In the realm of the information technology industry, every new technology is a potential risk factor as we don’t yet know the extent of the consequences (positive or negative) of using the technology for supporting business processes. Enterprise Architecture is critical for assessing the pros and cons of new technologies for the overall architectural fitness of an enterprise.
WHAT IS A TECHNOLOGY RISK
Risk has very specific definitions in the context of a specific
These losses in some cases may be avoided through pre-emptive actions. Higher the risk, higher the probability that the business outcomes may not be as intended. In the realm of the information technology industry, every new technology is a potential risk factor as we don’t yet know the extent of the consequences (positive or negative) of using the technology for supporting business processes.
Sometimes we may not even know if we are using them in the appropriate way to solve the right problems. The last few years have seen some of the promising technologies emerging such as cloud computing, AI, IoT, and blockchain etc. But do we really know what risks these technologies pose and if implemented, how can we efficiently manage them?
EMERGING TECHNOLOGIES AGGRAVATE OVERALL TECHNOLOGY RISK
In the previous post of the series, I argued that there has been growing adoption of the emerging technologies especially due to the incessant pursuit of Digital Transformation by enterprises. As the pace of Digital Transformation continues to accelerate, organizations are expected to make faster decisions and move from ideation to product to revenue with speed. The fear of lagging behind (mostly for justifiable reasons) pushes different departments of an enterprise to adopt these technologies, though with little consideration to the overall impact on the IT landscape.
This daily grind results into a one-eyed focus of enterprises on IT functions and business agility with the neglection of governance, collaboration, and transparency. The obvious outcome is a heightened business risk, developed due to a lack of alignment between business processes and technologies, with a potential to diminish returns, increase costs and paralyze growth. As the practice persists, the silo effect grows which exacerbate the detrimental effect on the top line and bottom-line efforts of the enterprise.
ENTERPRISE ARCHITECTURE FOR TECHNOLOGY RISK MANAGEMENT
According to the soon to be released, Enterprise Architecture Insights 2019, study of LeanIX; Cloud Computing, Internet of Things and Artificial Intelligence are the top technology architectural patterns increasing the complexity of IT landscape. Increasing usage of emerging technologies is also reflected in the fact that 36% of the enterprises are already using 3 or more Technology Architectures while 8% of the enterprises use 5 or more Technology Architectures.
This increasing interest in emerging technologies and the competitive pressure should in no way clamor down a rational and pragmatic approach in assessing the pros and cons of new technology for the overall architectural fitness of an enterprise. Therefore, it becomes necessary that enterprises follow a thorough process to select, invest and deploy emerging technologies. In the longer run, this assessment can act as an ingredient of competitive differentiation determining profits and losses, market value and brand perception.
The process of risk management requires visibility into the various business capabilities and the processes of the enterprise in addition to the underlying IT Landscape. Enterprise Architecture ensures that the enterprises have a transparent view of their IT assets in relation to the respective business capabilities. It also ensures collaboration between the stakeholders with regard to the strategic decision related to technology.
The product use case on the LeanX website gives you a detailed picture of how LeanIX Enterprise Architecture tool helps answer crucial questions related to technology risk management such as what technology standards are in use across the enterprise? Where are IT Components located? How well do IT assets adhere to security standards etc?
Enterprise Architecture Management tools have a critical role to play in Technology Risk Management as they help in
- Getting an up to date view of the entire IT landscape
- Identifying obsolete applications and IT components
- Promoting stakeholder's collaboration to identify and mitigate risks
- Defining standards and principles
- Ensuring IT landscape is compliant to the regulatory environment
What confirms LeanIX’s success in the Technology Risk Management space is that 39% of existing LeanIX customers are using Enterprise Architecture for managing Technology Risks.
The Definitive Guide to Technology Risk Management of LeanIX puts in minute details how Enterprise Architecture can be used for managing Technology Risks. A short and quick LeanIX primer on Why IT complexity makes you lose against your competitor gives you snapshot of how collaborative Enterprise Architecture approach can be used to tackle Technology Risk Management Challenges.
You will be able to get much more from our full study, Enterprise Architecture Insights 2019, which will be available for download on the LeanIX website towards the end of February, 2019. Till then stay tuned to our blog channel.