June 4, 2008 Investments in New Architecture on razor-thin margins IBI Summit, Nashville, TN

June 4, 2008

Investments in New Architecture on razor-thin

marginsIBI Summit, Nashville, TN

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AgendaWho is Tesch Consulting?Brief rewind… How did we get here?Side-effects of the journey…What have we learned?Change StrategyAdoption approachesCosts of approachesRisks / CautionsQ & A

Agenda

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Who is Tesch Consulting?

Who is Tesch Consulting?

Will Tesch Over 20 years of Business

Management experience Former CIO Owner and President of

Tesch Consulting Successful track record Today we’re delivering

services to some of the largest organizations in the US

The Team Seasoned enterprise

integration expertise Proven experience

matching technology solutions to business needs

Significant Project Management experience

Strong technical acumen Across all technologies “Lived in our solutions”

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Tesch Consulting Practice FocusThought Leadership

• Enterprise Innovation• Domain Experience (Retail, Supply Chain, Oil, Healthcare,

Document Management, Manufacturing)• Learning and Education

Executive Coaching• Project Quality Assurance• IT Department Assessments• Strategic Organizational Counseling

Business Intelligence• Retail Solution Framework• Data Warehouse Design• Enterprise Reporting Evaluations

Enterprise Integration• iWay integration expertise• Infrastructure Expertise• Mentoring Services

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Tesch Consulting – National Presence

Who is Tesch Consulting?

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Companies we’ve worked with…

Who is Tesch Consulting?

Impact21 Group ExxonMobil US Coast Guard Eby Brown Pamida Stores Red Prairie Manhattan Associates Infor Kehe Food Distribution Hayes-Lemmerz Information Builders (IBI) Large Health Care Provider

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Momentary rewind…

‘What business is’ – Sales, Acctg, Ops … hasn’t changed.

‘How business is’ has changed significantly.

‘How business has learned to be’ is fundamentally important as it will be a crucial input into what is ‘needed for the business to continue to operate.’

Business is…

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Convergence of innovations

40 years of technological advancesContinued personalizationMarkets are defined by effective uses of

innovationsEnterprise systems have grown organically

Convergence

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Convergence of Innovations

Technology disparity escalates complexity• Myriad of environments• Multitude of languages• Near-term Asset Obsolescence

Evolution of the Technologist• Competing topologies / infrastructure• Governance continues to rise in importance• Marketplace competition drives company initiatives

Convergence

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Side-effects

Skilled and knowledgeable resources across many technologies

Slower organizational response times due to challenges in managing the technologies

Lack of interoperabilityComplexity is significant IT methodology

continues to get re-shaped

Reuse is compounded by knowledge of same styles across the technology expertise

Entrenchment as a strategy for technologists

Today’s Landscape

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Shortly before 4:11 p.m. (est) on August 14, 2003, a series of power surges over a 12-second period triggered a cascade of shutdowns at more than 100 generating plants throughout eight U.S. states and Ontario. The result was the biggest blackout in North American history. 61,800 megawatts of power were lost to over 50 million people. - ieso, Ontario Power

On could argue that we are rather dis-integrated?

Toronto, August 22, 2003 (6:00 p.m.) -- Ontario's power emergency will end at 8:00 p.m., marking the return to service of the majority of the province's generating capability. Consumers are urged to continue with their conservation efforts until 8:00 p.m. - ieso, Ontario Power

Only 8 days…

Side-effects

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IT Characteristics

Common attributes and constraints• Operationally driven• Innovation occurs outside of IT• Black-box syndrome• Shoe-string budgets

Technologist is tactically minded…• Point-to-point interface approaches• ‘Quick and Dirty’, ‘Hard-coded’, etc…

Side-effects

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Sunshine Moment!

Change Strategy

“While there are proud moments, ingenious alternatives and quick-fix acts of wonder, the recognition of the fatal nature of the on-going behavior of the organization isn’t abstract any longer.” - (IBI whitepaper)

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What have we learned?

The heritage of the organization’s learning resides in the existing operational systems and resources

Internal and external pressures on the organization to become more efficient will not change so there must exist continuous responsiveness by the organization’s business systems.

The technologist reflects the temperament of the organization as they tend toward quick remedies

Organizational Learning

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Gleicher’s Formula

Working in organizational change management David Gleicher’s seminal research work discovered that organizations will change at a pre-determined rate based on the following ingredients.

