Difference between revisions of "Enterprise Architecture Quarter"

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[[Product Design Quarter]] (hereinafter, the ''Quarter'') is the third of four lectures of [[Project Quadrivium]] (hereinafter, the ''Quadrivium''):
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[[Enterprise Architecture Quarter]] (hereinafter, the ''Quarter'') is a lecture introducing the learners to [[portfolio design]] primarily through key topics related to [[enterprise architecture]]. The ''Quarter'' is the third of four lectures of [[Portfolio Quadrivium]], which is the first of seven modules of '''[[Septem Artes Administrativi]]''' (hereinafter, the ''Course''). The ''Course'' is designed to introduce the learners to general concepts in [[business administration]], [[management]], and [[organizational behavior]].
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*The ''Quarter'' is designed to introduce its learners to [[enterprise design]], or, in other words, to concepts related to creating architecture for achieving [[enterprise goal]]s; and
 
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*The ''Quadrivium'' examines concepts of administering various types of enterprises known as [[enterprise administration]] as a whole.
 
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The ''Quadrivium'' is the first of seven modules of [[Septem Artes Administrativi]], which is a course designed to introduce its learners to general concepts in [[business administration]], [[management]], and [[organizational behavior]].
 
  
  
 
==Lecture outline==
 
==Lecture outline==
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''The predecessor lecture is [[Business Analysis Quarter]].''
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''[[Feasibility Study Quarter]] is the predecessor lecture.  In the [[enterprise research]] series, the previous lecture is [[Enterprise Intelligence Quarter]].''
 +
:[[Portfolio design]] is the [[enterprise envisioning]] of the [[enterprise portfolio]]. This lecture concentrates on [[enterprise architecture]] because this ''architecture'' is the main outcome from this ''modeling''.
  
