Theoretical Framework - Business Management

The aim of this chapter is to position the Enterprise Architect in this profession’s contextual environment as an actor within the Business and IT Management. The Enterprise Architect is considered to have a majority of his / her assignments in the field of Enterprise Architecture (EA), which is part of the IT governance and IT Management of the Business Management. The theoretical framework chapter will introduce the Enterprise Architect’s position in the business organization. The Enterprise Architect is ordinarily considered to be employed by the organization, thus seldom on a consultant basis, besides to assist with accurate Enterprise Architectural knowledge, e.g. when to make certain adjustments to the architectural environment. This chapter will clarify the background and need for EA, which need is considered more important in the future than in the past. The initial sections will position the EA and architect in relation to the business management, the IT management, and specifically exemplify organizational roles that the Enterprise Architect will be in collaboration with, viewed from a multi-disciplinary approach. Besides the EA is a newcomer to the business arena, this position is reasonable multifaceted and interagency to its construct.

The Multi-disciplinary Approach

The position of the Enterprise Architect is revealed multi-facet and multi-disciplinary in the context of the various knowledge bases the architect is intended to work in and collaborate with. The multi-disciplinary approach to this study is interpreting the business domain and IS/IT domain to have a certain interest of overlapping the business, the socio-cultural/socio- technical and the strict technical disciplines. The multi-disciplinary approach found by this research from a universal perspective is discussed by Cabezas & Diwekar (2012) who elaborate the request of a this approach, viewed from the long-term sustainability perspective, involving the ecology of systems, economic sustainability, engineering requesting infrastructure and the socio-technical perspective on people in collaboration. Wagner et al. (2010) add the multi-disciplinary aspects of digital design. The multi-disciplinary approach found within the business discipline by Damij & Damij (2014) who relate the multi-disciplinary perspective on the business process management, including knowledge management and data modeling. Goodwin & Strang (2012) relate the multi-disciplinary to their socio-cultural meta-model in evaluating risk. Finally, the multi- disciplinary approach found in the technical discipline comprises Biffl et al. (2011) who discuss the risks in overlapping and missing competency in engineering roles, regarding multi- disciplinary as within the technical domain while interlinking engineering roles. In addition Chen et al. (2014) examining the knowledge bases in the interaction between multi- disciplinary computer systems. In an aim to position the EA, and especially the Enterprise Architect, there is a certain need to understand the context of the architect’s work field. The Enterprise Architect’s work field is expected to be multi-facet and multi-disciplinary while the literature survey for this research reproduces vague support for this statement. Moreover, the absence of literature elaborating a multi-disciplinary approach to the field for IS/IT, business and the socio-technical context is considered as rare. The next section will explore the context of the business management, which the Enterprise Architect is expected to be in cooperation with.

Business Management

The intention of this section is to clarify the connection for Enterprise Architecture (EA) and the Enterprise Architect’s position in the context of the business in general. The business has been in evolution for a few centuries, where the business could be either a public or a private establishment. The transformation of the business originated in the agriculture age, followed by the industrial revolution and the industrial age to come. Since the last decades, most businesses have entered the information age, still though in its infancy, which transformation will affect most actors on a market independently if private or public, cultures and individuals (Toffler, 1980; Toffler & Toffler, 1995). It is in these businesses, primarily in mid-sized and large companies, the function of EA will be found where employees have been assigned the role as Enterprise Architects in an effort to maintain, develop, and support the EA to add benefits and value to the business. Most businesses have left the industrial age and entered the information age, where primarily the large-sized business request for the Enterprise Architect. The next subsection will inquire if EA should be viewed mainly as a governance function, implicit seen as an audit function, or as a business driver.

EA as governance or as business driver?

