ENTERPRISE ARCHITECTURE

PHILIPS
Group 4 (Division A) Roll no.
Rahul Sajeev A050
Mohammad Irshan A023
Rajat Surve A060
Sharmad Aras A004
Antra Chawla A013
Table of Contents
Introduction:...............................................................................................................................3
Background:...............................................................................................................................3
Scope of Business:.....................................................................................................................3
System Context Diagram...........................................................................................................4
Foundation of execution.............................................................................................................4
EA Implementation of Philips....................................................................................................6
Operating Diagram.....................................................................................................................6
Business model diagram for Philips is mentioned below:.........................................................9
Operating and management process at Philips...........................................................................9
Enterprise Architecture- TOGAF.............................................................................................10
Reference:................................................................................................................................13
Introduction:
The Philips Company was founded in 1891, by Gerard Philips and his father Frederik Philips.
Frederik, a banker based in Zaltbommel, financed the purchase and setup of an empty factory
building in Eindhoven, where the company started the production of carbon-filament lamps
and other electro-technical products in 1892. Philips is organized into three main divisions:
Philips Consumer Lifestyle (formerly Philips Consumer Electronics and Philips Domestic
Appliances and Personal Care), Philips Healthcare (formerly Philips Medical Systems) and
Philips Lighting. Philips lighting is a leading provider of light solution and applications for
both professional and consumer markets. whether at home, on the road, in the shopping
malls or at schools, we are creating lights that transforms environment.

Background:  
Moving into a new century, Philips remained fully committed to innovation. Philips began
producing radios in the year 1927 and within five years it had sold one million sets and become
the world’s largest manufacturer of radios and radio tubes. Later on Philips Research had
tremendous contributions in development of transistors and integrated circuits. The year 1949
saw the introduction of the Philips Synchrocyclotron, enabling research into the treatment of
malignant tumors. Reflecting its focus on health and well-being, the company introduced the
Ambient Experience in 2002. This innovative solution improves hospitals’ workflow and
patient care by integrating architecture, design, dynamic lighting and sound. Other milestones
include, in 2006, the first commercial launch of a 3D scanner, providing unprecedented
image quality for CT scans. In 2012, Philips introduced the AlluraClarity interventional X-
ray system, which offers excellent visibility at low X-ray dose levels. Recent innovations
include the development of the Philips Smart Air Purifier and and Philips Azurion, the next-
generation image-guided therapy platform that enables clinicians to perform a wide range of
routine and complex procedures, helping them to optimize interventional lab performance
and provide superior care.

Scope of Business:
Philips as as company have vision of striving to make the world
healthier and more sustainable through innovation. Their goal is to improve the lives of 3
billion people a year by 2030. They will be the best place to work for people who share our
passion. Together we will deliver superior value for our customers and shareholders. In line
with their vision their key focus is to improve people’s lives through meaningful innovation.
Innovation is the key for Philips success. Philips lighting is a leading provider of light
solution and applications for both professional and consumer markets.
Values:
Delight Customers, develop peoples, depend on each others, Deliver on commitments.
Goal:
Our goal is to improve the lives of 3 billion people a year by 2025
We will be the best place to work for people who share your passion.
We will deliver superior value for our customers and shareholders.
System Context Diagram

Figure 1- System Context Diagram

Foundation of execution
The foundation for execution results from carefully selecting which processes and IT systems
to standardize and integrate. Just as humans must learn how to ride a bicycle (and think hard
about what they are doing while they are learning), the processes built into a foundation for
execution require a great deal of concentration— for a while. Eventually routine business
activities—just like bicycle riding—become automatic. Outcomes become predictable. The
foundation for execution takes on another layer. A company’s identity becomes clearer, and
executives can focus their attention on the future. To build an effective foundation for
execution, companies must master three key disciplines:

1. Operating model. –The operating model is the necessary level of business process
integration and standardization for delivering goods and services to customers. Different
companies have different levels of process integration across their business units (i.e., the
extent to which business units share data). Integration enables end-to-end processing and a
single face to the customer, but it forces a common understanding of data across diverse
business units. Thus, companies need to make overt decisions about the importance of
process integration. Management also must decide on the appropriate level of business
process standardization (i.e., the extent to which business units will perform the same
processes the same way). Process standardization creates efficiencies across business units
but limits opportunities to customize services. The operating model involves a commitment
to how the company will operate.