 
===Concepts===
 
===Concepts===
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#'''[[Product]]'''. A solution or component of a solution that is the result of a project.
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#'''[[Enterprise architecture]]'''. A composition of the interrelated [[enterprise business|business]]es, [[process asset]]s, [[enterprise factor]]s, and [[enterprise personnel|personnel]] that together are known as an [[enterprise]].
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#*[[Service]]. Work carried out or on behalf of others.
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#*[[File:Enterprise.png|400px|thumb|right|[[Enterprise]]]][[Enterprise]]. An undertaking to create something and/or develop somebody, which takes some level of [[enterprise effort]]. In other words, an [[enterprise]] is one or more [[business]]es unified in one [[system]]. An [[enterprise]] can also refer to an [[organizational unit]], [[organization]], or collection of [[organization]]s that share [[knowledge base]]s and other [[enterprise resource]]s.
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#'''[[Product vision statement]]'''. A brief statement or paragraph that describes the why, what, and who of the desired software product from a business point of view.
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#*[[Sector]]. The market that some [[market exchangeable]] or a group of interrelated products fits into. Examples include: consumer technology, cleantech, biotech, and enterprise technology. Venture Capitalists tend to have experience investing in specific related sectors and thus tend not to invest outside of their area of expertise.
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#*[[Product vision statement]]. a high-level description of a product which includes who it is for, why it is necessary and what differentiates it from similar products.
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#'''[[Enterprise business]]'''. The actual or potential practice of making enterprise's profit by engaging in commerce.
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#*[[Feature]]. A cohesive bundle of externally visible functionality that should align with business goals and objectives. Each feature is a logically related grouping of functional requirements or non-functional requirements described in broad strokes.
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#*[[Business]]. (1) An individual's regular occupation, profession, or trade; (2) The practice of making one's profit by engaging in commerce.
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#*[[Defect]]. A deficiency in a product or service that reduces its quality or varies from a desired attribute, state, or functionality. See also requirements defect.
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#*[[File:Departmentalization.png|400px|thumb|right|[[Departmentalization]]]][[Departmentalization]]. The basis by which jobs in an [[enterprise]] are grouped together.
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#'''[[Statement of work]]''' ([[statement of work|SOW]]). A formal document that defines the entire scope of the work that shall be completed in order to implement the [[proposed change]].
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#[[File:Efficiency-effectiveness.png|400px|thumb|right|[[Efficiency]] vs [[effectiveness]]]]'''[[Portfolio engineering]]'''. The application of scientific principles to designing and/or modifying of the [[enterprise portfolio]].
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#*[[Statement of work]] (SOW). A narrative description of products or services to be supplied under contract.
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#*[[Engineering]]. The creative application of science, mathematical methods, and empirical evidence to the innovation, design, construction, operation and maintenance of [[market exchangeable]]s, [[system]]s, [[process]]es, [[business]]es, and [[enterprise]]s. To simplify, [[engineering]] is the application of scientific principles to practical ends.
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#'''[[Product backlog]]'''. A set of user stories, requirements or features that have been identified as candidates for potential implementation, prioritized, and estimated.
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#*[[Startup business]] (or, simply, [[startup business|startup]]). (1) A [[business]] in its search of its [[business model]], which usually means ways not to depend on external [[funding]]; (2) An [[enterprise]] in the early stages of operations. [[startup business|Startup]]s are usually seeking to solve a [[problem]] of fill a need, but there is no hard-and-fast rule for what makes a [[startup business|startup]] since situations differ. Often, a company is considered a [[startup business|startup]] until they stop referring to themselves as a [[startup business|startup]].
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#*[[Backlog]]. A changing list of product requirements based on the customer’s needs. The backlog is not a to-do list; rather, it is a list of all the desired features for the product. The Agile team uses the backlog to prioritize features and understand which features to implement first.  
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#*[[Operational business]]. Any [[business]], which [[business model]] generates revenue.
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#*[[Backlog grooming]]. The process that occurs at the end of a sprint, when the team meets to make sure the backlog is ready for the next sprint. The team may remove user stories that aren’t relevant, create new stories, reassess priority, or split user stories into smaller tasks. Backlog grooming is both an ongoing process and the name for the meeting where this action occurs (a backlog grooming meeting).
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#'''[[Strategic business unit]]''' ([[SBU]]). A single independent [[business]] of an organization that formulates its own [[competitive strategy]].
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#*[[Product backlog item]] (PBI). A single element of work that exists in the product backlog. PBIs can include user stories, epics, specifications, bugs, or change requirements. The product owner of an Agile team compiles and prioritizes the product backlog, putting the most urgent or important PBIs at the top. PBIs comprise tasks that need to be completed during a Scrum sprint—a PBI must be a small enough increment of work to be completed during a single sprint. As PBIs move up to a higher priority in the product backlog, they are broken down into user stories.
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#*[[SBU market]]. A [[target market]] of a [[strategic business unit]] ([[SBU]]). Any [[SBU]] handles one or more [[target market]]s, which on which other [[SBU]]s of the same [[enterprise]] rarely target.
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#*[[Product backlog]]. The list of requirements requested by the customer. The product backlog is not a ''to-do'' list; rather, it is a list of all the features the customer has requested be included in the project. The requirements include both functional and non-functional customer requirements, as well as technical team-generated requirements. While there are multiple inputs to the product backlog, it is the sole responsibility of the product owner to prioritize the product backlog. During a [[Sprint planning meeting]], backlog items are moved from the product backlog into a sprint, based on the product owner's priorities.
