Enterprise Architecture as a Key Component

Relationship to other disciplines
Enterprise architecture has become a key component of the information technology governance process in many organizations. These companies have implemented a formal enterprise architecture process as part of their IT management strategy.

While this may imply that enterprise architecture is closely tied to IT, it should be viewed in the broader context of business optimization in that it addresses business architecture, performance management and process architecture as well as more technical subjects.

Depending on the organization, enterprise architecture teams may also be responsible for some aspects of performance engineering, IT portfolio management and metadata management.

The following image from the 2006 FEA Practice Guidance of US OMB sheds light on the relationship between enterprise architecture and segment(BPR) or Solution architectures. (From this figure and a bit of thinking one can see that software architecture is truly a solution architecture discipline, for example.)

Activities such as software architecture, network architecture, database architecture may be seen as partial contributions to a solution architecture.

It is uncommon for a commercial organization to publish rich detail from their enterprise architecture descriptions. Doing so can provide competitors information on weaknesses and organizational flaws that could hinder the company's market position.

However, many government agencies around the world have begun to publish the architectural descriptions that they have developed. Good examples can be found at the US Department of the Interior[3], and the US Department of Defense business transformation agency

Enterprise Architecture

Areas of Practice
Many enterprise architecture frameworks break down the practice of developing artifacts into four practice areas. This allows the enterprise to be described from four important viewpoints. By taking this approach, enterprise architects can assure their business stakeholders that they have provided sufficient information for effective decision making.

These practice areas are :

1. Business:

• Strategy maps, goals, corporate policies, Operating Model
• Functional decompositions (e.g. IDEF0, SADT), capabilities and organizational models
• Business processes
• Organization cycles, periods and timing
• Suppliers of hardware, software, and services

2.Information:

• Metadata - data that describes your enterprise data elements
• Data models: conceptual, logical, and physical

3. Applications:

• Application software inventories and diagrams
• Interfaces between applications - that is: events, messages and data flows
• Intranet, Extranet, Internet, eCommerce, EDI links with parties within and outside of the organization

4. Technology:

• Hardware, platforms, and hosting: servers, and where they are kept
• Local and wide area networks, Internet connectivity diagrams
• Operating System
• Infrastructure software: Application servers, DBMS
• Programming Languages, etc..

Enterprise architecture

The term enterprise architecture refers to many things. Like architecture in general, it can refer to a description, a process or a profession.

To some, "enterprise architecture" refers either to the structure of a business, or the documents and diagrams that describe that structure. To others, "enterprise architecture" refers to the business methods that seek to understand and document that structure. A third use of "enterprise architecture" is a reference to a business team that uses EA methods to produce architectural descriptions of the structure of an enterprise.

A formal definition of the structure of an enterprise comes from the MIT Center for Information Systems Research:

Enterprise Architecture is the organizing logic for business processes and IT infrastructure reflecting the integration and standardization requirements of the firm’s operating model.[1]

It is often said that the architecture of an enterprise exists, whether it is described explicitly or not. This makes sense if you regard the architecture as existing in the system itself, rather than in a description of it. Certainly, the business practice of enterprise architecture has emerged to make the system structures explicit in abstract architecture descriptions. Practitioners are called "enterprise architects."

Enterprise architects use various business methods and tools to understand and document the structure of an enterprise. In doing so, they produce documents and models, together called artifacts. These artifacts describe the logical organization of business strategies, metrics, business capabilities, business processes, information resources, business systems, and networking infrastructure within the enterprise.

A complete collection of these artifacts, sufficient to describe the enterprise in useful ways, could be considered an ‘enterprise’ level architectural description, or an enterprise architecture, for short. This is the definition of enterprise architecture implied by the popular TOGAF architectural framework.

An enterprise architecture framework is a collection of tools, process models, and guidance used by architects to assist in the production of organization-specific architectural descriptions. See the related article on enterprise architecture frameworks for further information.

Industrial Management

Industrial Management, in business, term used to describe the techniques and expertise of efficient organization, planning, direction, and control of the operations of a business.

In the theory of industrial management, organization has two principal aspects. One relates to the establishment of so-called lines of responsibility, drawn usually in the form of an organization chart that designates the executives of the business, from the president to the foreperson or department head, and specifies the functions for which they are responsible. The other principal aspect relates to the development of a staff of qualified executives.

Planning in industrial management has three principal aspects. One is the establishment of broad basic policies with respect to production; sales; the purchase of equipment, materials, and supplies; and accounting. The second aspect relates to the implementation of these policies by departments.

