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Enterprise Architecture: Enterprise Architecture Proposal

Executive Summary

Ralph’s Rockin` Ribs is a family-owned business that is based on good-old family values. Ralph and his sons, Ralph Jr., and John, serve the best ribs in the Pacific Northwest, and they currently have 200 franchises throughout Oregon, Washington, Idaho, and Montana. Ralph’s secret family recipe is a success with everyone who tries the scrumptious ribs, but Ralph’s Rockin` Ribs has only seen a modicum of success since they began offering franchises back in the early 80’s. Luckily for Ralph’s, Enterprise Architecture is here to help.

Ralph’s faces a number of challenges in creating an Enterprise Architecture. Franchise owners are struggling with outdated procedures, and too tight restrictions on their daily operations. Ralph Jr. and John are traveling throughout the service area in order to mandate procedures for mopping and cleaning, but little is done about late shipments or botched orders from Ralph’s processing plant. Ralph’s pride is their famous rib recipe, but those who are furthest from the supply house often suffer from a lack of fresh ingredients, and quality suffers as a result. The computer systems and software are out of date, and the lack of IT support sometimes leaves the owners stranded when they run into problems. All these processes need to be updated, and new methods for standardization and integration need to be adopted as Ralph’s begins to build their enterprise architecture.

Ralph’s Rockin’ Ribs is a family-owned business that began offering franchises in the early 1980’s. Ralph and his sons maintain a tight hold on all areas of the operation from food supply and preparation to lobby and bathroom maintenance. Their current unification model is stifling to franchise owners, and as a result corporate growth has come to a halt. Franchise owners also have issues with supplies running late, and orders from Ralph’s supply house have been getting mixed up on a regular basis. Ralph acknowledges these problems and is looking for a solution that will work for everyone.

The following challenges in redefining the operating model are expected:

  1. The essentials coming from Ralph’s supply house are less than fresh by the time they reach the end of the supply chain. Orders have been getting mixed up causing shortages in some areas and overages in others. Ordering, receiving, and shipping processes must be standardized, and alternative supply stations investigated.
  2. Accounting practices are outdated and insufficient for promoting growth. Accounting processes will be standardized with all arms of the business coming together to create a system that works for everybody.
  3. The IT infrastructure is a hodgepodge of disparate hardware systems with various software configurations. New IT processes will be standardized, hardware will be identical across the board and formal IT support will be part of the franchise package.

Proposed Operating Model

When deciding on an operating model, Ross, Weill, and Robertson (2006) recommend asking the following two questions as a starting point in determining how much integration and standardization should be employed:

  1. To what extent is the successful completion of one business unit’s transactions dependent on the availability, accuracy, and timeliness of other business unit’s data?
  2. To what extent does the company benefit by having business units run their operations in the same way? (Ross et al., 2006)

When looking at Ralph’s Ribs the business units are not dependant on each other, and actually do not share any customer or business data. Each franchise is an autonomous entity led by the owner/operator, and although each unit operates in basically the same way, each unit operates independently. These factors indicate that a low integration model should be selected.

On the other hand, Ralph’s benefits tremendously by having each unit run their operation the same as all other units. People come to Ralph’s for the ribs, and they expect these ribs to be the same whether they’re in Billings, Montana, or Coos Bay, Oregon. Preparation procedures and customer service procedures should be the same in every franchise, as should ordering, reporting, shipping, and receiving procedures. These factors indicate that a high level of standardization is required.

Found in the lower right quadrant of figure 2-1 in the Enterprise Architecture as Strategy book, the replication model is the best fit for Ralph’s Rockin` Ribs. According to the text, this operating model offers a high level of standardization and a low level of integration. Characteristics of the replication model include few if any shared customers, independent business operations that operate following the same procedures. This model also utilizes a centrally mandated IT system, and centralized control over business procedures and design. (Ross et al., 2006)

Created by Nick Malik for his series of articles on Service Oriented Architecture, the image to the right breaks down the replication model and helps to easily define what parts of the operation are handled centrally, and which parts are handled independently. Financial reporting, corporate strategy and business processes are standardized across all units. Customers and partners, management processes, operational data, and business intelligence are each handled on an individual basis which is possible while utilizing the low levels of integration of the replication model. (Malik, 2007)

