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What is the Value of Architecture. Andrew L Macaulay. Global Head of Architects Community. March 2006. In collaboration with. Microsoft Architect Insight ...
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What is the Value of Architecture
Andrew L MacaulayGlobal Head of Architects Community
March 2006
In collaboration with
Microsoft Architect Insight ConferenceDrive the Debate
March 2006
Copyright © 2006 Capgemini - All rights reserved
2
In collaboration with| Microsoft Architect Insight Conference
Agenda
Introduction
Issues Facing Business
How Can Architecture Help?
What Does Service-Oriented Architecture Add?
Critical Success Factors
Summary
March 2006
Copyright © 2006 Capgemini - All rights reserved
3
In collaboration with| Microsoft Architect Insight Conference
Introduction
What is the true value of architecture? • Cost Reduction? • Risk Reduction?• Improved Business/IT Alignment?• Improved Business (and IT) Agility?
And how does the culture and behaviour of an organisation affect the outcome?
To answer these questions, we need to understand …• What we mean by Architecture• What we mean by Value• And how we might start measuring Value
March 2006
Copyright © 2006 Capgemini - All rights reserved
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In collaboration with| Microsoft Architect Insight Conference
Architecture means different things to different people
Enterprise ArchitectureEnterprise Architecture
BusinessArchitectureBusinessArchitecture
Enterprise ITArchitectureEnterprise ITArchitecture
Enterprise IT Information Systems Architecture
Enterprise IT Information Systems Architecture
Enterprise ITTechnology Infrastructure Architecture
Enterprise ITTechnology Infrastructure Architecture
InformationArchitectureInformationArchitecture
Enterprise
Security A
rchitectureE
nterpriseS
ecurity Architecture
Enterprise
Governance A
rchitectureE
nterpriseG
overnance Architecture
Software Architecture, Network Architecture, Storage Architecture…Software Architecture, Network Architecture, Storage Architecture…
SolutionArchitecture
SolutionArchitecture
March 2006
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Aligning Business Strategy and Project Delivery
Project Delivery Lifecycle
Project Initiation & Start-up
Business Case
Project Mandate
Project & Stage Plans
Project Execution Project Closure
Transition to RunSolution Outline
Solution Design
Build/Test Cycle
Deploy
Enterprise Architecture Governance
Business Strategy
IT Strategy
Business & IT Project
Prioritisation & Planning
Influence choice & timing of projects to ensure progress along the roadmap towards the EA vision
Enterprise Architecture Transition Roadmap
(As-Is to To-Be) Roadmap represents the “route” to realising strategic business & IT goals and the EA vision
Enterprise Business & Information Architecture
Enterprise IS & IT Architecture
Enterprise architecture represents the desiredfuture state of the business & IT landscape
Enterprise architecture establishes and sets the standards by which solutions should be architected, and provides guidance across the project delivery lifecycle
Is the EA roadmap still taking us where we want to go?
Are the target architecture & defined standards still “fit for purpose”?
Ensures “project level” architecture work is properly planned & costed
Is the architecture being complied with in the way we want?
Are projects getting expected value from the architecture?
