Improving business - it alignment through business architecture

Improving business - it alignment through business architecture

IMPROVING BUSINESS – IT ALIGNMENT THROUGH

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

UMI Number: 3444219

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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

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

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

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

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

5.2.5 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

6.4.22 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

Table 2-1: Zachman Framework's artifacts based on (Zachman, 1996) 31

Table 2-2: TOGAF's ADM Deliverables based on (The Open Group, 2003) 32

Table 2-3: E2AF’s Deliverables based on (Schekkerman, 2006) 34

Table 2-4: Comparison of EA and ERP 45

Table 2-5: ERP Maturity Stage 47

Table 3-1: Top 10 IT Manager Concerns: 2006, 2007 and 2008 (Hiner, 2008; Humbarger, 2007; Jablonski, 2009; Luftman, 2006) 50

Table 3-2: The 12 Components of Alignment (Luftman, 1996) 53

Table 3-3: Henderson and Venkatraman’s Alignment Perspectives (Henderson & Venkatraman, 1993) 55

Table 3-4: Papp's 12 Alignment Perspectives (Papp, 2001) 56

Table 3-5: Diagnosis Criteria in Strategy Alignment Maturity Model (Luftman & Kempaiah, 2007) 64

Table 3-6: Weiss and Anderson's Alignment Profile Criteria (J W Weiss & Anderson, 2004) 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 (Steenkamp, 2009) 93

Table 5-1: Process Hierarchy and Domain of the BAPRM Model 106

Table 5-2: BAPRM Model 109

Table 5-3: Conceptual Solution - BA Framework 116

Table 5-4: Performance Matrix (Harmon, 2007) 122

Table 5-5: Gap Analysis Template 124

Table 6-4: Peak L.L.C – Gap Analysis of IS and SHOULD of FCP 162

Table 6-5: Peak L.L.C – Business Scenario of SHOULD FCP 164

Table 6-6: Peak L.L.C – Business Glossary of the FCP 165

Table 6-7: Peak L.L.C – Fact / Rule of the FCP 166

Table 6-8: Peak L.L.C – Systems / Information Mapping of the FCP 169

Figure 1-1: Inductive - Hypothetic Research Strategy (Graaff, 2001; Meel, 1994;

Sol, 1982; Vreede, 1995) 6

Figure 1-2: Research Strategy (adopt from (Graaff, 2001; Meel, 1994; Sol, 1982; Vreede, 1995) 8

Figure 1-3: Research Process Model 9

Figure 2-1: Literature Review Overview 14

Figure 2-2: Literature Review - Background Theory and Application 15

Figure 2-3: The Roles of IT (Luftman et al., 2004) 16

Figure 2-4: Porter's Five Forces Model (Porter, 1980) 18

Figure 2-5: GERAM components (IFIP-IFAC Task Force, 1999) 24

Figure 2-6: FEA’s Enterprise Architecture Process (Chief Information Officer Council, 2001) 28

Figure 2-7: Steenkamp, Avant and Li’s Architecture Process Model (Steenkamp et al., 2007) 30

Figure 2-8: TOGAF's Architecture Content Framework Meta-model (The Open Group, 2009) 33

Figure 2-9: Zachman Framework (Zachman, 2008b) 37

Figure 2-10: TOGAF ADM (The Open Group, 2003) 39

Figure 2-11: E2AF Framework (Schekkerman, 2007a) 42

Figure 2-12: Enterprise Architecture Program (Schekkerman, 2007b) 43

Figure 2-13: ERP System (Laudon & Laudon, 2010) 44

Figure 2-14: Physical Architecture of ERP adapted from (Sandoe et al., 2001) 45

Figure 3-1: Literature Review - Focal Theory and Application 49

Figure 3-2: Henderson and Venkatraman’s Strategic Alignment Model (Henderson & Venkatraman, 1993) 52

Figure 3-3: Convergence of Strategic Alignment Gaps, adapted from (Luftman et al., 2004) 57

Figure 3-4: Luftman's Strategic Alignment Maturity Model (Luftman, 2003) 62

Figure 3-5: Weiss & Anderson's IT/Business Alignment Value matrix (J W Weiss & Anderson, 2004) 65 Figure 3-6: Ganesan and Paturi's Composite Business Architecture Meta-Model