Malik then goes on to say, “Companies that use a Replication model encourage innovation in their business units but require common processes to create consistency and reduce costs” (Malik, 2007). Although Ralph’s has been lax in the innovation department of late, standardizing procedures and reevaluating integration needs will help in fostering an atmosphere that encourages innovation. According to McDonald’s, many of their best-selling items, including the Big Mac, the Filet-O-Fish, and the Egg McMuffin were all created by owner operators, (McDonalds, 2007) so it just makes sense to follow their example.

Ralph’s will see financial benefits from standardization in several ways. “Process standardization delivers efficiency and predictability across the company” (Ross et al., 2006). Increasing efficiency increases productivity which in turn increases profit. Being able to predict how a transaction will occur from start to finish will allow Ralph’s to replicate their business processes quickly and easily into new growth opportunities.

Ross et al., (2006) tell us “Many Replication companies grow through acquisition...but most Replication companies can also build new businesses from scratch.” New franchises quickly become established through the installation of standardized practices and a common infrastructure which helps to increase profits. Standardizing processes and relying on shared processes also has the advantage of decreasing IT costs which go a long way in strengthening the bottom line.

In conclusion, Ralph’s will be best served by adopting a replication model much like the one used by the McDonald’s Corporation.  Standardized processes and autonomous management can work together to promote growth and innovation, and this in turn can produce greater profits and reduce spending.

Steps to Implementing an Operating Model

Once an operating model has been selected, certain steps need to be taken to implement the new plan. In Bechera’s article, An Introduction to Enterprise Architecture, it states, “the main objectives of enterprise architecture is building a culture of reuse through a common language...” In order to create this culture of reuse and turn the visualization of the operating model into reality, the core business processes, data sharing, technologies and customer interfaces must be identified. (Ross et al., 2006)

As with anything worth having in life, implementing a new operating model is not an overnight procedure. In fact, it will take years for Ralph’s to become fully standardized. As Jeanne Ross tells us in her interview The Stages of EA Maturity, “Let’s find one process, or one kind of data that--if we got this right--would fundamentally improve our company.” This is the first step, and Ralph’s is no exception. They must identify the most important elements for standardization before they can implement their new operating model.

To identify these elements, a governance team was created. This team is comprised of a group of individuals from all sectors of the business operations, and includes members from senior management, IT, financial, product supply, human resources, and front-line staff. These people have been working together to analyze which procedures currently work for Ralph’s Ribs, and which processes need to be redefined to operate effectively throughout the organization. (Bechera, 2007)

In a replication model, key processes are standardized throughout the organization with each unit operating as an autonomous entity. According to Ross et al., 2006, “replication allows rapid expansion and scalability.” For Ralph’s to implement a replication model, the governance team has identified three areas where processes can be standardized to provide improved financial practices, efficient distribution of products, superior customer service, and reliable data transmission. These core business processes are:

  1. Accounting processes
  2. Distribution processes
  3. IT Infrastructure.

First and foremost, the accounting processes need to be standardized. These processes will encompass input/output of funds and daily reports, distribution of assets, budget planning, performance analysis, and payroll procedures. They will also include establishing policies and strategic planning. (Transport Financial Analysis, ND)

The distribution process has long been a bone of contention among franchise owners, so it will be addressed as well. Franchises in different regions cannot be expected to order from the same supply house. Procedures for approving local distributors will be standardized, along with ordering procedures, receiving processes, and inventory management processes.

According to Samson Lee (2006), in his definition for

Infrastructure is the physical hardware used to interconnect computers and users. Infrastructure includes the transmission media, including telephone lines, cable television lines, and satellites and antennas, and also the routers, aggregators, repeaters, and other devices that control transmission paths. Infrastructure also includes the software used to send, receive, and manage the signals that are transmitted.

