How do I create Enterprise Architectures

Enterprise Architecture is the holistic architecture for the enterprise. The enterprise may have many departments and functional groups. Each may be using tools and application for doing their jobs. There may also application or sites which are facing customers. These sites also connect with internal applications and derive their content from them. There will also be tools and application used by Executive and higher management for reports and decision making. Enterprise may also be using tools and application to interacts with its vendors.

So enterprise application landscape can be very complex with no start or end.

Well how do we start?

We start by understanding the enterprise business. The good point to start is making the value chain of a company. Value chain is built on the concept that every company buys a raw material from primary producer (vendor) and then company adds value to the product and then sells it to the market. The company charges the customer the price of that value-add.

Lets take an example of a garment making company,

Business

Core Functions: This includes the work which actually adds the value to the product.

Will source the clothes from clothes wholesaler, the clothes are stitched into garment (shirt, pant etc.) and clothes are then supplied to showrooms for selling.

The value-add is converting a raw cloth into shirt or pant. But this value-add needs several aspects to be attractive to the customer. To be able to make shirt:

Design

Company‘s designers create a design for the shirt. This creative design department is very artistic work and several fashion designers may be on roll of the company for creating this design. The design is also influenced by the Market Research and Sales inputs.

The design creation is project of its own. Design Manager is the owner of this project. He assigns the work of design like Summer Collection to several of his own designers or may source it from freelancer external Fashion designers (which are not on payroll of the company). In this case the there is contract signed between company and the Fashion Designers with terms & conditions of royalty and other legals, this is handled by legal department.

This design collection is first made on paper and undergoes several cycles of reviews and editing before getting finalized. This process is very lengthy and may take 2-6 months.

After final approval, the first design is sent for creation on real cloth. This is again a very creative process and again takes several cycle of approval. The design on final approval may be Marketing & Advertisement department for campaigns, fashion shows, hoarding etc. Market and Research may also contact Advertisement companies for their advertising; again contract is signed taken care by legal.

Production

After final Design approval, the design goes in for production. Here from one creative design, production is started for mass and for general public.

This process is undertaken by Production Manager, who manages production floors. The cloth in bulk is sourced from Cloth vendors and other vendors (like button, collars and other raw material etc) managed by logistics department. Logistics handles inventory management (ordering, storing, and warehouse), transportation and their invoicing.

Logistics also handle the upstream Distribution & Delivery part of the value chain supplies. It manages the inventory of finished product in warehouse and then shipping to showrooms, customers etc.

Sales & Marketing

Sales and marketing handles the sales of the finished products. It includes finding new customers, getting new orders from old customers, relationship management with clients.

It also handles advertising, campaigning, market surveys for feedback to the planning department.

Planning
Company‘s planning department plans for the new ventures, bringing out new collections, investments in marketing, advertising. Planning departments also plans for the volume of the finished products in market. It is plans for distribution to various territories. All this planned according to the information from past sales, surveys, territory wise data, planned Vs targets achievement etc.

After Sales Service

Company also services its customers for after-sales. This may include attending to customer problems like defect, returns, warranty.

Support Functions: This includes the work which supports the core services. These services are general services and do have direct impact on the value-add services.

Human Resource

All the services in the enterprise are done by people. People needs salary and Human Resource to service their HR needs like recruitment, bonus, payroll, compensation, leave management etc.

Finance

All expense, revenue, receivable etc. are part of Finance & Account Management.

IT

All services needs technology to deliver, this technology comprises of the IT.

All this information of the enterprise can be depicted in terms of the Enterprise Value chain, Value chain model by Michael Porter.

The Value Chain

This Value Chain helps me realizing the company’s business. It helps me funding the core and support service capabilities of the companies.

Support functional Capabilities are services which are part of value-add of the company and can be outsource to BPO.

Core functional gives the snapshot of the company’s capabilities which is differentiating it in the market.

The Core Capabilities now become my foundation of the Business Architecture.

The Enterprises’ application landscape are usually divided as per the department, whereas for smooth functioning of the end-2-end value-chain it should be as per capabilities of value-chain.

Enterprise Architecture

As depicted in the figure, Business capabilities identified in the Value Chain define the Business Architecture again differentiatied with Core and Common Service Capabilities. By dividing the entire Enterprise in smaller departments; Core Service capability of a department can match with Segment Architecture of FEAF and Common Service are capabilities across the entire Enterprise.

Business Architecture in terms of Core and Common Service Capabilities derives the Technical Architecture in terms of layers (User Interface , Collaboration, Process, Business  Services, EAI and Applications and Tools).

Also important is the Monitoring and Governance Layer for keeping track and control on the application Technical Architecture based on the foundation Business principles, Techincal Principles etc.

Data Architecture which defines the data of information flow across the enterprise in terms of the Business Entity , Information Exchange and Information Storage.