Week 6: EA as a strategy Flashcards
ArchiMate
Model is used for strategic consulting services –> to draw attention to the current situation of the enterprise as-is and to-be.
Key of ArchiMate is that the total enterprise of the firm is divided in three columns and three layers. Each layer is split in to a service and a resource layer. –> 6 layers, 3 columns.
Capability
Capacity * Ability
- Capacity: how much do we have.
- Ability: a person that can do it (–> has those capabilities).
- Relevant question for capability = ‘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.
Competence
Competence = Ability
- It is the quality of being able, and having sufficient knowledge and skills to do a task.
- Relevant question for competence = ‘Who knows what?’ and ‘How well do they know?’
Capability Maturity Model (CMM)
Famous maturity model. Levels of CMM: Stage 1: Initial level Stage 2: Repeatable level Stage 3: Defined level Stage 4: Managed level Stage 5: Optimizing level
Stage 1: Initial level
Business silos
- Divisions/departments: responsible for their own ways of working and accountable for own results.
- Role of IT:
+ Automate specific business processes.
+ Business managers decide business process design.
- Focus of IT investments:
+ Delivering solutions for local business problems and opportunities.
+ Justification is local business case, usually cost reduction.
Different business silos result in a spaghetti architecture. Hard to change. Most of the time IT is linking the different silo’s. Alignment process of this stage has no link between the business strategy and the EA.
Value of EA on stage 1:
- Focus on creating insight and oversight in portfolio of applications , and 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.
Alignment stage 1:
Strategy -> Local initiatives -> Local IT-solutions -> EA?
Stage 2: Repeatable level
Objective is to decrease the number of platforms to be managed. Mainly done by implementing standardized technology platform. Main reason for implementing this platform is to reduce risk and costs of shared services, improved reliability, security, and development time. Will result in:
- Lower IT costs compared to stage 1.
- Fewer choice on IT solutions.
Key management issue: Management of technology standards.
Organisation in stage 2:
- Creation of the corporate CIO role.
- Centralized selection and knowledge of technology platforms, and definitions of infrastructure is extended.
- Local focus remains on automating local business processes, but there is a shift from functionality to cost-effectiveness and reliability.
Alignment stage 2:
Strategy -> EA -> Local IT-solutions
Strategy -> Local initiatives -> Local IT-solutions
Stage 3: Defined level
A company moves from local data and applications to enterprise wide systems and enterprise wide data.
- Strategic role of IT: facilitate achievement of enterprise objectives by building reusable data and business process platforms.
- Challenge: convince local business managers to hand over process design.
- Condition: teamwork of senior IT and business managers.
- Choices: which data and which process platforms should be shaerd?
Alignment stage 3:
Strategy -> EA -> Shared processes & data -> Local implementation -> Strategy -> etc.
Stage 4: Managed level
In stage 4, a company focusses on strategic agility, which is seamless linkage between business process modules. The main investment area is business process modularity:
- Reusable
- Customized
- Process modules
- Potential shared modules
Stage 4 complements stage 3 by:
- Componentize shared applications, define and redefine modules and analyze local apps for potential shared modules.
- Standardized integration.
2 options in stage 4 architecture:
- Business services: create plug an play processes.
- Create and provide reusable business services with standard interfaces.
- Organized for collaboration between BU’s. - Allow business managers to create specific front-ends on core systems.
- The focus here is provide seamless linkages between business process modules.
- Firms develop independent tasks, an application, implement and evaluate the module. Updated when not fitting the requirements. Updated on an automated basis.
Some applications are shared across BU’s, business data is organized and stored in the same technology/standard.
Create a plug and play process:
Organizing for collaboration between BU’s:
- Develop ‘independent tasks’, then ‘application’, then ‘evaluate and adapt’.
+ Analyze your workflow
+ BPM/SOA: a series of web services organized in one process.
+ Design process model, build application, then execute.
+ Control: realization vs. model.
- Develop ‘interactive tasks’
+ Collaborative platforms: people cooperate on cases.
+ Milestones defined, range of possible actions, process emerges.
+ Accounting for choices made, case log.
IT for business modularity:
- Focus: provide seamless linkages between business process modules, standardization interfaces, interface service.
- Process modules build on the standard one:
+ Develop and maintain a set of reusable modules.
+ Local experiments result in new modules. If succesful -> extend the core set.
- New business skill: identify strategic opportunities that best leverage the IT core.
+ IT needs to communicate what the foundation can be used for.
Alignment of stage 4:
Strategy -> EA -> IT-offerings -> Evolutionary developments -> Strategy -> etc.
Stage 5: Optimizing level
The firm extends the concept of reusable modules to enable companies to rapidly reconfigure their portfolios of businesses. Based on the core capabilities, managers look for opportunities to partner and acquire business strategies that will focus on dynamically coupling with many other businesses.
Extend the concept of reusable modules:
- Internally: enable fast reconfiguration for partnerships, joint ventures -> support external networks.
- Externally: grab opportunities for partnerships, joint ventures -> support external networks.
- Dynamic: create and recreate business processes with changing partners.
Business components for the dynamic enterprise:
Based on unique intellectual property of the firm, on the following topics:
- Business rules, how to conduct the business of the component.
- Business process: optimized business process steps exposed to potential partners.
- Data: key data to be shared vs private data.
- Interfaces: standardized connections to all parties in context.
- Security: rules for connecting, encryption, self-diagnosis, defence against attacks.
- Rules for coupling: strategic, negotiated, and legal rules embedded into the component.
Rules according maturity
- Not every organization should strive for a higher maturity level.
- Organisations should go through all stages.
- Not the whole organisation has to change at the same time.
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 executives.
- Enhanced strategic business outcomes:
+ Operational excellence
+ Customer intimacy
+ Product leadership
+ Strategic agility
Drivers towards maturity of EA
- Need for cost decrease and risk management.
+ Synergy across the enterprise.
+ Cloud: across boundaries of enterprises. - Compliance, transparency, discipline
+ Sox, Basel II, HIPAA, global requirements. - Internal need to limit to focus IT knowledge and capability.
+ Focus on “core”: purchase/outsource what others can do better. - Incidents, e.g. outsourcing, M&A.
- Need for flexibility / agility
+ Growth for the organisation.
IT engagement model
A system of governance mechanisms to assure that business and IT projects achieve both local and company-wide objectives. 3 main ingredients at top performers: 1. Companywide IT governance 2. Project management 3. Linking mechanisms between these 2
How to coordinate and align 6 stakeholders groups in the firm?
- 3 management levels:
+ Overall company management
+ Business unit management
+ Line or project management - Each on the business side & the IT side of the company.
- The IT engagement model coordinates across 3 levels (enterprise, business, and project level) and 2 domains (IT and business).