Ralph’s IT Infrastructure is basically nonexistent which means building from the ground up. Standardized hardware will be required at all franchise locations, and a standardized transmission/internet connection method must be decided on. Software will need to be created for standardized processes in all core categories and standardized security software will be required. (Lee, 2006) The core diagram shows a breakdown of the areas where standardization is required.

Ralph’s Ribs will be well on their way if they follow the roadmap provided by the governance team. Standardizing these core business processes will provide an easily replicated, successful franchise operation which will benefit all involved.

Current Maturity Level

Ralph’s Ribs is currently operating at a Business Silos stage. Because there is no formal IT support, franchises have been forced to create their own IT solutions. These disparate programs and a variety of hardware setups are making it more difficult to achieve efficient customer service, and have made accounting and reporting to head office, even when it’s done with a single batch file, a real nightmare. Distribution has also been an issue. Each franchise has developed their own processes for tracking, ordering, and receiving deliveries.

None of these legacy processes work together, and these silo solutions are impeding growth by blocking the integration and standardization of company wide business processes. These solutions may work on a local level, but there are several redundancies that could be eliminated on a global level. Patching these disparate systems together has become time consuming and expensive, and for further development, IT capabilities need to become part of the solution. (Ross et al., 2006)

The following chart by Ross et al., (2006, p.83) provides a good overview of where Ralph’s currently stands, and the developments they should be working towards:

Business Silos Standardized Technology
IT Capability Local IT applications Shared technical platforms
Business Objectives ROI of local business initiatives Reduced IT costs
Funding Priorities Individual applications Shared infrastructure services
Key Management Capability Technology enabled change management Design and update of standards; funding shared services
Who Defines Applications Local business leaders IT and business unit leaders
Key IT Governance Issues Measuring and communicating value Establishing local/regional/global responsibilities
Strategic Implications Local/functional optimization IT efficiency


Recommendations for Greater Maturity

IT Capability

Currently using local IT applications, Ralph’s Ribs needs to begin utilizing shared technical platforms in order to remove redundancies and eradicate legacy systems. A complete evaluation of current IT capabilities will be required to identify over-lapping processes throughout the organization. Individual franchise owners must move away from silo business practices and work as a unified team in creating IT capabilities that benefit the entire company. A formal IT support team will be created to facilitate growth from business silos to standardized technology. (Ross et al., 2006)

Business Objectives

Up until this point, Ralph’s Ribs franchise owners have been concentrating their IT investments based on their individual return on investment (ROI). Each franchise has their own hardware configuration, their own way of connecting to corporate headquarters, and their own variety of OS’s and software. This has made is easy for owners to measure their individual ROI, but these localized measurements are hindering the global quantification of investments. It will be important that individual franchise owners understand that only through standardizing investment efforts will Ralphs be successful in reducing IT costs throughout the organization. (Ross et al., 2006)

Since the move towards standardized technology will require owners to concentrate on reducing IT costs throughout the organization, owners may be concerned that their investments are no longer assessable. To answer concerns regarding the measurement of new initiatives, costs will be documented both before and after implementation of the new process. (Ross et al., 2006)

Funding Priorities

It is only natural that funding priorities will change as we move towards greater business maturity. As Ralphs moves away from a reliance on individual applications, and begins to concentrate on shared infrastructure services, funding priorities will move away from the individual and will begin to benefit the entire organization. (Ross et al., 2006)

Key Management Capability

“To generate value from IT investments, managers must lead the process changes enabled by new technology” (Ross et al., 2006). In the current business silos state, management is forced to follow technology to facilitate change. In the new model, management will be responsible for defining and updating standards, and for funding shared services. In other words, technology will now follow management when it comes to implementing change. Management must lead by example in implementing new policies and procedures for the simple fact that if old processes don’t change when new technologies are introduced, the value of the investment decreases. (Ross et al., 2006)

Who Defines Applications

In the current business silo’s structure, applications are designed by individual franchise owners in response to local business needs. In the new stage of maturity, IT leaders, franchise owners, and business leaders will work together to define new business strategies. Franchise owners, distribution representatives, home office and financial leaders will still be responsible for determining their needs. Once needs are determined, IT will recommend possible solutions that fall inline with technological limitations. Only by working together will the objectives from all sectors of the corporate unit be recognized and true standardization achieved. (Ross et al., 2006)

