At some stage, almost every enterprise reaches a point where it needs to set up a project to overcome a functional deficit, and find a solution – usually the implementation of new software. This presents numerous challenges: time is a critical factor, the budget is tight, and resources are underestimated. Integration with existing applications may prove more problematic than originally expected, which leads to a schedule overrun and the need for additional financing. Once the results have been achieved, the user department finds fault, and the subsequent costs are still considerable, as another stand-alone solution has been added to the system landscape.
Geared towards the business strategy
This is by no means a one-off situation, and to avoid it, enterprises that want to enable more effective, future-oriented planning therefore often implement the Enterprise Architecture (EA) concept. Its most renowned proponent is John A. Zachman, who twenty years ago presented the concept of Enterprise Architecture, an idea that has since undergone permanent refinement. Zachman developed a descriptive model (Framework for Enterprise Architecture), which can be used to structure an enterprise and subdivide it into logical areas. EA derives targets and procedures from the business, and focuses on business development, rather than the tools or particular software applications. EA promotes a planned and goal-oriented approach and avoids uncoordinated individual measures that are merely a reaction to the deficits that arise.
Enterprise Architecture is not yet widespread in enterprises in general, or in the sporting goods sector in particular. In 2000, adidas-Salomon set up an Architecture department, in order to introduce EA across the whole company. This department is responsible for matching the companie’s enterprise strategy – which encompasses the business strategy, information strategy, application strategy, and technology strategy – onto the IT strategy as well as for developing and supporting the IT landscape. EA defines short-term, medium-term, and long-term goals, and all tasks and goals are geared towards the strategy and mission statement laid down by the adidas-Salomon executive board.
The value of EA for the enterprise
On the basis of strategic guidelines, adidas-Salomon developed an Enterprise Architecture Model which maps the architecture department’s structure to the operating areas within the company. This structure is subdivided in to the areas “Customer” (Customer Relationship Management – CRM), “Product” (Product Lifecycle Management – PLM) and “Operations” (Supply Chain Management – SCM). Organization, data, and processes are classified according to this structure, and measures such as business models, roadmaps, and improvements are developed. All three areas are interlinked and result in many overarching processes. The employees in the Architecture department, known as enterprise architects, ensure end-to-end processes by assigning the individual processes to the activities in the value chain.
Three years ago, adidas-Salomon started to draw up an Enterprise Architecture Blueprint (EAB) based on the Enterprise Architecture Model. This blueprint contains the adidas-Salomon business processes. The categories developed during the EA processes were refined to meet the needs of the particular activity, and detailed processes were added. The EAB itself is an ever-changing construct, which is constantly being adapted and enhanced.
adidas-Salomon documents the results of work using the ARIS toolset, which supports the design, implementation, and controlling of business processes. A certain amount of documentation is essential for defining a company as international as adidas-Salomon, for synchronizing and optimizing business processes, and for consolidating applications.
The systematic Enterprise Architecture procedure is currently being applied to programs that are used across the world in the adidas-Salomon business units. This includes the management of master data, for which there are numerous applications within adidas-Salomon. This makes the cross-application comparison and consolidation of data difficult, and leads to multiple entries, requires additional manual activities, and causes inconsistencies. The additional costs resulting from this run to more than five million euros per year.
The supplier data is a good example of why the situation is so unsatisfactory. Master data is stored and maintained separately in different applications for each business unit, and even within a single business unit, the same data has to be maintained several times, depending on whether a system for product development, order processing, or supplier communication is involved. The heterogeneous application landscape resulted from strong enterprise growth in recent years. The globalization of adidas-Salomon took its toll and resulted in incompatible solutions.
Together with the business units and the application owners around the world, the Architecture department defined a target situation, drew up a roadmap for achieving this, and developed a data model for the “Product”, “Customer,” and “Supplier” areas. The data model is part of the Data Management Framework, which also includes processes and addresses organizational questions such as who owns which data, who maintains it, and how. This procedure has enabled adidas-Salomon to achieve the following long-term aims:
- Consistent data and structures
- Less data redundancy and maintenance
- Clear statements on data owners, responsibilities, and processes
- Consolidation of the systems
Change management and governance
It took adidas-Salomon some effort to establish the Enterprise Architecture, and many obstacles needed to be overcome. Ultimately, it was not possible to implement EA in the enterprise without significant support from senior management. Key projects now all have project architects on the team, and EA plays an important role in driving global programs and changes. Example of this include the implementation of process documentation in more than one hundred processes, the definition of process and data owners, and the move from a function-oriented to a process-oriented approach.
In global areas, the Architecture department works closely with the specialist areas in order to create roadmaps for the value-added areas of Product Lifecycle Management, Customer Relationship Management (for Asia, in particular), or to define a new global Supply Chain strategy. The Architecture department is also responsible for principles and standards, for example those relating to data management, process documentation, best practices, naming conventions, technical standards, the definition of methods to be used, and meta data. The use of Enterprise Architecture is therefore supporting the transition from a reactive, project-driven company to a proactive, planning-based company.
Enterprise Architecture and SAP NetWeaver
SAP NetWeaver is an enterprise-wide platform that integrates processes and supports a long-term Enterprise Architecture vision. It is based on end-to-end process integration across enterprise boundaries. SAP NetWeaver supports an enterprise-wide view of IT by providing the technical foundation that allows flexible enhancement and the integration of different systems. This flexibility is desirable from both a functional and technical perspective.
As a first step, adidas-Salomon is using SAP NetWeaver to create an end-to-end solution for Enterprise Business Intelligence (EBI) on the basis of SAP Strategic Enterprise Management (SAP SEM) and SAP Business Information Warehouse (SAP BW). To this end, reporting requirements across Europe were first consolidated one the basis of a uniform definition of key figures and characteristics. The solution resulting from this “BI Foundations” project also integrates European countries that do not use SAP applications. After successful implementation in Europe, the solution will be rolled out globally. The final expansion stage will involve the integration of other group brands (Salomon, Taylormade, Bonfire and others).
Complex processes and organizations within a globally operating enterprise require a proactive approach in which IT solutions support constantly changing business requirements. Enterprise Architecture describes the enterprise-wide processes and requirements, and SAP NetWeaver provides the IT platform required for this.