The Concept of Enterprise

Architecture What is the concept of enterprise?

Enterprise is another word for a for-profit business or company, but it is most often associated with
entrepreneurial ventures. People who have entrepreneurial success are often referred to as “enterprising.”
There are many forms of legal enterprises, with the most common in the U.S.

• Enterprise Architecture Overview

• Enterprise Structure
• Enterprise Architecture Value and Risk
 What is architectural overview?
An architecture description is a formal description and representation of a system, organized in a way that supports
reasoning about the structures and behaviors of the system. A system architecture can consist of system components
and the sub-systems developed, that will work together to implement the overall system.

What Is Enterprise Architecture?

Enterprise architecture is the methodology by which an organization plans and arranges IT infrastructure. The
components of EA are analysis, design, planning, and implementation. Architectural framework principles guide the
organization through business, information, process, and technology strategies, all with an eye to reaching the desired
business outcomes.

Enterprise architecture was first conceptualized in the 1960s under the term of Business Systems Planning (BSP). But
the widespread implementation of enterprise architecture frameworks was a result of rapidly increasing business technologies
in the 1980s. EA had become a means for combining legacy applications with current and future processes, a concurrent
implementation allowing an organization to optimize business capabilities.

Today, EA has further developed to encompass various other methodologies. These range from quite general to
industry-specific architecture frameworks. Some models emphasize different domains or goals depending on management
resources and business vision and outcomes. For instance, a tech company from Silicon Valley will aim to increase
shareholder value. Whereas, a government agency will aim to improve the end-user experience.

Enterprise architecture (EA) can be defined as a collection of special documents (artifacts) describing various
aspects of an organization from an integrated business and IT perspective intended to bridge the communication gap
between business and IT stakeholders, facilitate information systems planning and thereby improve business and IT
alignment
Enterprise architecture typically describes business, applications, data, infrastructure and sometimes other
domains relevant from the perspective of business and IT, e.g. integration or security

The Essence of Enterprise Architecture

Enterprise architecture provides effective instruments facilitating communication, collaboration and mutual
understanding between different groups of actors
Using EA documents for supporting discussions helps alleviate communication problems resulting from
disparate knowledge, interests and goals of various involved actors
Essentially, enterprise architecture can be considered as a communication medium between diverse business and
IT stakeholders in organizations

EA Documents and OrganizationalActors

To business executives EA documents explain the implications of planning decisions for the business strategy
To IT executives EA documents explain the implications of planning decisions for the IT strategy
To business unit managers EA documents explain the impact of planning decisions on their business processes
To IT project teams EA documents explain the implications of planning decisions for specific IT projects
To third parties EA documents explain the implications of planning decisions for the structure of specific contracts
EA as an Instrument for Communication

Specifics of Enterprise Architecture

Enterprise architecture has not much in common with building

architecture
Organizations as dynamic socio-technical systems cannot be
designed or engineered and then built
Organizations are extremely complex, organic and living
entities that gradually evolve over time
Enterprise architecture is a pragmatic set of descriptions
useful for managing the evolution of organizations
The term “enterprise architecture” is purely metaphorical and is only an
umbrella term for multiple diverse documents used for information
systems planning
Domains of Enterprise Architecture

The informational contents of enterprise architecture typically encompass

the following common EA domains:

• Business domain – covers customers, capabilities, processes,

roles, etc.

• Applications domain – covers programs, systems, custom

software, vendor products, etc.

• Data domain – covers data entities, structures, sources, etc.

• Integration domain – covers interfaces, connections, interaction

protocols, integration platforms, etc.

• Infrastructure domain – covers hardware, servers, operating

systems, networks, etc.

• Security domain – covers firewalls, authentication mechanisms,

identity and access management systems, encryption, etc.
 Enterprise Structure
An enterprise structure is the structure that represents an enterprise in the
SAP ERP system. It is subdivided into various organizational units which, for legal
reasons or business-related reasons, are grouped together. An enterprise structure
defines various levels in an organization.