Key IT Governance Issues

Up until now, IT governance has been focused on measuring ROI based on individual efforts. This local measurement is used to display “careful business case development and effective project management” (Ross et al., 2006). The focus of IT governance has got to change for successful maturity. Instead of focusing on individual efforts, IT governance needs to set standards for implementation and maintenance of new technical processes. (Ross et al., 2006)

Strategic Implications

In their current state, Ralph’s Ribs franchise owners concentrate their efforts on localized business systems and IT development is geared towards functional optimization. To achieve greater business maturity, the concentration needs to shift towards IT efficiency and shared processes. Strategically, it’s important to remember that changes don’t happen over night. The transition from business silos to standardized technology will take several years but efforts will be rewarded with increased productivity and reduced IT costs. (Ross et al., 2006)

Summary for Stages of Maturity

Ralph’s Ribs is currently operating in a business silos environment. This immature stage of development concentrates efforts on individual efforts and has created a multitude of legacy issues that have hindered progress, and increased IT spending needlessly. To move towards greater maturity, a transition towards a standardized technology stage is recommended.

Standardized technology will provide decreased IT costs through standardization of basic business processes and will allow for a shared infrastructure of companywide services. The IT governance team will be charged with the responsibility of leading implementation and maintenance of the new technological processes defined by the business team. This manner of working together to achieve technical advances that benefit the entire organization will ensure our successful advance into the more mature stage of standardized technology.

Changes in Management Practices

As Ralph’s Ribs moves forward from a silos business stage to a standardized technology stage there will be several changes in management practices. This is to be expected. Change is a natural consequence of growth and should be seen as an opportunity to improve many aspects of our business.

Jeanne Ross, in her interview Leveraging What Has Been Learned, tells us, “If the company is not focused on the changes that people have to absorb, and derive value from, we are simply not going to see any benefit from enterprise architecture.” Everybody needs to be on board for the progression to be successful. Business leaders and IT developers “need to start thinking about what’s best for the company in addition to the business units’ needs.” (Ross et al., 2006)

Changes in Business Processes

Several changes in business processes will take place over the coming years. Ralph’s will need to focus on centralized funding of enterprise applications instead of concentrating on the needs of individual business units. Capital budget expenditures will be geared towards creating and implementing standards that will add value throughout the company. Ralph’s will also undergo an infrastructure renewal process to fund projects that will allow legacy systems to retire while upgrading the technology base. (Ross et al., 2006)

It will be vitally important that new projects adopt the standard technologies defined during the infrastructure renewal process. A formal architecture compliance process will be created to ensure standards are upheld in all new projects. To encourage innovations that could benefit the entire company, an architecture exception process will also be created. This formal process will be the basis for deciding when an exception can add value throughout the organization. (Ross et al., 2006)

Changes in Business Roles

It will be important to have people in charge who are thinking about what’s best for the company. An IT steering committee will be tasked with the responsibility of determining IT priorities. A centralized standards team will also be required. This team of technical experts will identify the appropriate standards and will be responsible for retiring or updating outdated processes. Ralph’s will also need architects for project teams. These people will be responsible for making sure technical standards are followed unless exceptions have been granted. (Ross et al., 2006)

Rationale for Changes

There are several benefits to be gained from implementing enterprise architecture. First and foremost are the reduced IT costs. Ross et al., (2006) tell us that, “As enterprise architecture introduces discipline in systems and processes, companies start to control the high cost of business silos.” As more services become available, Ralph’s can expect to see reductions in the cost of individual service and support. Applications maintenance costs will also be reduced as processes are standardized and become reusable throughout the company. (Ross et al., 2006)

The changes outlined will also provide increased IT responsiveness, improved IT services and improved risk management. Perhaps most importantly, adopting the recommended changes will lead to increased management satisfaction. According to Ross et al., (2006), “Satisfaction increases dramatically at each architecture stage.” There will be some anxiety as everyone adjusts to this new way of thinking, but in the end the value will far outweigh any minor discomfort.

