EA Voices

I made an interesting mistake, today… one that comes up from time to time.  I used a business term in one way, and some members of my audience understood what I meant, while others did not.  In this case, the word was “core”.  The word has two different definitions.  Unfortunately, the definitions are quite different, at least in an Enterprise Architecture context.

The dictionary definition of “core” reflects the problem.  Bing dictionary defines “core” as the “central” or “most important” part of something.  Notice the word “or.”  Either meaning can be intended.

This goes to an old idea of putting the most important part of something in the middle.  In ancient kingdoms, the capital city was often very centrally located, usually near a convenient transportation route (like a river) that offered quick access to all parts of the kingdom (within reason).  So, the word core can mean “most important” or it can mean “in the middle.”  In the past, those two meanings were synonymous.

But in business, the thing “in the center” is not the most important thing.  Porter illustrates this with his (now famous) value chain model:

Porter’s Value Chain.  Image source.

What is the most important part of that model?  It’s the bottom-half, illustrated as the “primary activities” or value chain.  Porter is smart enough to avoid the word “core” because it has the connotation of “in the center” when he wanted to illustrate that value chains are not “in the center.” They traverse “end-to-end”. 

Porter seems to be somewhat alone in avoiding the term “core.”  Many business books and resources use the term “core” when referring to the primary activities.  There are countless illustrations, if you bing for images with the search phrase “business core”, where you are looking either at a set of service offerings or a value chain.  The following diagram is a business architecture reference model for the hospitality industry.  The name of this model: Core Business Domains and Processes. 

Core Business Domains and Processes – Hospitality Technology Next Generation Reference Architecture

On the other hand, there are also illustrations of business where “shared” items are at the center, and non-shared items are “at the edge”.  Illustrations like this one are also quite easy to find:

Source: United Nations Office for the Coordination of Humanitarian Affairs

In business architecture, do we illustrate “core” things to be “shared things at the center of a circle” or do we mean “core” to be “the most important things?”

In Enterprise Architecture, the distinction becomes more problematic.  Shared things are often the LEAST important thing from the perspective of the business, not the MOST important thing.  For example, the HR department is often a shared function, and unless the company is an HR service provider, that business function is not part of the value stream.  On the other hand, from the perspective of information architecture, the shared things are the most important and the non-shared things are the least important.  For example, a single understanding of “customer” is critical, especially when that understanding is shared across marketing, sales, and customer service.  It is shared, common, and very important.   

Now, add a specific use of the word “core” that is used in EA:  the notion of a “core diagram” as described in the book “Enterprise Architecture As Strategy” from Ross and Weill.  In that sense, the diagram itself may vary depending on which one of the operating models is being used, but the model itself is a shared, common understanding of the key items that are shared (whether that is process, information, or both).  In that case, the thing that is important is the thing that is shared.  That is called “core.”

Two years ago, I made a presentation to the Open Group conference about creating core diagrams using a method I created called “Minimum Sufficient Business Integration.”  In that method, I use the word “core” many times to refer to “shared” items that are central to an organizations’ Enterprise Architecture. 

So, what definition should I use for “core” when having a discussion about business and enterprise architecture?  Should the word “core” refer to “the most important” thing, or “the most shared” thing?

I don’t have a good answer.  Perhaps the best answer is to avoid the word “core” altogether. 

Last technique in the Measure phase (M in DMAIC), the Fact collection will be the subject of this Blogpost. Facts and numbers about potential causes of problems and the process in general will give you a better understanding of the process and the way…

Ben Geller, VP Marketing, Troux

A poll at a recent Wall Street Journal CIO Network conference found that 40 percent of attendees rank business intelligence (BI) and analytics as a top priority. Findings suggest that CIOs credit BI tools with providing the insight necessary to make critical business decisions because they provide a view into high volumes of data. For us data geeks findings like these mean the value of data intelligence is finally reaching the mainstream. You see, BI is a revelation on the business side. It lets companies sift through big data to glean insights into market dynamics and consumer behavior – two key drivers of product development and go-to-market strategy. But, IT strategy has different data needs that BI tools only partially fulfill.

CIOs require a different type of data intelligence tool that helps them make decisions about where to invest their resources – both human and capital. Unfortunately, a BI tool wasn’t purpose-built for that job. But, the right tools for the job do exist and at Troux we call those enterprise intelligence tools.

You wouldn’t put gas in a car that runs on diesel, right?

Just because two things seem alike doesn’t mean they serve the same purpose. And, the same holds true for using BI tools to capture enterprise intelligence (EI).

CIOs and IT executives need their own set of fit-for-purpose tools to glean critical insight into the enterprise to really know where to invest.

Decision-making and strategic planning is typically challenging within the enterprise environment.  There are lots of departments and functions that work in silos and it is difficult to get a sense of the big picture. In today’s business environment it is important to recognize that strategic decisions can no longer made in silos or on a single view of the enterprise. Decisions must be made with an understanding of the “connected” enterprise. That’s the beauty of EI.  Enterprise Intelligence gives CIOs and their decision-making counterparts a new level of transparency by establishing a line-of-sight that spans the entire enterprise.

EI enables executives to take the constructs of market analysis and BI and apply it to Business & Technology Strategy Planning. This is possible because EI is multi-dimensional and shows information in the context of the business, so you see the depth to your decision-making by understanding how Goals and Strategy, Business Capabilities, Investments, Applications, Technology, and Information etc. fit together and relate.  Ultimately decision makers see the big picture instead of a single area of the business, which helps them understand the impact of every decision they make. EI gives business leaders the necessary context and insight to understand the cost and benefits of change against the entire business, not just at a group or departmental level.  With this newfound clarity, decision makers have the ability to better understand and prioritize where they invest in the business and establish a plan to execute change that considers the business as a whole.

EI in Action: CHEP Case Study

WHO: CHEP, the leading provider of pallet, container and crate pooling services for many of the world’s largest supply chains.

THE CHALLENGE: Connect information stored across operations in more than 50 countries, covering more than 500,000 customer touchpoints.

CHEP needed a vendor to guide them through the process in order to access both big-picture views and the essential details needed to support business decision-making.

THE SOLUTION: Leveraging Troux’s enterprise intelligence tools helped CHEP understand and optimize its applications portfolio and technology architecture on a grand scale. A BI solution would have only allowed them to look at one area – either the application portfolio or technology architecture, without any insight into how the two relate to other parts of their business, such as business strategy and capabilities.

THE RESULTS: “Now we’re looking at strategic planning three to five years in advance, centering around our capabilities and our business goals,” said Christopher Esser, CHEP Senior Enterprise Architect. “We know what we have, and we are getting an idea of what we are missing. Now we need to look at where we’re going. Troux helps us do that.”

The CHEP example illustrates that CIOs, CEOs, CFOs, COOs need a more robust IT solution for their data intelligence. BI is the right tool for many things, but for strategic IT decisions that drive enterprise cohesion and IT success, only enterprise intelligence will do.

To learn more about how you benefit from EI, download the complete CHEP EPM case study. (http://resources.troux.com/chep)

 

Last week I discussed the importance of effective communication for EA.This week I will talk about how important Enterprise Architecture and Business Architecture are to being successful at executing a Business Transformation in your organization.
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