Companies that want to gain a competitive edge, whether by being the first into a market with new products or by launching an electronic-commerce channel, know how much they depend on information technology architectures to achieve their aims. Usually, though, the architecture is a costly and aging maze of applications, hardware systems, and networks. Far from making it possible to achieve strategic goals, it can make a mockery of them. But by looking at the evolution of another complicated set of systems—those that make up a modern city—senior managers can begin to understand more fully how the controlled and rational development of an IT architecture can enhance the ability to compete.

Stories about companies that stumbled because their IT architectures couldn't accommodate rapid and drastic change are legion. Fast-growing companies are liable to hit a wall when their architectures fail to expand quickly enough to serve new customers cost-efficiently. Long-established companies can lose market share if their architectures lack the flexibility to move products to market as quickly as their competitors do.

A leading international bank discovered this problem the hard way. Its strategy involved launching an Internet channel that included an on-line securities brokerage, but its deadlines were...