Changes in Organizational Structure

It is only natural to expect that organizational changes will also take place during Ralph’s growth from one stage of maturity to the next. As companies advance through the stages of maturity, the skills required to lead the company change and grow along with everything else. The CIO must evolve with the needs of the company or risk being left behind. In fact, Martha Heller (2008) mentions a new career opportunity for CIO’s when she states, “The SVP of technology and operations role is springing up in all sorts of industries.” Heller (2008) goes on to say that this position represents, “a new level of organizational integration between IT and the business...”

As Ralph’s moves from business silos into standardized technology, the CIO needs “detailed knowledge of how the business functions” (Ross et al., 2006), and must understand how the architecture works.  The CIO must be able to control a large central budget while managing large organizational change efforts and must maintain credibility with members throughout the organization. Only through growing with the company can a CIO hope to encompass all these roles successfully. (Ross et al., 2006) (Heller, 2008)

Changes in Partner Relationships

It can be expected that business partner relationships will also change as Ralph’s grows into a more mature corporation. As processes become standardized across the board, suppliers will need to adopt the new standards to work within Ralph’s new framework. Initial communications have been favorable, and suppliers can see the benefits of working within a structured business environment.

Summary of Management Changes

The changes outlined above are essential to the successful move from business silos to standardized technology. These changes will take place over several years and will be implemented in a step-by-step procedure. Some resistance is expected, but as the company matures those involved will see that the benefits far outweigh any discomfort. All these changes must be completed and fully implemented before Ralph’s can move into the next stage of business maturity, optimized core.

IT Engagement Model Recommendations

As Ralph’s begins to build their foundation one project at a time it will be important for them to define their IT engagement model. An IT engagement model is a “system of governance mechanisms assuring that business and IT projects achieve both local and company-wide objectives” (Ross et al., 2006). The IT engagement model ties together three branches of business; company, business unit, and project team, and organize their efforts into one common goal.

There are three main components in a successful IT engagement model: companywide IT governance, project management and linking mechanisms. A closer look at these components will reveal how they tie together to achieve companywide objectives.

Companywide IT Governance

Companywide IT governance is essential to the success of the IT engagement model. IT governance overlooks the entire organization. It blends business requirements together with IT capabilities in a way that allows each unit to reach performance goals in a way that meets or exceeds corporate expectations. IT governance should be thought of as part of an overall effort. Instead of being a separate entity, IT governance is integrated throughout all branches of the corporation. (Ross et al., 2006)

Ross et al., (2006) point out that, “IT governance encompasses five major decision areas related to the management and use of IT in a firm.” These decision areas include IT principles, enterprise architecture, IT infrastructure, and business application needs. Decisions made through IT governance also include prioritization and investment. By utilizing IT governance in all areas, a company can clarify the need for shared services, define project priorities and funding levels, and establish the standardization and integration requirements set forth through the operating model. (Ross et al., 2006)

Project Management

“Project management has emerged as a critical competence in many, if not most, companies” (Ross et al., 2006). Project management uses proven methodologies to define what needs to be delivered from the new process and sets up checkpoints (gates) along the way to access metrics that evaluate progress. Post-implementation reviews are often used as tools to improve project management skills and to review the company’s methodology. (Ross et al., 2006)

Effective project management requires both discipline and commitment. Each project must be subjected to the same governance measures as it cycles through the natural project life cycle. Scorecards and metrics must be applied for every project, and reviews must be structured to guarantee adherence with corporate strategy. Communication is a third essential in effective project management. IT and business must communicate effectively so needs throughout the company can be translated into successful project implementation. (Ross et al., 2006)

Linking Mechanisms

Effective IT governance and disciplined project management are not enough; a company also needs linking mechanisms to achieve true success. Linking mechanisms are the tie between project management and IT governance. According to Ross et al., (2006):

Good IT governance ensures that there’s clear direction on how to evolve the company’s foundation. Good project management ensures that projects are implemented effectively, efficiently and in a consistent manner to maximize learning. Good linking mechanisms ensure that projects incrementally build the company’s foundation and that the design of the company’s foundation (its operating model and enterprise architecture) is informed by projects.

