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Strategic architecture

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This presentation shows how the strategic management and architecture disciplines add value in creating an effective organization

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Strategic architecture

  1. 1. Strategic Architecture Bas van Gils <bas@van-gils.org> Strategic Architecture Bas van Gils <bas@van-gils.org>
  2. 2. Strategic Architecture 2 The name of the game The name of the game is communication! A quick overview of tools and techniques that help Setting the scene What is meant by strategy and architecture Strategic architecture How an architecture approach helps to add value in organizations Resources & contact information References, links and contact information Agenda
  3. 3. In this section a high-level overview of strategic management and architecture is given. Each discipline is introduced after which typical questions are discussed and frameworks / models presented. SETTING THE SCENE Strategic Architecture 3
  4. 4. Strategic Management Strategic Architecture 4 Strategic management is the discipline concerned with the strategy of an organization. It is mainly concerned with positioning the organization with respect to its environment Goal: meaningful survival of the organization by aligning it to its environment Process: the process of strategizing can be both planned or incremental, rational or intuitive. Documentation: strategies may be documented in a strategic plan. This does not hold for the incremental perspective where a “pattern of decisions” may be recognized in hindsight
  5. 5. • What is our product offering? • With which activity system and resources base do we realize this product offering? • What markets are we in? • What is our competitive advantage? • Should we strive for synergy between business units, or optimize market responsiveness? • Should our strategic processes be logical and planned, or creative and incremental? • Should our strategic processes be bottom-up or top-down? Strategic Architecture 5 Questions for strategists
  6. 6. Strategic Architecture 6 In strategic decision making, there is a natural tension between an inside-out perspective (building on your own strengths) and an outside-in perspective (look for opportunities in the environment and adapt the business system)
  7. 7. Strategic Architecture 7 For multi-business firms, there is a tension between maximizing responsiveness to the markets for each of the business units at the cost of synergies or vice versa.
  8. 8. Strategic Architecture 8 Porter’s value chain model is the model for analyzing the chain of value adding / supporting activities of an organization.
  9. 9. Strategic Architecture 9 In positioning a product offering (or set thereof), firms may adopt a different approach.
  10. 10. Strategic Architecture 10 The traditional 5-forces model (Porter) and the PEST-drivers can be used to analyze the relation of the organization to its environment
  11. 11. Enterprise architecture Strategic Architecture 11 Enterprise architecture is the discipline concerned with the constitution of the organization. It answers the question: how should we organize ourselves? Goal: there are many goals for `doing architecture’, revolving around the question how we should be organized (and how to get there) Process: many approaches have been proposed for doing architecture. A common trait is the rational, planned approach that is taken Documentation: every (organization) system has an architecture, whether it is documented or not. Architecture documentation tends to come in the form of models and principles
  12. 12. • What products and services do we offer to our customers, and via which channels? • How and where do we realize these products and services? • How is our organization structured, and who performs/ is responsible for what? • What information is used by whom, and who is responsible for managing this information? • What IT support do we need, and which IT do we currently have? • Is our current organization efficient, or should we reorganize? How? In what phases? Who are the stakeholders? Strategic Architecture 12 Questions for architects
  13. 13. Strategic Architecture 13 Strategic Architecture Segment Architecture Capability Architecture An architecture approach can be used at different levels of an organization. The TOGAF standard distinguishes between strategic level, segment architecture, and capability architecture
  14. 14. Strategic Architecture 14 View- points Process Language Enterprise Continuum, Repository, Reference Models Enterprise Continuum, Repository, Reference Models ArchiMateTOGAF An architecture approach / framework consists of both a process and a language. TOGAF and ArchiMate are complementary open standards that are both maintained by the Open Group
  15. 15. Strategic Architecture 15 The TOGAF standard consists of six components of which the Architecture Development Method (ADM) is the core. The Architecture Content Framework can be mapped onto the ArchiMate language
  16. 16. Strategic Architecture 16 ArchiMate is the defacto architecture modeling language at the enterprise level. It covers the business, application, and technology levels of an organization. Recent additions cover the implementation/migration and motivation domains.
