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Shortfalls in the enterprise architecture blueprint

Shortfalls in the enterprise architecture blueprint

Synopsis
3 Minute Read

Embracing transformation is necessary to help your credit union remain competitive in an evolving marketplace. However, many credit unions frequently encounter shortfalls in the journey towards transformation in areas including:

  • Strategy development and execution
  • Operating model alignment
  • Developing an enterprise architecture blueprint

It is crucial to understand each of these shortfall areas and take the right steps to mitigate them during the transformation process. This will help your credit union achieve the full benefits of transformation and ensure it continues to thrive in the future.

Partner, National Credit Union Leader
Senior Manager, Enterprise Transformation

Your credit union’s enterprise architecture includes its business, technology, and data architecture as well as its standards, policies, and procedures. Shortfalls in this area may have a significant impact on your credit union’s business processes and decision-making capabilities. Understanding these common shortfall areas in the enterprise architecture blueprint and implementing the appropriate mitigation strategies can help your credit union achieve its transformation goals.

Ian Burns, President and CEO at Servus Credit Union, discusses how Servus is looking to create a high-performance culture within a cooperative banking framework:

“To attract the brightest talent, we need to effectively use the tools that exist today and ones that will come to build the best member relationships. This means looking at the way we do business differently. We must not only consider how we handle our brick-and-mortar business, but also how we use different types of technologies and continue to evolve the member experience.”

Business architecture

Your credit union’s business architecture (BA) encompasses the enterprise-wide relationships between its organizational structure, divisions, functions, capabilities, and various key business processes. It illustrates how your organization is currently achieving its business objectives and outcomes as part of its transformation. Additionally, it shows how your BA will evolve over time with new or updated components from your credit union’s transformation.

It is critical to maintain a clear, updated view of your credit union’s BA that accurately represents its current state to support decision-making during the transformation process.

However, many credit unions fail to regularly update the BA documentation necessary to provide the full picture of an organization. This shortfall may cause your credit union to begin and implement transformation programs based on incomplete or inaccurate information about the current state of operations or ways of work. Furthermore, these inaccuracies may lead to faulty business cases for transformation, specifically in assumptions related to run-time, resourcing requirements, cost projections, and benefit realization.

Technology architecture

The technology architecture (TA) of your credit union encompasses the enterprise-wide relationships among its technologies, including hardware, software, and infrastructures. It also describes how each component works together to support your credit union’s regular business functions.

Additionally, TA documentation may include integration and security architecture for larger organizations. This complex architecture articulates the front- to back-end connectivity required to deliver services — as well as how they are best housed in a secured enterprise environment.

Large-scale transformations will have significant technology implications for your credit union, and it is necessary to appropriately update your TA documentation and keep it up to date. Without fostering a functional understanding of your credit union’s TA, important business decisions may be made without appropriate consultation or feasibility reviews from technology. This shortfall can significantly hinder the success of the transformation program over the long term.

Data architecture

Data architecture (DA) outlines the structure of your credit union’s logical and/or physical data assets and management resources (e.g., models, policies, rules, standards, and arrangement / organization). It also illustrates the data flowthrough within all components of your credit union.

The DA effectively binds your credit union’s business and technology architecture views together in a singular enterprise architecture document. This document is central to maintaining the data integrity of your organization.

Enterprise-wide data is often a prime trigger for transformation efforts. This is due to its upstream and downstream implications on the front-end products and services as well as the back-end operations of your credit union.

More importantly, data provides the foundation for all business, technology, and people-related decisions for your credit union. Therefore, shortfalls in DA documentation and data strategy are one of the primary causes of transformation failures within credit unions.

Standards, policies, and procedures

Your credit union’s standards, policies, and procedures support the execution of its daily business activities — just like its architecture blueprints. Well-documented policies and procedures articulate how to carry out business activities and achieve business objectives.

It is crucial to review all your credit union’s existing documentation during the initial due diligence process before the transformation effort. This includes its architecture mappings, standards, policies, and procedures.

However, many credit unions launch large-scale transformation programs and engage in executive decision-making without thoroughly reviewing this documentation. This shortfall creates the risk of overlooking deeper, more nuanced areas that may require attention during the transformation effort, causing new activities to be carried out against the original intentions.

How to mitigate shortfalls in the enterprise architecture blueprint

Transformations involve a series of deliberate changes to benefit your credit union. Each of these decisions will have broad implications on your organization’s ability to carry out its business activities effectively — and impact your members and external stakeholders. Therefore, it is critical to avoid shortfalls in this area during the transformation process.

Include vital components such as your credit union’s BA, TA, DA, and relevant policies and procedures to provide a comprehensive enterprise architecture blueprint of your credit union. This will best position your leaders to make informed decisions at the helm of transformation programs. 

Additionally, your enterprise architecture blueprint should be kept up to date after the transformation to document key areas of change and drive change management and/or sustainment activities. This will help you measure the benefits of transformation to your credit union over time.

These steps can help you mitigate shortfalls in your credit union’s enterprise architecture blueprint during the transformation process:

Set up an architecture design committee (ADC)

Set up a committee that involves professionals from each domain (e.g., BA, TA, and DA) who meet regularly to update your credit union’s enterprise architecture blueprint. This committee should also be responsible for reviewing and approving design and/or change requests to your credit union’s architecture from the broader organization. This will help ensure that any suggested changes will meet your specific enterprise standards.

Integrated change management planning

Integrated change management planning can help your credit union document key areas of change during the transformation process. These key areas may include business processes, technology, and/or people within your credit union. Clearly articulate strategies to manage each of these changes, facilitate transparency, and specify any upstream and/or downstream implications to your credit union.

Checklist for the board of directors: Key questions to ask during transformation

Discover the questions that your credit union’s board of directors should ask during the transformation process to achieve success. 

Checklist for executive leaders: Key questions to ask during transformation

Explore the questions that executive leaders should ask during the transformation journey to achieve successful outcomes. 

Where to go from here

Credit unions must navigate many challenges both today and in the future. However, there are also numerous opportunities that your credit union can seize through transformation. While this journey is exciting, it is also important to stay aware of potential shortfalls along the way — no matter whether you are just beginning your transformation or are setting up the final components for its long-term sustainment.

Taking the right steps to mitigate shortfalls in your credit union’s strategy development and execution, operating model alignment, and enterprise architecture blueprint will position you to receive the full benefits of transformation. This will enable you to achieve successful outcomes and ensure that your credit union continues to thrive in 2030 and beyond.

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