92

Figure 4-3: Architectural Conceptual Model (ISO/IEC, 2007) 93

Figure 4-4: Case Study Process 96

Figure 5-1: Conceptual Model of Research Domain of Discourse 101

Figure 5-2: Conceptual Solution of the Research Problem 105

Figure 5-3: Hierarchical Structure of BAPRM 107

Figure 5-4: Conceptual BA Process Model 117

Figure 5-5: Input and Output for Pre-Inception Phase 118

Figure 5-6: Inputs and Outputs of Inception Phase 119

Figure 5-7: Organization Diagram with External Relationship (Harmon, 2007) 120 Figure 5-8: Value Chain for a Manufacturing Company (Porter, 1985) 121

Figure 5-9: Inputs and Outputs of Elaboration Phase 123

Figure 5-10: Inputs and Outputs of Interpretation Phase 124

Figure 5-11: Inputs and Outputs of Transfer Phase 126

Figure 6-1: Architecture Process Model (adapt from Steenkamp, Avant & Li) (Steenkamp et al., 2007) 134

Figure 6-2: Peak L.L.C – Long Term Goals 136

Figure 6-3: Peak L.L.C – Short Term Goals 137

Figure 6-4: Peak L.L.C – Goals of Achieving Better Financial Consolation Processes 138

Figure 6-5: Peak L.L.C – BA Team Directory 139

Figure 6-6: Peak L.L.C – Organization Chart 141

Figure 6-7: Peak L.L.C – Business Location Diagram 142

Figure 6-8: Peak L.L.C – Product Catalog 143

Figure 6-9: Peak L.L.C – Five Forces Model 144

Figure 6-10: Peak L.L.C – External Relationship Diagram 145

Figure 6-11: Peak L.L.C – Value Chain 146

Figure 6-12: Peak L.L.C – SWOT Analysis 147

Figure 6-13: Peak L.L.C – Weaknesses 148

Figure 6-14: Peak L.L.C – Opportunities 149

Figure 6-15: Peak L.L.C – Tiered Business Systems Architecture 151

Figure 6-16: Peak L.L.C – Business System Diagram related to FCP 152

Copyright © 2010 by CHINGMEI LI All rights reserved

IT infrastructure and digitized business processes that automate the core capabilities of the enterprise Enterprise Architecture (EA) is beneficial to an enterprise, since it provides the blueprints to develop and build up information systems and IT within an enterprise

Enterprises have placed a high degree of emphasis on the architectural viewpoints of technical/infrastructure, information and application since they are more IT-driven and it is easier to conceive the benefits once the architectural viewpoints and blueprints are developed An architecture viewpoint is defined

as “a specification of the conventions for constructing and using a view” and is

“a pattern or template from which to develop individual views by establishing the purposes and audience for a view and the techniques for its creation and analysis (IEEE Computer Society, 2000).”

However, the core of an enterprise is business process, no matter what kind of industry the enterprise is Thus, there is an emergent need of studying business processes Therefore, the development of blueprints to model business processes (i.e business architecture) captures a lot of attention from Enterprise Architects (Infosys, November, 2005)

Information systems were originally developed to support a specific business function and satisfy the requirements of some of the employees within a department More and more information systems were built as their own silos,

or islands of information These stove-piped information systems failed to provide the right information to the right person at the right time (Smith & Fingar, 2003) To integrate the data, function and timing information, the EA concept has been proposed by Zachman in 1987 (Zachman, 1987)

Like the architectural blueprints in the building industry, the enterprise should have its blueprints for all IT related assets and processes, making it feasible to come up with solutions to provide responses in the hyper-competition age (Boar, 1999) The hyper-competition age has characteristics such as no sustainable competitive advantages existence, the demanding customers with no loyalty, innovative and aggressive competitors The enterprise architecture encompasses client requirements along with the external, internal and technological constraints as a whole, to build information systems on a shared vision and to bridge gaps between requirements and IT products (Perks & Beveridge, 2003)