Enterprise structure is the organization structure as represented in SAP system.

Enterprise structure is the basis for the configuration of other parameters. It’s primarily
defined with three primary domain areas and is very similar to the finance organization
structure used in an organization or sales organization structure used in SAP.

 Finance & Controlling

 Sales and Distribution
 Logistics

Finance and controlling

Following are the elements of FICO related Enterprise structure

 Operating Concern
 Controlling area
 Company code
 Credit control area

Sales and Distribution

SD related enterprise structure defined under the company code is.

 Sales organization
 Distribution channel
 Division
 Sales offices
 Sales group

Logistics
 Logistics related enterprise structure defined under the company code are

 Plants – Plant describes the place where the production activities are performed or
goods and services are provided. It is attached to the company code.
 Storage locations – It represents the physical area within a plant where the materials
are stored. It is attached to a plant.
 Purchase organizations – It is responsible for procuring material and services,
negotiation of price with the vendor. It can be assigned to company code to make it
company specific or assigned to plant to make it plant specific
 Purchasing group – Represents a buyer or group of buyer responsible for certain
purchasing activities.

The Value of Enterprise

Architecture in Managing Risk,
Compliance and Security
Enterprise architecture improves organizational impacts through
productivity, agility, product and service timeliness, revenue growth,
and cost reduction. Each of these individually can make your case for enterprise
architecture. However, combined, these benefits form a compelling business
case
The enterprise architecture benefits include more efficient business
operation with lower costs, more shared capabilities, lower management costs,
more flexible workforce, more organization, less duplication and redundancies
and improved business productivity
Enterprise risks are risks that could cause losses (monetary and
reputation) or jeopardize our ability to remain in business. ... Enterprise
risk management is the way we address all of these risks as a cohesive whole -
our strategy for understanding and controlling risk.

Strategic insight into risk

To be in control of the risks you run, the first thing you need is strategic
insight into your organization from a risk management perspective. This requires
having a consistent and up-to-date overview of your current landscape of
products, processes, applications, and infrastructure, and all related risk &
security aspects. C-level management cannot fulfill its responsibilities without
knowing what the main risk-related issues are.

Having an understanding of these relationships also helps you to assess

the effects of business decisions. This provides the business with a clear insight
into the enterprise risks related to, for example, introducing new products and
initiatives, outsourcing business processes or IT systems, or assimilating another
organization after a merger. Thus, they can weigh the risk propensity of the
enterprise against the potential consequences.

Moreover, the propagation of risks throughout the enterprise is of great

concern to executives and operational management. Risks in one area may
entail risks in another. For example, what are the potential ripple effects of a
system failure, break-in, power outage, fraud or other mishap on critical business
processes, services, clients, partners, markets…? Enterprise architecture helps
you to create insight into these relations and dependencies, and thus avoid or
mitigate potential disasters.

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Business-driven security and risk management

A related area in which EA provides tangible business value is in aligning

security and risk management with business goals and objectives. Many
organizations find it difficult to decide on the right level of security measures, and
business managers often see this as a technical issue that is left to the IT people.
They, in turn, don’t want to take any risks and create gold-plated solutions that
are quite secure but also very expensive (and often rather unfriendly towards
users).

Better alignment between business goals, architectural decisions and

technical implementation helps the organization to spend its security budget
wisely, focused on business-relevant risks. This may lead to both cost savings
and lower risks, because you are not investing in overly strong security measures
for unimportant stuff, leaving more budget to protect the things your enterprise
really cares about.

Moreover, security is not something that can be ‘tacked on’ afterwards.

Inherently insecure architectures and systems are very difficult to fix later on.
Rather, security and risk management should be designed from the start, using
the business goals of the enterprise to decide on appropriate measures.

Regulatory compliance and auditing

Another common reason for having a mature EA practice, especially in

heavily regulated sectors such as banking and insurance, is regulatory
compliance. Central banks and other regulatory bodies mandate or at least
strongly recommend that financial institutions have a well-established EA
practice, to ensure they are in control of their operation. They may even audit
these architectures or use them in other ways to assess the risks the
organization runs. Of course, internal auditors, CISO’s, and risk managers
benefit from using EA artifacts as well. The insights into enterprise-wide relations
and dependencies that these provide are important inputs for their tasks.