This subsection is intended to elucidate that the EA could gain as either a governance function and, or as a business driver. It is up to the management of the business to decide which outcome that is anticipated and to select the appropriate balance between the two. Enterprise Architecture could be considered as either a tool to be in control of the technology (Lankhorst, 2013) or provide the necessary guidance for information technology to act as a business driver, piloting the prerequisites regarding information and architecture corresponding to customer demands for the successful business. In acknowledging EA this strategic capability (Ross et al., 2006) the Enterprise Architect may act as the glue between technology and the business in a successful socio-technical-business implementation (Li & Solis, 2013). The question how EA should be regarded is left as an open question in this thesis, as this topic is regarded as an issue to be discussed in the organization where EA is operating. Nevertheless, both directions have consequences for the organization. The next section will briefly review the business in a retrospective perspective.

The traditional business

This subsection is envisioned to describe briefly the generic business organization’s core and supporting business processes in retrospective, and the reason behind that IT management was introduced to the business. The traditional business in evolution from the 18 th century and on has evolved from the market demands and drivers for the business in the revelation to its customers. Achievements from new technology, has forced customers to queue up for the new adventure to be purchased (Hui et al., 2013). The market during the early and middle industrial age was mainly focused on a physical product in itself. The traditional way to introduce new product to the market was the initial invention, and the subsequent innovation from this invention, what is usually mentioned as marketing the product, where the product is contributing to the market on four properties: the product, the place, the promotion and the price (Kotler, 1986). The business constitutes of the core process, mainly the production process, and its supporting processes, such as Human Resource (HR), Sales & Marketing, Finance & Accounting (F&A), and in recent years, the growing field of Information Technology (IT) (Hui et al., 2013). From the infancy of the business, most every business was local, i.e. serving customers with physical products in a local market. Most businesses realized the need for a common business goal (Cadle et al., 2010) to formulate where the business was intended to invest its scarce resources as money while a business strategy (Kourdi, 2003) to obtain these future goals was necessary. Quite rapidly, the methods and technics to govern if the business was the strategy was successful or not, were developed (Kyriazoglou, 2012). When the information technology was emerging in the 1960 and 1970, the need to govern and control of the IT was developed too, while the concept of IT Management was due, in advising the organization about the architecture, IT strategy, and control of the new technology (Barton, 2003). This subsection has simplified the traditional business with its core business process and supporting business processes, where the IT Management is part of the latter, in an aim to position IT Management in its context of the traditional business. The next subsection will deal with the future business.