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#*[[SBU resource]]. A [[resource]] of a [[strategic business unit]] ([[SBU]]).
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#*[[Sprint backlog]]. A segment of Product Backlog Items (PBIs) that the team selects to complete during a Scrum sprint. These PBIs are typically user stories taken from the product backlog.
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#*[[SBU business]]. A [[business]] of a [[strategic business unit]] ([[SBU]]). Any [[SBU]] handles one or more [[business]]es, but any of those shall use the same [[competitive strategy]].
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#'''[[Minimum viable product]]''' (MVP). A low-cost prototype that measures if an idea attracts interest. (see 6 Steps to Building an MVP to learn more)
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#[[File:Porter-curve.png|400px|thumb|right|Profitability curve for [[competitive strategy|competitive strategi]]es]]'''[[Competitive strategy]]'''. A formulated [[strategy]] for how a [[strategic business unit]] is going to compete. This formulation usually states which one of four types of [[competitive strategy|competitive strategi]]es the [[strategic business unit]] is going to pursue, what it considers as its [[competitive advantage]] or [[competitive advantage|advantage]]s, defines its [[business model]], and may or may not include (a) what products, (c) resulted from what production, (d) at what price, (e) using what presentation and promotion, (f) on what [[market]] or [[market]]s with regard to the region or regions and/or segment or segments of customers, (g) with what front-end office personnel, (h) with what level of [[enterprise]]'s support this enterprise is going to offer, as well as (i) what financial results and/or competitors' actions would trigger what changes in those decisions. Rarely, a mature [[enterprise]] formulates just one [[competitive strategy]]; usually, there are several [[Competitive strategy|competitive strategi]]es in the [[enterprise portfolio]] since different [[strategic business unit]]s are supposed to have their own [[Competitive strategy|competitive strategi]]es.[[File:Competitive-strategies.png|400px|thumb|right|[[Competitive strategy|Competitive strategi]]es]]
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#*[[MVP]]. Minimum Viable Product. A minimum viable product (MVP) is the "version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort" (similar to a pilot experiment)
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#*[[Core competency]]. An organization's major value-creating capability that determines its competitive weapons.
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#*[[Wizard of Oz minimum viable product (WoOMVP)]]. A version of a product that looks functional, but it actually operated by a human behind the scenes, granting the appearance of automation.
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#*[[Competitive advantage]]. What sets an enterprise apart; its distinctive edge.
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#*[[Concierge minimum viable product]] (CMVP). A manual service simulating the same exact steps people would go through with a final product.
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#'''[[Cost leadership strategy]]'''. The [[competitive strategy]] that strives to achieve the lowest [[cost of operation]] in the industry. The lowest cost of operation is usually driven by (a) significant [[economy of scale]], which requires a substantial [[market share]], and/or (b) [[learning curve]], which requires substantial experience in the [[operations]]. The lowest costs do not necessarily mean the lowest prices; a [[cost leadership strategy]] is about two [[competitive advantage]]s: (1) [[business opportunity|business opportuniti]]es to lower prices when and if the competition requires it and (2) maximization of the difference between [[sales]] and [[cost of operation]].
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#*[[Piecemeal minimum viable product (PMVP)]]. A functioning model of a product that takes advantage of existing tools and services in order to emulate the user experience process.
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#*[[Mass production]]. The production of items in large batches.
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#'''[[Product life cycle]]'''.
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#*[[Mass customization]]. Providing customers with a product when, where, and how they want it.
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#*[[Lifecycle]]. Important phases in the development of a system from initial concept through design, testing, use, maintenance, to retirement.
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#*[[Exporting]]. Making products domestically and selling them abroad.
 +
#*[[Importing]]. Acquiring products made abroad and selling them domestically.
 +
#'''[[Differentiation strategy]]'''. The [[competitive strategy]] that strives to charge high prices. These high prices are commonly driven by unique features (or differences) of the [[market exchangeable]] that are offered for sale on the [[market]]. [[Customer]]s usually are willing to pay high prices when [[market exchangeable]]s are uniquely desirable.
 +
#*[[First mover]]. An enterprise that's first to bring a product innovation to the market or to use a new process innovation.
 +
#'''[[Focus strategy]]'''. The [[competitive strategy]] that strives to offer specialized [[market exchangeable]]s on a [[niche market]].
 +
#*[[Cost focus]]. A [[focus strategy]] that strives to achieve the lowest [[cost of operation]] on the [[niche market]].
 +
#*[[Differentiation focus]]. A [[focus strategy]] that strives to charge high prices on the [[niche market]].
 +
#'''[[Innovation]]'''. Taking [[change idea]]s and turning them into new products, product features, production methods, pricing strategies, and ways of [[enterprise administration]].
 +
#*[[Sustaining innovation]]. Small and incremental changes in established products rather than dramatic breakthroughs.
 +
#*[[Disruptive innovation]] (or [[disruption]]). [[Innovation]]s in [[market exchangeable]]s or [[process]]es that radically change existing [[market]]s including an industry's rules of the game.
 +
#'''[[Exit strategy]]'''. An [[enterprise strategy]] that seeks to withdraw an [[enterprise]] out of a particular [[business]] at the lowest cost and biggest gain. With regard to [[startup business]]es, this is how their founders usually get rich. An [[exit strategy]] is the method by which an investor and/or entrepreneur intends to "exit" their investment in a company. Commons options are an [[IPO]] or [[buyout]] from another company. Entrepreneurs and [[venture capitalist]]s often develop an [[exit strategy]] while the [[startup business]] is still growing.
 +
#*[[Buyout]]. A common [[exit strategy]]. The purchase of a company's shares that gives the purchaser controlling interest in the company.
 +
#*[[Liquidation]]. The process of dissolving a company by selling off all of its assets (making them liquid).
 +
#*[[IPO]]. Initial public offering. The first time shares of stock in a company are offered on a securities exchange or to the general public. At this point, a private company turns into a public company (and is no longer a startup).
 +
#*[[Harvesting]]. Exiting a venture when an entrepreneur hopes to capitalize financially on the investment in the future.
  
