Implement The Operating Model Via Enterprise Architecture Group 5: Harika Malineni, Oyin Adeleye, Kalyani Prabhakar, David Siegelman, Micheal MAI

What Is Enterprise Architecture? Tool for aligning business and technological initiatives throughout a company. Converting the operating model into their business processes and IT capabilities Often represented by principles, policies, and technology choices INTEGRATION STANDARDIZATION Key: identify processes, data, technologies and customer interfaces EA helps answer questions such as: Is the current architecture supporting and adding value to the organization?

Integration: High Low Unification Replication Coordination Diversification Standardization: High Low

Core Diagram 4 operating models of the EA. Unification Model Diversification Model Coordination Model Replication Model

Unification Model Diagram Example: Delta Air Lines Three main elements: Identify the customers List the key processes Identify the shared data to integrate processes Optional- The Key technologies that either automate or link processes (Oyin) Transportation- Airlines, 1. Do you think that this model will always apply for the airline industry? 2. Do you think companies can only integrate certain sections of their business processes, not necessarily all? 3. Does anyone have an example of any company that uses a unification model? Do you think it is effective?

Unification Model Diagram

Unification Model Diagram

Diversification Model Opposite of Unification Model Key Elements: Identify technologies to be shared Incorporate the remaining elements (Key customer types, business processes and data only needed) (Michael) Hospitality Management, Hotel management, Travel 1) Which types of business implement the diversification model as their enterprise architecture model? Answer: Hotel and lodging, hospitality management and restaurant. 2)What are the shared technologies in the diversification model? Answer: data centers, the telecommunication network, offshore systems development and maintenance capability, centralized vendor negotiations, and help desks. 3) Which other processes is required standardization, although the diversification operating model is low integration and low standardization? Answer: data for financial reporting, risk management and compliance across business units. 

Diversification Model `

Diversification Model

Coordination Model High Business process integration, Low standardization Usually implemented where companies provide a great variety of products to the same customers. (Harika) Insurance, Risk, securities, banking/Investment firms Provides integrated customer service across products. Integrating data helps improve efficiency. Example: No matter which customers tap into the organization, local representatives have that information Low levels of standardization helps keep the uniqueness of each separate unit while still being highly integrated - The data generated by one division may be needed for another division but for different purposes or needs.

Coordination Model Can someone read this chart and describe it? -What type of companies would this model be good for? Example: MetLife Why do this?

Coordination Model

Replication Model Example: ING DIRECT High level of integration Identify the key processes to be standardized and replicated Identify the key technologies to automate these key processes Identify the linking technologies that can be shared It is not necessary to share data or identify key customers (Kalyani) Questions: 1. How can the individual operational units contribute to any changes or innovations in the enterprise? 2. What industries are best suited to adopt this model? Any example? 3. What are the factors that drive a company to decide on Replication model? This is diagonally opposite to Coordination Model This model has high level of standardization All processes are standardized All key technologies are standardized Success depends on efficient and repeatable business processes rather than shared customer relationship Helps to install its standardized practices and technology into the new unit Yet, individual business units enjoy autonomy in choosing the modules What are the factors that drive a company to decide on Replication model? Advantages Low cost Scalability Reusable modules The objectives of the whole enterprise are met Simplicity of organizational design at individual business units Brand recognition What industries are best suited to adopt this model? Any example? Key industries adopting this model: Banks and franchises ING DIRECT – All the modules are created and standardized at the center The individual units either adopt them or do not adopt them They can not make any changes ING Vysya, India has to use the same modules and use the same system. Disadvantage: Lack of flexibility How do the individual units contribute to any innovations or changes in the enterprise? Are the changes or innovations regional?

Replication Model How it differs from the coordination module? There is no need to share customer data among the business units. This is the only decision that is taken at the individual business unit level. Replication model is normally used in acquisitions and mergers and new businesses Geographical expansion (E.g. IKEA is an example of replication model. The decision as to how the inventory will be performed is taken globally, but it is up to the regional units to decide what kind of products they will stock and sell.)

Replication Model Looking at the core diagram of ING DIRECT, could anyone of you explain the level of standardization or integration that is followed by ING DIRECT? - The level of standardization is high and the level of integration is very low. - Here all the five modules are decided at the center and the country units can only decide whether to adopt the module or not.

Now what? Conclusion Which Model is best? Is a Model better for one industry? Or is a model better for a global or regional company? How does this relate to the archetypes we read about last week?