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Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
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
Transcribed Image Text:Situation
SteelCo is a large steel manufacturing company established several decades ago. Historically,
Steel Co grew largely via mergers and acquisitions of smaller companies occupying adjacent or
complementary market niches and underwent a number of corporate restructurings. Presently, at the
highest level the company is split into two major divisions: Division Alpha and Division Beta. Both
divisions are governed from the lean central head office and report their quarterly financial
indicators to top business executives for their consideration. However, operationally these divisions
represent essentially independent businesses with non-overlapping suppliers, products, customers
and markets. Each division is managed by an appointed executive director reporting directly to C-
level corporate leadership. Divisions are free to set their own agendas, pursue their own competitive
strategies and make their own investment decisions, though major investments must seek approval
at the corporate level.
Division Alpha is an established and large-scale, but highly centralized manufacturing shop. It
specializes on fabricating a single line of products, which are distributed directly to a narrow circle
of wholesale customers over stable supply chain network arrangements. The division has a rather
conservative IT investment strategy intended primarily to achieve better automation of existing
operations and enable smooth, uninterrupted and efficient business processes. It has a central
division-wide IT department employing around 150-180 in-house specialists and also involving
about 100-120 external contractors working on a full-time basis. The IT department is responsible
for providing necessary IT support across all activities of Division Alpha's value chain, e.g.
production, warehousing, sales and delivery as well as various supporting activities including HR,
finance and legal services.
Division Beta has a more complex, dynamic and diversified business model. It offers three core
lines of products focused largely on different market segments and customer groups. These product
lines require substantially different manufacturing processes, distribution channels, sales
approaches and marketing campaigns. However, all products are fabricated from similar raw
materials and components procured from the same suppliers. Moreover, customer bases of these
products also partially overlap and the department's leadership is planning to leverage cross-selling
opportunities more actively in the future. Organizationally, Division Beta is structured into three
major units aligned to its three product lines and an additional supporting unit providing shared
division-wide services to the main business, e.g. HR, finance, accounting and IT. Its IT department
employs around 450-500 IT staff qualified in different technologies used in the division's IT
landscape. To accommodate with the quickly changing market conditions, Division Beta invests a
significant share of its profits in new IT systems and infrastructure. It has an aggressive IT
investment strategy aimed at enabling innovative ways of working.
Questions
Question 1: List how SteelCo should structure its enterprise architecture providing high-level
examples of the types of artifacts to be included in the enterprise architecture.
Question 2: Describe the best architecture solution that SteelCo Division Beta can use to
consolidate its data for central control.
Instructions
You are required to use a two-dimensional table format to answer the questions. Use at least
four columns (section or question number, theory concept, theory detail, and application) showing
each theory concept and application on SEPARATE rows. Note that Question 1 is high-level, we are
not looking for the detail of Kotusev or Bernard's EA3 cube.
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