 
===Roles===
 
===Roles===
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#'''[[Agile team]]'''. A [[work team]] that is responsible for committing to work, delivering and driving the product forward from a tactical perspective in terms of [[Agile methodology]]. Usually, an [[Agile team]] is a small, high-functioning group of five to nine people who collaboratively work together to complete an iteration or project. The team has the necessary skills and competencies to work on the project. Scrum teams are cross-functional; Kanban teams can either be cross-functional or specialists. Scrum teams lack any roles. Kanban teams usually have team leads.
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#'''[[Enterprise architect]]'''. A practitioner of [[enterprise architecture]].
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#*[[Agile team member]]. A member of an [[Agile team]]. Often, [[Agile team]] include engineers, architects, developers, analysts, QA experts, testers, UX designers, etc.
 
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#*[[Team lead]].
 
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#'''[[Scrum role]]'''. One of the following: [[product owner]], [[Scrum master]], [[Agile team member]].
 
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#*[[Scrum master]]. A facilitator for the team and [[product owner]]. Rather than manage the team, the [[Scrum master]] works to assist both the team and product owner in the following ways: (1) Remove the barriers between the development and the product owner so that the product owner directly drives development. (2) Teach the product owner how to maximize return on investment (ROI), and meet his/her objectives through Scrum. (3) Improve the lives of the development team by facilitating creativity and empowerment. (4) Improve the productivity of the development team in any way possible. (5) Improve the engineering practices and tools so that each increment of functionality is potentially shippable. (6) Keep information about the team's progress up to date and visible to all parties. [[Scrum master]] is often viewed as the coach for the team.
 
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#*[[Product owner]]. A person who holds the vision for the product and is responsible for maintaining, prioritizing and updating the [[product backlog]]. In [[Agile methodology]], the [[product owner]] has final authority representing the customer's interest in backlog prioritization and requirements questions. This person must be available to the team at any time, but especially during the [[Sprint planning meeting]] and the [[Sprint review meeting]]. Challenges of being a product owner: (1) Resisting the temptation to "manage" the team. The team may not self-organize in the way you would expect it to. This is especially challenging if some team members request your intervention with issues the team should sort out for itself. (2) Resisting the temptation to add more important work after a Sprint is already in progress. (3) Being willing to make hard choices during the [[sprint planning meeting]]. (4) Balancing the interests of competing stakeholders.
 
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#'''[[Customer]]'''. The organization or individual that has requested (and will pay for) a product or service.
 
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#'''[[Project sponsor]]'''.
 
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*[[Regulator]]. A stakeholder with legal or governance authority over the solution or the process used to develop it.
 
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*[[Stakeholder]]. An individual or group affected in some way by the undertaking. Stakeholders are valuable sources for requirements.
 
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*[[Stakeholder]]. Anyone outside the Scrum team who has an interest in the product that the team is producing. Stakeholders can include but are not limited to direct managers, subject matter experts, account managers, salespeople, and legal officers.
 
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===Methods===
 
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#'''[[Development methodology]]'''.
 
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#*[[Methodology]]. A set of processes, rules, templates, and working methods that prescribe how business analysis, solution development and implementation is performed in a particular context.
 
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#*[[Plan-driven methodology]]. Any methodology that emphasizes planning and formal documentation of the processes used to accomplish a project and of the results of the project. Plan-driven methodologies emphasize the reduction of risk and control over outcomes over the rapid delivery of a solution.
 
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#*[[Change-driven methodology]]. A methodology that focuses on rapid delivery of solution capabilities in an incremental fashion and direct involvement of stakeholders to gather feedback on the solution's performance.
 
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#'''[[Agile methodology]]'''. The project management approach of developing increments of software in frequent iterations based on evolving requirements. The [[Agile Manifesto]] was the initial public declaration for [[Agile methodology]] related to software. Its authors believed that they found "better ways of developing software by doing it and helping others do it."
 
