5c - Ross & Weill 3 Flashcards
What is dynamic capability?
The firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.
What are the 3 dynamic capabilities necessary in order to meet new challenges, according to Teece?
- Sense and shape opportunities and threats
- Seize opportunities
- Maintain competitiveness through enhancing, combining, protecting, and (optionally) reconfiguring the enterprise’s assets.
In short: sensing, seizing & reconfiguring.
What are the 5 maturity stages in EA?
- Business silos
- Standardized technology (best practice 1995)
- Optimized core (best practice 2005)
- Business modularity
- Dynamic enterprise
Business silos: divisions/departments are …
- responsible for their own ways of working
- and accountable for own results
Business silos: what is the role of IT?
- to automate specific business processes
- business managers decide process design
Business silos: what is the focus of IT investments?
- delivering solutions for local business problems and opportunities
- justification is local business case, usually cost reduction
How many large firms (%) are still in stage 1?
12%, according to the R&W research
What is the result of a business silo?
BU silos and spaghetti architecture, design debt
What is the value of EA in stage 1 of EA maturity?
Focus on creating insight & oversight in:
- Portfolio of applications
- Portfolio of IT competences
Support the learning, reuse, and co-development of systems
Behavioural guidelines
Standardized technology: what is the objective of this stage?
Decrease the number of platforms to be managed
-> stage 2 companies have 15% lower IT costs vs. stage 1
Result: fewer choices for IT solutions
Standardized technology: what is the key management issue?
Management of technology standards
How many firms are in stage 2 (%)?
48%, from a research conducted in 2005.
Standardized technology: what does the IT-organization look like?
- Creation of the corporate CIO-role
- Centralized selection & knowledge of technology platforms
- Local focus remains on automating local business processes; but shifting from functionality to cost-effectiveness and reliability.
What is the value of EA in stage 2 of EA maturity?
Gaining efficiency, cost-reduction
Optimized core: what is the goal of this stage?
Going from local data & applications to enterprise-wide systems and enterprise-wide data.
Optimized core: what is the (strategic) role of IT?
- Facilitate achievement of enterprise objectives
- by building reusable data and business process platforms
Optimized core: what is the main challenge?
Convincing local business managers to hand over control of process design.
Optimized core: what are the main choices to be made?
Which data and which process platforms should be shared?
How many firms are in stage 3 (%)?
34%
Optimized core: what are the main competitive advantages of this stage?
- Higher profitability
- Faster time to market
- Higher ROI IT investments
- Better access to shared customer data
- Lower risk of mission-critical system failure
- 80% higher senior management satisfaction with technology
- 25% lower IT costs
Business modularity: what is the main focus & investment area of this stage?
Strategic agility, by investing in business process modularity: reusable, customized process modules
How many firms are in stage 4 (%)?
6% realized a plug-and-play architecture
Business modularity: what are the 2 options for realizing this stage?
- Create/provide reusable business services with standard interfaces
- Allow business managers to create specific front-ends on core systems
Business modularity: how do you create plug-and-play processes?
Organize for collaboration between BUs:
- Develop independent tasks, then application, then evaluate and adapt
- Develop interactive tasks (collaborative platforms, milestones, logs etc.)
Business modularity: what is the main focus of IT in this stage?
Providing seamless linkages between business process modules: standardized interfaces, interface services
Process modules are built on the standard core
Dynamic enterprise: how does this stage extend the previous stage?
From p&p processes to p&p business
It extends the concept of reusable modules to enable companies to rapidly reconfigure their portfolio of businesses.
Managers look for opportunities to partner / acquire in the network, based on the core capabilities.
Create and recreate business processes with changing partners.
Dynamic enterprise: what are the business components?
- Business rules
- Business process
- Data
- Interfaces
- Security
- Rules for coupling
Name 5 benefits of EA, according to Ross et al?
- Reduced IT costs
- Increased IT responsiveness
- Improved risk management
- Increased management satisfaction
- Enhanced strategic business outcomes
How do you develop the FfE, according to Ross & Weill?
“No Big Bang” -> make small steps, one project at a time, using good governance & IT-engagement
However, the more mature, the more capabilities and the more projects can be handled successfully.
What is the IT engagement model?
A system of governance mechanisms.
What is the purpose of the IT engagement model?
Assure that business and IT projects achieve both local and company-wide objectives.