Implementing standards and policies such as SEPA, Solvency II, Basel

III and others requires enterprise-wide coordination, visibility and traceability from
boardroom-level decisions on e.g. risk appetite of the organization, down to the
implementation of measures and controls in business processes and IT systems.
Enterprise architecture as a practice, and enterprise architecture models that
capture these relations, are indispensable to managing the wide-ranging impact
of such developments.

Next steps

To fully benefit from the use of enterprise architecture in the context of security,
compliance and risk management, we suggest that you focus on the following:

 Align security and risk management with business strategy. Always view
security and risk measures from the perspective of the business value
they add. Enterprise Studio’s strategy support will help you with that.
 Capture and visualize risk and security aspects of your organization.
Visualize hazards, risks and mitigation measures in relation to the overall
architecture and business strategy. Use our EA capabilities to create
integrated models of your risks and measures.
 Measure and visualize the impact of risks and use these insights for
decision making with our risk analysis functionality. Use heatmaps to
inform decision makers about the necessary measures.
 Prioritize security projects. Calculate the business value and impact of
security projects and use this to make a prioritization of IT measures. Use
 our enterprise portfolio management to decide where to spend your
budget most effectively.

Enterprise Architecture

The organizational architecture is a description of the systems existing in

the organization. ... The organizational architecture is about creation of roles in
the organization, processes to handle inputs and outcomes and formal reporting
lines in the organization for the management purposes.
Business architecture is the bridge between the enterprise
business model and the enterprise strategy on one side, and
the business functionality of the corporate business or organization on the other
side. People who build business architecture are known as Business Architects.
Information architecture (IA) is the structural design of
shared information environments; the art and science of organizing and labelling
websites, intranets, online communities and software to support usability and
findability; and an emerging community of practice focused on bringing principles
of design, .
An application architecture is a map of how an organization's
software applications are assembled as part of its overarching
enterprise architecture and how those applications interact with each other to
meet business or user requirement
The technology architecture describes the infrastructure required to
support applications, operations, and reporting requirements. A framework for
building an enterprise including networking, hardware, operating systems,
database management systems, and application development standards.

• Implementation Methodology
• Frameworks Components @ Artifacts
The implementation methodology is the method by which the projects are
technically and operationally implemented in the field, most often by using
contractors or subcontractors. Typical implementation models are Energy Performance
Contracting, Energy Supply Contracting and Separate Contractor Based.
What is difference between methodology and implementation?
is that implementation is the process of moving an idea from concept to reality in
business, engineering and other fields, implementation refers to the building process
rather than the design process while methodology is the study of methods used in
a field.

Definition: An architecture framework is an encapsulation of a minimum set of

practices and requirements for artifacts that describe a system's architecture. ...
This architecture becomes the foundation for developers and integrators to create
design and implementation architectures and views.
Framework Components and Artifacts
EA artifacts are types of documentation that describe components,
including reports, diagrams, charts, spreadsheets, video files, and other types of
recorded information. High-level EA artifacts are often text documents or
diagrams that describe overall strategies, programs, and desired outcomes. Mid-
level EA artifacts are documents, diagrams, charts, spreadsheets, and briefings
that describe organizational processes, ongoing projects, supply chains, large
systems, information flows, networks, and web sites. \nLow-level EA artifacts
describe specific applications, data dictionaries, technical standards, interfaces,
network components, and cable plants. When these EA artifacts are harmonized
through the organizing taxonomy of the EA framework, new and more useful
views of the functioning of EA components are generated. This is one of the
greatest values of EA as a documentation process creation of the ability to see a
hierarchy of views of the enterprise that can be examined from several
perspectives.
EA components are changeable goals, processes, standards, and
resources that may extend enterprise wide or be contained within a specific line
of business or segment. Examples of components include strategic goals and
initiatives; business products and services; information flows, knowledge
warehouses, and data objects; information systems, software applications,
enterprise resource programs, and web sites; voice, data, and video networks;
and supporting infrastructure including buildings, server rooms, wiring
runs/closets, and capital equipment.
CIT 3102 - SYSTEMS INTEGRATION AND ARCHITECTURE LEARNING
OUTCOMES Understand what EA components are and their role in an EA
framework. Understand how EA artifacts describe EA components. Understand
how management views help executives understand EA components.