According to the 2005 Enterprise Architecture Survey (Schekkerman, 2005b) conducted by the Institute for Enterprise Architecture Development, ninety-five percent of enterprises have recognized the importance of EA They expect that the EA can address the following top three 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%), Information-Systems Architecture (14%), Information Architecture (13%), Software Architecture (11%), and less on Business Architecture (BA) (10%) and Governance Architecture (7%)

Therefore, companies expect the EA to address business related issues, but the current efforts in the field of EA are more focused on IT viewpoints other than the BA viewpoint IT management should direct more efforts to the BA to ensure that business concerns receive top priority, such as Business – IT Alignment,

Clearly additional information and research is required to understand what BA

is and how to develop a BA in an organization in order to improve the alignment between business and IT

1.1 Overview of Background Theory and Application

This section provides the overview of the background theory for the research problem The researcher had examined the background theory based upon literature review covering the current business environment, the issues and businesses concern, enterprise strategy, how to sustain competitive advantages for an enterprise, how IT assists business, IT strategy and IT architecture

A full understanding of the research context allowed the researcher to determine the elements of the background theory A mind map diagram was constructed

in Figure 2-2 to highlight these elements:

 Business including business environment and enterprise strategy

 IT and IT strategy

 Architecture including EA, EA development approach, and examples of

EA framework

Chapter 2 describes these elements in greater detail

1.2 Overview of Focal Theory and Application

The primary purpose of this research is to expand the body of knowledge of BA for an enterprise, with focus on the BA contribution to the business – with proper

IT alignment

A mind map diagram was constructed in Figure 3-1 to highlight the elements of

assessment and diagnosis criteria, alignment means and current alignment status

 BA including sub-viewpoints in BA, process of implementing BA, BA in business and IT alignment

Chapter 3 describes these elements in greater detail

Literature related to the research topic was collected from the following on-line technical library search engines: ACM Digital Library, Business Source Complete, EBSCOhost, Emerald Management Xtra, FirstSearch (OCLC), Forrester Research, IEEE Digital Library, ProQuest, and Science Direct

1.3 Purpose of the Study

Based on the findings of the 2005 Enterprise Architecture Survey (Schekkerman, 2005b), it is not difficult to notice that enterprises expectations of EA deliverables are actually different from what the current EA provides This research is focused on addressing the issues such as Business – IT Alignment, Business Change, and the Transformation road map This may only be accomplished by having the enterprise spend more effort and time to understand the BA viewpoint, since the BA is the superstructure that sits above all other enterprise architectures The changes an enterprise wants to accomplish must start with the

BA models and then propagate down to the other architectures (Whittle & Myrick, 2005)

Stakeholders view the BA differently Bearing this in mind, the purpose of this study is the development of an integrated and comprehensive BA viewpoint The BA viewpoint is expected to improve the alignment between business and IT

to support the process of integrating the four alignment domains of business strategy, IT strategy, organizational infrastructure and process, and IT infrastructure and process This integration will yield a Strategic Fit and Function Integration thereby allowing businesses to respond to changes in an agile, flexible and cost effective manner

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 needs the BA, who should be involved in creating a BA, who will be impacted by the BA, when the BA is needed and how to develop the BA

The scope of this dissertation research includes the study of the different viewpoints of the BA within the context of the EA and the development approach of BA The research studied what aspects of business and IT alignment could be improved by a specified BA as well

sub-Most companies have some legacy systems Because the focus of the study is on the BA, the business processes embedded in the legacy system were reviewed However, the integration of legacy systems from a technical viewpoint would be considered as out-of-scope

1.5 Research Questions and Proposition

The research project addresses the following questions:

1 Does a comprehensive BA improve IT and Business alignment?

2 How can a comprehensive BA be developed?

3 What is the role and relevance of BA in relation to the EA?

4 What inputs are needed to create a comprehensive BA?

5 What models are encompassed in the BA that can guide other architecture viewpoints in the EA?

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?

