The negative effectsof the overall complexity of business and IT in the enterprise, manifest themselves asunreliability and excessive cost of operations, and excessive cost and time tomake changes.

Business complexity has additional negative effects due to the difficulties in selling more complex products and customer dissatisfaction due to unclear and time consuming business processes.

Therefore complexity of the business and IT in enterprise needs to be controlled and managed.

To be able tocontrol and manage the complexity, we need to be able to measure it.

If looking into different treatments of the complexity of systems, we can define the complexity as

the number of different elementsand their interconnectedness (number of interconnections between theseelements).

Based on such definition, we propose tomeasure business and IT complexity by counting the elements of business(like business models, customer segments, offered products, business functions, business services, business processes, etc.) and IT (like data stores, applications, technologies, etc.), and their interconnections.

In both business andIT we can differentiate between:

• external complexity, caused by the external factors that are notunder our control or depend on large scale strategic decisions (that define in which business the enterprise is in), which cannot be reduced without the large changes in the enterprise business strategy, and

• internal complexity, caused by our tactical choices and decisionsof how we organize ourselves or how we operate (that also defines the complexity for the customers), which can and should be reduced to improve the overall efficiency and agility of the enterprise.

The internal business complexity (e.g. how we organize or operate the business) defines also large part of the external IT complexity, the other part being defined by the external technological factors.