Rethinking enterprise architecture for the agentic era
Rethinking enterprise architecture for the agentic era
https://www.mckinsey.com/capabilities/mckinsey-technology/our-insights/rethinking-enterprise-architecture-for-the-agentic-era
By
with
with
Tech leaders face a choice in modernizing enterprise IT architecture: incremental change or full-scale transformation. Here are the benefits and pitfalls of each path.
A company’s enterprise architecture is its blueprint for long-term value creation. Grounded in business strategy, a strong enterprise architecture comprises all the technology—networks, hardware, software, systems, and services—that make executing that strategy possible. For decades, CIOs and CTOs have built their companies’ architectures brick by brick, integrating new elements as business goals evolve.
Now tech leaders stand on a precipice: Agentic AI is changing the very fundamentals of architecture modernization. Technology leaders must quickly decide how to incorporate agentic AI into their architectures, with little precedent to guide them. They have two main choices: incremental integration, which entails deliberately adding agentic AI into existing systems to update an enterprise architecture over time; or comprehensive transformation, which requires a complete, organic overhaul of an enterprise architecture to support agentic workflows.
But technology leaders will need to move fast. That’s because agentic AI is accelerating at lightning speed, collapsing traditional IT planning horizons. Tech leaders accustomed to thinking in three-to-five-year cycles must now make foundational choices in months, not years. Incremental integration allows companies to quickly deploy agents into the tech stack, but this piecemeal approach can increase technical debt and ultimately slow progress. On the other hand, a full transformation sets companies up for long-term success, but the extended implementation required could put them at a short-term disadvantage. Whichever path they choose, agentic tools can be used to speed modernization with lower risk and lower long-term run costs.
Of course, choosing one path or the other is rarely a binary decision. Most organizations will pursue a middle path, which might look like domain-based modernization. That’s because few companies will find the funding to do an enterprise-wide transformation in one go. Every technological shift, whether incremental or transformational, will need to be aligned to tangible business benefits; such is the new economics of enterprise technology in the AI age. Nonetheless, examining these two paths is a valuable exercise for leaders who are exploring how to update their companies’ technology organizations.
The incremental path: Building on existing foundations
For many large organizations, especially those with complex legacy systems built over decades, the idea of ripping out their technology foundations overnight is unrealistic. Their data is embedded in mainframes, their business logic written in legacy code, and their processes tuned through years of iteration. For these enterprises, an incremental path offers a way forward.
When it comes to integrating agentic AI, the incremental approach is rooted in pragmatism. It sees agentic AI not as a wholesale substitute for existing systems but as a layer of augmentation that can supercharge what already works. Just as the adoption of microservices enabled agile software development without dismantling the enterprise core, the first wave of agentic AI will sit atop legacy systems to extend existing capabilities.
Companies can start by embedding AI agents into high-value workflows that have the ability to become automated, such as customer service, supply chain forecasting, or product life cycle management. First movers have already seen success with this approach. Each insertion brings efficiency gains, new data flows, and lessons that feed into the next stage of modernization. Over time, the hope is that these pockets of intelligence could coalesce into a more native-agent architecture.
Unlocking institutional memory
The incremental path does increase technical debt, but it also leverages the institutional memory of the enterprise, the processes and tech equity that have been built over time. Decades of business rules, data models, and domain expertise live within tech architectures, and agentic AI can unlock new knowledge from these assets. Replacing legacy systems is risky and expensive. Enhancing them, on the other hand, allows organizations to capture new value from old assets. An insurance company, for example, could deploy an underwriting agent that queries a legacy risk engine through APIs, translating its outputs into natural language explanations for underwriters or regulators. The underlying system remains intact, but its usability, transparency, and speed are transformed.
A key enabler of this evolutionary path is the agentic mesh, an orchestration layer that connects new AI agents to one another and to traditional systems. Think of it as the nervous system that gives coherence to an otherwise sprawling digital organism. Without such a mesh, incremental modernization risks devolving into chaos. Dozens of agents, each with their own objective function, could create friction and contradiction: one optimizing inventory levels for cost savings, another for customer satisfaction, for example. The agentic mesh prevents that fragmentation by acting as a coordination fabric, enforcing business rules and maintaining a shared source of truth.