Three types of linking mechanisms must be used for any engagement model. Architecture linkage is used for creating standards and updating as necessary. Architecture also evaluates projects for compliance and connects IT governance with project decision. Business architecture translates companywide goals into project goals while maintaining architectural standards. Alignment linkage mechanisms are used to ensure lines of communication between IT and business always remain open. (Ross et al., 2006)

Effects on Business Partner Communication

In all stages of implementing enterprise architecture, communication is vitally important. Just as all departments within the corporation must communicate to establish needs, define standards, and exceed project goals, the company must continue to communicate effectively with business partners. Innovation can come from anywhere and encouraging business partners to freely discuss their concerns and needs can help Ralph’s reach their architecture objectives.

Rationale for Recommendations

There are several reasons for adopting an engagement model, but perhaps the most important is clarity about who will make the decisions and who will be held accountable in achieving successful results. According to Ross et al., (2006), “engagement model ingredients reinforce desirable behavior to create a foundation for execution one project at a time.”

Since effective IT governance leads to efficient project management while linkage mechanisms keep everything tied together, this is a solid move for Ralph’s Ribs. One project at a time is the goal for Ralph’s Ribs, so adopting an effective engagement model is essential to the successful implementation of new enterprise architecture.

Outsourcing Opportunities Recommendations

As Ralph’s Ribs moves into the standardized technology phase, outsourcing must be considered. Outsourcing can lower costs, provide greater flexibility, and will give Ralphs the opportunity to concentrate on core processes while leaving the noncore activities to experts in their field.

Recommended Activities for Outsourcing

Of the three types of outsourcing; strategic partnership, co-sourcing alliance or transaction relationship, a strategic partnership would be the most beneficial for the time being. Ross et al., (2006) tell us that, “In a strategic partnership, vendors provide an integrated set of operational services.” By outsourcing noncore activities, Ralphs can benefit from the expertise readily available, and can avoid reinventing procedures that already exist.

The biggest benefit for Ralphs will come from outsourcing the IT infrastructure management. Without even an IT support team available, Ralphs is sorely lacking in computer expertise. Outsourcing here will provide Ralphs with the IT proficiency they require, and will free them to concentrate on sales, marketing, distribution, and retail execution. To remain consistent with Ralph’s plans to move towards more standardized technology we would like to recommend an IS Lite organization model similar to the one implemented by Campbell in 2002. According to Ross et al., (2006), “In an IS Lite model many traditional IT services (applications development, maintenance, and computer operations) are outsourced” (Ross et al., 2006).

It makes sense for Ralph’s Ribs to outsource their IT infrastructure management because they currently lack the capability of running their own IT department. To get the IT infrastructure under control, Ralphs would be forced to hire an entire team to oversee the necessary IT improvements. This team would need to be trained, and not only would it be time consuming, but it would also create an unnecessary fixed cost. XYZ Corp already has people in place who know how to run this type of operation. Working closely with top management at Ralphs, this team can quickly and efficiently bring the IT infrastructure up to speed. Outsourcing to the team from XYZ Corp will turn the IT infrastructure from a fixed cost to a variable cost while improving IT services and support. (All Business, 2008)

Financial Impact

Although the financial impact from outsourcing the IT infrastructure management will be incredible, cost savings alone are not the only benefit Ralphs will derive from entering a strategic partnership with XYZ Corp.  Strategic planning and the speed with which changes can be implemented also provide excellent financial benefits. Doreen Wright, the CIO for Campbell, is quoted in the book Enterprise Architecture as Strategy as saying, “if you can find someone who can to it is well or better at an equal or lower cost, why would you not do that?” At this juncture, it is essential that management be allowed to concentrate on core practices that differentiate the company from their competition. Outsourcing the IT infrastructure management can provide the cost savings that will allow this to happen. (Ross et al., 2006)