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#*[[Agile methodology]]. A strategic approach, often used in software development, building products via a series of incremental development sprints. This approach helps teams respond to the inherent unpredictability of product development. (see The Ultimate Guide to Project Management Fundamentals to learn more)
 
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#*[[Agile software development methodology]]. A methodology fundamentally incorporating iteration and continuous feedback to refine and deliver a software system. It involves continuous planning, testing, integration, and other forms of continuous evolution of both the project and the software.
 
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#*[[Agile]]. A philosophy of software development that promotes incremental development and emphasizes adaptability and collaboration. “Able to move quickly and easily: “as agile as a monkey”; “an agile mind”.” (Source: Google Define) There is plenty of debate and argument about the misuse of the term ‘agile’. It should only be used in it’s proper context to avoid argument.
 
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#*[[Scrum]]. The most widely used framework under the Agile umbrella. Scrum is an iterative software model that follows a set of predefined roles, responsibilities, and meetings. In Scrum, iterations are called sprints and are assigned a fixed length—sprints typically last one to two weeks, but can last as long a month.
 
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#*#[[Scrum]]. An iterative product development method, often introduced to manage software development projects. In scrum-based projects, the team is self-directed with no specified project manager and a high level of communication is maintained between team members. (see 5 Hacks for Non-Technical Founders)
 
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#*[[Lean Agile methodology]]. An example of lightweight Agile methodology applied to project development. Lean Software Development combines the Lean manufacturing approach pioneered by Toyota in the 1950s (also known as just-in-time production) and Lean IT principles, and applies them to software. LSD places a strong emphasis on people and effective communication. LSD is defined by seven principles: (1) Eliminate waste, (2) Create knowledge, (3) Build quality in, (4) Defer commitment, (5) Optimize the whole, (6) Deliver fast, (7) Respect people
 
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#*[[Lean UX]]. Inspired by Lean and [[Agile methodology|Agile methodologi]]es, Lean UX speeds up the UX process by putting less emphasis on deliverables and greater focus on the actual experience being designed.
 
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#*[[Test-driven development]] (TDD). The practice of designing and building tests for functional, working code, and then building code that will pass those tests.
 
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#'''[[Kanban]]'''. A highly visual framework that falls under the Agile umbrella. The Kanban process uses continuous work flow rather than fixed iterations to produce shippable deliverables. When applied over an existing process, Kanban encourages small, incremental changes to the current process and does not require a specific set up or procedure. Kanban focuses on completing entire projects rather than sprints.
 
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#'''[[Iterative design]]'''. A methodology based on a cyclic process of prototyping, testing, analysing, and refining a product or process. Based on the results of testing the most recent iteration of a design, changes are made. This process is intended to ultimately improve the quality and functionality of a design.
 
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#*[[Iterate]]. The act of repeating a process with the aim of approaching a desired goal, target or result. Each repetition of the process is also called an iteration.
 
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#*[[Iteration]]. A fixed or timeboxed period of time, generally spanning two to four weeks, during which an Agile team develops a deliverable, potentially shippable product. A typical Agile project consists of a series of iterations, along with a [[Sprint planning meeting]] prior to development and a [[Sprint retrospective]] at the end of the iteration. Iterations are referred to as sprints in Scrum.
 
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#*#[[Iteration]]. Each phase of agile development is referred to as an iteration.  Iterations are short time frames granted to deliver sets of features. Each iteration generally contains activities such as analysis, design, development, and testing.
 
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#*[[Iterative development]]. The process of breaking down projects into more manageable components known as iterations. Iterations are essential in Agile methodologies for producing a potentially shippable deliverable or product.
 
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#'''[[Collaborative design]]'''. Inviting input from users, stakeholders and other project members.
 
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#'''[[Waterfall methodology]]'''. A sequential design process where progress is seen as flowing steadily downwards through the phases of Conception > Initiation > Analysis > Design > Construction > Testing > Implementation > Maintenance.
 
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#*[[Waterfall methodology]]. A product life cycle strategy including Analysis, Design, Development, Testing, and Deployment phases.
 
  
 
===Instruments===
 
===Instruments===
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#'''[[Scrum meeting]]'''. One of the following: [[story time]], [[Sprint planning meeting]], [[Sprint review meeting]], [[Sprint retrospective]], [[daily standup]].
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#[[File:Bcg-matrix.png|400px|thumb|right|[[BCG matrix]]]]'''[[BCG matrix]]'''. A strategy tool that guides resource allocation decisions on the basis of market share and growth rate of [[strategic business unit]]s.
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#*[[Sprint planning meeting]]. A working session held before the start of each sprint to reach a mutual consensus between the [[product owner]]'s [[acceptance criteria]] and the amount of work the development team can realistically accomplish by the end of the sprint. The length of the sprint determines the length of the [[Sprint planning meeting]], with two hours being equivalent to one week of the sprint. Using this formula, the [[Sprint planning meeting]] for a two-week sprint would last about four hours, although this can vary.
 