The mesh also supports governance and compliance, ensuring that AI-driven decisions adhere to corporate policies and regulatory requirements. For incremental adopters, this layer is indispensable; it provides order and trust in a hybrid world where old and new systems coexist.
Balancing costs and capabilities
Incremental integration distributes agentic AI investment over time, allowing organizations to learn as they scale. Full-scale transformations, meanwhile, demand enormous compute power and specialized AI engineering talent, both of which are scarce and costly. Thus, companies that take an incremental approach can instead reskill and redeploy existing talent, giving employees gen AI superpowers. For example, developers could learn to build prompt-based workflows and data engineers could become AI operations specialists.
This same spirit of redeployment can be applied to legacy applications. Decades-old mainframes still process a vast amount of business operations, including the majority of global financial transactions. The same will be true of today’s ERP and CRM systems. Even in the agentic AI age, they will persist. The incremental path accepts this reality. Rather than tearing down what exists, it focuses on reducing technical clutter, or the thousands of micro-applications that have accumulated over time. These can be replaced by lightweight, agent-driven workflows that achieve the same outcomes with greater flexibility. Thus, the enterprise architecture becomes more composable: a set of interoperable building blocks that can evolve with business needs.
Governance as a guardrail
A thoughtful incremental approach embeds governance from the start, ensuring that AI deployments operate within clearly defined ethical, operational, and compliance boundaries. Here again, the agentic mesh plays a central role by enabling centralized visibility across distributed systems. This makes it possible to audit agent behavior and enforce consistent rules. A robust governance framework is like a seatbelt in a racecar, allowing users to freely experiment with agentic AI without fear of security risks.
The incremental path is less about flashy reinvention and more about architectural endurance. But technology leaders will have to carefully integrate each agentic AI deployment into their tech stacks to add intelligence without increasing technical debt. Just bolting on gen AI won’t generate real enterprise value. The incremental approach is often the smarter bet for large, risk-sensitive organizations. It preserves continuity, manages cost, and allows leaders to scale agentic AI at a measured pace (see sidebar “A case study in incremental change”).
The comprehensive path: Embracing transformation
If the incremental approach is evolution, the comprehensive approach is revolution. It calls for reimagining enterprise architecture from the ground up by placing agentic AI not at the periphery but at the core of operations. On this path, agentic AI doesn’t supplement existing systems—it replaces them entirely. Agents become the primary executors of business logic, the connectors of data, and the interpreters of intent. The enterprise evolves from a collection of fixed applications into a living network of intelligent agents capable of self-organization and continual adaptation.
Unlike traditional microservices, which rely on APIs and predefined interfaces, agentic architectures are designed to be flexible and malleable. Agents can ingest unstructured data, negotiate access to resources, and modify workflows dynamically. The result is an IT ecosystem that evolves in real time, aligning itself continuously with shifting business priorities. For organizations unburdened by deep legacy constraints, an agentic AI transformation holds a strategic upside. It enables them to achieve, within three to five years, what might otherwise take a decade: the creation of a truly adaptive enterprise. Once the transformation is complete, the marginal cost of building new applications plummets and innovation accelerates.
Simplified governance
The irony of radical transformation is that it can simplify governance. By consolidating thousands of brittle connections into one standardized agentic framework, companies can monitor and govern an enterprise architecture more effectively than in a patchwork scenario. Yet governance must be transformed as well. The old model of static controls won’t work for dynamic agents that are continually learning and adapting. Instead, organizations can invest in AI governance platforms that monitor, validate, and coordinate agent behavior in real time. Done well, this kind of governance accelerates innovation because agents are given free rein within specific, human-monitored guardrails. This could enable, for example, much faster software development cycles. A project that once took 100 engineers a full year could be completed by a handful of teams working in concert with agent factories, such as collections of agents specializing in architecture design, documentation, testing, and deployment.