These questions have been considered and have lead to the following propositions:

1 A comprehensive BA is a requirement to improve Business - IT alignment

2 Development of the BA should be done before the Information Architecture, the Application Architecture, and the Technical Architecture

1.6 Research Strategy

The framework and methodology for developing the BA is a rather new research area with limited theoretical support To examine the research problem and develop the possible solution, an Inductive - Hypothetic research strategy (Graaff, 2001; Meel, 1994; Sol, 1982; Vreede, 1995) has been adopted The strategy includes five major research steps and four models that are depicted in Figure 1-1

Descriptive Empirical model

Prescriptive Empirical model

Descriptive Conceptual model

Prescriptive Conceptual model

1 Initiation

3 Theory formulation

5 Evaluation

1 Initiation Step: Several initial theories are identified regardless of their

completion or verification These theories are used to investigate empirical situations and then lead to one or more Descriptive Empirical Models It allows the researcher review various theories knowledge, or experiences related to the research problem and then conclude the findings into one or more Descriptive Empirical Models

2 Abstraction Step: During this step, Descriptive Empirical Models are studied

and then abstracted at a generic level as a Descriptive Conceptual Model especially on the perceived problems

3 Theory Formulation Step: A Prescriptive Conceptual Model is derived from

the Descriptive Conceptual Model The Prescriptive Conceptual Model should be capable of solving the research problem observed in the Initiation step because it originates from Descriptive Empirical Models

4 Implementation Step: The Prescriptive Conceptual Model is elaborated in

many prescriptive empirical situations in order to support its validation After extensive testing, the Prescriptive Empirical Model is developed

5 Evaluation Step: The Prescriptive Empirical Model is evaluated focusing on

the components of this model, and the findings may be used as input to the Descriptive Empirical Model, where the cycle repeats again for further refinement

In the Initiation step, the researcher performed an extensive literature reviews related to the research problem Based on the literature review the researcher believes that the understanding of the business is a key factor to achieve business – IT alignment, and EA is a way of achieving the goal As part of the Abstraction step, the researcher reviewed many EA articles on the theories and practices, and concluded that the development approach of an EA includes four elements: EA Principles, EA Framework, EA Process Model, and EA Methodology The researcher also reviewed strategic alignment models, alignment perspectives, and current development of BA Thus a conceptual model which illustrates the research problem domain is developed

conclusion of this step was the proposed a BA Development Approach, which includes BA Principles, BA Framework, BA Process Model and BA Methodology

During the Implementation step, the researcher elaborated the conceptual solution with a real company, Peak L.L.C., and developed the set of BA models following the proposed BA Development Approach

In the Evaluation step, the outcomes of the research project were evaluated in terms of the research questions and propositions identified in Section 1.5

Figure 1-2 presents how the researcher applied the Inductive – Hypothetic Research Strategy in this research project

Descriptive Empirical model

(Findings of Background and Focal Literature Reviews)

Prescriptive Empirical model

(Case Study: set of models for Peak L.L.C.)

Descriptive Conceptual model

(Conceptual Model)

Prescriptive Conceptual model

Figure 1-2: Research Strategy (adopt from (Graaff, 2001; Meel, 1994; Sol, 1982; Vreede, 1995)

To implement the research strategy, the research project followed the detail steps

in the research process model proposed by Steenkamp and McCord (Steenkamp

& McCord, 2007) in Figure 1-3

Research Process Model

Preliminary Literature Review

Identify Research Problem

Define Research Focus: Goal, Objectives

Define Research Problem, Question, Hypothesis And Scope

Design Possible Method Of Investigation:

Methods, Techniques, Notations

Present And Defend Proposal Adopt Research

Approach

Plan Research Schedule: Draft Dissertation Format, Deliverables

Develop Proposal:

Potential Outcomes

Synthesize Findings

Classify, Categorize, Establish Evaluation Criteria

Analyze Data Theory Analyze Focal

Theory Analyze

Background

Theory

Verify Conceptual Model i.t.o Research Problem Conceptualize

Solution

Document Findings

Data Gathering, Analysis And Interpret

Interpret And Evaluation i.t.o

Evaluation Criteria

Document Findings

Present And Defend Dissertation

Validate Last Chapter (Conclusion) i.t.o

Chapter 1 (Introduction)