The third relates to the establishment of standards of work in all departments. Direction is concerned primarily with supervision and guidance by the executive in authority; in this connection a distinction is generally made between top management, which is essentially administrative in nature, and operative management, which is concerned with the direct execution of policy.

Control involves the use of records and reports to compare performance with the established standards for work.

Industrial management as just defined dates from the latter part of the 19th century. A notable impetus to its evolution was provided by the American engineer Frederick Taylor, who developed techniques for analyzing the operations involved in production and for setting standards for a day's work.

The techniques originally devised by Taylor were adapted by industrialists to other phases of business, including the employment of qualified workers, and wage incentive programs either to replace or to supplement the piecework system that had previously prevailed. Industrial management experts who succeeded Taylor have applied his techniques to a wider range of business problems.

Among the leading successors are the Austrian-American management consultant and educator Peter Drucker and the American economist, writer, and diplomat John Kenneth Galbraith.


articles to read:

I-O Psychology
Industrial-Organizational Psychology, application of various psychological techniques to the workplace and other organizations. Psychologists in this field advise businesses and organizations on a variety of subjects:

The selection and training of workers
How to promote efficient working conditions and techniques
How to boost employee morale
Productivity, and job satisfaction
The best ways to evaluate employee performance and create incentives that motivate workers
read the story..

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Management
Partnership
Avoiding Mistakes with Your Money
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Industrial-Organizational Psychology

Industrial-Organizational Psychology (I-O psychology), application of various psychological techniques to the workplace and other organizations. Psychologists in this field advise businesses and organizations on a variety of subjects:

The selection and training of workers
How to promote efficient working conditions and techniques
How to boost employee morale
Productivity, and job satisfaction
The best ways to evaluate employee performance and create incentives that motivate workers

I-O psychology first became prominent during World War II (1939-1945), when it became necessary to recruit and train the large number of new workers who were needed to meet the expanding demands of industry.

The selection of workers for particular jobs is essentially a problem of discovering the special aptitudes and personality characteristics needed for the job and of devising tests to determine whether candidates have such aptitudes and characteristics. The development of tests of this kind has long been a field of psychological research.

Once the worker is on the job and has been trained, the fundamental aim of the I-O psychologist is to find ways in which a particular job can best be accomplished with a minimum of effort and a maximum of individual satisfaction. The psychologist's function, therefore, differs from that of the so-called efficiency expert, who places primary emphasis on increased production.

Psychological techniques used to lessen the effort involved in a given job include a detailed study of the motions required to do the job, the equipment used, and the conditions under which the job is performed. These conditions include ventilation, heating, lighting, noise, and anything else affecting the comfort or morale of the worker.

After making such a study, the I-O psychologist often determines that the job in question may be accomplished with less effort by changing the routine motions of the work itself, changing or moving the tools, improving the working conditions, or a combination of several of these methods.

Industrial-organizational psychologists have also studied the effects of fatigue on workers to determine the length of working time that yields the greatest productivity. In some cases such studies have proven that total production on particular jobs could be increased by reducing the number of working hours or by increasing the number of rest periods, or breaks, during the day.

I-O psychologists may also suggest less direct requirements for general improvement of job performance, such as establishing a better line of communication between employees and management.

Management

Managers supervise, monitor, and coordinate the different areas of an industry. For example, financial managers focus on generating and reinvesting finance capital. Human resource managers help recruit people with desirable skills and place them where they are most needed. Marketing managers help sell final goods and services to customers.

Current Trends

Business activities are becoming increasingly global as numerous firms expand their operations into overseas markets. Many U.S. firms, for example, attempt to tap emerging markets by pursuing business in China, India, Brazil, and Russia and other Eastern European countries.

Multinational corporations (MNCs), which operate in more than one country at once, typically move operations to wherever they can find the least expensive labor pool able to do the work well. Production jobs requiring only basic or repetitive skills—such as sewing or etching computer chips—are usually the first to be moved abroad.

MNCs can pay these workers a fraction of what they would have to pay in a domestic division, and often work them longer and harder. Most U.S. multinational businesses keep the majority of their upper-level management, marketing, finance, and human resources divisions within the United States.

They employ some lower-level managers and a vast number of their production workers in offices, factories, and warehouses in developing countries. MNCs based in the United States have moved many of their production operations to countries in Central and South America, China, India, and nations of Southeast Asia.