Human–machine interfaces
Transformation doesn’t stop at the back end. The way people interact with systems must also change, creating a fully agentic organization. For example, instead of navigating screens and forms, users will converse with digital “chiefs of staff” that anticipate needs, synthesize data, and execute actions. Such human–machine symbiosis could unlock huge productivity and efficiency gains, but only if people are supported to adapt through thoughtful change management.
The comprehensive path requires a large up-front investment of time and financial resources. But it also offers the chance for companies to become first movers in agentic AI, gaining competitive advantage over companies that choose the safer incremental approach. Of course, large-scale transformations also carry risks, namely that they end up costing far more, or taking much longer to complete than expected. Our experience has shown that the majority of transformations fail to deliver what leaders had hoped, stymied by many common frustrations. Transformations may start within the technology organization, but they also require cultural reinvention.
For companies that can achieve full transformation, the benefits are substantial (see sidebar “A case study in transformation”). They emerge not with upgraded systems but with entirely new capabilities: architectures that learn, adapt, and improve continuously. This turns the technology organization from a cost center into a value creator.
A future-proof road map
No two enterprises will walk the same path when it comes to integrating agentic AI. Some will move incrementally and others all at once. And many will pursue a hybrid strategy—starting with augmentation but designing toward transformation. Before choosing a path, technology leaders can take stock of their goals to plan effectively for the journey.
As organizations navigate the future of enterprise architecture, CIOs and CTOs can follow a three-part strategy to generate maximum value from their technology investment:
- Make a deliberate choice: The most important action a technology leader can take when deciding between an incremental or transformational approach to agentic change is to simply choose. Getting to a decision will call for coordinated strategy with C-suite leaders, but once it’s made, it’s made. Technology leaders can then execute quickly, implementing the technology they need to modernize the stack and hiring or upskilling to ensure teams can deliver on the change.
- Modernize with and for agents: Once a path is chosen, technology leaders can focus their attention where it matters most: on how to leverage agentic AI to modernize in future-proof ways. Technology teams can use agentic AI tools to automate workflows, streamline architecture modernization, and speed up application development. But along with building with agentic AI, they must build for agentic AI—creating a future architecture that supports agent scaling.
- Prioritize business impact: Modernizing technology only for technology’s sake will never deliver maximum value. The main goal of every technology organization is to improve business outcomes. When approaching any technology modernization, companies can focus first on the domains where architecture decisions will drive the greatest competitive advantage. They can then balance ambition with practicality, applying an incremental or transformational approach with the company’s risk tolerance, resources, and strategic goals in mind.
CIOs and CTOs have always walked a tightrope between stability and innovation. They are tasked with creating and evolving an enterprise architecture that is secure but also cutting-edge. Agentic AI only amplifies this tension.
For some companies, the path of incremental integration will offer the best balance of control and progress. For others, comprehensive transformation will be the only way to seize a competitive advantage before rivals do. But the greater risk lies in hesitation. In the age of agentic AI, enterprise architectures are not merely the foundation of the business; they are the business. Starting now to define an agentic architecture is the only way to achieve long-term competitiveness.
Julienne Smith returns to Hyatt as head of Americas growth
https://hotelsmag.com/news/julienne-smith-returns-to-hyatt-as-head-of-americas-growth/
Hyatt has announced the appointment of Julienne Smith as head of Americas growth, where she will lead the company’s brand portfolio expansion across North America, Latin America and the Caribbean.
Smith brings more than two decades of hospitality experience in driving growth through strategic development, owner relationships and brand expansion. In her new role, she will advance Hyatt’s brand growth across its Luxury, Lifestyle, Classics and Essentials brands, deepen relationships with owners and developers and accelerate the company’s long-term growth strategy.
“Julienne is a highly respected industry leader with deep expertise and a proven ability to deliver results,” said Mark Hoplamazian, chairman, president & CEO of Hyatt. “Her experience across development, brand strategy and owner engagement positions her exceptionally well to drive Hyatt’s next phase of growth in the Americas. She leads with a strong sense of care that embodies Hyatt’s purpose—supporting colleagues and fostering trusted relationships with owners. We are delighted to welcome her back to Hyatt.”