Change Strategy

1. Awareness of why the change is needed2. Desire to support and participate in the change3. Knowledge of how to change4. Ability to implement new skills and behaviors5. Reinforcement to sustain the change

1. Awareness of why the change is needed2. Desire to support and participate in the change3. Knowledge of how to change4. Ability to implement new skills and behaviors5. Reinforcement to sustain the change

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Think Psyche-logically

Maneuvering in your company is unique to your style, but critical for long-term planning building an architecture

The #1 factor for successfully adopting an enterprise integration framework is getting your IT team to change

Architectural planning begins a new chapter in your IT department / company

Instills a framework for software development disciplines

Map your goals to the business needs

Change Strategy

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What is the ‘New’ Architecture?

New Architecture

It is a FRAMEWORKIt depends on the effective deployment of the

following components

• IT leadership change - a commitment to adopt new methods of integration

• Technology tools (iWay Service Manager, iWay developer workbench, adapters suitable to the existing operational systems of the organization)

• Resilient commitment to stay the course

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Adoption Approaches…

1. Start with Integration• Stop custom point-to-point development;

adapt existing systems; build a custom adapter

• Eliminate system redundancies and breakdown points

Adoption Approaches

2. Remove inter-system dependencies• Cascading FTP scenarios;

reduces Help Desk support

• Use to leverage the removal of legacy systems

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Adoption Approaches…

3. Align Integration effort with new business functionality• Sell to Sales; Market to Marketing; Show

Accounting the beans

• Visibility of approach should be pronounced

Adoption Approaches

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Adoption Approaches…

Adoption Approaches

4. Consider an Integration Layer for Enterprise System replacements / strategic projects• Higher risk, but richer

rewards

• Force the philosophy, require the immediate commitment by dedicated resources

• Mentoring critical for long-term success of integration

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What are the costs?

Adoption Approaches

Initial Investment considerations• Negotiate up-front for the long-term investment• Build into budget• Work with business vertical areas to include in

integration strategy within overall project

Managing related costs depend on the ongoing commitment…

• By IT Leadership• By the Technology team• By ability to deliver value quickly to

gain momentum

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IT efficiencies

Smallest impact $

Tool Investment

Targeted IT Cost

Reduction

SameInvestment $

Tool Investment

New BusinessFunctionality

Overtakes Cost

Internal Costs rise

Tool Investment

Enterprise Critical Path;

Must existulterior rationale

Most Impact $

Tool InvestmentDifferent Adoption Approaches

“The best practice for architecture adoption is to follow on the heels of a business feature enhancement that is politically charged!” – IBI Whitepaper

Timid Driven Leveraged Versatile Glue

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Adoption Approaches

Best ways• Market to Marketing• Sell to Sales• Show Accounting the beans

Plausible but boring ways• IT efficiencies• Human Resources• Internal Portal

Worst ways• Executive Information Systems• NON-Strategic; backlog projects

Think Psyche-logically

GOAL…

TO GET

MOMENTUM!

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Market to Marketing

Corporate-wide EDI initiatives (Supply Chain)

Real-time feeds of competitive information

Market differentiator opportunities with new functionality

Think Psyche-logically

GOAL…Need Support From Internal Innovators

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Sell to Sales

Enhance the company image through tight integration

Reusability creates quicker customer response

CRM integrationMessaging medium

constantly changing… (Lots of opportunity here)

Think Psyche-logically

GOAL…

Have Sales Sell I.T.!

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Show Accounting the beans

Review Accounting Batch Job interfaces

Post-Audit your implementation

Comparable estimating metrics for old-fashioned integration

Establish your plan for future reusability

Think Psyche-logically

GOAL…

Give your CFO the

eyes to see the value of

the new

architecture

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Risks and Cautions

Business Issues• Cost of initial investment• Architecture cant’ be deployed fast enough• Toolset doesn’t solve all ills

Design Issues• Master Data Management needs planning• Effect on operational systems for up-to-the-

minute data requests• Old practices impede approach to designing the

architecture

Risks

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Risks and Cautions

Change Issues• Internal ‘expert’ inhibits momentum• Unsubstantial training on toolset• Inexperienced technology team• ‘Not invented here’ blind spots• ‘Why consider a new approach’

personalities• Feeling that one’s job may be

threatened

Risks

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SummaryTechnologists embrace problems naturally… Organizations

and their systems grown organically… They’ve been doing it for 40 years…

The ability for the organization to grow is directly related to the commitment by the technology team to change

Investments in new architecture are required for organizations positioned to grow quickly

IT budgets do not have to impede the ability to consider a new architecture

Begin a strategy to invest in a new architecture or you will continue to have ‘razor-thin’ margins…

Risks

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Questions & Answers

TeschConsulting.com

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E-Marketplace

6a. Sales reporting3. Check credit

5.

Submit order

4.Record purchase

2.Validate order1.

Enter order

8b. Billing

6c. Notify service department

7. Order parts

6b. Manufacturing

8a. ShippingBusiness Customer

Supplier

This too could be you!