Improving business - it alignment through business architecture

Improving business - it alignment through business architecture

IMPROVING BUSINESS – IT ALIGNMENT THROUGH BUSINESS ARCHITECTURE By CHINGMEI LI Master’s of Information Systems, Lawrence Technological University, 2000 Bachelor’s of Business Administration, Tamkang University, 1995 Dissertation Submitted to the College of Management In Partial Fulfillment of the Requirements for the Degree of DOCTOR OF MANAGEMENT IN INFORMATION TECHNOLOGY DISSERTATION COMMITTEE CHAIR: Dr. A. L. Steenkamp Lawrence Technological University December 2010 UMI Number: 3444219 All rights reserved INFORMATI ON TO ALL USERS The quality of this reproduction is dependent upon the qualit y of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI 3444219 Copyright 2 01 1 by Pro Quest LLC. All rights reserved. This edition of the work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, MI 48106-1346 i ABSTRACT The business and Information Technology (IT) alignment issue has become one of the Top-10 IT management issues since 1980. IT has continually strived to achieve alignment with business goals and objectives. These IT efforts include ERP implementation to benefit from the best practices; data center consolidation and server virtualization to keep costs down; data warehouses and business intelligence to provide data with better quality; COBIT to provide IT regulation and control; ITIL to address IT operations; as well as Enterprise Architecture (EA) to provide the foundation of IT in an organization. EA has been extensively covered in the past two decades with most of the efforts focusing on Technology Architecture, Information Architecture and Application Architecture and less emphasis on Business Architecture (BA). This research developed a comprehensive Business Architecture methodology to address and improve Business and IT alignment. The research is based firstly on the proposition that a comprehensive Business Architecture is required to enhance Business IT alignment. The second proposition states that Business Architecture development must be done before the development of Information Architecture, Application Architecture, and Technical Architecture. A thorough literature review was performed on topics of business situations, enterprise strategy, IT strategy, existing theories of EA, EA development approaches, famous EA frameworks, the existing theories of Business and IT alignment as well as the current development state of BA. This research has resulted in the development of the conceptual solution of the BA Development Approach, and used to validate the research propositions. The conceptual solution encompasses the BA principles, BA sub-viewpoint, BA framework, BA process model and BA methodology. The conceptual solution was validated using a qualitative research methodology and a case study performed in an actual manufacturing company. The key contribution of this research is that it has demonstrated that the business can greatly benefit from the development of the Business Architecture that provides improved alignment with the IT processes. The improvements are mainly achievable in the communication and partnership perspectives. The Business Architecture should be implemented before other architectures. ii DEDICATION This dissertation is dedicated to my mother, Mrs. Fujung LiHsu who has had a thirty-five year career as a college teacher. She always insisted that life is a never-ending learning process, and she is the one who first encouraged me to pursue both a Master’s and a Doctoral degree in my college years. iii ACKNOWLEDGMENTS The successful completion of this research project required the direction and support from many different experienced individuals. In this regard, I would like to thank all members on my dissertation committee, Dr. Lerine Steenkamp, Dr. Peter Chang, Dr. Olga Petkova and Dr. Donald Warner. I especially want to thank Dr. Chang, Dr. Petkova and Dr. Warner for all their time, efforts and valuable feedback to enhance the quality of this dissertation research. Dr. Steenkamp as my dissertation supervisor spent numerous hours, countless emails and face-to-face discussions with me throughout this dissertation research project. Dr. Steenkamp provided me with extraordinary guidance and direction and made learning interesting. I am extremely grateful to her dedicated efforts, and the leadership she provided me. I also would like to use this opportunity to thank Peak L.L.C. and its management, who sponsored this research project allowing me to demonstrate my solution in practice. I am especially