Document And Assemble Dissertation Chapters

Evaluate Findings

i.t.o Research

Problem

Review For Consistency, Completeness,

Document Findings

Figure 1-3: Research Process Model

The research process model includes the following phases:

 Research Planning - Problem Identification Phase: During this phase, the researcher selected the research area of interest and reviewed articles related to the subject Then the researcher identified the major problems within that area and defined the scope, goals and objectives of the study The researcher proceeded to identify the key research questions and where possible defined the research proposition

the goals and objectives of the research project, the research questions, the research proposition, research approach and the research schedule Finally, the researcher submitted the proposal to the dissertation committee for review and presented it to the committee for approval before embarking the research journey

The output of the above Research Planning phases constitutes the Chapter

1 of this document

 Research Literature Review Phase: During this phase, the researcher studied topics related to research problem from both the background and focal perspectives with theoretical and practical contexts It involved an extensive literature review during which the major academic and research findings in the field were examined The findings are summarized in Chapter 2 and Chapter 3 of this document

 Research Conceptualization of Solution Phase: In this phase, the researcher conceptualized the research problem from existing understanding, background and experience derived from previous research phases into a conceptual model Next the researcher enhanced the draft conceptual model of the solution with components of an innovative solution The output of this phase is illustrated in Chapter 5 of this document

 Research Experimentation Phase: The researcher divided this phase into two sub-phases

o The first sub-phase focuses on demonstrating the conceptual solution The researcher adopted a case study tactics by selecting a real world business case, designing BA deliverables based on the proposed solution developed in the previous phase, and interpreting and evaluating the results in terms of the evaluation criteria developed throughout the research project Criteria for the evaluation of the conceptual solution, compiled throughout the research project, are utilized The outputs of these tasks are described in Chapter 6

o The second sub-phase focuses on preparing the final dissertation It includes the tasks of finalizing and assembling the dissertation chapters, reviewing and revising the dissertation from the beginning to the end for consistency, and then submitting the final dissertation for review by the dissertation committee Following their review the research will present and defend dissertation The final deliverable is the bound printed dissertation as well as the PDF (Portable Document Format) digital copy which will be submitted to UMI/ProQuest Dissertation Publishing

1.7 Contribution of the Dissertation

This research contributes to the overall understanding of the content of the BA, and how the BA plays a bridge between business and IT alignment

One of the main contributions made by this research effort is to expand the industry understanding of the BA in the context of EA and fill the gap of the imbalance regarding the development of different viewpoints of EA (Schekkerman, 2005b) The BA development approach provides a systematic method to develop the BA in an organization

The demonstration of the solution in a real world company contributes to the research in two manners First, it demonstrates that not only can a large enterprise develop and benefit from the BA, but also a medium size company does Secondly, it has been shown that the development of BA can improve the business and IT alignment from the communications and partnership perspectives, and confirmed findings of Luftman (Luftman, 2000)

1.8 Format of the Dissertation

The structure of this dissertation is based on the Lawrence Technological University DMIT Dissertation Template (Steenkamp & McCord, 2007) It contains seven chapters A short explanation of each chapter is given below

Chapter 1 provides the introduction to the research topic, and includes the overview of the background and focal literature review, the research scope, the research questions, the research propositions, the research strategy and contributions

Chapter 2 is an extensive literature review of business and IT including business environment, enterprise strategy, IT strategy, EA, EA development approach and well-known EA frameworks

Chapter 3 includes the literature review of the focal theory of the research topic, including business and IT alignment, alignment model, alignment gaps, alignment assessment and current BA in the EA context

Chapter 4 contains the research design, research process model and limitations of the research design

Chapter 5 reports on the conceptualization of solution that includes BA Process Reference Model, BA Principles, BA sub-viewpoints, BA framework, BA process model and BA methodology

Chapter 6 describes the demonstration of the conceptual solution in a medium size company in the automotive industry It includes all outputs of BA of the company

Chapter 7 is the final chapter, which includes the evaluation of the outputs from the case study in terms of research questions, the findings and recommendations

