Enterprise architecture: A competence-based approach to achieving agility and firm performance

Abstract

As information technology (IT) proliferates across functional units, manufacturers that lack a coherent strategy for integrating, standardizing and leveraging their IT resources and capabilities are more likely to end up with fragmented systems that do not properly support business processes and hinder performance. One strategic approach to facilitating standardization and integration among IT resources is enterprise architecture (EA). As the representation of an enterprise's business processes and IT systems, EA underpins decisions relating to data, applications, IT infrastructure (technical and human), and management responsibilities in order to inform business strategies that enable organizations to accomplish their business objectives. In this research, we leverage competence-based theory to introduce EA strategic orientation and EA assimilation as dynamic and operational capabilities, respectively. Data collected from 190 manufacturers and seemingly unrelated regression are used to test hypotheses related to a nomological network consisting of EA strategic orientation, EA assimilation, agility and firm performance. The findings suggest that EA-based capabilities can enhance agility, and indirectly increase firm performance. As the first study to assess the value of EA from a non-IT-centric perspective, this work serves as a pivot point for examining the reach and range of EAbased capabilities, particularly in operations management. The findings provide operations and IT managers with evidence of how enterprise IT initiatives are ultimately linked to firm performance by way of EA-based capabilities.