Smith most recently served as chief development officer for the Americas at IHG Hotels & Resorts, where she led development strategy and execution across a broad portfolio of brands.
“I’m excited to rejoin Hyatt at such a pivotal moment,” said Smith. “Our approach is insights-led and brand-focused, growing our Luxury, Lifestyle and Classics brand portfolios where we see strong demand and scaling our Essentials brands to unlock new markets, all while delivering strong returns for our owners.”
Earlier in her career, Smith spent nearly 14 years with Hyatt, most recently as SVP of development and owner relations, where she helped expand Hyatt’s select service portfolio and built strong relationships with owners across the United States and Canada. She is actively involved in the hospitality and real estate communities and serves on the Dean’s Advisory Board for Boston University’s School of Hospitality.
Smith’s appointment strengthens Hyatt’s focus on intentional growth as a key driver of long-term value creation, including brand expansion into new markets and increased brand presence across segments. Her role complements the recent creation of Hyatt’s Global Growth Strategy & Operations team, designed to drive alignment and faster, more effective execution across Hyatt’s global development organization.
The Holy Island That Appears When the Sea Disappears
Rob Atherton/Shutterstock
https://www.fodors.com/world/europe/england/experiences/news/the-pilgrimage-to-holy-island-is-only-accessible-when-the-sea-recedes
Kings and saints, bloody battles, and muddy toes.
History casts long shadows in Northumberland. This wild, desolate, achingly beautiful stretch of northeast England sits hard against the Scottish border and the North Sea.
Roman emperors, Viking raiders, saints, and kings–all have left their stamp here. As a wellspring of England’s Christianity, Northumberland draws pilgrims by the thousands to the Holy Island of Lindisfarne, known simply as Holy Island.
Twice a day, during low tides, the island rejoins the mainland. Cars by the hundreds stream across a causeway built in the 1950s. The rest of us follow the ancient Pilgrim’s Way, just as the monks did, walking three miles (customarily barefoot) across silt and mud to reach Holy Island.
So it was that my wife, Mica, and I peeled off socks and shoes for the final stretch of a weeklong exploration of England’s least-populated region, via train and bus and often two legs. Northumberland is home to an untamed section of the newly renamed King Charles III England Coast Path, which promises to circle England for 2,700 miles when completed.
Holy Island has only 160 residents but attracts more than 650,000 visitors annually. It is perceived as a “thin place”–one where Heaven and Earth cling more closely. The Rev. Canon Dr. Sarah Hills, vicar of Holy Island’s St. Mary’s Church, says visitors’ motivations vary.
“Some are looking for God,” she said. “Others want peace or stillness or beauty–which I would also say is God. Mostly they are looking for something they haven’t got in their lives.”
Fair enough. I suppose we are all searchers, scurrying apace, too busy to ask ourselves exactly what we seek. Or what to do when we find it. When you walk unfamiliar ground, allowing beauty and quiet to seep in, the experience can leave lasting impressions.
As our footprints marked the final steps toward Holy Island, our guide struggled to wedge 14 centuries of English history into a two-hour walk. His words sent me back four days and almost 100 miles, to where our own pilgrimage began.
To a place called Heavenfield. Where a king named Oswald, following his faith, planted a cross on the eve of battle.
St. Oswald’s Church at Heavenfield.Alex Pulaski
A King’s Victory and an Emperor’s Wall
Six miles from Hexham, a charming market town on the River Tyne, a humble sign and weathered replica wooden cross welcome visitors to St. Oswald’s Church. It was named for a king whose real-life exploits helped inspire the character of J.R.R. Tolkien’s fictional wandering king, Aragorn.
Though scholars disagree about the battle’s actual location and date, prevailing history holds that in 634 C.E. the king and his troops raised a cross here, overlooking Heavenfield’s wind-swept grasses.
The day before, St. Columba, an Irish missionary, had visited Oswald in a dream. So recounts Bede the Venerable, a monk and influential historian who also described Columba’s visionary promises that the king would vanquish his enemies and “reign happily” thereafter.
