CIS/MIT 8090 Intro
Set the stage
2
Cognitive Map of 8090
IS Architectures as Strategy Weill, Ross & Robertson, “Enterprise
Architecture as Strategy”
Work Systems Models S. Alter, “Work System Method”
IS architectural components and development Mid-Range Modeling
Architectural Modeling options
ERP as instantiation of Architectures
3
Lag
Data
Applications
Infrastructure
Traditional Approach to Systems Implementation
Source: Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, J. Ross, P. Weill, D. Robertson, HBS Press, 2006.
Strategic Initiative
New Idea
Lag Solution Design
4
The Result of Traditional System Implementation Approaches
Corporate Data
Technology Platforms
Applications
Data
5
The systems landscape we'd like to have Data Warehouse
Technology Platforms
Applications
Data
Middleware
6
There Are Four Operating Models
Source: Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, J. Ross, P. Weill, D. Robertson, HBS Press, 2006.
Bus
ines
s P
roce
ss In
tegr
atio
n
Hig
h
Coordination Unique business units with a need
to know each other’s transactions Examples: Merrill Lynch GPC,
PepsiAmericas, MetLife
Key IT capability: access to shared data, through standard technology interfaces
Unification Single business with global process
standards and global data access Examples: Southwest Airlines, Dow
Chemical, UPS Package Delivery
Key IT capability: enterprise systems reinforcing standard processes and providing global data access
Low
Diversification Independent business units with
different customers and expertise Examples: Johnson & Johnson, GE, ING
Key IT capability: provide economies of scale without limiting independence
Replication Independent but similar business
units Examples: Marriott, CEMEX, ING
DIRECT
Key IT capability: provide standard infrastructure and application components for global efficiencies
Low High
Business Process Standardization
7
Different Standardization Requirements of the Four Operating Models
Source: Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, J. Ross, P. Weill, D. Robertson, HBS Press, 2006.
Bus
ines
s P
roce
ss In
tegr
atio
n
Hig
h
Coordination Customer and product data Shared services Infrastructure, portal, and
middleware technology
Unification Operational and decision making
processes Customer and product data Shared services Infrastructure technology and
application systems
Low
Diversification Shared services Infrastructure technology
Replication Operational processes Shared services Infrastructure technology and
application systems
Low High
Business Process Standardization
8
Business Silos
Standardized Technology
Optimized Core
Business Modularity
Business Agility
25% 46% 27% 2% % of Firms
Companies gradually mature enterprise architecture and build out their platforms.
Source: Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, J. Ross, P. Weill, D. Robertson, HBS Press, 2006. Percentage of firms in each stage is updated based on a 2007 survey of 1508 IT executives.
Standardized Enterprise Processes/
Data
Standard Interfaces
and Business Componentization
Enterprise-Wide Technology Standards
Locally Optimal Business Solutions
9
Business Silos
Standardized Technology
Optimized Core
Business Modularity
Architecture maturity increases global agility.
Source: Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, J. Ross, P. Weill, D. Robertson, HBS Press, 2006.
Global Agility Local
Flexibility
10
IT spending changes as architecture matures.
IT budgets are based on a 2007 survey of 1508 IT executives. Business silos budget is the baseline. Budgets for other stages are represented as a percentage of the baseline budget.
Strategic Choices
Operational Efficiency
IT Efficiency
Local/Functional Optimization
Business Modularity
Optimized Core
Standardized Technology
Business Silos
0%
100%
Perc
enta
ge o
f IT
Inve
stm
ent
Local Applications
Shared Data
Enterprise Systems
Shared Infrastructure
100% 84% 92% 145% IT Budget
Strategic Implications of IT
Architecture Maturity
36%
35%
25%
40%
16%
35%
15%
33%
18% 21%
32% 34%
11% 14% 17% 18%
11
Architecture Planning and Design
Standards Management
IT Funding Project Management
Firms learn by building management competencies.
Management practices within each practice set are statistically significantly correlated with each other. All four competencies are significantly correlated with architecture benefits.
Project methodology Post-implementation assessment IT program managers Business leadership of project teams
Senior executive oversight Enterprise architecture guiding principles Enterprise architecture graphic Process owners Full-time enterprise architecture team
Business cases Centralized funding of enterprise apps Infrastructure renewal process IT Steering Committee
Architects on project teams Technology research & adoption process Architecture exception process Formal compliance process Centralized standards team
12
Getting from ‘as-is’ to ideal state
MIT/CIS 8090 Intro
Operating Model Defines integration and standardization requirements
Foundation for Execution • Core Business processes
• IT infrastructure
Enterprise Architecture
Engagement Model
Strategic Initiative Strategic Initiative
Strategic Initiative Strategic Initiative
Strategic Initiative
Strategic Initiative
Strategic Initiative
Establishes priorities
Learning and
exploitation
13
Getting from ‘as-is’ to ideal state
MIT/CIS 8090 Intro
Operating Model Defines integration and standardization requirements
Foundation for Execution • Core Business processes
• IT infrastructure
Enterprise Architecture
Engagement Model
Strategic Initiative Strategic Initiative
Strategic Initiative Strategic Initiative
Strategic Initiative
Strategic Initiative
Strategic Initiative
Establishes priorities
Learning and
exploitation
14
Getting from ‘as-is’ to ideal state
MIT/CIS 8090 Intro
Operating Model Defines integration and standardization requirements
Foundation for Execution • Core Business processes
• IT infrastructure
Enterprise Architecture
Engagement Model
Strategic Initiative Strategic Initiative
Strategic Initiative Strategic Initiative
Strategic Initiative
Strategic Initiative
Strategic Initiative
Establishes priorities
Learning and
exploitation
15
Alter’s Work System Framework
16
Alter’s Work System Framework
17
Work System Snapshot
18
Work systems are NOT Information Systems
19
Cognitive Map of 8090
IS Architectures as Strategy Weill, Ross & Robertson, “Enterprise
Architecture as Strategy”
Work Systems Models S. Alter, “Work System Method”
IS architectural components and development Mid-Range Modeling
Architectural Modeling options
ERP as instantiation of Architectures