Enterprise Architecture: Stages of Maturity

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, Weill, and Robertson, 2006)

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

Recommendations for Greater Maturity

IT Capability

Currently using local IT applications, Ralph’s Ribs needs to begin utilizing shared technical platforms 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, Weill, and Robertson, 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, Weill, and Robertson, 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, Weill, and Robertson, 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, Weill, and Robertson, 2006)

Key Management Capability

“To generate value from IT investments, managers must lead the process changes enabled by new technology.” (Ross, Weill, and Robertson, 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, Weill, and Robertson, 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, Weill, and Robertson, 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, Weill, and Robertson, 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, Weill, and Robertson, 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, Weill, and Robertson, 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.