The Convergence of Strategy, Performance and Enterprise Architecture in the US Federal Government
© 2003 Paul Arveson
In the new millennium, enterprise architecture is playing an increasingly important role in plans to improve management in the US Federal government. The advancement of enterprise architecture has been remarkably rapid, despite the fact that this concept is highly complex and multidimensional. It remains to be seen whether enterprise architecture initiatives will succeed in their strategic goal, which is no less than the transformation of government management practices at all levels, in all agencies. One aspect of this transformation is the integration of performance and budgeting.
What is Enterprise Architecture?
Although architecture generally denotes the design of buildings, the term has been applied increasingly to the design of information systems ("information architecture"). All modern organizations use such systems, and they are tightly integrated into their business processes. The term enterprise refers to the whole functioning organization (whether a company or a governmental organization). This includes far more than only information systems. So an enterprise architecture is a design for the arrangement and interoperation of business components (e.g., workers, policies, operations, infrastructure, information) that together make up the enterprise's means of operation, along with principles and plans governing their evolution over time.
The complex, multidimensional nature of enterprise architecture often leads to misunderstandings because of the differing viewpoints or perspectives of the different players or stakeholders. To deal with this problem, it is helpful to create some kind of framework in which all the various viewpoints have a place. John Zachman, the pioneer in this field, developed the Zachman Framework in the 1980s. It is a table with 5 rows, representing perspectives of different kinds of workers (planner, owner, designer, builder, subcontractor), and 6 columns that answer the questions what, how, where, when, who and why. In each cell of this table, artifacts or documents are developed. When all the cells are filled, the documentation for an enterprise architecture can be accommodated. (Actually, it provides a "snapshot" of the architecture at a high level and at given time; the cells of the framework are recursive in detail and version).
Zachman developed this framework originally for a manufacturing enterprise, where the product was a tangible one, such as a jet plane. But in recent times the framework has been entirely focused on the design of information systems, i.e. information architecture. However, it has always been important to align information systems to business needs, so it is misleading to think only about architecture in terms of its technical or infrastructure aspects. This need to align IT to strategic business goals has been underscored in the wake of the "dot-com bubble".
It has been increasingly recognized that enterprise architecture is not only a "thing"; it is also a process. Information technology advances rapidly, so ongoing budgets are required for the development of new systems to replace the old. In order to do this in a cost-effective way, government enterprise architects have embraced several corporate best business practices, such as enterprise architecture planning, business process reengineering and data warehousing.
Recent History of Federal Enterprise Architecture
Historically, the government has wasted billions of dollars on information systems that never worked right, didn't interoperate with related systems, vastly exceeded their schedule and budget, or were never even finished. Increasingly, the public demanded greater control over the runaway costs of these systems.
The crucial event in Federal enterprise architecture history was the passing of the Information Technology Management Reform Act (now called the Clinger-Cohen Act) in 1996. This act mandated architecture best practices for government agencies. It authorized a Chief Information Officer (CIO) in each agency, thereby recognizing the increasingly important strategic role played by information technology in government. The CIO's responsibility was to ensure that IT investments were selected based on business needs, to ensure that they were implemented only after reengineering existing business processes, and to move the agency toward standardization of its infrastructure. A CIO Council was established to encourage agencies to share plans and architecture standards among each other.
Although there continue to be some serious problems, the general perception among government managers is that enterprise architecture is a strategy that is working to control costs of IT investments and deliver value to the missions of the government. This is especially true after the emergence of web technology in the mid-1990's. The General Accounting Office (GAO) has written several reports recommending increased adoption of web and XML standards across the government. They have also provided an evaluation methodology for determining the maturity of an agency's enterprise architecture.
By 2001, the Office of Management and Budget (OMB) had firmly taken control of the planning and justification of most IT investments in the Federal government by requiring business case reviews for all significant IT projects. OMB Circular A-130 established the guidelines for these investments. Agencies are now required to provide a business case ("Exhibit 300") and "Exhibit 53" from the Capital Planning and Investment Process (CPIP) to justify all major IT investments. Major projects in individual agencies have sometimes been halted if they did not adequately address inter-agency architecture standards.
