Business Architecture & Transformation LITERATURE (BM03BIM) Summary FULL content & notes

RSM, Erasmus University
Msc BIM 2021 - 2022
Kathleen Gaillot




BM03BIM • 5 EC
Business Architecture &
Transformation
Notes/imagery based on literature

Literature
Summary

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, Table of Contents
Session 1: IT Strategy .......................................................... 1 Session 5: IT Risk Management ........................................ 15
1.1 What is Your Strategy.............................................. 1 5.1 Framework for Integrated Risk Management in IT 15
1.2 Enterprise Architecture Management .................... 1 5.2 Project Risk Management Techniques .................. 18
1.3 IT-Enabled Business Transformation....................... 3 5.3 Risk Analysis for IT ................................................. 22
Session 2: IT Governance .................................................... 4 Session 6: IT Sourcing ....................................................... 28
2.1 IT Governance Arrangements ................................. 4 6.1 IT Outsourcing Review .......................................... 28
2.2 Matrixed Approach to IT Governance Design ......... 7 6.2 IT Outsourcing: Maximizing Flexibility .................. 33
Session 3: IT Project Management I ................................. 10 6.3 Effectively Offshoring IT Work .............................. 34
3.1 Project Management Infamous Failures ............... 10 Session 7: IT Decision Making ........................................... 38
3.2 IT Project Managers’ Successful Practice .............. 12 7.1 Heuristics & Biases ................................................ 38
Session 4: No Literature .................................................... 15 7.2 Traps in Decision Making ...................................... 40
4.1 No Literature ......................................................... 15 7.3 Guiding Online Choice Through Interface Design . 43


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Course & Topics Division
A. Business Architecture
It Strategy (Course 1) IT Governance (Course 2)
B. Business Transformation
IT Process Management (Course 3) IT Project Management (Course 4) IT Risk Management (Course 5)
C. Business Decisions
IT Sourcing (Course 6) IT Decision Making (Course 7)




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, Session 1: IT Strategy
Learning goals:
1) Define business architecture and business transformation.
2) Analyze different business strategies and operating models
3) Explain how IT and business strategy can be aligned
4) Examine factors influencing Business-IT alignment


1.1 What is Your Strategy
Can You Say What Your Strategy Is? (Collis, 2008)
Companies with no clear & simple strategy = fail to execute said strategy, or never have one.
A well-understood statement of strategy aligns behaviour within the business. Individuals make choices that reinforce
each other; pointing in the same direction. With a clear strategy definition, two things happen:
1. Formulation becomes infinitely easier because executives know what they are trying to create.
2. Implementation becomes simpler because the strategy’s essence can be readily communicated and easily internalized
by everyone in the organization.

1. Objective (ends): the single precise objective that will drive the business over the next 5+ years
o The strategic objective should be specific, measurable, and time bound, and should be a single goal.
2. Scope (domain): since most firms compete in a +/- unbounded landscape, it is crucial to define the scope. It
encompasses 3 dimensions, and clearly defined boundaries in those areas should make it obvious to managers
which activities they should concentrate on and, more important, which they should not do:
Customer or offering; Geographic location; Vertical integration.

3. Advantage (means): the essence and most critical aspect of a strategy statement. Clarity about what makes
the firm distinctive is what most helps employees understand how they can contribute to successful
execution of its strategy. The firm’s competitive advantage includes:
o Customer value proposition (e.g. your value offered relative to competitors) and
o The complex combination of activities allowing that firm alone to deliver the customer value
proposition. These are the internal and external components.
In determining the objective, scope and advantages, trade-offs happen, e.g.: Trade-offs = what
- Pursue growth or size = profitability takes a back seat distinguishes a
- Serve institutional clients = may ignore retail customers company
- Lower price as a value proposition = may not be able to compete on (e.g.) fashion or fit strategically

Developing a Strategy Statement: Sweet Spot | where it meets customers’ needs in a way that rivals can’t, given the
context in which it competes. In short - it’s at the intersection of Competitors’ offerings, Customers’ needs, and
Company’s capabilities, within the larger Context (technology, industry, demographics, regulation etc)

1.2 Enterprise Architecture Management
Enterprise Architecture Management and Its Role in Corporate Strategic Management (Simon 2014)
Organizations face difficulties bringing strategy to execution; lacking structure & transparency.
Solution: Comprehensive business architecture framework.


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, IT Consolidation involves: IT cost management, project portfolio planning, compliance management, project
initialization, and post-merger integration.
Why do companies need a business architecture? What are components of a business architecture?

Companies need business architecture to help bring strategy to execution. It supports structure and transparency in
corporate strategic management. Moreover, it:
- Reduces operating costs
- Improves project execution
- Increase alignment of business & information technology (IT)

An integrated approach offers descriptive models of past, current & future states - often interpreted as the
fundamental management information system at the core of business processes and strategies.
According to D. Simons et al., (2014) EA application scenarios, shown below each step, fall under three wider stages
of strategic management:
Stage of Strategic Management EA Application Scenario
Strategy formation Strategic analyses
Strategic choice
Business execution design Business transformation
Strategy programming/implementation readiness assessment
Strategy implementation planning
Strategy evaluation/control Strategy review
Strategic governance

For each application scenario, many benefits are distinguished:
Application Scenario Benefits
Strategic analyses Business capability identification; business context understanding; strategy
documentation & validation/confirmation
Strategic choice Intra-strategy evaluation; inter-strategy evaluation
Business execution design Strategy decomposition (business model representation); strategy deduction
(capability design)
Business transformation Business complexity/dependency analysis; IT complexity/dependency analysis
readiness assessment
Strategy implementation Prioritization of transition initiatives/projects; project dependency analysis; strategic
planning validation of project portfolio
Strategy review Strategy traceability
Strategic governance Strategy communication; evaluation of change requests/new requirements;
strategic alignment check; business capability monitoring
Enterprise Architecture (EA): involves business goals, strategies, plans, products and partners. It’s the blueprint
of the enterprise and should be a business exercise. It’s an instrument for corporate strategic management. EA
facilitates…
 business execution design aligned with business motivation
 the business transformation readiness assessment by providing transparency regarding the current business
and IT landscape
 strategy re-design due to the traceability provided from execution back to strategy.
 sustainable strategy execution.
One should rank strategies not only on financial criteria but also on their prioritized relationship with the firm’s
mission.


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