Mergers and acquisitions are also becoming more common than in the past. In the United States, for example, America Online, Inc. (AOL) and Time Warner merged in 2000 to form AOL Time Warner, Inc., a massive corporation that brought together AOL’s Internet franchises, technology and infrastructure, and e-commerce capabilities with Time Warner’s vast array of media, entertainment, and news products.

Internationally, a growing number of mergers and acquisitions have been taking place, including Daimler Benz’s acquisition of Chrysler to form DaimlerChrysler AG and Ford Motor Company’s acquisition of Volvo’s automobile line.

With large mergers and the development of new free markets around the world, major corporations now wield more economic and political power than the governments under which they operate. In response, public pressure has increased for businesses to take on more social responsibility and operate according to higher levels of ethics.

Firms in developed nations now promote—and are often required by law to observe—nondiscriminatory policies for the hiring, treatment, and pay of all employees. Some companies are also now more aware of the economic and social benefits of being active in local communities by sponsoring events and encouraging employees to serve on civic committees.

Businesses will continue to adjust their operations according to the competing goals of earning profits and responding to public pressures for them to behave in ways that benefit society.

Business in Free Market Economy

The economy of the United States, as well as that of most developed nations, operates according to the principles of the free market. This differs from the economies of Socialist or Communist countries, where governments play a strong role in deciding what goods and services will be produced, how they will be distributed, and how much they will cost.

Businesses in free-market economies benefit from certain fundamental rights or freedoms. All people in free-market societies have the right to own, use, buy, sell, or give away property, thus permitting them to own and operate their own businesses as private, profit-seeking enterprises.

Business owners in free markets may choose to run their businesses however they like, within the limits of other, mostly non-business-oriented laws. This right gives businesses the authority to hire and fire employees, invest money, purchase machinery and equipment, and choose the markets where they want to operate.

In doing so, however, they may not violate or infringe on the rights of other businesses and people. Free-market businesses also have the right to keep or reinvest their profits.
All free-market economies, however, keep the rights of businesses in check to some degree through laws and regulations that monitor business activities.

Such laws vary from country to country, but they generally encourage competition by protecting small businesses and consumers from being hurt by more powerful, large enterprises. For example, in the United States the Sherman Antitrust Act, enacted in 1890, and the Clayton Antitrust Act of 1914 forbid business agreements that impede interstate and most international commerce.

The Clayton Antitrust Act also protects against unfair business practices aimed at creating monopolies and guarantees the rights of labor to challenge management practices perceived as unfair. The U.S. Federal Trade Commission Act of 1914 prohibits businesses from attempting to control the prices of its products or services, among other provisions.

Other laws prohibit mergers that decrease competition within an industry and require large merging companies to notify the Federal Trade Commission (FTC) for approval.

Human Resource Management

Businesses rely on effective human resource management (HRM) to ensure that they hire and keep good employees, and that they are able to respond to conflicts between workers and management.

HRM specialists initially determine the number and type of employees that a business will need over its first few years of operation. They are then responsible for recruiting new employees to replace those who leave and for filling newly created positions.

A business’s HRM division also trains or arranges for the training of its staff to encourage worker productivity, efficiency, and satisfaction, and to promote the overall success of the business. Finally, human resource managers create workers’ compensation plans and benefit packages for employees.


articles to read:

I-O Psychology
Industrial-Organizational Psychology, application of various psychological techniques to the workplace and other organizations. Psychologists in this field advise businesses and organizations on a variety of subjects:

The selection and training of workers
How to promote efficient working conditions and techniques
How to boost employee morale
Productivity, and job satisfaction
The best ways to evaluate employee performance and create incentives that motivate workers
read the story..

related articles:

Industrial Management

Management

Finance

Finance involves the management of money. All businesses must have enough capital on hand to pay their bills, and for-profit businesses seek extra capital to expand their operations.

In some cases, they raise long-term capital by selling ownership in the company. Other common financial activities include granting, monitoring, and collecting on credit or loans and ensuring that customers pay bills on time.

The financial division of any business must also establish a good working relationship with a bank. This is particularly important when a business wants to obtain a loan.

Marketing

Marketing is the process of identifying the goods and services that consumers need and want and providing those goods and services at the right price, place, and time. Businesses develop marketing strategies by conducting research to determine what products and services potential customers think they would like to be able to purchase.

Firms also promote their products and services through such techniques as advertising and personalized sales, which serve to inform potential customers and motivate them to purchase. Firms that market products for which there is always some demand, such as foods and household goods, often advertise if they face competition from other firms marketing similar products.