Structure of Federal Enterprise Architecture
Architecture frameworks for the Federal government have been evolving rapidly. Several agencies initially developed their own enterprise architecture frameworks. In the Department of Defense, the Technical Architecture for Information Management (TAFIM) gave way to the C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, Reconnaissance) Architecture Framework in 1997. The current, comprehensive framework is the Federal Enterprise Architecture Framework (FEAF).
The Federal Enterprise Architecture Framework
"To facilitate efforts to transform the Federal Government to one that is citizen-centered, results-oriented, and market-based, the Office of Management and Budget (OMB) is developing the Federal Enterprise Architecture (FEA), a business-based framework for Government-wide improvement." Thus OMB inaugurated Federal Enterprise Architecture -- their last, best hope for gaining control over the management and cost of government.
The FEA is being constructed through a collection of interrelated "reference models" designed to facilitate cross-agency analysis and the identification of duplicative investments, gaps, and opportunities for collaboration within and across Federal Agencies.
The Performance Reference Model
In the initial design of the Federal Enterprise Architecture reference models, the Business Reference Model was placed at the top:
This arrangement was based on the natural assumption that business goals must drive the architecture. However, after further work, it was realized that different agencies have similar business goals, but perhaps different ways of achieving them. In order to achieve maximum mission effectiveness and reduce duplication, architecture seeks to standardize and optimize business rules, also. This approach will serve to break down long-established "stovepipes" between and within agencies. Therefore, the overarching business rule for all of government is to achieve the highest value (benefit/cost), or maximum mission performance. So the arrangement of reference models was changed to place the Performance Reference Model on top. Other changes were made in the arrangement as well. The current structure in the Federal Enterprise Architecture Framework is as follows:
The new arrangement recognizes that the Performance Reference Model is the overall driver for all the other reference models, including the Business Reference Model. The "business driver" now is not the individual business functions within the agencies, but rather a unified, common approach to mission performance in all agencies.
Management Tools in the Performance Reference Model
The PRM will be designed to integrate with and complement OMB's development of the Program Assessment Rating Tool (PART) and common measures initiative. By defining outcome and output measures for lines of business and sub-functions, the Performance Reference Model will provide the tools necessary to measure cross-agency initiatives at the Federal enterprise level.
What are the tools and methodologies in the Performance Reference Model? There are several, including strategic planning and analysis, business cases (Statement 300's), enterprise architecture itself, applied information economics, and -- the balanced scorecard. Here is a diagram based on the draft plan, showing the overall business process:
This process begins with strategic analysis to determine what must be done, and with what priority. Business activities are identified, based on strategic goals and business drivers from the vision and mission of each organization. A business case is written to document the AS-IS assessment and justify improvements. Then the transformation to the TO-BE architecture is launched, which results in measurable business outcomes including client/customer satisfaction data. Performance measurements are reviewed and this provides feedback into the subsequent strategic plans. The balanced scorecard, in this process, serves as a measurement framework (using the four perspectives of employee learning and growth, internal operations, external customers, and financial). This set of balanced measures provides the reward system to maintain strategic alignment.
The President's Management Agenda
The President's Management Agenda (PMA, FY 2002) added a new voice to that of Congress as expressed originally in the Government Performance and Results Act (GPRA) of 1993. The PMA points in the same strategic direction as the GPRA, but it added top-level support and visibility, plus a strong emphasis on citizen-focused results in government. The PMA recognizes the significance of information management as a core mission of government, and thus gave an impetus to the development of a federal enterprise architecture.
The President's Management Agenda calls for five government-wide strategic initiatives:
Strategic Management of Human Capital
Improved Financial Performance
Expanded Electronic Government
Budget and Performance Integration
Four of these five government-wide initiatives have an important IT component. Strategic Management of Human Capital recognizes the demographic situation in the Federal workforce -- large numbers of the most experienced workers will retire in the next few years. Knowledge management systems are proposed to aid in capturing some of their valuable experience. Improved financial performance requires re-engineered processes and expanded use of web-based technologies. Expanded e-government proposed 25 initiatives to be accomplished over several years in the agencies. Budget and performance integration requires increased collection of performance data and increased quality of data through the use of advanced technology and data management best practices. At this point in time, many of the PMA initiatives have been at least partly achieved: for example, the Federal government's one-stop portal, firstgov.gov, has proved to be an effective tool to help citizens discover government information.