2. Enterprise architecture. –The enterprise architecture is the organizing logic for business
processes and IT infrastructure, reflecting the integration and standardization requirements of
the company’s operating model. The enterprise architecture provides a long-term view of a
company’s processes, systems, and technologies so that individual projects can build
capabilities—not just fulfill immediate needs. Companies go through four stages in learning
how to take an enterprise architecture approach to designing business processes: Business
Silos, Standardized Technology, Optimized Core, and Business Modularity. As a company
advances through the stages, its foundation for execution takes on increased strategic
importance.

3. IT engagement model. –The IT engagement model is the system of governance

mechanisms that ensure business and IT projects achieve both local and companywide
objectives. The IT engagement model influences project decisions so that individual solutions
are guided by the enterprise architecture. The engagement model provides for alignment
between the IT and business objectives of projects, and coordinates the IT and business
process decisions made at multiple organizational levels (e.g., companywide, business unit,
project). To do so, the model establishes linkages between senior-level IT decisions, such as
project prioritization and companywide process design, and project-level implementation
decisions.

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process owners

Idea Integration
 High to Market Global IT infrastructure
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Market to Order Global IT Infra
Order to cash
Capability (Adobe, Sap)
 Standard
Integration platforms
 Standard
Enabling
Interfaces Processes

Figure 2- Phillips Foundation of Execution

EA Implementation of Philips

Figure 3- Phillips Integrated Landscape

Operating Diagram

An operating model is the first layer in the foundation for execution in an enterprise
architecture. The operating model is the business process standardization and integration
necessary to deliver value to Customer Segments. It is the conceptual component in the
organizing logic that defines an enterprise architecture. In this sense, the operating model is
the initial manifestation of the business model when it is deployed as it indicates how value is
created, delivered and captured by the business units in the enterprise. Research conducted
by MIT’s Center for Information Systems Research found that enterprises implementing an
operating model reported the following:
 17% greater strategic effectiveness,
 31% higher operational efficiencies,
 33% more customer intimacy,
 34% higher product leadership, and
 29% greater strategic agility than those companies that did not.
Loosely grouped Operating Models essentially can be defined as follows:
 Diversification model: low standardization, low integration
 Coordination model: low standardization, high integration
 Replication model: high standardization, low integration
 Unification model: high standardization, high integration
 Figure 4- Phillips Diversification Model

Successful companies rely on incentive systems and management training to encourage

companywide thinking at the business unit level. The environments and missions of different
organizations mean that their operations are inevitably also different. They face a variety of
challenges, and so the precise ways in which they can benefit from a given best practice will
change, depending on the circumstances of each organization. Our company Phillips, follows
the third of four, a Diversification operating model, as defined by Ross, Weill and Robertson
in their excellent book “Enterprise Architecture as Strategy”. In the classification schema
defined by the authors, a Diversification model organization is one where the different
business units perform different tasks and do so for completely different customers. Phillips
designs electronic hardware in that cater to a variety of customers. The Diversification
Operating Model places the emphasis on the shared technology and platform stack instead of
business process standardization and integration. The business units in this type of enterprise
can then leverage the shared services to execute highly specialized business processes to
deliver value to their specific customer segments. The business units also own the data to
serve their customer segments lowering the need for a common master data set. However,
the design of the operating model can allow for a common set of business processes that can
be leveraged and then customized by each business unit. One of the Other companies that
follow this model is the giant conglomerate General Electric, where the business units largely
produce different products that they sell to various customers. Another example that they
give would be the Carlson group of hotels, where again the various hotel chains target
different groups of customers by providing different levels of service.
 Figure 5- Diversification model new ventures

In the Diversification operating model, the shared services are exploited by the new venture
in business model innovation. The new venture can be accelerated by developing specialized
business processes to deliver value to its specific customer segments using the foundational
technology stack. The new venture can focus on proving out is business model without the
need to deploy the pre-requisite technology infrastructure. In fact, in this operating model,
using a common collaboration platform can facilitate the mobilization of information worker
resources from established business units into the new venture. Information workers familiar
with the user interface can more readily execute the specific activities involved in the new
processes.
This type of model is extremely useful for a company like Phillips that introduces new
ventures consistently. Also, one of their business include Phillips innovation services that
focus on incubating start-ups and developing them under their infrastructure. Managing such
a wide network of start-ups is made easier with diversification model.
Business model diagram for Philips is mentioned below:

