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Flashcards in Week 4: EA as a strategy Deck (24)
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EA consists of

- Organizational architecture
- Process architecture
- IS application portfolio architecture
- Information architecture
- IT architecture


Enterprise architecture as a business strategy

Based on empirical research: Focussing on strategy -> analysis, choice, implementation. However, based on findings in large firms, only a few were early adopters. Research is somewhat outdated with limited vision for the future.


3 models for implementing the operational model of EA at the business network level.

- Value network diagram
- Capabilities diagram
- Capabilities blueprint


Business network theory

Organizations work together in IT enabled business networks or integrated supply chains to outperform other business networks.


Resource based view of the firm (Barney1991)

- Acquire resources (VRIN: Valurable, Rare, Inimitable, Non-substitutable).
- Develop capabilities --> competences to use these resources.


What is EA needed for

- Division of labor and coordination.
- Centralization and decentralization (concentration and de-concentration)
- Standardization


Position of EA

An instrument, a management tool, to implement business strategy.


Definitions EA

- EA: The deliberate design of the enterprise as a whole; this is in contrast to the design of a part of the enterprise, such as an information system (McDonald).
- EA: The organizing logic for core business processes and IT infrastructure reflecting the standardization and integration of a company's operating model (Ross, et al).
- EA: A strategic information asset base, which defines the business mission, the information to perform the mission, the technologies necessary to perform the mission, and the transitional processes for implementing new technologies in response to changing mission needs (US Federal CIO Council).


Indicators of trouble for EA

- Different parts of the organization give different answers to the same customer questions --> Information needed to make key product and customer decisions is not available.
- Our business lack agility - every new strategic initiative is like starting from scratch - IT is consistently a bottleneck for change.
- There are different business processes for completing the same activity across the company, each with a different IT system.
+ we don't know whether our company gets good value from IT.
+ senior management dreads discussing IT.


Foundation for execution.

Routine tasks in a firm need to be automated so that they are executed reliably and predictably without requiring and thought.
- the foundation for execution digitizes the routine processes.
- to provide reliability and predictability
Foundation for execution is:
- The IT infrastructure
- The digitized business processes
- Together automating a company's core capability's


Operating model

The vision on the organization by the top management -> this is translated to EA and it serves a maturity model.


Why use foundation for execution?

- Reduce complexity
- Enhance business agility
- Fulfill needs for regulatory and legal compliance.


Operating model

Represent the necessary level of business process integration and standardization for delivering goods and services to customers. Operating model describes how a company wants to thrive and grow -> 2 growth strategies:
- Organic growth
- Acquisition growth


Dimensions of an operating model

- Business process standardization: choosing how a process will be executed regardless of who is performing the process and where it is completed.
- Business process integration: choosing how to link organizational units through shared data.


Determining the quadrant of the operating model

- To what extend is the success of one business unit dependent on the availability, accuracy, and timeliness of other business units' data? -> Degree of integration.
- To what extend does the company benefit by having business units run their operations in the same way? -> Degree of standardization.


Management and data

Management should own the data, the process shouldnot own the data. Data sharing should be stimulated by the management.


Diversification, autonomy and shared services

- Low level of process standardization and integration.
- Synergy in IS portfolio
- Growth strategy


Low level of process standardization and integration

Business units have a few shared product/clients, and independent transactions.
- Bus: unique operations, own selection of supplier and partner.
- Local process design, no shared data and data definitions.


Synergy in IS portfolio

Look for shared services in this quadrant, and look where you can use the same service in another department.
- Business units generate business for each other: related by not integrated organizations.
- Scale benefit of shared services: HRM, finance, procurement, property, etc. and IT services.


Growth strategy

- Organic growth: succes of individual business units.
- Acquisition: related business strengthen portfolio.


Why departments should share data

- High level of process integration
+ BU's realize aggregate product, serving the same end customer, and/or using the same suppliers/dependent transactions.
+ Shared data on customers/suppliers/product.
+ Necessary coordination centralized + consensus processes.
- Low level of process standardization.
+ Operationally unique business units or functions.
+ BU control over business process design and IT apps.
- Growth strategy
+ Organic: product innovations to existing customers.
+ Acquisitions: new customers for existing products, new products for existing customers.


Opportunities and challenges Coordination & Unification

- Integration of business processes makes acquisitions more challenging.
- Process integration facilitates expansion into new markets through organic growth.


Opportunities and challenges Unification & Replication

Acquisition through 'rip&replace' approach.


Opportunities and challenges Diversification

Fewer constraints and leverages fewer capabilities.