Ross & Weil - Chapter 4 (Enterprise Maturity) Flashcards
What is the description of the ‘four/five stages of architecture maturity’?
The predictable path that companies navigate to achieve a foundation for execution and for building their EA
What are the 5 stages of architecture maturity?
- Business Silos
- Standardized Technology
- Optimized Core
- Business Modularity
- Dynamic Enterprise (Smits)
How can companies move through these stages?
- First by building and leveraging the foundation of execution.
- Then shifting focus of IT investments and practice business process redesign.
- Looking for global synergies instead of local autonomy
What are the benefits if moving through these stages?
- Organizational learning on applying IT and business process discipline as strategic capabilities IN EACH STAGE
- Reduced IT cost
- Greater strategic agility
What are the characteristics of stage 1 - Business Silo’s?
- IT investments for local problems and opportunities
- Focus IT: Automate specific business processes
- Might have shared data, but not technology standards
- IT investments are justified on cost-reduction base, capital to invest by BU’s is acquired by cost-benefit analysis
- Local solutions can increase company competitiveness through local specialization
- One-off solutions create a legacy of system - complex
- Obstruct standardization and integration
- Often focus on solving immediate business needs, not developing future capabilities.
When do companies go from business silo’s to standardized technology?
When there is a need for efficiency in IT operations and a desire to build a solid data and process platform.
What are the characteristics of stage 2 - Standardized Technology?
- IT investment shift from local applications to shared infrastructure
- Technology standards and fewer platforms (lower cost, but fewer choices)
- Focus IT: automate specific processes, but more focus on cost-effectiveness and reliability
- IT shapes the business solutions no, NOT BU managers
- Creation of CIO: standardizing and consolidating platforms, providing shared infrastructure;
- Solutions are based on the best solution given the acceptable technology platforms.
- Problem: data still embedded in individual applications
What are the characteristics of stage 3 - Optimized Core?
- Move from local view to enterprise view
- Eliminate data redundancy by developing interfaces to corporate data and standardizing business processes
- IT investments: Enterprise systems and shared data
- Role of IT: Build reusable data and business process platforms based on predictable core processes
- Managers to be convinced that standardization enables innovation and better delivery to customers
- Standardized processes means taking over control over business process design from BU leaders
What are the characteristics of stage 4 - Business Modularity?
- Enables strategic agility through customized and reusable modules
- Digitized processes are refined and modularized
- Role IT: provide linkages between process modules
- Process modules are built on the standard core and link to other processes through standardized interfaces (so still standardization)
- Platform for innovation by ensuring predictability of core processes; enabling local experiments
- Companies need to learn to identify strategic opportunities and how to develop and reuse modules to extend their core.
- Reusable modules -> thicker core -> greater efficiencies while allowing global customization
Which two ways are there to refined digitized processes and modularize them?
- Create reusable modules and allow BU’s to select customer-oriented processes from a menu of options
- Grant BU managers discretion in the design of front-end processes, which can be built or bought as modules.
Either way, managers get more freedom again.
What are the characteristics of stage 5 - Dynamic Enterprise (Smits)?
- Extending the concept of reusable modules to enable companies to rapidly reconfigure their portfolios of businesses.
- Based on core capabilities managers look for opportunities to partner in the network(extended supply chain) and acquire (firms with resources and capabilities needed)
- Extend the concept of reusable modules
How can companies extend the concepts of reusable modules in stage 5 - dynamic enterprise?
- Internally: enable fast reconfiguration of business portfolios
- Externally: grab opportunities for partnerships, joint ventures –> support external networks
- Dynamic: create and recreate business processes with changing partners
How is organizational flexibility in stage 1?
- BU Managers full control over business and IT decisions
- Local flexibility, global inflexibility (latter: all BU managers need to agree for global change)
- 100% solution for local problems
How is organizational flexibility in stage 2?
- BU managers give up some control due to technical standards
- 80% solution for local problems
- Standardized technology increases global flexibility
How is organizational flexibility in stage 3?
- Local BU managers lose control over core processes and people and systems executing them
- Local processes might become sub optimal for global flexibility (due to process and data standardization)
- Global flexibility increases due to data transparency, comparability and predictability.