March 2006
Copyright © 2006 Capgemini - All rights reserved
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In collaboration with| Microsoft Architect Insight Conference
Value is also measured from an individual viewpoint
Increasing Business
Advantage
Increasing Business/IT Alignment
Improving IT/Project
Effectiveness
Reduced IT Complexity
Reducing Cost of IT
CEO
CIO
CFO IT/System Manager Business Manager
Issues Facing Business Today
www.capgemini.com
March 2006
Copyright © 2006 Capgemini - All rights reserved
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Many Business Drivers – Often Conflicting
Cost reduction
More value from IT
More flexible IT
Cheaper solutions and faster
Reduce project failures
Integrated and interoperable information services
Better service from SOE/SOA solutions
Guarantee of Quality
Compliance
…
March 2006
Copyright © 2006 Capgemini - All rights reserved
9
In collaboration with| Microsoft Architect Insight Conference
Business Unit CBusiness Unit C Business Unit DBusiness Unit DBusiness Unit BBusiness Unit BBusiness Unit ABusiness Unit A
Typical Current State – Project-focused Silos
There is rarely an alignment of functional requirements across business units and even less often alignment with service level and other non-functional requirements across the business
Infrastructure and
Governance
Infrastructure and
Governance
Functional Requirements
Version 1
Functional Requirements
Version 1
Business processe
s
Business processe
s
Business processe
s
Business processe
s
Functional Requirements
Version 2
Functional Requirements
Version 2
Business processe
s
Business processe
s
Business processe
s
Business processe
s
Infrastructure and GovernanceInfrastructure and Governance
Business or OrganisationBusiness or Organisation
Processes optimised for specific BU requirements
result in considerable overlap and redundancy
70% of IT projects fail to deliver their expected
results because of this ‘silo’ mentality
With increased complexity and integration of function,
cost of change and maintenance is increasing
Increasing complexity = increasing £££ for each change
Infrastructure and Governance
Infrastructure and Governance
Functional Requirements
Version 3
Functional Requirements
Version 3
Functional Requirements
Version 4
Functional Requirements
Version 4
March 2006
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IT Landscapes often locked in a ‘vicious circle’
Continual business improvement and new initiatives are inhibited by IT due to the slow and costly nature of implementing change
Things have been made worse by projects attempting to deliver in an isolated fashion to bypass inhibitors – but this has only resulted in further constraints for subsequent projects in the medium term
Cycle of:Lower phase 1 cost
Higher phase 2..n costHigher operational cost
Inflexible, slow to change
Phase 1
Phase 2..n
Cost
75%
25%
Operational
"Operational Support"Euphemism
CxOs often cannot understand why relatively straightforward business changes are costly, risky and slow to implement
CxOs often cannot understand why relatively straightforward business changes are costly, risky and slow to implement
How Can Architecture Help?
www.capgemini.com
March 2006
Copyright © 2006 Capgemini - All rights reserved
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The Four Quadrants of Enterprise Architecture Value
Increase Business Agility
Reduce IT Cost
Expand IT Reach
Increase Project Success
You can continuously adapt your business more quickly and with lower risk than your competition by changing your IT
You can significantly improve your success with your investment in IT-enabled business projects
You can deliver new IT solutions and manage your existing IT services at lower cost than your competition
Reduce Cost
IncreaseValue
You can collaborate more effectively than your competition with your customers, suppliers and partners through your IT
March 2006
Copyright © 2006 Capgemini - All rights reserved
13
In collaboration with| Microsoft Architect Insight Conference
Where Does the Value Come From?
ReducingCosts
ReducingCosts
ImprovingProject
Success
ImprovingProject
Success
MoreReactive
to BusinessChange
MoreReactive
to BusinessChange Enabling
CompetitiveAdvantage
EnablingCompetitiveAdvantage
EnterpriseArchitecture
Capability andGovernance
Valueto the
Business
Valueto the
Business
EnterpriseArchitectureEnterprise
Architecture
SolutionArchitectures
SolutionArchitectures
ProjectPortfolio
Management
ProjectPortfolio
Management
BusinessStrategy
and Goals
BusinessStrategy
and Goals
Consistent(or Managed)View of Non-
functional Req
Consistent(or Managed)View of Non-
functional Req
Holistic Viewof Business
& IT Systems
Holistic Viewof Business
& IT Systems
Design withKnowledge ofContext andEnterprise
Design withKnowledge ofContext andEnterprise
Integratingexistingsystemseasier
Integratingexistingsystemseasier
Reducingproject
risk
Reducingproject
risk
Enablingconsolidation
of servers
Enablingconsolidation
of servers
Reducingcomplexityof IS & ITsystems
Reducingcomplexityof IS & ITsystems
IncreasedUnderstandingof the Business
IncreasedUnderstandingof the Business
Technologyand SystemsRoadmaps
Technologyand SystemsRoadmaps
Innovating &leveraging newtechnologies
Innovating &leveraging newtechnologies
Availabilityand reuse of
sharedservices
Availabilityand reuse of
sharedservices
can drive
March 2006
Copyright © 2006 Capgemini - All rights reserved
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Understanding the Different ‘Types’ of Value
Based on Maslow's Hierarchy of Needs
Improved responsiveness to Business Change
Increase flexibility within the Business and IT
Innovation/leveraging of new technology
Reduced costs of environment
Increased project success
Reduced project risk
Leverage new capabilities for competitive advantage
Reduced costs
Architecture can enableArchitecture can enable
Busine
ss Benefit
Busine
ss Benefit
Compliance
What you have to doto be in business
Cost
What you have to doto run your business
Compet-itiveness
SpendSpend
Small %decrease in costsfrees significant %increase in ability
to invest
March 2006
Copyright © 2006 Capgemini - All rights reserved
15
In collaboration with| Microsoft Architect Insight Conference
Info
rmatio
nS
ystems
Tech
no
log
yIn
frastructu
re
Bu
sin
es
s
Info
rmatio
n
Security
Governance
WHY?Contextual
WHAT?Conceptual
HOW?Logical
WITH WHAT?Physical
Taking a Holistic View of the Architecture
Integrated Architecture Framework, version 3.9, Copyright © 2000-2006 Capgemini
March 2006
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Architecture Maturity/Culture Affects Delivery of Value
Level Reduced Cost/Risk
Biz-IT Alignment
Added Value
-1 Not Needed
0 Not Understood
1 Appreciated £
2 Product Standardisation ££
3 Strategy Development ££ £
4 Architecting Projects £££ £
5 Enterprise Architecture Development ££££ ££ ££
6 Enterprise Architecture Service ££££ ££££ ££££
March 2006
Copyright © 2006 Capgemini - All rights reserved
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In collaboration with| Microsoft Architect Insight Conference
Where Does Service-Oriented Architecture fit?
