Royal Philips: Enterprise Architecture – The Nucleus of Business and IT Transformation


Published on

Philips has embarked on a multi-year transformation to become an agile, process-oriented global company to help business owners bring propositions to market faster, reduce complexity and lower IT costs. The company has developed robust and innovative business architecture techniques to transform both business and IT. The key to success lies in the enterprise architecture repository, which allows Philips connect the different components of the business and IT transformation. Learn how Philips uses this to identify business capabilities that are critical, differentiating and common within business units, to manage process performance and to provide a direct link to the IT architecture.

Anosh Thakkar
VP, Head of Architecture & Platforms, Royal Philips

Published in: Technology, Business

Royal Philips: Enterprise Architecture – The Nucleus of Business and IT Transformation

  1. 1. Enterprise Architecture: The Nucleus of Transformation at Philips Anosh Thakkar Vice President, IT 1
  2. 2. Agenda Philips Accelerate! transformation Enterprise Architecture Repository (EAR) Key Learnings 2
  3. 3. Philips: A strong diversified industrial group leading in health and well-being Geographies Businesses Healthcare Consumer Lifestyle Lighting Western Europe North America Other Mature Geographies Growth Geographies3 44% 19% 37% 25% 31% 9% 35% Since 1891 €23.5 Billion ~116,000 $9.1Billion 8% of sales invested Headquarters in Amsterdam, the Netherlands People employed worldwide in over 100 countries Brand value in 2012 in R&D in 2012 59,000 patent rights, 35,000 trademark rights, 81,000 design rights Confidential Sales in 2012. Portfolio consists of ~70% B2B businesses Business Architecture, 23rd May 3
  4. 4. But, we risk losing our relevance…. 4
  5. 5. And so the Accelerate! transformation was born 2016 Targets Customer service >XX% Inventory levels -XX% IT cost -XX% Cost of non-quality -XX% Time-tomarket -XX% 5
  6. 6. IT is an area of Accelerate! in need of dramatic improvement • High IT costs with Philips at X.X%, whilst peers are at X% of Sales • Complex and patched up IT landscape • Our business is real-time, our systems are not 6
  7. 7. Where are we in our journey so far… 7
  8. 8. We have simplified from 75 to 4 Business Models FROM : – No synergies across Business Units – Many specialized Business Models – Unclear view on differentiating capabilities TO : – Business Units aligned to 4 simplified business models – Simplified organisation structures – Clear view on common and differentiating capabilities 8
  9. 9. We have defined the Philips Business Process Framework (PBPF) FROM : – No documented process framework – Many variants of the same process – Different language, structure, governance TO : – One process framework – Single common language – Governance to track process changes 9
  10. 10. We are building a simplified IT landscape FROM : – Expensive and complex IT landscape – Many customisations – 16,000 applications TO : – Simplified IT landscape – Lower cost of support – Focus on standardization 10
  11. 11. Enterprise Architecture at Philips 11
  12. 12. Key questions during the Accelerate! transformation “Can I see the Architecture of my company?” (2012) Chief Executive Officer, Philips “How does our business strategy connect to IT architecture?” Chief Information Officer, Philips “Which capabilities do I need to win in the market?” Chief Market Leader, Philips “How does the components of our operating model link together? ” Chief Financial Officer, Philips 12
  13. 13. Philips Operating Model Capabilities and learning Structure and governance People and culture Performance and reward Source: Galbraith's Star Model Process and systems 13
  14. 14. The EAR captures and links the Philips Operating Model All Business Models, Process & Capability Framework and IT architecture are captured in one connected repository EAR 14
  15. 15. The EAR enables different view points for both business and IT Visualize E2E transformation journeys and winning value chains. Business Quality & Regulatory EAR Provides a view of quality processes (Philips Integrated Quality System). IT Delivery Provide solution and design guidelines to construct or design a solution, initiating implementation. Architecture Provides view of architecture from capabilities, processes and technologies. Including architecture principles. 15
  16. 16. A snapshot into the EAR 16
  17. 17. Looking into the lenses of the EAR Process and systems Capabilities and learning Process (Level 3) Performance and reward Structure and governance People and Culture 17
  18. 18. Looking into the lenses of the EAR Process and systems Capabilities and learning Process (Level 3) Performance and reward Structure and governance Process and systems 18
  19. 19. Looking into the lenses of the EAR Process and systems People and culture Process (Level 3) Performance and reward Capabilities and learning Structure and governance 29
  20. 20. Key learnings from our journey so far 34
  21. 21. Lessons learnt  Visualize your transformation journey  Start with one documented common language  Map capabilities at executive level – accept no delegates  Empower IT Architecture through Executive Business Process Owners  Create a pull effect for new IT Programs  Choose an enterprise grade EA tool  Over communicate! “Finally, I see the architecture of my company!" (Aug 2013) Chief Executive Officer, Philips 35
  22. 22. 36