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#*[[Daily standup]]. A brief communication and status-check session facilitated by the Scrum Master where Scrum teams share progress, report impediments, and make commitments for the current iteration or sprint. The Daily Scrum consists of a tightly focused conversation kept to a strict timeframe; the meeting is held at the same time, every day (ideally, in the morning), and in the same location. The Scrum task board serves as the focal point of the meeting. During the Daily scrum each team member answers three questions: (1) "What have I done since the last Scrum meeting? (i.e. yesterday)" (2) "What will I do before the next Scrum meeting? (i.e. today)" (3) "What prevents me from performing my work as efficiently as possible?"
 
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#*[[Story time]]. A regular work session where items on the backlog are discussed, refined and estimated and the backlog is trimmed and prioritized.
 
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#*[[Scrum of scrums]]. A meeting that is a scaling mechanism used to manage large projects involving Scrum multiple teams. A Scrum of Scrums is held to facilitate communication between teams that may have dependencies on one another. One member from each team attends the Scrum of Scrums to speak for the team—this could be the Scrum Master but may be any team member who can effectively relay information and handle questions or concerns for the team.
 
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#*[[Sprint review meeting]]. A [[meeting]] that a [[Scrum team]] holds immediately following the completion of a sprint to review and demonstrate what the team has accomplished during the sprint. This meeting is attended by the product owner or customer, Scrum Master, Scrum team, and stakeholders. The [[Sprint review meeting]] is an informal meeting (no Powerpoint slides allowed). The length of the sprint determines the length of the [[Sprint review meeting]], with one hour being equivalent to one week of the sprint. Using this formula, the [[Sprint planning meeting]] for a two-week sprint would last two hours, although this can vary.
 
  
 
===Results===
 
===Results===
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#'''[[Product scope]]'''. The features and functions that characterize a product, service or result.
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#'''[[Enterprise portfolio]]'''. A collection of all [[business]]es in which a particular [[enterprise]] operates.
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#*[[Scope]]. The area covered by a particular activity or topic of interest. See also project scope and solution scope.
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#*[[Portfolio]]. A range of investments held by a [[legal entity]], an individual or organization.
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#*[[Scope model]]. A model that defines the boundaries of a business domain or solution.
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#'''[[Enterprise strategy]]'''. The plan for how the [[enterprise]] will engage or keep engaged in one or more [[business]]es, how it will do what it's in business to do, how it will compete successfully, and how it will attract and satisfy its customers in order to achieve its goals. An [[enterprise strategy]] for a separate business of the [[enterprise]] is called [[business strategy]]. An [[enterprise strategy]] for a separate unit of the enterprise, known as [[strategic business unit]], is called [[competitive strategy]].
  
 
===Practices===
 
===Practices===
  
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''The successor lecture is [[Project Management Quarter]].''
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''[[Concept Management Quarter]] is the successor lecture. In the [[enterprise envisioning]] series, the next lecture is [[Business Modeling Quarter]].''
  
 
==Materials==
 
==Materials==
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==See also==
 
==See also==
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[[Category:Septem Artes Administrativi]][[Category:Lecture notes]]

Latest revision as of 13:34, 6 May 2023

Enterprise Architecture Quarter (hereinafter, the Quarter) is a lecture introducing the learners to portfolio design primarily through key topics related to enterprise architecture. The Quarter is the third of four lectures of Portfolio Quadrivium, which is the first of seven modules of Septem Artes Administrativi (hereinafter, the Course). The Course is designed to introduce the learners to general concepts in business administration, management, and organizational behavior.


Lecture outline

Feasibility Study Quarter is the predecessor lecture. In the enterprise research series, the previous lecture is Enterprise Intelligence Quarter.

Portfolio design is the enterprise envisioning of the enterprise portfolio. This lecture concentrates on enterprise architecture because this architecture is the main outcome from this modeling.

