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Philips has embarked on a multi-year transformation to become an agile, process-oriented global company to help business owners bring propositions to market faster, reduce complexity and lower IT costs. The company has developed robust and innovative business architecture techniques to transform both business and IT. The key to success lies in the enterprise architecture repository, which allows Philips connect the different components of the business and IT transformation. Learn how Philips uses this to identify business capabilities that are critical, differentiating and common within business units, to manage process performance and to provide a direct link to the IT architecture. Presenter: Anosh Thakkar VP, Head of Architecture & Platforms, Royal Philips
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Enterprise Architecture: The Nucleus of Transformation at Philips
Anosh Thakkar Vice President, IT
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Agenda
Philips Accelerate! transformation
Enterprise Architecture Repository (EAR)
Key Learnings
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Confidential Business Architecture, 23rd May
Philips: A strong diversified industrial group leading in health and well-being
Businesses Geographies
Healthcare Consumer Lifestyle
Lighting North America
Other Mature Geographies
31% 9% 35%
Growth Geographies3
44%
€23.5 Billion Sales in 2012. Portfolio consists of ~70% B2B businesses
~116,000 People employed worldwide in over 100 countries
19% 37%
Since 1891 Headquarters in Amsterdam, the Netherlands
8% of sales invested in R&D in 2012 59,000 patent rights, 35,000 trademark rights, 81,000 design rights
Western Europe
25%
$9.1Billion Brand value in 2012
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But, we risk losing our relevance….
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And so the Accelerate! transformation was born
Time-to-market -XX%
Inventory levels -XX%
Customer service >XX%
Cost of non-quality
IT cost -XX%
-XX%
2016 Targets
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IT is an area of Accelerate! in need of dramatic improvement
• High IT costs with Philips at X.X%, whilst peers are at X% of Sales
• Complex and patched up IT landscape
• Our business is real-time, our systems are not
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Where are we in our journey so far…
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We have simplified from 75 to 4 Business Models
FROM : – No synergies across Business Units – Many specialized Business Models – Unclear view on differentiating
capabilities
TO : – Business Units aligned to 4 simplified business
models – Simplified organisation structures – Clear view on common and differentiating
capabilities
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FROM : – No documented process framework – Many variants of the same process – Different language, structure,
governance
TO : – One process framework – Single common language – Governance to track process changes
We have defined the Philips Business Process Framework (PBPF)
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FROM : – Expensive and complex IT landscape – Many customisations – 16,000 applications
TO : – Simplified IT landscape – Lower cost of support – Focus on standardization
We are building a simplified IT landscape
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Enterprise Architecture at Philips
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“How does our business strategy connect to IT architecture?” Chief Information Officer, Philips
“Which capabilities do I need to win in the market?” Chief Market Leader, Philips
“How does the components of our operating model link together? ” Chief Financial Officer, Philips
Key questions during the Accelerate! transformation
“Can I see the Architecture of my company?” (2012) Chief Executive Officer, Philips
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Philips Operating Model
People and culture
Capabilities and
learning
Structure and
governance
Process and
systems
Performance and reward
13 Source: Galbraith's Star Model
The EAR captures and links the Philips Operating Model
All Business Models, Process & Capability Framework and IT architecture are captured in one connected repository
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EAR
Provides a view of quality processes (Philips Integrated Quality System).
Visualize E2E transformation journeys and winning value chains.
Provides view of architecture from capabilities, processes and technologies. Including architecture principles.
Provide solution and design guidelines to construct or design a solution, initiating implementation.
Quality & Regulatory
EAR
IT Delivery
Architecture
Business
The EAR enables different view points for both business and IT
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A snapshot into the EAR
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Looking into the lenses of the EAR
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Process (Level 3)
Process and
systems
Performance and reward
Capabilities and
learning
Structure and
governance
People and Culture
Looking into the lenses of the EAR
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Process (Level 3)
Process and
systems
Performance and reward
Capabilities and
learning
Structure and
governance
Process and
systems
Looking into the lenses of the EAR
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Process and
systems
Performance and reward
People and culture
Capabilities and
learning
Structure and
governance
Process (Level 3)
Key learnings from our journey so far
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Lessons learnt
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“Finally, I see the architecture of my company!" (Aug 2013) Chief Executive Officer, Philips
Visualize your transformation journey
Start with one documented common language
Map capabilities at executive level – accept no delegates
Empower IT Architecture through Executive Business Process Owners
Create a pull effect for new IT Programs
Choose an enterprise grade EA tool
Over communicate!
