technology infrastructure and meet technical standards?
  • Architecture Assessment—Is there a need to update the architecture?

For PMBOK, users complete various project management processes:

  • Initiating—Define and authorize the project.
  • Planning—Define objectives and plan course of action.
  • Executing—Integrates resources to carry out project management plan.
  • Closing—Accept product or service.

Note: The EA/CPIC alignment is adapted from Architecture Alignment and Assessment Guide, Chief Information Officers Council, August 2001. The PMBOK definitions are adopted from the Project Management Book of Knowledge, Third Edition.

User-centric EA promotes the alignment of the various IT system processes to help users to easily understand the touch points in the various life cycle steps to getting their system up and running. Moreover, the alignment enables the CIO to develop processes and job aids to assist and ‘speed’ users through the process. Thus, the processes are transformed from inhibitors to facilitators of systems progress for the enterprise.