Concepts

  1. Enterprise architecture. A composition of the interrelated businesses, process assets, enterprise factors, and personnel that together are known as an enterprise.
  2. Enterprise business. The actual or potential practice of making enterprise's profit by engaging in commerce.
  3. Efficiency vs effectiveness
    Portfolio engineering. The application of scientific principles to designing and/or modifying of the enterprise portfolio.
  4. Strategic business unit (SBU). A single independent business of an organization that formulates its own competitive strategy.
  5. Profitability curve for competitive strategies
    Competitive strategy. A formulated strategy for how a strategic business unit is going to compete. This formulation usually states which one of four types of competitive strategies the strategic business unit is going to pursue, what it considers as its competitive advantage or advantages, defines its business model, and may or may not include (a) what products, (c) resulted from what production, (d) at what price, (e) using what presentation and promotion, (f) on what market or markets with regard to the region or regions and/or segment or segments of customers, (g) with what front-end office personnel, (h) with what level of enterprise's support this enterprise is going to offer, as well as (i) what financial results and/or competitors' actions would trigger what changes in those decisions. Rarely, a mature enterprise formulates just one competitive strategy; usually, there are several competitive strategies in the enterprise portfolio since different strategic business units are supposed to have their own competitive strategies.
    Competitive strategies
    • Core competency. An organization's major value-creating capability that determines its competitive weapons.
    • Competitive advantage. What sets an enterprise apart; its distinctive edge.
  6. Cost leadership strategy. The competitive strategy that strives to achieve the lowest cost of operation in the industry. The lowest cost of operation is usually driven by (a) significant economy of scale, which requires a substantial market share, and/or (b) learning curve, which requires substantial experience in the operations. The lowest costs do not necessarily mean the lowest prices; a cost leadership strategy is about two competitive advantages: (1) business opportunities to lower prices when and if the competition requires it and (2) maximization of the difference between sales and cost of operation.
    • Mass production. The production of items in large batches.
    • Mass customization. Providing customers with a product when, where, and how they want it.
    • Exporting. Making products domestically and selling them abroad.
    • Importing. Acquiring products made abroad and selling them domestically.
  7. Differentiation strategy. The competitive strategy that strives to charge high prices. These high prices are commonly driven by unique features (or differences) of the market exchangeable that are offered for sale on the market. Customers usually are willing to pay high prices when market exchangeables are uniquely desirable.
    • First mover. An enterprise that's first to bring a product innovation to the market or to use a new process innovation.
  8. Focus strategy. The competitive strategy that strives to offer specialized market exchangeables on a niche market.
  9. Innovation. Taking change ideas and turning them into new products, product features, production methods, pricing strategies, and ways of enterprise administration.
  10. Exit strategy. An enterprise strategy that seeks to withdraw an enterprise out of a particular business at the lowest cost and biggest gain. With regard to startup businesses, this is how their founders usually get rich. An exit strategy is the method by which an investor and/or entrepreneur intends to "exit" their investment in a company. Commons options are an IPO or buyout from another company. Entrepreneurs and venture capitalists often develop an exit strategy while the startup business is still growing.
    • Buyout. A common exit strategy. The purchase of a company's shares that gives the purchaser controlling interest in the company.
    • Liquidation. The process of dissolving a company by selling off all of its assets (making them liquid).
    • IPO. Initial public offering. The first time shares of stock in a company are offered on a securities exchange or to the general public. At this point, a private company turns into a public company (and is no longer a startup).
    • Harvesting. Exiting a venture when an entrepreneur hopes to capitalize financially on the investment in the future.

Roles

  1. Enterprise architect. A practitioner of enterprise architecture.

Instruments

  1. BCG matrix
    BCG matrix. A strategy tool that guides resource allocation decisions on the basis of market share and growth rate of strategic business units.

Results

  1. Enterprise portfolio. A collection of all businesses in which a particular enterprise operates.
  2. Enterprise strategy. The plan for how the enterprise will engage or keep engaged in one or more businesses, how it will do what it's in business to do, how it will compete successfully, and how it will attract and satisfy its customers in order to achieve its goals. An enterprise strategy for a separate business of the enterprise is called business strategy. An enterprise strategy for a separate unit of the enterprise, known as strategic business unit, is called competitive strategy.

Practices

Concept Management Quarter is the successor lecture. In the enterprise envisioning series, the next lecture is Business Modeling Quarter.

Materials

Recorded audio

Recorded video

Live sessions

Texts and graphics

See also

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