5c - Ross & Weill 3 Flashcards

1
Q

What is dynamic capability?

A

The firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.

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2
Q

What are the 3 dynamic capabilities necessary in order to meet new challenges, according to Teece?

A
  1. Sense and shape opportunities and threats
  2. Seize opportunities
  3. Maintain competitiveness through enhancing, combining, protecting, and (optionally) reconfiguring the enterprise’s assets.

In short: sensing, seizing & reconfiguring.

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3
Q

What are the 5 maturity stages in EA?

A
  1. Business silos
  2. Standardized technology (best practice 1995)
  3. Optimized core (best practice 2005)
  4. Business modularity
  5. Dynamic enterprise
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4
Q

Business silos: divisions/departments are …

A
  • responsible for their own ways of working

- and accountable for own results

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5
Q

Business silos: what is the role of IT?

A
  • to automate specific business processes

- business managers decide process design

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6
Q

Business silos: what is the focus of IT investments?

A
  • delivering solutions for local business problems and opportunities
  • justification is local business case, usually cost reduction
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7
Q

How many large firms (%) are still in stage 1?

A

12%, according to the R&W research

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8
Q

What is the result of a business silo?

A

BU silos and spaghetti architecture, design debt

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9
Q

What is the value of EA in stage 1 of EA maturity?

A

Focus on creating insight & oversight in:

  • Portfolio of applications
  • Portfolio of IT competences

Support the learning, reuse, and co-development of systems
Behavioural guidelines

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10
Q

Standardized technology: what is the objective of this stage?

A

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

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11
Q

Standardized technology: what is the key management issue?

A

Management of technology standards

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12
Q

How many firms are in stage 2 (%)?

A

48%, from a research conducted in 2005.

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13
Q

Standardized technology: what does the IT-organization look like?

A
  • 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.
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14
Q

What is the value of EA in stage 2 of EA maturity?

A

Gaining efficiency, cost-reduction

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15
Q

Optimized core: what is the goal of this stage?

A

Going from local data & applications to enterprise-wide systems and enterprise-wide data.

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16
Q

Optimized core: what is the (strategic) role of IT?

A
  • Facilitate achievement of enterprise objectives

- by building reusable data and business process platforms

17
Q

Optimized core: what is the main challenge?

A

Convincing local business managers to hand over control of process design.

18
Q

Optimized core: what are the main choices to be made?

A

Which data and which process platforms should be shared?

19
Q

How many firms are in stage 3 (%)?

A

34%

20
Q

Optimized core: what are the main competitive advantages of this stage?

A
  • 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
21
Q

Business modularity: what is the main focus & investment area of this stage?

A

Strategic agility, by investing in business process modularity: reusable, customized process modules

22
Q

How many firms are in stage 4 (%)?

A

6% realized a plug-and-play architecture

23
Q

Business modularity: what are the 2 options for realizing this stage?

A
  1. Create/provide reusable business services with standard interfaces
  2. Allow business managers to create specific front-ends on core systems
24
Q

Business modularity: how do you create plug-and-play processes?

A

Organize for collaboration between BUs:

  • Develop independent tasks, then application, then evaluate and adapt
  • Develop interactive tasks (collaborative platforms, milestones, logs etc.)
25
Q

Business modularity: what is the main focus of IT in this stage?

A

Providing seamless linkages between business process modules: standardized interfaces, interface services

Process modules are built on the standard core

26
Q

Dynamic enterprise: how does this stage extend the previous stage?

A

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.

27
Q

Dynamic enterprise: what are the business components?

A
  1. Business rules
  2. Business process
  3. Data
  4. Interfaces
  5. Security
  6. Rules for coupling
28
Q

Name 5 benefits of EA, according to Ross et al?

A
  • Reduced IT costs
  • Increased IT responsiveness
  • Improved risk management
  • Increased management satisfaction
  • Enhanced strategic business outcomes
29
Q

How do you develop the FfE, according to Ross & Weill?

A

“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.

30
Q

What is the IT engagement model?

A

A system of governance mechanisms.

31
Q

What is the purpose of the IT engagement model?

A

Assure that business and IT projects achieve both local and company-wide objectives.