Moving to a Services view of the world …• Fosters reuse• Enables flexible Orchestration rather than fixed process• Allows you to leverage virtualisation and consolidation
Traditional organisation
Tightly coupled processes/systemsStovepipes - Integration “spaghetti”
Tightly coupled processes/systemsStovepipes - Integration “spaghetti”
Services organisation
Loose coupling of processes/systemsService Webs - Standard Interfaces
Loose coupling of processes/systemsService Webs - Standard InterfacesTO
TO
TO
March 2006
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SOA Delivering Business and IT Value
Externally created Value through more efficient
market interaction
Mobility Event Driven Real Innovation ………… etc
Internal Value createdthrough process
redesignInternal Cost
Reduction by shared resources
License costsavings
Platform Rationalisation
Storage Area Networks Server Virtualisation Grid Computing Security
Web Services Business Intelligence Management tools Development Tools Service Orientated Architecture
b
Mobility
Processbased
Service-OrientedInfrastructure
Service-OrientedApplications
Service-OrientedEnterprise
March 2006
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Measuring Value (Quantitive and Qualitative) Examples
£ Reduced Project Risk and Complexity
Reduction in project over-runs both in terms of cost and time without reduction of required scope
£ Improved Project Success
Measure around quality of solution; the delivery on-time and within budget
£ Cost Control and Improved ROI
Measuring ROI of projects over time – there is, however, an investment cost to start this (building reusable services)
£ Reduced Costs for Business As Usual
Operational costs of the IT estate to reflect the total cost of ownership and does not just shift (hide) costs elsewhere
£ Facilitate Delivery of IT Strategy
Progress in the delivery and sustaining of the IT Strategy, which itself will be delivering Value through IT
Improved Business Requirements
This should become visible through better development metrics around faults due to incorrect requirements
Better Alignment with Business
Quality-related feedback from the business, for example through annual surveys
Increased Agility & Competitiveness
IT seen as an enabler and partner with the business and not just a cost and constraint on the business
Improved Business Knowledge
Measure through effect, with the business becoming better connected, business units able to see themselves in context
March 2006
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Case Study: National Assembly of Wales
£500k avoided cost in one year joining up projects and delivering common requirements as corporate services rather than siloed functionality
Currently predicting over £2m of avoided integration cost across 3 projects by taking an enterprise view early in the project lifecycle
The are indications (although not fully quantified yet) from projects that have worked independently to meet siloed needs, that the cost of ignoring the Architecture are orders of magnitude higher than aligning to the Architecture
March 2006
Copyright © 2006 Capgemini - All rights reserved
21
In collaboration with| Microsoft Architect Insight Conference
Capgemini Research: Added Value of Architecture Used Six Sigma methodology for analysis Work to date summarises the first results of
the research of benefits of architecture and other factors on project results. A sample is shown on this page
The results are based on a survey of 30 projects. Currently developing revised figures based on between 100 and 300
A 95% confidence level is used to test the significance of our hypothesis
Quality of the project architec
95% Bonferroni Confidence Intervals for StDevs
2
1
706050403020100
Quality of the project architec
Cost over/ underrun
2
1
100806040200-20-40
F-Test
0,166
Test Statistic 0,05P-Value 0,000
Levene's Test
Test Statistic 2,08P-Value
Test for Equal Variances for Cost over/ underrun
Role of Project Architecture
Quality of the project architec
95% Bonferroni Confidence Intervals for StDevs
2
1
706050403020100
Quality of the project architec
Time over/ underrun
2
1
100806040200-20-40
F-Test
0,234
Test Statistic 0,08P-Value 0,001
Levene's Test
Test Statistic 1,52P-Value
Test for Equal Variances for Time over/ underrun
What was the architecture metho
Quality of the project architec
NoneIAF
3,0
2,5
2,0
1,5
1,0
Boxplot of Quality of the project architec by What was the architecture metho
Role of IAF
Summary
www.capgemini.com
March 2006
Copyright © 2006 Capgemini - All rights reserved
