MIT 8090 Intro - J. Mack Robinson College of Business · MIT 8090 Intro Day 1 “Seng the stage” May 23, 2009 Professor: Duane Truex

MIT8090Intro

Day1“Se3ngthestage”May23,2009

Professor:DuaneTruex

2

CogniBveMapof8090

ISArchitecturesasStrategyWeill,Ross&Robertson,“Enterprise

ArchitectureasStrategy”

WorkSystemsModelsS.Alter,“WorkSystemMethod”

ISarchitecturalcomponentsanddevelopmentMid‐RangeModeling

ArchitecturalModelingopBons

ERPasinstanBaBonofArchitectures

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 DataWarehouse

Technology Platforms

Applications

Data

Middleware

6

There Are Four Operating Models


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


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.

StandardizedEnterpriseProcesses/

Data

StandardInterfaces

andBusinessComponenBzaBon

Enterprise‐WideTechnologyStandards

LocallyOpBmalBusinessSoluBons

9

BusinessSilos

StandardizedTechnology

OpBmizedCore

BusinessModularity

Architecture maturity increases global agility.


GlobalAgilityLocal

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.

StrategicChoices

OperaBonalEfficiency

ITEfficiency

Local/FuncBonalOpBmizaBon

BusinessModularity

OpBmizedCore

StandardizedTechnology

BusinessSilos

0%

100%

Percen

tageofITInvestmen

t

LocalApplicaBons

SharedData

EnterpriseSystems

SharedInfrastructure

100% 84% 92% 145%ITBudget

StrategicImplicaBonsofIT

ArchitectureMaturity

36%

35%

25%

40%

16%

35%

15%

33%

18%

21%32% 34%

11% 14% 17% 18%

11

ArchitecturePlanningandDesign

StandardsManagement

ITFundingProjectManagement

Firmslearnbybuildingmanagementcompetencies.

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

Ge3ngfrom‘as‐is’toidealstate

MIT/CIS 8090 Intro

Opera&ngModelDefinesintegraBonandstandardizaBonrequirements

Founda&onforExecu&on• CoreBusinessprocesses

• ITinfrastructure

EnterpriseArchitecture

EngagementModel

StrategicIniBaBveStrategicIniBaBveStrategicIniBaBveStrategicIniBaBve

StrategicIniBaBve

StrategicIniBaBve

StrategicIniBaBve

EstablishesprioriBes

Learning

and

exploitaBon

13


MIT/CIS 8090 Intro





EngagementModel


StrategicIniBaBve

StrategicIniBaBve

StrategicIniBaBve


Learning

and

exploitaBon

14


MIT/CIS 8090 Intro





EngagementModel


StrategicIniBaBve

StrategicIniBaBve

StrategicIniBaBve


Learning

and

exploitaBon

15

Alter’sWorkSystemFramework

16

Alter’sWorkSystemFramework

17

WorkSystemSnapshot

18

WorksystemsareNOTInformaBonSystems

19

CogniBveMapof8090

ISArchitecturesasStrategyWeill,Ross&Robertson,“Enterprise

ArchitectureasStrategy”

WorkSystemsModelsS.Alter,“WorkSystemMethod”

ISarchitecturalcomponentsanddevelopmentMid‐RangeModeling

ArchitecturalModelingopBons

ERPasinstanBaBonofArchitectures

Documents

MIT 8090 Intro - J. Mack Robinson College of Business · MIT 8090 Intro Day 1 “Seng the stage” May 23, 2009 Professor: Duane Truex