  17. 17. Strategic Architecture 17 The ADM is the core of TOGAF. This process is iterative and incremental and combines with ArchiMate. The original specification maps to phases B,C, and D. Extensions have been developed for the other phases
  18. 18. Strategic Architecture 18 The core concepts used in developing architectures are described in the architecture content framework. This figure shows ho the ArchiMate concepts cover all areas of this content framework in more detail.
  19. 19. In this section the relation between strategic management and architecture is discussed. The goal is to show how the two disciplines can reinforce each other. STRATEGIC ARCHITECTURE Strategic Architecture 19
  20. 20. Overlap in scope Strategic Architecture 20 Products & services Products & services ProcurementProcurement SalesSales ProductionProduction…… Supporting functions: HR, IT, …Supporting functions: HR, IT, … Competitors Partners CustomersSuppliers Strategy:aligningthe organizationwithitsenvironment Architecture:aligning& structuringtheorganization Strategic management is concerned with external positioning, whereas architecture is concerned with internal design. The disciplines overlap in touching e.g. products and services, as well as high-level structuring.
  21. 21. Overlap in models Strategic Architecture 21 In strategic management the Value Chain model by Porter plays an important role in assessing how an organization is organized In enterprise architecture, the function model can be used to represent the same information In strategic management, products and services relate the organization to its environment In enterprise architecture, a product architecture represents the same information. Even more, details are provided with respect to their realization. Business function Business function Business role Business actor Business object Business service Contract Business product Business interface Application service Application functionData object Applicationcomponent Application interface Infrastructure service Infrastructure interface System software Device Node Artifact
  22. 22. Value chain & function model Strategic Architecture 22
  23. 23. Example: service realization Strategic Architecture 23
  24. 24. Mutual reinforcement Strategic Architecture 24 In the light of long term, meaningful survival of the organization, strategists and architects should join forces in aligning the organization to its environment & developing a suitable / effective organization. Strategic Management Enterprise Architecture • Provide guidance and direction • Leading discipline • Set qualitative and quantitative goals for the organization • Give insight in architecture of org. • Present “evidence” to guide decision making • Develop solution alternatives for (future) strategic directions • Impact analysis of choices
  25. 25. The name of the game is communication. In many cases, the relation between architects and strategists is hampered by misunderstanding. This section provides insight in aligning architecture processes to existing frameworks in the enterprise and improving communication. THE NAME OF THE GAME Strategic Architecture 25
  26. 26. Conflicting worldviews Strategic Architecture 26 Architecture: Systemic perspective The organization is a legal entity and uses resources to achieve (fixed) goals The organization can be governed, changed etc. as if it were a machine The organization is a `thing’ that exists on its own and has a clear boundary Architecture: Systemic perspective The organization is a legal entity and uses resources to achieve (fixed) goals The organization can be governed, changed etc. as if it were a machine The organization is a `thing’ that exists on its own and has a clear boundary Strategy: societal perspective The organization is a society of individuals forming alliances to achieve goals Maximize freedom to adapt to changing conditions, goals, society; non-deterministic No clear boundaries of the organization; employees are not “part of” the organization Strategy: societal perspective The organization is a society of individuals forming alliances to achieve goals Maximize freedom to adapt to changing conditions, goals, society; non-deterministic No clear boundaries of the organization; employees are not “part of” the organization The predominant way of considering organization differs greatly between the fields of strategic management and enterprise architecture. This causes many communication problems between practitioners.
  27. 27. Keeping options vs optimization Strategic Architecture 27 In order for the organization to survive, strategists keep their options open in aligning the organization to its environment In order for the organization to survive, strategists keep their options open in aligning the organization to its environment In order to function, an organization must be organized. Architecting implies creating a structure and therefore limits strategic options In order to function, an organization must be organized. Architecting implies creating a structure and therefore limits strategic options
  28. 28. Dialog instead of debate Strategic Architecture 28 Like many practitioners, architects tend to have a natural reaction to “want to be right” Like many practitioners, architects tend to have a natural reaction to “want to be right” Being right is less important than meaningful survival of the organization Being right is less important than meaningful survival of the organization Rather than debating who’s right (debate), communicate and help! Without communication there is no alignment between strategy and architecture Rather than debating who’s right (debate), communicate and help! Without communication there is no alignment between strategy and architecture
  29. 29. 5 commandments for architects Strategic Architecture 29 11 Be relevant: make sure that what you do adds value to the organization. A nice architecture (drawing) is nice, but no more than that! 22 Be prepared: make sure you know what you’re talking about. Do the work. Gather information about the architecture of the enterprise, structure and store it for later reuse. 33 Walk the walk and talk the talk: learn how to communicate in the language of the people you’re helping. Answers to questions and a summary of findings may be of more use to strategists than the models on which they are based 44 Less is more: at the strategic level of an organization, detailed architecture models and diagrams contain too much information. Condense the information, provide guidance and insight (and be prepared to follow up!) 55 Ask and inspire: improving communication takes commitment of both parties. It takes time. When things are unclear – ask for more information, and inspire strategists to join in the dialogue!
