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

1. Enterprise Architecture: The Nucleus of
Transformation at Philips
Anosh Thakkar
Vice President, IT
1

2. Agenda
Philips Accelerate! transformation
Enterprise Architecture Repository (EAR)
Key Learnings
2

3. Philips: A strong diversified industrial group leading in health and
well-being
Geographies
Businesses
Healthcare
Consumer
Lifestyle
Lighting
Western
Europe
North
America
Other Mature
Geographies
Growth
Geographies3
44%
19%
37%
25%
31%
9%
35%
Since 1891 €23.5 Billion
~116,000
$9.1Billion
8% of sales invested
Headquarters in
Amsterdam, the
Netherlands
People employed
worldwide in over 100
countries
Brand value in 2012
in R&D in 2012
59,000 patent rights,
35,000 trademark rights,
81,000 design rights
Confidential
Sales in 2012.
Portfolio consists of
~70% B2B
businesses
Business Architecture, 23rd May
3

4. But, we risk losing our relevance….
4

5. And so the Accelerate! transformation was born
2016 Targets
Customer
service
>XX%
Inventory
levels
-XX%
IT cost
-XX%
Cost of
non-quality
-XX%
Time-tomarket
-XX%
5

6. 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
6

7. Where are we in our journey so far…
7

8. 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
8

9. We have defined the Philips Business Process Framework (PBPF)
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
9

10. We are building a simplified IT landscape
FROM :
– Expensive and complex IT landscape
– Many customisations
– 16,000 applications
TO :
– Simplified IT landscape
– Lower cost of support
– Focus on standardization
10

11. Enterprise Architecture at Philips
11

12. Key questions during the Accelerate! transformation
“Can I see the Architecture of my company?” (2012)
Chief Executive Officer, Philips
“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
12

13. Philips Operating Model
Capabilities
and
learning
Structure
and
governance
People and
culture
Performance
and reward
Source: Galbraith's Star Model
Process
and
systems
13

14. The EAR captures and links the Philips Operating Model
All Business Models, Process & Capability Framework and IT
architecture are captured in one connected repository
EAR
14

15. The EAR enables different view points for both business and IT
Visualize E2E transformation
journeys and winning value chains.
Business
Quality &
Regulatory
EAR
Provides a view of
quality processes (Philips
Integrated Quality
System).
IT Delivery
Provide solution and design
guidelines to construct or
design a solution, initiating
implementation.
Architecture
Provides view of
architecture from
capabilities, processes and
technologies. Including
architecture principles.
15

16. A snapshot into the EAR
16

17. Looking into the lenses of the EAR
Process
and
systems
Capabilities
and
learning
Process
(Level 3)
Performance
and reward
Structure
and
governance
People and
Culture
17

18. Looking into the lenses of the EAR
Process
and
systems
Capabilities
and
learning
Process
(Level 3)
Performance
and reward
Structure
and
governance
Process
and
systems
18

29. Looking into the lenses of the EAR
Process
and
systems
People and
culture
Process
(Level 3)
Performance
and reward
Capabilities
and
learning
Structure
and
governance
29

34. Key learnings from our journey so far
34

35. Lessons learnt
 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!
“Finally, I see the architecture of my company!" (Aug 2013)
Chief Executive Officer, Philips
35

36. Anosh.Thakkar@Philips.com
linkedin.com/in/anosh
36