INTRODUCTION TO ENTERPRISE ARCHITECTURE COMPONENTS AND

ARTIFACTS
EA components are those „plug-and-play‟ changeable resources that
provide capabilities at each level of the framework. Examples include strategic
goals and initiatives; business services; information flows and data objects;
information systems, web services, and software applications;
voice/data/video/mobile networks, cable plants, equipment, and buildings. An EA
artifact is a documentation product, such as a text document, diagram,
spreadsheet, briefing slides, or video clip. EA artifacts document EA components
in a consistent way across the entire architecture. While an EA framework
provides an overall structure for modeling the enterprise‟s business and
technology operating environment, EA components are the working elements of
the framework at each level. In other words, EA components are “building blocks”
that create discrete parts ofthe overall IT operational capability. EA artifacts
describe EA components.
EA COMPONENTS AT THE GOALS AND INITIATIVES LEVEL EA
COMPONENTS
Strategic Plan
E-Commerce/E-Government Plan
EA ARTIFACTS
Strategic Plan (S-1)
SWOT Analysis (S-2)
Concept of Operations Scenario (S-3)
Concept of Operations Diagram (S-4)
Balanced Scorecard™ (S-5)
STRATEGIC PLAN Strategic planning produces a high-level view of the direction
that an enterprise sets for itself. This direction is further articulated in long-range
scenarios, strategies, goals, and initiatives that serve as the baseline for short-
term tactical (operational) planning that is updated annually. Strategic Plans for
enterprises in dynamic and/or highly competitive environments should look three
to five years into the future and be updated annually. Strategic Plans for
enterprises in more stable environments should look five to ten years into the
future and be updated approximately every three years. A Strategic Plan is a
composite EA artifact that should guide the enterprise‟s direction over a 3-5 year
period in the future by providing the following items, each of which are primitive
(basic) EA artifacts.
E-COMMERCE/E-GOV PLAN An E-Commerce/E-Government Plan is often
needed by an enterprise in addition to the general Strategic Plan. This is
because the general Strategic Plan usually does not address IT in sufficient
detail to identify the various IT-related initiatives that may enable many of an
enterprise‟sstrategic goals. The E-Commerce/E-Government Plan is more like a
tactical plan due to the dynamic nature of IT resources and the processes they
support.
SWOT analysis (or SWOT matrix) is a strategic planning and strategic
management technique used to help a person or organization identify strengths,
weaknesses, opportunities, and threats related to business competition or project
planning. It is sometimes called situational assessment or situational analysis.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths

and weaknesses are internal to your company—things that you have some
control over and can change. Examples include who is on your team, your
patents and intellectual property, and your location
CONCEPT OF OPERATIONS (CONOPS) The Concept of Operations (CONOPS)
document is a high-level requirements document that provides a mechanism for users to
describe their expectations of the system. The CONOPS is used as input to the
development of formal testable system and software requirements specifications.
Operational Scenario. (1) Description of an imagined sequence of events that includes
the interaction of the product or service with its environment and users, as well as
interaction among its product or service components.
Concept of Operations (CONOPS) Properties In general, it will include the
following: Statement of the goals and objectives of the system. Strategies, tactics,
policies, and constraints affecting the system. Organizations, activities, and interactions
among participants and stakeholders.

A balanced scorecard is a strategic management performance metric that helps

companies identify and improve their internal operations to help their external outcomes.
It measures past performance data and provides organizations with feedback on how to
make better decisions in the future.