  30. 30. Example: BriteLite • BriteLite is a manufacturer of lighting products based in the Netherlands. BriteLite currently has two production facilities in Veghel and Dordrecht. Traditional light bulbs will disappear in the next 5-10 years. • BriteLite’s strategy therefore is to actively promote LED lighting systems and phase out production of traditional bulbs. • The Architectecture department is asked to come up with a roadmap for the organization to make this happen in order for marketing to come up with new campaigns in line with the new strategic direction Strategic Architecture 30
  31. 31. Strategic Architecture 31 Step 1 - analysis A first step for the architects is to analyze which business functions are executed at which locations. IT is only in Dordrecht, Marketing, Sales, HR, and Procurement is only in Veghel. Productsion and Logistics are at both locations
  32. 32. Strategic Architecture 32 Proposition – phase 1 In the first phase, production capacity in Dordrecht is used to continue production of old bulbs. New products are developed in Veghel.
  33. 33. Strategic Architecture 33 Proposition – phase 2 In the second phase, both facilities produce LED-products. All “old” production capacity related to light bulbs is phased out
  34. 34. The advice Strategic Architecture 34 Architects advice to do a phased migration. Further analysis shows that LEDs are relatively easy to customize. New IT will make it easier to track orders through production and diversification (light solution consulting) is considered After careful consideration, the proposal is accepted and BriteLite enters a new market After careful consideration, the proposal is accepted and BriteLite enters a new market
  35. 35. • BriteLite is not a “real” company and the analysis presented here is greatly simplified • Architectural analysis based on only business functions is very high-level. More detailed analysis includes among other things: • Roles and responsibilities related to processes • Information use and management, both in business and IT terms • Flow of information and goods • Application and infrastructure support • TOGAF and ArchiMate combined can be used to add value to strategic decision making Strategic Architecture 35 Remarks
  36. 36. RESOURCES & CONTACT INFORMATION Strategic Architecture 36
  37. 37. Resources Strategic Architecture 37 B. De Wit & R. Meyer. Strategy Synthesis, Revolving Strategy Paradoxes to Create Competitive Advantage - Concise version. Thomson, 2006 . ISBN: 1408018993 The Open Group. TOGAF version 9. Van Haren Publishing, 2009. ISBN: 9789087535995 The Open Group. ArchiMate 1.0 Specification. Van Haren Publishing, 2009 . ISBN: 9789087535025 B. van Gils. Strategy and Architecture - Reconciling Worldviews. In: First NAF Academy Working Conference on Practice-Driven Research on Enterprise Transformation. LNBIP, vol: 28, pp: 181-196. Springer Verlag, 2009
  38. 38. Dr. Bas van Gils • Email: bas@van-gils.org • Web: http://www.van-gils.org/~bas • Blog: http://strategic-architecture.bpogspot.com • Twitter: http://twitter.com/basvg Strategic Architecture 38 Bas is an enterprise architect with a passion for business and IT. His first involvement in this field was in his studies in Information management and technology at Tilburg University. After receiving his MSc from Tilburg University (the Netherlands) and his PhD from Radboud University (Nijmegen, the Netherlands) he has continued to explore this field. His experience ranges from enterprise architecture to strategic management and leadership. A balance between adding value in practice and continuous learning is an essential ingredient of his attitude towards work. His ambition is to work on complex issues in the field of strategic architecture. Bas is currently active as consultant, researcher and trainer/lecturer for BiZZdesign.

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