The contrasting business – A business in transition

This subsection will clarify the shift for several businesses in the information age, what kind of complexity that is apparent, the need to handle the “glocal” organization, the shift in actor and social interaction, which request for a certain business need of business coordination, appointed as part of the Enterprise Architect’s work field. For the business, information has become more core for the contemporary organization heading the information age, in comparison to the industrial age, combining the information with intelligence and ideas (Handy, 1991). Numerous organizations have grown from serving the local market only, into a multifaceted business, operating on a global market. For the majority of businesses several competitors are operating in the very same market, competing for the very same customer by an identical concept. In this context, the information about the customer and the client’s demand is essential to survive in business (Jamali et al., 2014). Nonetheless, market changes and expectations on the contemporary organization, mainly due to imbalances in the global systems, appeared to be more volatile and unpredictable (Møller, 2013). Complexity of human global economic activity The contemporary organization is considered by the business, as under persistent pressure from an increasing complexity due to globalization, rapid technology development, pressure from cost cutting and cost-savings, increased demand and sourcing of information (Nilsson, 2015). Although complexity and chaos have been prevalent since the origin of the universe, this study reveals the complexity caused by expansion and globalization of human economic activity (Mainzer, 2007). An analysis of the patterns of the relationship between the objects involved could reduce complexity while a decent architecture is chosen (Solà-Morales de, 2012). Local, Global or Glocal? ‘All business is local’, defend Quelch & Jocz (2012). Although the traditional business started as a local presence to supply products on a local market, the very same statement is true for the modern business as well. Nevertheless, several businesses have outgrown its local market to support customers on several markets with sometimes competing products. This growth has caused new requirements in the product portfolio, operating simultaneously in several markets, which is an global market (Kotler & Caslione, 2009) while the challenge is to cope with the global market as it was the local, termed “glocal” (Robertson, 1995). Shift in actor The information stakeholders have been promoted the role as simultaneously attaining the locus of information requester and supplier in co-creation (Ozcan & Ramaswamy, 2014). The same information stakeholder may concern a human or a machine, escalating various actions within the business to act as an ecosystem of data and information (Simon, 2014), where stakeholders as actors are impacting other systems (Hanseth et al., 2004), and their knowledge (Bahrami & Evans, 2010). The appropriateness of influences from machines in this ecosystem has been questioned by Bostrom (2014). Shift in social interaction Increased customer empowerment and self-actualization will force the businesses to act differently on markets in the information age, where the socio-cultural transformation has started (Kotler et al., 2010). The customer’s perceived value of a product and service will shift away from an enterprise-centric value creation to value created by interactions between people in co-creation (Ozcan & Ramaswamy, 2014) adding value in a value-chain (D'Heur, 2015). Smart communities (Morse & Cook, 2014) in interaction will supply information to this chain through crowdsourcing (Brabham, 2013). Actions and transactions have led to interactions in decision sourcing (Roberts & Pakkiri, 2013). Information which quickly could be transferred, will impact the structure of the society, business, and its customers (Carr, 2010) but should be seen as an enabler to come (Roberts, 2013). As synopsis from the literature revealed and referred to in this subsection, reflecting the society and business in transition, figure 5 is intended to compare the impact of attributes during the agriculture, industrial, and information ages. In conclusion of this sub-section for the business in transition, the complexity of human global economic activity, the need to handle the glocal business, the shift in actors and social interaction will impact every business in development while there is a need to coordinate these activities, requesting for piloting by the business in transition, where this study considers the Enterprise Architect as a core member of this transition team. The next subsection explores the business drivers.

Business drivers

All businesses have some more or less pronounced business drivers as objectives to achieve a future state. One driver could be a cost reduction, another to invent a new technology leap and by then obtain a competitive advantage. The third driver is reflecting the multinational business to take advantage of a regulatory competition in locating some business in a region that is appropriate for the business to acquire a particular goal. In recent years, the IS/IT business has been emerging as a core business driver for some organizations, where information and technology had been recognized as a strategic capability for a future transformation of the business or the business area in general. In this context, the presence of the Enterprise Architect is more crucial today than in the past, to coordinate architectural knowledge in and between organizations. Moreover, business drivers might be recognized in cooperation, influencing each other. Despite information technology so far has mainly been considered as a supporting function to the core business process of the production, the swift in market is obvious, where products are interchanged by services (Scott Morton, 1994) or where products are equipped with a service (Bragg, 2010). The primary business driver for the business is mainly to achieve competitive advantages: the aim for cost reduction in a purpose to provide the customers with either products and services at a lower price, or to extend the business margin (Gilliam & Taylor-Jones, 2004). Another business driver is the technological leap, where old fashioned products or services are provided in a new body, aimed to acknowledge competitive advantages through improved technology (Ceschin, 2014). A third business driver is the regulatory advantages, due to production, sales or provision of a product or a service is strategically chosen by the supplier upon legal advantages (Larouche & Cserne, 2013). The fourth business driver is information and information technology as the driver for either supplied information or to explore new markets (Wijegunaratne et al., 2014). However, these four examples are presented as separate drivers for the extended business, these business drivers are most likely combined and in cooperation.The conventional business in transformation and development, forced and amplified by its business drivers in an aim to achieve new business opportunities, as displayed in figure 6. In summary, the business management is an essential domain for the Enterprise Architect’s knowledge and understanding, comprising the governance and/or business driver approach for EA, and for the architect as a core and natural member of the transition team in developing opportunities for the business. Next section will position the architect in the domain of IT Management.

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