"The successful IT organization will be characterized by strong service delivery, excellent process management disciplines, a strong emphasis on relationship management (including sophisticated demand management), and reliance on key performance indicators and SLAs," Gartner reports. "A tight alignment will exist between the operating model and the service model. This might be a combination of the federated operating model and a shared services model growing first from a process-based model. For some early adopters, the profit service model may offer enhancements to enterprise differentiation and income generation. For most IT organizations in the near future, a traditional, centralized, functional service model will be rendered too inflexible and unresponsive to be sustainable."

Yet in a December 2005 Gartner Group paper called "Managing a Federated Architecture", analyst Brian Burke predicted 40 percent of organizations intending to implement a federated enterprise architecture would ultimately fail.

Burke found large complex organizations had reasons aplenty to embrace a structural change from being loose formations of largely autonomous BUs — "acting much like 'a federation of tribes at war'," as one Gartner client put it, to becoming more integrated and harmonized organizations. These included: competitive demands; mega-trends of globalization, consolidation and Anglicization; corporate-level strategies aimed at making the organization "one company", integrating operations after a merger or acquisition; or in the case of government, providing citizen-centric services. There is often a desire to achieve economies of scale in centralizing the provision of commodity IT services and to streamline cross-functional business processes.

The challenge for these organizations is to define a governance structure that establishes or clarifies the boundaries between corporate-level and BU-level decision making, then to manage the political, cultural and financial barriers to centralization. Yet things fall down when the often toothless and impoverished corporate enterprise architecture (EA) team — lacking budget clout and necessary governance structures — is charged with driving this effort.

"Embracing a tiered enterprise architecture governance structure enables organizations to accommodate both corporate shared services and BU autonomy," Burke says. "The driving strategies for centralization must be crystal clear, be explicitly stated and have the unwavering support of senior business managers.

"Successful enterprises proactively anticipate and resolve the real issues around politics, culture and funding," he says.

Burke warns those attempting to establish a federated structure not to fall for the common mistakes of allowing IT to drive the centralization effort and failing to sell the benefits to the business. The central EA group must work in concert with the BU EA teams to ensure buy-in to the results. Without this, federated programs will at best fail to communicate effectively and at worst create a climate of conflict with the BUs.

Likewise the architecture governance structure must reflect the corporate governance structure and clearly state which area will be responsible for which parts of the EA.