Oswald’s outnumbered forces indeed prevailed, routing a Welsh army. Oswald united the northern kingdoms during his reign and sought to spread Christianity.
Doing so required a spiritual leader, in the form of an Irish monk named Aidan, who in 635 became Lindisfarne’s first bishop. Walking from Holy Island to mainland villages, Aidan offered a powerful message of compassion and charity.
Despite Columba’s assurances of a happy reign, Oswald died a bloody death just eight years after his Heavenfield victory. Pagans displayed his dismembered body parts on poles. Yet Oswald’s life still reverberates–in a web of Christian faith extending southwest from Holy Island throughout Northumberland.
Earlier rulers have left their mark as well. Today, many of the region’s low farm fences, houses, and churches–even sections of the majestic Hexham Abbey–share the same dull gray/brown appearance. That’s because locals lifted stones one by one, century after century, from a massive Roman wall.
Hadrian’s Wall, a UNESCO World Heritage Site named for the Roman emperor who ordered it built, is the region’s defining manmade feature. It stretched across England’s 73-mile width when built in the second century and remains best preserved in little-populated Northumberland.
Was it designed to repel barbarian invaders? Or perhaps regulate trade?
“I think it was more a statement of power,” Duncan Wise, a tourism officer at Northumberland National Park, told us. “The Romans wanted to instill that sense of, ‘We’re here, and we’re not going anywhere.’”
The rooftop vantage of The Sill, a regional visitor center just a few miles from Heavenfield, shows how the wall ambles across the horizon. From there, we walked along the wall, past the colorfully named Sycamore Gap and Whin Sill, watching lambs scurry behind their mothers.
Other vestiges of Roman occupation can still be found nearby, including Roman Vindolanda Fort & Museum. There, priceless wooden tablets describing the daily lives of soldiers and their wives can be viewed inside, while kneeling volunteers excavate building sites outside.
“You are walking in the footsteps of many a Roman soldier,” said Penny Trichler, an archeologist who serves as Vindolanda’s visitor experience coordinator. “This is the story of the Roman Empire’s frontier, and it’s told better along this stretch of England than anywhere else in the country.”
Leaving Hexham, trains carried us northeast to the coastal village of Alnmouth. From there, our feet would provide most of the propulsion northward, along the coast path, where people grew scarcer, but the wind remained a constant companion.
Castles, Crashing Waves, and the Walk to Holy Island
Our planned pace called for daily walks of 10 to 12 miles, stopping in the occasional village for lunch, with overnight stays at inns or bed-and-breakfasts. The steady sound of sandy gravel crunching beneath our feet and waves walloping the rocks accompanied us.
We walked past gorse interspersed by wildflowers, measuring our progress by castle sightings. Passing the village of Craster, the ruined battlements of Dunstanburgh Castle, a 14th-century stronghold, pointed skyward like crooked fingers.
North of the market town of Seahouses, the imposing outline of Bamburgh Castle announced its presence from miles away. Beautifully restored in the 19th century, the castle’s rooms and ornate halls housed kings for ages. From here, we had our first sighting of Holy Island.
Steps away, in the village of Bamburgh, stands pretty St. Aidan’s Church. The stone building dates to the 12th century, on the same site where Aidan had a wooden church built in 635.
At last, the morning arrived for us to walk the Pilgrim’s Way to the island. Guide Dave Harris-Jones met us in sandals and a tunic. He and his wife, Harvest, offered us alder walking sticks, and he read a short prayer to assure our passage.
Locals monitor tides closely for safe road crossing times by car. Though poles mark the walking route, we were glad for both the company and Harris-Jones’ perspective on history and myth.
When St. Aidan died, he recounted, a young shepherd beheld a vision of angels in the sky. Was it simply the Northern Lights putting on a show? The shepherd, Cuthbert, interpreted it as Aidan’s soul ascending to heaven, and it inspired Cuthbert (later a renowned saint) to become a monk himself.
As we walked, silt squishing between our toes, Harris-Jones cautioned that in a few hours the tide would rise again, isolating Holy Island from the mainland. But his warning also held a promise.