Such products rarely need to be sold face-to-face. On the other hand, firms that market products and services that buyers will want to see, use, or better understand before buying, often rely on personalized sales. Expensive and durable goods—such as automobiles, electronics, or furniture—benefit from personalized sales, as do legal, financial, and accounting services

Production

Production includes those activities involved in conceptualizing, designing, and creating products and services. In recent years there have been dramatic changes in the way goods are produced. Today, computers help monitor, control, and even perform work.

Flexible, high-tech machines can do in minutes what it used to take people hours to accomplish. Another important development has been the trend toward just-in-time inventory. The word inventory refers to the amount of goods a business keeps available for wholesale or retail.

In just-in-time inventory, the firm stocks only what it needs for the next day or two. Many businesses rely on fast, global computer communications to allow them to respond quickly to changes in consumer demand.

Inventories are thus minimized and businesses can invest more in product research, development, and marketing.

Sole Proprietorship

The most common form of ownership is a sole proprietorship—that is, a business owned by one individual. At the beginning of the 21st century, there were more than 17 million sole proprietorships in the United States.


These businesses have the advantage of being easy to set up and to dissolve because few laws exist to regulate them. Proprietors, as owners, also maintain direct control of their businesses and own all their profits.


On the other hand, owners of proprietorships are personally responsible for all business debts and, because they are constrained by the limits of their personal financial resources, they may find it difficult to expand or increase their profits.


For those reasons, sole proprietorships tend to be small, primarily service and retail businesses.

Partnership

A partnership is an association of two or more people who operate a business as co-owners. There are different types of partners. A general partner is active in the operation of a business and is liable for all of its debts.


In small businesses with only two or three owners, all typically will be general partners. A limited partner, by contrast, invests in a business but is not involved in its daily operations. Partnerships, like sole proprietorships, are relatively easy to establish.


Furthermore, partners can pool financial resources to fund expansion and can divide their duties and responsibilities according to personal expertise and abilities. For example, one partner may be very good at selling, while another has a knack for maintaining good financial records.


As with sole proprietorships, however, partnerships may entail substantial financial risks, as all of the general partners are liable for the debts of the business. And unlike proprietorships, disagreements among partners can harm partnership businesses.

Corporation

A corporation is a legal entity that exists as distinct from the individuals who control and invest in it. As a result, a corporation can continue indefinitely through complete changes of ownership, leadership, and staffing.

Current owners can sell their holdings to other individuals or, if they die, have their assets transferred to heirs. This is possible because a corporation creates shares of stock that are sold to investors.



One strength of the corporate business structure is that stockholders have limited liability, as opposed to the unlimited liability of general partners, so they cannot lose more than their initial investment. Investors may also easily buy and sell stocks of public corporations through stock exchanges.

By offering stock publicly, a corporation enables anyone with some money to buy the stock and become a part-owner of the company. As a result, corporations can more easily raise capital for business expansion than can sole proprietorships and most partnerships.


Investors control a corporation through the election of a managing body, known as a board of directors. In a large corporation, investors collectively decide who will oversee the operation of the enterprise. In turn, the board chooses a president, who decides on the key company personnel and helps formulate company strategy.


Many corporations are highly successful business organizations, with profits far exceeding those of many sole proprietorships and partnerships. However, they traditionally have higher tax burdens than other kinds of businesses. Also, the fees involved in creating and organizing a corporation can be expensive.

Joint Ventures and Syndicates

In joint ventures and syndicates, individuals or businesses cooperate to create a single product or service package. A joint venture is a partnership agreement in which two or more individual- or group-run businesses join together to carry out a single business project.

For example, U.S.-based General Motors Corporation and Toyota Motor Corporation, based in Japan, have a joint venture called New United Motor Manufacturing, Inc., created for the purpose of producing cars in California.

A syndicate is an association of individuals or corporations formed to conduct a specific financial transaction such as buying a business. Quite often syndicates are created for the purpose of buying sports franchises.

For example, the Miami Heat basketball team and the New York Yankees baseball team are each owned by syndicates of individuals. Each member of these syndicates is also involved in the operation of other businesses.

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Service Enterprises

Service enterprises include many kinds of businesses. Examples include dry cleaners, car rentals info, shoe repair stores, barbershops, restaurants, ski resorts, hospitals, and hotels. In many cases service enterprises are moderately small because they do not have mechanized services and limit service to only as many individuals as they can accommodate at one time.