1.9 Summary

This chapter contains an outline of the entire research project An overview of background and focal literature reviews provides adequate ground for the introduction of this research This chapter discussed the research problem, purpose, scope, and strategy It briefly provides a justification for performing the research activity, the research questions and propositions, the research contributions, and a summary of the format of this dissertation

CHAPTER 2 LITERATURE REVIEW – BACKGROUND THEORY AND

APPLICATION

To explore the research topic, the researcher preformed 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 of BA, the sub-viewpoints of BA, and the previous researches related to BA in the alignment is included in Section 3.2

The background literature review for this dissertation focused on three primary subject matters as follows, and the background literature review map is shown in

 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 Therefore, in this research of the business and IT alignment, we use business and enterprise interchangeably An enterprise is defined as any collection of organization that has a common set of goals, principals or a single bottom line It could be a government agency, a corporation, a division of a corporation, a single department or a global organization linked together by a common ownership (Schekkerman, 2004; The Open Group, 2009)

We are now in the hyper-competition Information Age (Boar, 1999) The characteristics of hyper-competition include the difficulty for a company to maintain its own competitive advantages for a long time period, the speed of innovation being faster than ever, customers becoming more powerful,

personal computers are becoming popular, enterprises rely more heavily on computing power When the Internet connects everyone in the world, it also brings new innovative ways to do business Enterprises streamline their business flows by using workflow software, building the Enterprise Resource Planning (ERP) applications to connect their suppliers, perform outsourcing to concentrate on their own core businesses, and send work offshore to reduce costs New technologies also provide changes to both enterprises and consumers such as the inventions of wiki, blog, Really Simple Syndication (RSS) and podcasting Google, Yahoo and MSN search engines make consumers search information easily and decrease the information imbalance between consumers and enterprises The invention of the mobilization makes it especially easily for people to stay connected in the world at any time at any place

The business changes described above require enterprises to react quickly to find

a way to response to these challenges Therefore, a transformation roadmap is required to identify the tasks to be done, the timing of when the tasks need to be completed and the dependencies of each task In this transformation, it is inevitable that IT needs to support the business from all aspects from finance, internal to external, see Figure 2-3 (Luftman et al., 2004)

Internal External

Customers of customer interactions Primary business activities Technology Development & support Other Infrastructure (H/R, etc.)

Finance

2.1.2 Enterprise Strategy

According to Nykryn, strategy is "the thorough setting up and utilization of certain forces to achieve some decisive goals in the future (Nykryn, 1970)" Therefore, enterprise strategy is about the allocation of the resources in the enterprise in order to achieve enterprise goals in the future It must choose between certain types and levels of risk Once the strategy is decided, it will affect the enterprise now as well as the future Thus, enterprise strategy defines how the organization tries to add value to its stakeholders in order to legitimize its existence and ensure its future (Meznar, Chrisman, & Carroll, 1990)

Further, Porter emphasizes operational effectiveness is not a strategy although it may bring profits to the company (Porter, 1996) Strategy is the creation of a unique and valuable position that involves a different set of activities differentiating the company from what rivals do and able to bring competitive advantages to the company Strategy is making trade-offs in competing The company needs to choose what it should and what it will not do In addition, strategy is creating fit among the selected activities, effectively creating a block to prevent competitors catching up Other than operational effectiveness, strategy

is able to achieve excellence in the combining of activities not in individual activities or functions

Harmon believes that an enterprise strategy defines what its goals will be, what products or services it will provide, how a company will compete, and what design and configuration of policies it will support to achieve those goals It also describes how a company will create values for its customers, its shareholders, and other stakeholders In the strategy, an enterprise needs to perform SWOT analysis in order to understand its strengths, weaknesses, opportunities, and threats It also needs to consider trends, social, political, technological and

measurable statement of where the enterprise wants to go It should be imaginable, desirable, feasible, focused, flexible, communicable and measurable Strategic objectives are how the enterprise achieves the identified vision It may include the checkpoints, milestones, and benchmarks Mission is what we are – why the department exists, what its purpose is and what its core values are In a word, an effective enterprise strategy is not static, but changes continuously to reflect changes in the business environment