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In collaboration with| Microsoft Architect Insight Conference
Critical Success Factors for Enterprise Architecture
ConnectConnect
Developing an EA Capability is a major change programme that will not happen in a few months (acknowledge/plan for this)
Strong executive sponsorship from within IT and Business
Work collaboratively with both business and IT as partners
Regular targeted communication with both the Business and IT, effectively driving a Marketing Plan
Understand key stakeholders and communicate specifically with them
Make your success and value visible
Developing an EA Capability is a major change programme that will not happen in a few months (acknowledge/plan for this)
Strong executive sponsorship from within IT and Business
Work collaboratively with both business and IT as partners
Regular targeted communication with both the Business and IT, effectively driving a Marketing Plan
Understand key stakeholders and communicate specifically with them
Make your success and value visible
DeliverDeliver
A common language/framework and approach, with supporting tools if appropriate
A clear governance model over projects/Solution Architectures, including sufficient Authority
A pragmatic approach so that you can delivery some results early and you are not seen as just an ivory tower doing strategy stuff
Architecture is a living thing. Use feedback from projects to learn and track the changing priorities and goals in the business
A common language/framework and approach, with supporting tools if appropriate
A clear governance model over projects/Solution Architectures, including sufficient Authority
A pragmatic approach so that you can delivery some results early and you are not seen as just an ivory tower doing strategy stuff
Architecture is a living thing. Use feedback from projects to learn and track the changing priorities and goals in the business
March 2006
Copyright © 2006 Capgemini - All rights reserved
24
In collaboration with| Microsoft Architect Insight Conference
Critical Success Factors for Solutions Architecture
GovernanceGovernance
Work collaboratively with both business and IT as partners
Leverage and conform to the Enterprise Architecture
Work under the right level of EA governance and provide the right level of solution governance to the design/engineering teams
Reuse services and infrastructure wherever possible and appropriate
Work collaboratively with both business and IT as partners
Leverage and conform to the Enterprise Architecture
Work under the right level of EA governance and provide the right level of solution governance to the design/engineering teams
Reuse services and infrastructure wherever possible and appropriate
ApproachApproach
A common language/framework and approach with supporting tools, if appropriate
Solution Architects with the correct mix of Business and IT skills, and subject-matter-specialists available, maybe through a ‘T-model’
A pragmatic approach, knowing where to focus and when to stop (when it is ‘good enough’)
A common language/framework and approach with supporting tools, if appropriate
Solution Architects with the correct mix of Business and IT skills, and subject-matter-specialists available, maybe through a ‘T-model’
A pragmatic approach, knowing where to focus and when to stop (when it is ‘good enough’)
March 2006
Copyright © 2006 Capgemini - All rights reserved
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In collaboration with| Microsoft Architect Insight Conference
Summary
Enterprise Architecture is a journey• The business change to implement the capability, the evolution of
the Architecture itself, the cycle of awareness to acceptance to adoption of the approach, the change it can foster in the business …
Governance, Authority and Sponsorship are critical• Getting a governance model that reflects the corporate culture but
can deliver the goods, together with the authority and support are critical for EA to be able to function – and then deliver value
Communication is key• As with Architecture as a whole, communication of the EA function,
the Architecture and the value is something that needs to become business as usual
Value is ‘in the eye of the beholder’• Value can come in many forms - never forget that you must
understand the business context, culture and stakeholders to be able to really demonstrate value
Andrew L Macaulayandrew.macaulay@capgemini.com
www.capgemini.com
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