“When everyone’s home tonight,” he said, “that’s when the island will be the most magical.”
By mid-afternoon, the cars had streamed back across the causeway and the village streets were emptied. In the shadowed ruins of the Lindisfarne Priory, pigeons cooed. Afternoon light shone through the stained-glass windows of St. Mary’s Church, so quiet that we could hear our own footsteps.
We walked outside and around a bend to the water’s edge, watching the rising tide. We saw no angels that night but felt a palpable sense of calm. Every day, this holy place embodies the words of English poet John Donne, who held that none of us is an island–all are connected, “a piece of the continent, a part of the main.”
A recurring theme here is one of peace, reflection, and even atonement. Hills, the vicar of St. Mary’s, recalls how a few years ago a group from Norway–some dressed as Vikings–visited to apologize for raids dating to the Middle Ages.
They laid their ceremonial axes at her feet. She blessed them. And they left.
“This island lets people enter another place out of their daily routine, and extraordinary things can happen,” Hills says. “Christianity is strong here. It feels like holy ground.”
Tides rise and fall. Pilgrims leave fleeting footprints in the silt and mud, retracing ground walked by saints before us. Hills noted as much in a St. Aidan Day sermon.
And so as we journey on our pilgrimage, we pray–for ourselves, for the other pilgrims along the way… for what has happened in our lives and our hopes for the future. As the hymn goes, there is indeed a ‘wideness in God’s mercy, like the wideness in the sea.’
So let us indeed walk in Aidan’s footsteps – steps of peace, of love, of mercy, wide enough, big enough for us all to share the gospel of good news.
Amen.
A Mini Guide to Northumberland
Places to Stay
Twice Brewed Inn is a cozy and modern inn/pub next to the Sill. The Old Rectory B&B in Howick embodies charm, just a few hundred yards from the coast path. The Beach House Hotel in Seahouses looks out on the Farne Islands, a seabird spectacle worth visiting on a day outing. The Lindisfarne Inn is strategically located on the mainland for pilgrims wanting to overnight before walking to Holy Island. Manor House Hotel on Holy Island has spectacular views of the neighboring Lindisfarne Priory and Lindisfarne Castle.
Places to Eat
The Garden in Hexham offers freshly made sandwiches, soups, coffee, and more. The Joiners Arms in Newton-by-the-Sea offers elevated pub fare. Bamburgh Walled Garden in Bamburgh is remarkable for its salads, sandwiches, and pastries in a lovely setting. Both Northern Edge Coffee and the Corner House café are worth a visit in the walkable walled town of Berwick-upon-Tweed.
Making Connections
Train service is frequent and dependable, and the Hadrian’s Wall Country Bus runs daily to and from Hexham. Baggage transfers are available on routes such as St. Oswald’s Way and the coast path.
DUHC&S | Strategic Hospitality Consulting & Advisory
We transform hospitality and tourism businesses through strategic solutions, operational efficiency, and comprehensive renovation. With over 40 years of experience working with brands like Hilton, Hyatt, Sheraton, and Sonesta, we enhance asset value and profitability through:
*Operational excellence and brand standards (GSI +90%)
*Market penetration and commercial strategies
*Key partnerships and disruptive innovation
*Hotel openings and repositioning
Proven results :
✅ 48% GOP |
✅ +120% asset valuation growth
✅ Successful projects across 6 Latin American countries
🔹 Let's connect :
📩 Email: diurugeles@gmail.com
🎥 YouTube:https://www.youtube.com/@DUHC-S
Instagram: https://www.instagram.com/diur_2000/
https://viajes-noticias-duhospitality.blogspot.com
https://viajes-duhospitality.blogspot.com
https://travel-duhospitality.blogspot.com
Disclaimer
DUHC&S shares this information for educational and informational purposes only. The news articles reproduced here are sourced from public and recognized media outlets. We are not the original authors of this content but rather distributors of it. All credits go to the original sources cited in each article. If you are the legitimate owner of any material and wish to have it modified or removed, please contact us immediately at diurugeles@gmail.com, and we will address your request promptly.
Comments
Post a Comment