grateful to the sponsors and senior management of Peak L.L.C. for their time and effort. Last but not least, I extend a special thank you to all my friends and colleagues in the DMIT journey. In particular, I thank Ms. Yushan Lin who has helped and supported me over these years for her encouragement and true friendship. You are like family to me. iv TABLE OF CONTENTS CHAPTER 1 INTRODUCTION 1 1.1 Overview of Background Theory and Application 3 1.2 Overview of Focal Theory and Application 3 1.3 Purpose of the Study 4 1.4 Research Scope 5 1.5 Research Questions and Proposition 5 1.6 Research Strategy 6 1.7 Contribution of the Dissertation 11 1.8 Format of the Dissertation 12 1.9 Summary 13 CHAPTER 2 LITERATURE REVIEW – BACKGROUND THEORY AND APPLICATION 14 2.1 Business 15 2.1.1 Business and Business Environment 15 2.1.2 Enterprise Strategy 17 2.2 Information Technology (IT) and IT Strategy 19 2.3 Architecture 20 2.3.1 Enterprise Architecture 20 2.3.2 Enterprise Architecture Development Approach 23 2.3.2.1 Architecture Principles 26 2.3.2.2 Architecture Frameworks 27 2.3.2.3 Architecture Process Model 27 2.3.2.4 Architecture Methodology 30 2.3.2.5 Architecture Tools 35 2.3.3 Examples of Well-known EA Framework 35 2.3.3.1 Zachman Framework 36 2.3.3.2 The Open Group Architecture Framework (TOGAF) 38 2.3.3.3 Extended Enterprise Architecture Framework (E2AF) 41 2.3.4 EA and Enterprise Resource Planning (ERP) 43 2.4 Summary and Conclusions 48 v CHAPTER 3 LITERATURE REVIEW – FOCAL THEORY AND APPLICATION 49 3.1 Business and IT Alignment 50 3.1.1 Definition of IT and Business Alignment 51 3.1.2 Alignment Model 51 3.1.3 Alignment Perspectives 54 3.1.4 Alignment Gaps and Critical Success Factors (CSF) 57 3.1.5 Alignment Assessment and Diagnosis Criteria 60 3.1.5.1 Chan's Alignment Assessment Dimensions 61 3.1.5.2 Luftman's Strategy Alignment Maturity Model 61 3.1.5.3 Weiss & Anderson's Alignment Profile 65 3.1.6 Alignment Means 67 3.1.7 Current Alignment Status 69 3.2 Business Architecture 73 3.2.1 Definition of Business Architecture 73 3.2.2 Sub-viewpoints in Business Architecture 74 3.2.3 Process of Implementing Business Architecture 79 3.2.4 Business Architecture in Business and IT Alignment 81 3.3 Summary and Conclusions 84 CHAPTER 4 RESEARCH DESIGN AND PROCEDURES 86 4.1 Research Approach 86 4.2 Research Design 87 4.2.1 Supporting Models Used 91 4.2.2 Case Study Method 94 4.3 Data Collection Method 97 4.4 Data Analysis Method 98 4.5 Limitation of the Research Design 99 4.6 Summary 99 CHAPTER 5 CONCEPTUALIZATION OF SOLUTION 100 5.1 Conceptual Model of the Research Domain of Discourse 100 5.2 Conceptual Solution of the Research Problem 104 5.2.1 BA Process Reference Model (BAPRM) 105 5.2.2 BA Principles 110 5.2.3 BA Sub-viewpoints 111 vi 5.2.4 BA Framework 111 5.2.5 BA Process Model 117 5.2.6 BA Methodology 127 5.3 Summary 128 CHAPTER 6 DEMONSTRATION OF CONCEPT 130 6.1 Introduction 130 6.2 Overview of the Company 130 6.2.1 Company Vision 131 6.2.2 Enterprise Strategy 131 6.2.3 Current Business and IT Environment 132 6.3 Case Study 132 6.3.1 Scope of the Case Study 132 6.3.2 Understanding of BA and BA Development Approach 133 6.4 Peak L.L.C.’s BA 134 6.4.1 Long Term Goal 135 6.4.2 Short Term Goal 136 6.4.3 BA Team Directory 139 6.4.4 Role and Responsibilities Matrix 140 6.4.5 Organization Chart 141 6.4.6 Business Location Diagram 142 6.4.7 Product Catalog 143 6.4.8 Five Forces Model 144 6.4.9 External Relationship Diagram 145 6.4.10 Value Chain 146 6.4.11 SWOT Analysis 147 6.4.12 Performance Matrix 150 6.4.13 Tiered Business Systems Architecture 151 6.4.14 Business System Diagram 152 6.4.15 Business Function Decompositions 154 6.4.16 IS Business Process Diagram 155 6.4.17 SHOULD Business Process Diagram 158 6.4.18 BA Principles 161 6.4.19 Gap Analysis Worksheet 161 6.4.20 Business Scenario 163 vii 6.4.21 Business Glossary 165 6.4.22 Business Information Requirement 166 6.4.23 Fact / Rule Table 166 6.4.24 Business Entity Diagram 167 6.4.25 Business Information Flow Diagram 168 6.4.26 Business Systems / Information Requirement Mapping 169 6.5 Case Study Evaluation 170 6.5.1 Findings to Peak L.L.C. 170 6.5.2 Recommendations to Peak L.L.C. 171 6.5.3 Evaluation Criteria of the Conceptual Solution 171 6.6 Summary and Conclusions 173 CHAPTER 7 CONCLUSIONS, CONTRIBUTIONS, AND LIMITATIONS 174 7.1 Answers to the Questions 174 7.2 Conclusion Related to Proposition 178 7.3 Summary of Contributions 179 7.4 Limitations 181 7.5 Recommendations 181 7.6 Future Research 182 APPENDIX A CASE STUDY – PEAK L.L.C.'S PRODUCT LIST 183 ABBREVIATION AND ACRONYMS 185 GLOSSARY 187 REFERENCES 200 [...]