For example, a waiter may be able to provide good service to four tables at once, but with five or more tables, customer service will suffer.In recent years the number of service enterprises in wealthier free-market economies has grown rapidly, and spending on services now accounts for a significant percentage of all spending.

By the late 1990s, private services accounted for more than 21 percent of U.S. spending. Wealthier nations have developed postindustrial economies, where entertainment and recreation businesses like Martial Arts, have become more important than most raw material extraction such as the mining of mineral ores and some manufacturing industries in terms of creating jobs and stimulating economic growth.

Many of these industries have moved to developing nations, especially with the rise of large multinational corporations. As postindustrial economies have accumulated wealth, they have come to support systems of leisure, in which people are willing to pay others to do things for them. In the United States, vast numbers of people work rigid schedules for long hours in indoor offices, stores, and factories.

Many employers pay high enough wages so that employees can afford to balance their work schedules with purchased recreation. People in the United States, for example, support thriving travel, theme park, resort, and recreational sport businesses.

Merchandisers

Merchandisers are businesses that help move goods through a channel of distribution—that is, the route goods take in reaching the consumer. Merchandisers may be involved in wholesaling or retailing, or sometimes both.A wholesaler is a merchandiser who purchases goods and then sells them to buyers, typically retailers, for the purpose of resale.

A retailer is a merchandiser who sells goods to consumers. A wholesaler often purchases products in large quantities and then sells smaller quantities of each product to retailers who are unable to either buy or stock large amounts of the product. Wholesalers operate somewhat like large, end-product manufacturing firms, benefiting from economies of scale.

For example, a wholesaler might purchase 5,000 pairs of work gloves and then sell 100 pairs to 50 different retailers. Some large American discount chains, such as Kmart Corporation and Wal-Mart Stores, Inc., serve as their own wholesalers. These companies go directly to factories and other manufacturing outlets, buy in large amounts, and then warehouse and ship the goods to their stores.

The division between retailing and wholesaling is now being blurred by new technologies that allow retailing to become an economy of scale. Telephone and computer communications allow retailers to serve far greater numbers of customers in a given span of time than is possible in face-to-face interactions between a consumer and a retail salesperson.

Computer networks such as the Internet, because they do not require any physical communication between salespeople and customers, allow a nearly unlimited capacity for sales interactions known as 24/7—that is, the Internet site can be open for a transaction 24 hours a day, seven days a week and for as many transactions as the network can handle.

For example, a typical transaction to purchase a pair of shoes at a shoe store may take a half-hour from browsing, to fitting, to the transaction with a cashier. But a customer can purchase a pair of shoes through a computer interface with a retailer in a matter of seconds.

Computer technology also provides retailers with another economy of scale through the ability to sell goods without opening any physical stores, often referred to as electronic commerce or e-commerce. Retailers that provide goods entirely through Internet transactions do not incur the expense of building so-called brick-and-mortar stores or the expense of maintaining them.

Manufacturing Firms

Manufacturing firms.
Manufacturing firms produce a wide range of products. Large manufacturers include producers of airplanes, cars, computers, and furniture. Many manufacturing firms construct only parts rather than complete, finished products.

These suppliers are usually smaller manufacturing firms, which supply parts and components to larger firms. The larger firms then assemble final products for market to consumers. For example, suppliers provide many of the components in personal computers, automobiles, and home appliances to large firms that create the finished or end products.

These larger end-product manufacturers are often also responsible for marketing and distributing the products. The advantage that large businesses have in being able to efficiently and inexpensively control any parts of a production process is known as economies of scale.

But small manufacturing firms may work best for producing certain types of finished products. Smaller end-product firms are common in the food industry and among artisan trades such as custom cabinetry.

Business

Business, organized approach to providing customers with the goods and services they want. The word business also refers to an organization that provides these goods and services. Most businesses seek to make a profit—that is, they aim to achieve revenues that exceed the costs of operating the business.

Prominent examples of for-profit businesses include Mitsubishi Group, General Motors Corporation, and Royal Dutch/Shell Group. However, some businesses only seek to earn enough to cover their operating costs. Commonly called nonprofits, these organizations are primarily nongovernmental service providers. Examples of nonprofit businesses include such organizations as social service agencies, foundations, advocacy groups, and many hospitals.

Business plays a vital role in the life and culture of countries with industrial and postindustrial (service- and information-based) free-market economies such as the United States. In free-market systems, prices and wages are primarily determined by competition, not by governments. In the United States, for example, many people buy and sell goods and services as their primary occupations.

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