Part 3: Lecture 6a - Maturity of the firm & IT Engagement Flashcards

1
Q

Explain the definition ‘Resources’ within an enterprise.

A

Resources are ‘things’ like hardware, software licenses, people, data, etc.
• A firm owns (or has access to) certain amounts of resources
• Of interest (RBV-theory) are VRIN resources (Valuable, Rare, In-imitatable, Non-substitutable)
• “you may count how many resources a firm has”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Explain the definition ‘Competence’ within an enterprise.

A

Competence = the ability to use the resources
• Having sufficient knowledge and skills (and resources) to do a task
• Competence is another word for an individual’s know-how or skill
• Relevant question for competence is “Who knows how?” and “How well do they know?”
• “you may count how many competences a firm has”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Explain the definition ‘Capability’ within an enterprise.

A

Capability = capacity * ability
• Capacity = how much does a firm 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?”
• “you may count how many capabilities a firm has”
• Counting capabilities may be regarded as assessing “Business processes”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the famous maturity model?

A

CMM: Capability Maturity Model for software development

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the 5 stages of the maturity model?

A
Stage 1: Business Silos
Stage 2: Standardized technology
Stage 3: Optimized core
Stage 4: Business modularity
Stage 5: Dynamic venturing
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Explain the role of the department/division in stage 1.

A

Divisions / departments: responsible for their own ways of working and accountable for own results

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Explain the role of the IT in stage 1.

A

Role of IT: Automate specific business processes. Business managers decide business process design

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Explain the focus of IT investment in stage 1.

A

Focus of IT investments: delivering solutions for local business problems and opportunities. Justification is local business case, usually cost reduction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Explain the architecture in stage 1.

A

Silos and spaghetti architecture: high design debt.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Explain the value of EA in stage 1.

A
  • Focus on creating insight & oversight in portfolio of applications and portfolio of IT competences
  • Support the learning, reuse and co-development of systems
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the behavioral guidelines in stage 1?

A
  • Respect the total accountability of the divisions

* Help divisions to create success

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Explain stage 2 (Standardized technology).

A

In this stage, the CIO comes in. They try to link the applications and data.

• Objective: decrease the number of platforms to be managed
o Reduce risk and costs of shared services, improves reliability, security and development time.
o Key management issue: management of technology standards

• Result: fewer choices for IT-solutions. Acceptable trade-off.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the benefits of stage 2?

A
  • Lower cost
  • Easier technical integration
  • Basis for future co-development
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Explain the IT organization of stage 2.

A
  • Creation of the corporate CIO-role
  • Centralized
  • Selection & knowledge of technology platforms
  • Definition of infrastructure is extended

• Local

  • Focus remains on automating local business processes
  • But: shift from functionality to cost- effectiveness and reliability
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the misunderstanding in stage 2?

A

Business implicitly assume that “shared systems = shared info”. Business (top) management in stage 2 tends to be confused on the “technology platform” versus the “actual business implementation”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Explain stage 3 (Optimized core/the digital firm)

A

From local data and applications to enterprise wide systems and enterprise wide data.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the strategic role of IT in stage 3?

A

Strategic role of IT:

  • Facilitate achievement of enterprise objectives
  • By building reusable data and business process platforms
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the challenge, condition and choices of stage 3?

A

• Challenge: convince local business managers to hand over control of process design.
• Condition: team work of senior IT and business managers
• Choices: which data and which process platforms should be shared?
- The choice is which data en process platform can we share in our organization to reduce the diversity between business units.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What are the benefits in stage 3?

A
Benefits:
• Higher profitability
• Faster time to maker
• Higher ROI It investments
• Better access to shared customer data
• Lower risk of mission-critical system failure
• 25% lower IT costs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the focus of stage 4 (Business modularity)?

A

Strategic agility.

Choose your value proposition, markets, services, given the requirements for agility within the market.

21
Q

What is the main investment area in stage 4?

A

Business process modularity: reusable, customized process module

22
Q

What is the extend on results of 3d stage in stage 4?

A

Extend on results of 3d stage
• Componentize shared applications, define and refine modules, analyse local apps for potential shared modules
• Standardize integration

23
Q

What are the two options in stage 4?

A

Option 1: Business Services: Create / provide reusable business services with standard interfaces
Option 2: Front Ends: Allow business managers to create specific front-ends on core systems

24
Q

What is the role of IT in stage 4?

A

The role of IT in stage 4:
• Focus: provide seamless linkages between business process modules: standardized interfaces, interface services

• Process modules build on the standard core
o Develop and maintain a set of reusable modules
o Local experiments result in new modules, if successful extend the core set

• New business skill: identify strategic opportunities that best leverage the core. IT needs to communicate what the foundation can be used for.

25
Q

Explain the plug & play processes in stage 4.

A

Plug & play processes: organizing for collaboration between units.

• Independent tasks:
o alayse your work flow
o BPM/SOA: a series of web services organized in one process
o Design process model, build app, then execute
o Control: realization vs. Model

• Interactive tasks
o Collaborative platforms: people cooperate on cases
o Milestones defined,range of possible actions, process emerges
o Accounting for choices made, case log

26
Q

What is the name of stage 5?

