From Accounting to Enterprise Architecture: Why EA Reporting to the CEO is the Next Evolutionary Step

In 1926, McKinsey & Company was founded by James O. McKinsey, a professor of accounting at the University of Chicago, with a singular focus on accounting. At the time, accounting wasn’t just a department; it was the entire enterprise. Everything revolved around financial management.

Historical progression from accounting-centric enterprises to IT as a standalone department and finally to modern Enterprise Architecture as a unifying framework.

Organizations were structured around this singular function, and accounting governed nearly every aspect of the enterprise. The concept of separate departments like marketing, HR, or IT had yet to emerge, as accounting was considered the enterprise’s strategic backbone.

Fast forward to today, and accounting is one of many specialized departments, each playing a vital but distinct role in an enterprise’s success. Over time, other functions like marketing and HR, which were once part of sales and finance respectively, have also evolved into independent departments, reflecting their growing strategic importance.

IT has become one of the most transformative functions, now central to strategy and operations across departments. This journey—from accounting-centric enterprises to IT as a standalone, strategic department reporting to the CEO—offers valuable lessons for the evolution of Enterprise Architecture (EA).

Much like IT’s past, EA is currently positioned within IT. However, its application and potential extend far beyond IT. EA must now emerge as a separate, strategic department reporting directly to the CEO, ensuring its enterprise-wide impact is fully realized.

1926: When Accounting Was the Enterprise

Nearly a century ago, enterprises operated as accounting-driven organizations. This was the era when:

• Accounting governed all decision-making: From budgeting to operations, enterprises revolved around financial management.

• IT’s initial purpose was finance-centric: Early IT systems were designed to automate accounting processes, cementing IT’s position as a sub-function of finance.

• IT leaders reported to finance heads: Because IT was seen as a tool for financial operations, its leadership was confined to reporting within the finance department.

The Evolution of IT: Becoming a Strategic Function

As IT’s capabilities expanded, so did its influence. IT was no longer limited to automating financial processes; it began enabling:

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