One of the most famous concepts to shape an enterprise strategy for an enterprise is the Five Forces Model proposed by Porter and is illustrated in Figure 2-4 An enterprise strategy should consider how to keep its competitive advantages from five perspectives: customers, suppliers, competitors, potential entrants, and substitute products or services (Porter, 1980)

Industry Competitors

Organization

Potential Entrants

Customers

Substitute Products / Services

2.2 Information Technology (IT) and IT Strategy

Information Technology Association of America (ITAA) defines IT is "the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware" (Information Technology Association of America, 2009) Therefore, IT deals with the use of infrastructure, applications and information within an enterprise securely

IT strategy is a set of decisions made by IT management that enable the business strategy It does not only concern the technologies or infrastructures deployed in the enterprise, but also about the relationship of technology choices to business strategy These choices allow the enterprise to become more competitive (Luftman et al., 2004)

According to Savin, IT strategy should include six components (Savin, 2004) They are

 Application systems component: these describe the business functions in the company

 Application development component: these discuss the plans for new systems acquisitions and how they are to be acquired

 Infrastructure component: provide information regarding the physical IT assets in the company

 Maintenance component: give a defined maintenance and support strategy for the application component and infrastructure component

 Operations component: includes personnel, quality control, user training and support, data center and disaster recovery

 Security component: details the internal and external security policies, access and privilege, firewall, as well as the procedure handling email spam and viruses

using the portfolio approach (Craig & Tinaikar, 2006) Thus, they classified IT initiatives into three types

 Scale IT investments: Stay-in-the-race projects are those necessary to compete in a market and must be managed for cost It focuses on reducing operational costs and ensuring service and quality level, but these investments alone will not create a competitive advantage

 Competitive-advantage investments: Win-in-race investments improve service, cut prices, and increase the effectiveness of decision-making or the efficiency of operations

 Rule-changing innovations investments: change-the-rules investments deliver a competitive advantage by creating new and unique products or services or by generating a hard-to-replicate cost or performance advantage

A sound IT strategic plan should include all these three types of projects In addition, in order to pursue high-growth, a company should allocate more of the

IT budgets on the rule-changing innovations projects and layout its IT strategic plan into multiyear planning (Craig, Kanakamedala, & Tinaikar, 2007)

The major reason why an enterprise needs an EA is to provide the foundation for future technological expansion and document the existing technology and process structures of an enterprise EA contains a variety of very detailed information and artifacts for future re-use It enables companies to achieve the right balance between IT efficiency and business innovation It can also reduce development, support and maintenance costs, increase portability of applications, improve interoperability, and provide better ability to address critical enterprise-wise issues such security, governance, privacy, and mobilization (The Open Group, 2003)

EA must be flexible to allow the enterprise to adapt to changes in an agile manner when emerging technologies are being introduced into an enterprise It also provides as a mechanism to assess IT trends promptly and keep the enterprise positioned to respond to threats from its competitors in an effective and timely manner

Compared to other IT fields, EA is a relatively young field EA was first introduced by Mr John Zachman in 1987 as an article in the IBM Systems Journal (Zachman, 1987) The immaturity of EA, approximately twenty years, has resulted in the lack of a consistent definition Zachman believed “Enterprise Architecture is the set of primitive, descriptive artifacts that constitute the knowledge infrastructure of the Enterprise (Zachman, 2000a)”

“The Electronic Government Act of 2002 defines an EA as a strategic information asset base that defines the mission, the information necessary to perform the mission, and the technologies necessary to perform the mission EA also includes the transitional processes for implementing new technologies in response to the changing mission needs” “The EA must include a baseline architecture, a target architecture and a migration plan” (United States Department of Commerce, 2007)

The Meta Group, which merged with Gartner in 2005, defines that “Enterprise

According to The Open Group, “Enterprise architecture is about understanding all of the different elements that go to make up the enterprise and how those elements inter-relate” (Schekkerman, 2004) Therefore, EA is understood as the fundamental enterprise either in part or as a whole, or extended to its suppliers, partners or customers, as well as the principles governing its design and evolution (The Open Group, 2009; Winter & Schelp, 2008)

