Enterprise Architecture

Enterprise Architecture

Executive Summary

The purpose of this paper is to present the concept of an operating model in enterprise architecture. The report will begin with the description of an operating model, its functions and its significance within an organizational IT infrastructure. It is followed by key dimensions of an operating model as well as the four main types of operating models which are widely used in enterprises and organizations. After this section, case studies of two organizations, namely Dow Corning Corporation and United Parcel Service will be considered. The operating models employed within these two organizations will be discussed in detail and the main benefits these organizations derive from the employment of these operating models will be illustrated.

Enterprise Architecture4

Operating Model4

Key Dimensions of Operating Models5

Standardization5

Integration5

Main Types of Operating Models6

Diversification Operating Model7

Coordination Operating Model8

Replication Operating Model10

Unification Operating Model11

Operating Model Used at Dow Corning Corporation: Business Benefits12

Operating Model Used at UPS: Business Benefits15

Enterprise Architecture

Enterprise Architecture

Enterprise architecture may be referred to as the systematizing logic for IT capabilities and business processes imitating standardization and integration requirements of the operating model employed in the firm. Architecture is viewed as a strategic, instead of a technical application. The architecture of a company established a common vision of the way a company would operate, thereby imparting a mutual understanding of the role of information technology. Enterprise architecture if found to be an essential and significant tool for the alignment of business and IT strategy as well as for drawing out business value from information technology.

Operating Model

For the order of making information technology a proactive instead of a reactive force to create business value, firms must mark out and establish an operating model. An operating model may be defined as the essential level of business process standardization and integration in order to deliver services and goods to the consumers. An operating model, by means of figuring out the standardization and integration requisites, establishes essential business and IT process capabilities.

Key Dimensions of Operating Models

There are two dimensions of an operating model;

Business process integration; and

Standardization

Standardization

The standardization of business procedures and other interrelated systems implies to the precise definition of the way a procedure would be carried out irrespective of the person carrying out the procedure or where it is executed.

Integration

Integration relates the endeavors of the various units operational in an organization by means of shared data. This articulation of data may be amid procedures for the purpose of facilitating end-to-end transaction processing, or even across procedures for the purpose of allowing an organization for presenting a single face to the consumers.

Main Types of Operating Models

There are four major types of operating models;

Diversification Operating Model

Coordination Operating Model

Replication Operating Model

Unification Operating Model

Diversification Operating Model

Figure: Diversification Operating Model Characteristics

Diversification Operating Model effectively refers to the independence with shared services. Diversification may be applicable to those organizations that have a business unit with few common suppliers, customers, or means of carrying out business activities. In diversified organizations, business units impart varying services and products for the central management exercises to ...