... to the business – with proper IT alignment A mind map diagram was constructed in Figure 3-1 to highlight the elements of the Business - IT alignment and BA They are:  Business and IT Alignment including alignment model, alignment perspectives, alignment gaps and Critical Success Factors (CSF), alignment Chapter 1 Introduction 3 Improving Business – IT Alignment through Business Architecture  assessment... issues: Business – IT Alignment, Business Change, and Transformation road map However, the same survey shows that enterprises currently place various degrees of emphasis on architecture topics, such as Enterprise Architecture (15%), Technology Infrastructure Architecture (15%), Security Architecture (15%), InformationSystems Architecture (14%), Information Architecture (13%), Software Architecture. .. Background Theory and Application 14 Improving Business – IT Alignment through Business Architecture   The IT and IT strategy The current development of EA Figure 2-2 : Literature Review - Background Theory and Application 2.1 Business 2.1.1 Business and Business Environment According to the Oxford dictionary and Merriam-Webster dictionary, an enterprise is defined as a business organization or company... concerned with the BA? Does BA inform IT during the development of the IT strategic plan? Does BA let IT understand what the key concerns are from the business perspectives? Chapter 1 Introduction 5 Improving Business – IT Alignment through Business Architecture 10 Does BA help IT stakeholders to understand the business side of the organization? 11 Could a comprehensive BA apply to the small-medium businesses?... based on various business models, Craig and Tinaikar suggested that the way to manage IT should be different by Chapter 2 Literature Review – Background Theory and Application 19 Improving Business – IT Alignment through Business Architecture using the portfolio approach (Craig & Tinaikar, 2006) Thus, they classified IT initiatives into three types    Scale IT investments: Stay-in-the-race projects... the literature review by searching for key words such as business, IT, architecture, business and IT alignment, as well as BA The literature review tree is shown in Figure 2-1 Figure 2-1 : Literature Review Overview Therefore, the following areas were studied:      Business: the definition of enterprise, today's business environment and the enterprise strategy is discussed in Section 2.1 IT: the... definition of IT and IT strategy is covered in Section 2.2 Architecture: The definition of EA, the viewpoints of EA, the EA development approach and the frameworks of EA as presented in Section 2.3 Business and IT alignment: the definition of business and IT alignment, alignment models, perspectives, assessment, alignment means and current BA status which are contained in Section 3.1 BA: the definition... cost effective manner Chapter 1 Introduction 4 Improving Business – IT Alignment through Business Architecture 1.4 Research Scope In general, the EA comprises Information Architecture, Business Architecture, Technical Architecture and Application Architecture (Perks & Beveridge, 2003) This research project has the primary focus on the BA It includes the determination of what the BA is, why an enterprise... 66 Table 3-7 : Business Architecture Comparsion Matrix (Ganesan & Paturi, 2008) 77 Table 3-8 : Ganesan and Paturi’s Composite Business Architecture Framework (Ganesan & Paturi, 2008) 78 Table 4-1 : Matching Research Questions with Strategy Technique (Marshall & Rossman, 1995) 88 Table 4-2 : Research Design for Research Questions 89 Table 4-3 : DMIT Architecture Meta Framework... Figure 6-2 0: Peak L.L.C – Business Entity Diagram of FCP 167 Figure 6-2 1: Peak L.L.C – Business Information Flow Diagram of FCP 168 xi COPYRIGHT Copyright © 2010 by CHINGMEI LI All rights reserved xii Improving Business – IT Alignment through Business Architecture CHAPTER 1 INTRODUCTION For the past few decades, Information Technology (IT) has been supporting enterprises in performing business . Definition of Business Architecture 73 3.2.2 Sub-viewpoints in Business Architecture 74 3.2.3 Process of Implementing Business Architecture 79 3.2.4 Business Architecture in Business and IT Alignment.  Business and IT Alignment including alignment model, alignment perspectives, alignment gaps and Critical Success Factors (CSF), alignment Improving Business – IT Alignment through Business. architecture topics, such as Enterprise Architecture (15%), Technology Infrastructure Architecture (15%), Security Architecture (15%), Information- Systems Architecture (14%), Information Architecture