Perks and Beveridge define EA is “The collection of strategic and architectural disciples that encompass the Information, Business System, and Technical Architectures” (Perks & Beveridge, 2003)

Schekkerman states “Enterprise Architecture is a complete expression of the enterprise; a master plan which acts as a collaboration force between aspects of business planning such as goals, visions, strategies and governance principles” Enterprise Architecture addresses “aspects of business operations such as business terms, organization structures, processes and data; aspects of automation such as information systems and databases; and the enabling technological infrastructure of the business such as computers, operating systems and networks (Schekkerman, 2008)”

Based on the various definitions of EA, the definition of EA is summarized as follow: EA concerns both corporate strategy and technology (Perks & Beveridge, 2003; Schekkerman, 2008; United States Department of Commerce, 2007) EA may incorporate with its suppliers, partners or customers (The Open Group, 2009) EA is a knowledge repository to host related architectural artifacts (United States Department of Commerce, 2007; Zachman, 2000a) EA has a process model that guides the EA development (United States Department of Commerce, 2007) In general, EA consists of Business Architecture, Information Architecture, Application Architecture and Technology Architecture (Perks & Beveridge, 2003; Schekkerman, 2004; Schekkerman, 2008; The Open Group, 2009)

Some analysts and researchers may separate BA into an organizational view,

processes in terms that are actionable for business technology" (Hoque, 2008) It

"defines the business strategy, governance, organization and key business processes" (The Open Group, 2003) and "describes the current and target business environments, focusing on the business processes and operations of the enterprise" (Metastorm, 2007)

“Information Architecture deals with the structure and use of information within the organization, and the alignment of information with the organization’s strategic, tactical and operational needs” (Perks & Beveridge, 2003) It also describes "the structure of an organization’s logical and physical data assets and data management resources" (The Open Group, 2003)

Application Architecture provides a blueprint for each application system to be deployed, their interactions and relationships to the core business processes in the company (The Open Group, 2003)

Technology architecture" defines the technical environment and infrastructure in which all information systems exist" (Perks & Beveridge, 2003)

As mentioned above the business architecture is important because it deals with the business perspective of the enterprise In order to align IT to the business, it

is necessary to understand enterprise from the business point of view

2.3.2 Enterprise Architecture Development Approach

In order to comprehend the scope and concept of EA, a systematic approach is needed The architectural approach is applied to implement the EA in an enterprise

The International Federation for Information Processing (IFIP) and International

their entire life history The major components in GERAM are shown in Figure 2-5 and include:

Figure 2-5: GERAM components (IFIP-IFAC Task Force, 1999)

 GERA - Generic Enterprise Reference Architecture: Defines the generic

 EEMs - Enterprise Engineering Methodology: Describe the processes of enterprise engineering and integration in the form of a process model or structured procedure with detailed instructions

 EMLs - Enterprise Modeling Languages: Define the generic modeling constructs to create and use enterprise models These constructs is able to describe and model human roles, operational processes, their functional contents

 GEMCs - Generic Enterprise Modeling Concepts: Define the most generic concepts of enterprise modeling It could be natural language explanation such as glossaries, meta models explaining the relationship among concepts or Ontological Theories

 PEMs - Partial Enterprise Models: Capture common characteristics to many enterprises within one or more different industries They retain previous knowledge and allow to be reused They often refer as reference models

 EETs - Enterprise Engineering Tools: The tools that support the processes

of enterprise engineering and integration by implementing an enterprise engineering methodology and supporting modeling languages

 EMs - (Particular) Enterprise Models: The model represents the reality of the business operation for a particle enterprise

 EMOs - Enterprise Modules: Enterprise modules are building blocks that could be used as common resources in the enterprise engineering or integration They are intended to support the operational use of enterprise models

 EOSs - (Particular) Enterprise Operational Systems: Support the operation

of a particle enterprise They could be hardware or software that are designed from enterprise requirements in order to fulfill enterprise goals

Leist and Zellner believed that developing an EA is based on its EA descriptions (Leist & Zellner, 2006) Therefore, they propose an EA development method that consists of five elements for developing EA descriptions They are meta model, procedure model, technique/modeling technique, role and specification