Lecture 6: EA as a strategy Flashcards
Wat is a capability?
Capacity * ability
- Capacity : how much do we have.
- Ability: a person that can do it.
- Capability is a feature or a process that can be developed or improved.
- The relevant question for capability is “how can we get done what we need to get done?” and “How easily is it to access, deploy or apply the competencies we need?”
What is a competence?
Ability
= having sufficient knowledge and skills (and resources) to do a task.
• Relevant question for competence is “Who knows how?” and “How well do they know?”
What does EA maturity stage 1 consist of?
- Primarily business silos
- Divisions/ departments are responsible for their own ways of working and are accountable for own results.
- Role of IT: IT automates specific business processes and business managers decide business process designs
- IT investments are focused on delivering solutions for local business problems and oppurtunities.
(Spaghetti architecture)
What does EA maturity stage 2 consist of?
EA maturity stage 2 (48%) is about standardized technology.
The objective is to decrease the number of platforms to be managed. Stage 2 companies have 15% lower IT costs versus stage 1.
There is lower cost, easier tehnical integration and a basis for future co-development.
The result is that there are fewer choices for IT-solutions.
The CIO role is created in this stage. The infrastructure beomes more centralized, but the focus remains on automating local business processes. There is a shift happening from functionality to cost- effectiveness and reliability.
BUT: shared systems does not mean shared info.
What does EA maturity stage 3 consist of?
Optimized core, 34%. From local data and applications to enterprise wide systems and enterprise wide data.
IT is more strategic and facilitates achievement of enterprise objectives by building reusable data and business process platforms.
Main challenge is convincing local business managers to hand over control of process designs.
Stage 3 organizations have higher profitability, faster time to market, higher ROI IT investments, better access to shared customer data, etc.
What does EA maturity stage 4 consist of?
Business modularity (6%), the focus lies on strategic agility and providing seamless linkages between business process modules (standardized interfaces, interface services).
There are more plug and play processes and BU’s collaborate more.
The process modules are build on the standard core.
A new business skill is required: identifying strategic opportunities that best leverage the IT core.
What does EA maturity stage 5 consist of?
A dynamic enterprise. It is an extended concept of stage 4.
Extending the concept of reusable modules to enable companies to rapidly reconfigure their portfolios of businesses. However: needed are standards, standards, and standards.
Based on core capabilities managers look for opportunities to partner and acquire. Business strategies will focus on dynamically coupling with many other businesses.
Extend the concept of reusable modules 1. Internally: enable fast reconfiguration of business portfolios 2. Externally: grab opportunities for partnerships, joint ventures -> support external networks 3. Dynamic: create and recreate business processes with changing partners.
What are the main benefits of EA?
• Reduced IT costs: IT operations + Application maintenance
• Increased IT responsiveness (due to standardization; especially stage 4)
• Improved risk management • Increased Management Satisfaction (improved confidence of non-IT execs)
• Enhanced strategic Business outcomes: Improved……
1. Operational excellence
2. Customer intimacy
3. Product leadership
4. Strategic agility
What is the IT engagement model?
It is a system of governance mechanisms which assures that business and IT projects achieve both local and company-wide objectives (one project at the time, incremental steps, no big bang).
There are three main ingredients at top performers:
- Companywide IT governance;
- Project management;
- Linking mechanisms connecting these two.
Which 6 decision categories are there for enterprise wide IT governance?
- IT Principles: high level statements about how IT is used in the business;
- IT Architecture: the organizing logic for business processes and IT infrastructure;
- IT infrastructure strategies: Strategies for the base foundation of budgeted-for IT capability (both technical and human) shared throughout the firm as reliable services, and centrally coordinated;
- Business application needs: specification of the business need for purchased or internally developed IT applications;
- IT Investment and Prioritization: decisions about how much and where to invest in IT including project approvals and justification techniques.
What is the value of EA on level 1?
- Focus on creating insight & oversight in: portfolio of applications, portfolio of IT competences
- support the learning, reuse and co-development of systems
Behavioral guidelines:
- respect the total accountability of the divisions
- help divisions to create success
What are the six business components for the dynamic enterprise?
- business rules
- business process
- data
- interfaces
- security
- rules for coupling
What are the three linkages of the IT engagement model?
There are two dimensions: Business and IT
The three levels are: Enterprise level, business level and project level
company wide IT governance encompasses IT and Business on the enterprise and business level.
Project management encompasses business and project level.
Architecture linkage is the link between project management and enterprise wide IT governance
What are the contents and organization of the IT engagement model?
contents: IT standards and principles, reviews, exception management
Organization: project architecture/PSA’s, training of IT architects, Architecture committees.