Figure 6- Phillips Operating Model

Operating and management process at Philips

Figure 7- Operating and management process at philips

Enterprise Architecture- TOGAF
Phillips currently uses a subset of ArchiMate 2.1 concepts and TOGAF methodology as their
core content metamodel for enterprise architecture. The metamodel is adjusted to eliminate
some elements which are of strategic importance to the organisation. It is their intBecause of
this reason, many objects of the motivation layer have also been changed to general
ArchiMate terms. 

There are four layers present in the core content metamodel: Motivation, Business,
Application and Technology. It follows a top-down approach and shows the realization levels
of business goals in each layer, starting from the motivation layer. Following are the
descriptions of the elements in the metamodel and the key relationships between them:
 
Motivation Layer 
It defines the highest and most profound level of the goals of organisation. IT makes use of
the ArchiMate objects such as goals, requirements, drivers and shows the ulterior motives for
design and/or change in the enterprise architecture. The elements of motivation guide and
constrain the design decisions of the lower layers. They are:

 Goal: The end state which the stakeholder wants to achieve. 

 Driver: It drives, encourages and finally creates change in an organisation. 
 Assessment: The outcome of analysis of a driver. 
 Requirement: It is a state of need which must be fulfilled by the system. 
Business Layer 
This layer illustrates the frameworks and design processes of the organisation. These
processes describe the organisation behaviour and how it provides products and services to
its consumers. According to the APQC classification framework, seven levels of processes-
from L1 (highest) to L7 (lowest)- are defined based on the granularityBusiness layer
illustrates the process framework and design of the company:
L1- Area of domain
L2- Description of Process Group
L3- Describing a unique standalone process
L4- Activity describing reusable pieces of flow
L5- Tasks describing the activity for each person
L6- granular breakdown of task
L7- providing instructions and guidelines regarding activities 

People and/or softwares execute processes, which is shown in a Business Role element.
Some important terms in business architecture are:
 
▪ Business Role: It is the onus of executing a specific behaviour, to which an actor can be
designated. 
▪ Business Process: A It is an element that groups behaviour on the basis of sequencing of
activities. It is expected to yield a defined set of business products or services. 
▪ Business Event: It is defined as something that manifests and influences behaviour. 
▪ Business objects (Input/output): It is a passive element that has relevance to business.

Application Layer 
The Application layer describes the application support that business processes provide. The
core component of this layer is the application component, which can be used to model any
structural entity such as softwares, sub-applications, or even information systems. It also
defines how information flows between various components and different interfaces between
them. Other elements include the following: 

▪ Application Component: It is a part of a software which is modular, replaceable, and

deployable. It encapsulates its behaviour and data and uses interfaces for their exposure. 
▪ Information Flow (Application Interface): Information flow, or application interface is a
point of access where the services of an application are available to an end user or any other
component in the application layer.
▪ Application Function: It is an element that classifies automated behaviour that can be
executed by an application component.
▪ Data Object: A data object is defined as a passive element suitable for automated
processing. 

Technology Layer 
This is the lowest realisation layer of the metamodel. It defines and maps the application
components to supporting software systems. However, a single component may have
multiple softwares available. For this, the location element is used for distinguishing.
 
▪ System Software: It is a representation of a software environment for particular
components and objects that are used as artifacts. 
▪ Location:  It is a conceptual point in the space (region, market, etc.). 
Reference:
 Rurua, N, An approach to variability management in enterprise
architecture, Eindhoven, October 2015.
 https://www.philips.com/a-w/about/company/our-strategy
 https://www.philips.com/a-w/about/company/our-strategy/our-strategic-focus.html
 https://www.philips.com/a-w/research/blog/20191209-reference-architectures-and-
guardrails-burden-or-opportunity-for-innovation.html
 https://vizologi.com/business-strategy-canvas/royal-philips-business-model-canvas/