Legal Considerations

There are several legal considerations to keep in mind as Ralph’s Ribs considers outsourcing their IT department. First and foremost is the matter of ownership. Who will own and control the technology and intellectual property that are created for this project? What is the partner company allowed to do with the technology once it has been produced, and what actions will be restricted? What milestones have been agreed upon, and what will happen if milestones are not met on time? Other legal considerations may include foreign regulations, export control regulations, and privacy issues. These and other ownership, development and implementation questions including liability issues, dispute resolution, and infringement enforcement will need to be agreed upon before production can begin. (Patel & Pais, 2004)

Projected Benefits from Outsourcing

In conclusion, the benefits Ralph’s will gain from outsourcing their IT infrastructure management include cost savings, flexibility, and the ability for management to concentrate on core processes while noncore processes are handled by a team far better suited to the task. Management does not need to be overwhelmed by the inner workings of the IT infrastructure. It is far more important for these people to be involved with introducing the new standardized technology, and in leading their teams through the expected adjustment period.

Growing the Organization

Without growth a company stagnates, and stagnation is exactly what Ralph’s Ribs want to avoid. According to Ross, et al (2006), “There are two strategies for profitable growth: organic growth and acquisition-driven growth.” A solid foundation is required in either case, and the operating model the company has adopted will dictate which avenue for growth will be more effective.

In organic growth, a company leverages their existing technology and business know-how in order to utilize processes and infrastructures that are already in place. This allows them to get a new enterprise up quickly and efficiently. Acquisitions-driven growth uses one of two strategies; rip-and-replace or diversification. In a rip and replace situation, the purchasing company transforms the newly purchased company, so it fits into their existing foundation. In a diversification situation the purchasing company allows the acquired company to use their existing foundation, and gains synergy by sharing services and technology. (Ross et al., 2006)

Strategies for Growth in a Replication Model

Ralph’s Ribs would see the most profitable growth through using a combination of organic and acquisitions-driven growth. Organic growth would allow Ralph’s to utilize their standardized IT business processes to develop businesses in new markets. New franchises could quickly adopt Ralph’s standards and would be operable in a short amount of time. Since new franchises would not need to invest in developing their own IT infrastructure and standardized processes, they would begin to see a profit in a short amount of time. (Ross et al., 2006)

As the business matures, acquisitions driven growth will also a good fit for Ralph’s Ribs, particularly if the right property became available. Ralph’s would be best off using a rip-and-replace strategy in order to bring the new company into the existing foundation. Utilizing their already strong foundation, Ralph’s could quickly implement the necessary upgrades, and once again the acquired company, not needing to invest in IT and standardization processes, would quickly begin to see a profit. At this point acquisitions involving diversification are not recommended for Ralph’s Ribs. They have not yet reached the level of maturity required to make this profitable. (Ross et al., 2006)

Implementation Plan for Growth

The first step Ralph’s Ribs must make as they look towards future growth opportunities is to solidify their own foundation. Before they can successfully bring existing or new franchises aboard, they will need to have solid enterprise architecture already in place. Seven-Eleven Japan (SEJ) started developing their enterprise architecture in 1974. Using the replication model, they developed a solid foundation, and “with the goal of better customer service, SEJ has, over the past thirty years, evolved its IT, inventory management, and distribution capabilities” (Ross, et al, 2006). By developing and continually evolving their own infrastructure, Ralph’s has a good chance of being just as successful as SEJ in achieving their growth aspirations.

Summary of Growth Recommendations

Once Ralph’s has solidified their foundation, organic growth is the recommended strategy, at least for the time being. Developing new franchises, following the newly standardized IT and business processes, will allow new ventures to begin operations quickly and efficiently. As Ralph’s continues to mature their architecture, acquisitions will become easier, and rip-and-replace operations will become feasible.


Enterprise architecture is an ongoing evolution through documented steps of business maturity. Each company that achieves true, long-lasting success has maneuvered these steps successfully. Ralph’s Rockin` Ribs is currently at the beginning of their journey. As they advance from business silos to standardized technology to an optimized core and beyond, Ralph’s will face many changes and challenges. Keeping the lines of communication open and encouraging innovation within the defined architecture ensure Ralph’s is successful in implementing their enterprise architecture.


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