A

Dynamic venturing

27
Q

Explain stage 5 (Dynamic venturing)?

A

Extending the concept of reusable modules (stage 4) to enable companies to rapidly reconfigure their
portfolios of businesses. However: needed are standards, standards, and standards.

28
Q

What is the focus of stage 5?

A

Based on core capabilities managers look for opportunities to partner in the network (extended
supply chain) and acquire (firms with resources and capabilities needed). Business strategies will focus on dynamically coupling with many other businesses.

29
Q

What is the vision of stage 5?

A

Vision (2005) Dow Chemical: from plug & play processes to plug & play business.

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
30
Q

What are the 6 Business components for the Dynamic Enterprise?

A
  1. Business rules (competence): how to conduct the business of the component.
  2. Business process (capabilities): optimized business process steps exposed to potential partners
  3. Data (resource): key data to be shared vs private data
  4. Interfaces: standardized connections to all parties in context
  5. Security: rules for connecting, encryption, self-diagnosis, defense against attacks, etc.
  6. Rules for coupling: strategic, negotiated, and legal rules embedded into the component
31
Q

Where are the Business components for the Dynamic Enterprise based on?

A

Based on unique intellectual property (resource) of the owner

32
Q

What are technologies that enables dynamic venturing?

A

IaaS, PaaS, SaaS

33
Q

In which stages are digital firms?

A
  • Stage 4 (business modularity)

- Stage 5 (dynamic venturing)

34
Q

Do organizations have to go through all stages?

A

You need to grow stepwise to reach a next level of maturity. Move incrementally.

35
Q

When do you want to increase the maturity level (drivers towards maturity)?

A
  1. Need for cost decrease and risk management
    a. Synergy across the enterprise
    b. Cloud: across boundaries of enterprises
  2. Compliance, transparency, discipline
    a. SOx, Basel II, HIPAA, global requirements
  3. Internal need to limit to focus IT knowledge and capability
    a. Focus on “core”: purchase / outsource what others can do better
  4. Incidents, e.g. outsourcing, M&A
  5. Need for flexibility / agility
    a. Growth of the organization  next slide: Greiner
36
Q

What are the benefits of EA (in 5 areas)?

A
  1. Reduced IT costs: IT operations + Application maintenance
  2. Increased IT responsiveness (due to standardization; especially stage 4)
  3. Improved risk management
  4. Increased Management Satisfaction (improved confidence of non-IT execs)
  5. Enhanced strategic Business outcomes: Improvements in:
    a. Operational Excellence • Customer Intimacy • Product Leadership • Strategic Agility
37
Q

How to get value from the Foundation for Execution?

A

How to build the FfE? = Stages of maturity

“Build the Foundation One Project at a Time”

38
Q

What is the IT engagement model?

A

System of governance mechanisms

39
Q

What is the purpose of the IT engagement model?

A

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

40
Q

What are the three main ingredients at top performers of the IT engagement model?

A
  1. Company-wide IT governance
  2. Project management
  3. Three Linking mechanisms connecting these two
41
Q

The IT engagement model coordinates across three levels and two domains. What are the three levels the IT engagement model coordinates across?

A

Three management levels:

  1. Overall company management
  2. Business unit management
  3. Line or project management
42
Q

The IT engagement model coordinates across three levels and two domains. What are the two domains the IT engagement model coordinates across?

A

The business side & the IT side

43
Q

Explain the Company wide IT governance regarding the IT engagement.

A

Company wide IT governance coordinates among these six stakeholders the decision rights
& accountability for the use of IT. Each domain does something with enterprise architecture. This resembles to some extent the fact sheets in the picture approach.

44
Q

IT Governance coordinates among six decision categories. What are these?

A
  1. IT Principles: High-level statements about how IT is used in the business
  2. IT Architecture: The organizing logic for business processes and IT infrastructure
  3. 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.
  4. Business Application Needs: Specification of the business need for purchased or internally developed IT applications
  5. IT Investment & prioritization: Decision about how much and where to invest in IT including project approvals and justification techniques.
45
Q

What are the thee linkages in the IT engagement model?

A
  1. Business linkage
  2. Alignment linkage
  3. Architecture linkage
46
Q

Explain the content and the organization roles of the Business linkage in the IT engagement model.

A

Decide on which IT and business project we run - which project are in the portfolio? How do we check if things are okay (audits)? There are also business executives.

Organization: process managers, program managers

47
Q

Explain the content and the organization roles of the Alignment linkage in the IT engagement model.

A

Decide on the enterprise architecture as-is and to-be. Alignment offices to train business and IT architects. The enterprise architect has (or should have) a role in the alignment linkage, linking the IT stuff and helping IT to support the business needs.

Organization: Alignment officers, project management office, train B & IT-architects

48
Q

Explain the content and the organization roles of the Architecture linkage in the IT engagement model.

A

IT Standards and principles, reviews, exception management

Organization: project architects/PSAs, training of IT architects, architecture committees