The strategic vision of better government is being realized through initiatives in three areas: performance, budgeting, and enterprise architecture. The Office of Management and Budget is providing guidance and coordination to enforce compliance. We conclude that the Federal government is moving on an inexorable course toward the convergence of enterprise architecture, performance and budgeting. From one administration to another, from one political party to another, the movement has been in the same direction, toward more effective and efficient governance by harnessing technology to manage information, including performance information, in a feedback loop that embraces the Federal budget:
And in the center, the balanced scorecard is the system that, more than any other, is being recognized as the all-embracing pattern for strategic management. It provides a process that can contain the Performance Reference Model architecture, business process improvement methods such as BPR and Six Sigma, and performance evaluation practices such as the PART -- all within a feedback process that allows the government to determine what strategies are working to improve mission effectiveness and results for citizens.
The GPRA provided the legislative mandate that required agencies to integrate strategic plans and performance.
The President's Management Agenda, and the supportive efforts of OMB, require agencies to provide business cases, measures of program performance, and results of performance in order to justify their budgets.
The Clinger-Cohen Act requires agencies to establish and maintain enterprise architecture standards, and efforts are underway to build standards that cut across the agencies. Old "stovepipes" are being broken down surprisingly fast, because of the high priority being placed on this requirement by OMB and the White House.
No wonder the balanced scorecard is being adopted by the House of Representatives Chief Administrative Office, by the Office of the Secretary of Defense, and by other Federal agencies as their central strategic management framework. We expect to see increasing adoption, adaptation, and specialization of the balanced scorecard concept in the days ahead, no matter who takes the leadership in the government.
Many challenges remain in accomplishing the government's strategic initiatives. Enterprise architecture planning is often made difficult because of the neglect of documentation of the AS-IS architecture and processes. Performance plans suffer from a lack of baseline data. Buy-in for organizational efforts is generally gradual and encounters cultural change barriers. The best concepts, methodologies and tools in the world are insufficient by themselves to achieve strategies. These complex requirements will require the sustained and diligent efforts of many people over many years. Nevertheless, steady progress -- in a consistent direction -- is being made and there is increasing optimism that the government is maturing in its ability to use information technology as a strategic asset for improving results for its citizens.
The Zachman framework - http://www.zifa.com/
Clinger-Cohen Act - Summary http://irm.cit.nih.gov/itmra/itmrasum.html 
GAO Enterprise Architecture evaluation methodology - http://www.gao.gov/new.items/d03584g.pdf
Dept. of Defense C4ISR Framework - observations by GAO - http://www.gao.gov/new.items/d03571r.pdf [Mar. 28, 2003]
President's Management Agenda - http://www.whitehouse.gov/omb/budintegration/pma_index.html
Management Reform: Continuing Progress in Implementing Initiatives in the President's Management Agenda - http://www.gao.gov/new.items/d03556t.pdf [Mar. 26, 2003]
Program Assessment Rating Tool (PART) - http://www.whitehouse.gov/omb/part/index.html
Applied Information Economics - a highly-regarded system for IT investment decision-making.
Management of Federal Information Resources - OMB Circular A-130 - http://www.whitehouse.gov/omb/circulars/a130/a130.html
Federal Transition Framework - http://www.whitehouse.gov/omb/egov/a-2-EAFTF.html
Interoperability Clearinghouse - http://www.ichnet.org/
ELECTRONIC GOVERNMENT: Success of the Office of Management and Budget's 25 Initiatives Depends on Effective Management and Oversight - http://www.gao.gov/new.items/d03495t.pdf [Mar. 2003]
ELECTRONIC GOVERNMENT: Challenges to Effective Adoption of the Extensible Markup Language [XML] - http://www.gao.gov/new.items/d02327.pdf [Apr 2002]
usa.gov - the US Government's web portal
ELECTRONIC GOVERNMENT: Opportunities and Challenges Facing the FirstGov Web Gateway - http://www.gao.gov/archive/2000/d010087t.pdf [Oct. 2, 2000]
National Association of Chief Information Officers - Recognition Awards http://www.nascio.org/ [Not a Federal reference, but gives several examples of best practices in enterprise architecture at the state level.]