Are Your Architecture plans meeting business needs?

1Enterprise Data World 20103/16/2010

How Do You Know Your Architecture Plans are

Meeting Business Needs?Techniques and Guidance

William A. Wimsatt, Wells Landers Group


Agenda

• Introduction• Defining Value & Success – in the Business

Perspective• Identifying Business Value of Enterprise

Architecture• Measuring Value & Demonstrating Success• Plan for Long-term Incremental Success


Agenda

• Introductions• Historical View of Enterprise Architecture• The Value of EA to the Organization• The Value of EA definition Efforts• Quality of Data Collected


Wells Landers Group, LLC

Small Business Professional Services firm• Federal and Commercial customer base• Sister company to TVAR Solutions

Technical Architecture & AnalysisTechnical Architecture & AnalysisTechnical Architecture & Analysis

Business Architecture & Analysis

• Strategic Planning• Actionable Metrics Derivation• Business Requirements

Technical Architecture, Analysis & Development

• Enterprise & Tech Architecture• Data Warehouse Design• Data Mart Design• ETL Planning & Deployment• System Integration• Development Services (Web, SOA)

IT Infrastructure • Data Center Infrastructure• Storage Management• Services Delivery


IT Paradox

Help Enable Growth

Positive Growth

Help Improve Margins

Flat Growth

Help Reduce Costs

Negative Growth

More CapacityMore CapabilityMore CapacityMore Capability

Find Cost ReductionsFind EfficienciesFind Cost ReductionsFind Efficiencies

Find OpportunitiesFind Why?Cost Reductions

Find OpportunitiesFind Why?Cost Reductions

IT Budget

Revenue

Demand for IT Services

Martin Curley, Intel Corp.


Architecture Viewpoint (Design)

Enterprise Architecture identifies corporate systems, their key properties, and their interrelationships, and plans for and guides the evolution of the enterprise systems to support and enable the evolution of the enterprise in its pursuit of strategic advantage.

Enterprise Architecture identifies corporate systems, their key properties, and their interrelationships, and plans for and guides the evolution of the enterprise systems to support and enable the evolution of the enterprise in its pursuit of strategic advantage.


The Integrated Enterprise


Enterprise Architecture

• EA Value• EA provides the framework and

language to make the critical link between the strategy, mission requirements, processes, skill sets, and the technology needed to enable the business and accomplish an organization’s mission *

• EA Process and Products• Process – e.g. Mission Thread

Analysis, Intelligence Planning• Product – e.g. mission architectures;

operational & system views; mgmt decision support reports; Functional Requirements Documents (FRD); assessments of gaps, shortfalls, and duplicative investments

“An EA is the explicit description and documentation of the current and desired relationships among business and management processes and information technology.”

Current State

Business Process

Organizational Relationships

Data

IT Capabilities

Target State

Business Process

Organizational Relationships

Data

IT Capabilities

Transition Plans


Business Value

• So what is of value to “The Business”?• How’s that different from what “IT” values?

– Isn’t “IT” part of “The Business” as a Strategic Member?


Business Values

• What Is of Value to “The Business” (and to IT as well – as a Business Partner)– Meeting Organizational Strategic Goals– Meeting Business Unit Goals and Needs (in alignment

with Strategic Goals)– Insuring Positive Cash Flow– Meeting Regulatory Requirements– Attaining Personal Business Goals

• When bonus plans specify performance goals

• These all have a dimension of Perspective


How Business Defines Value

• Increase Business Value– Revenue/Budget

• Improve Customer Demand• Increase value - what public is willing to pay

– Cost Management• Help reduce cost for a given effort

– Efficiency Increase• Do more with less

– Sustainability• Is upgrade really needed? Why not extend existing system’s

life?

– Governance• What can investment do for governance?


Meaning of Value … It Depends!

• Value Defined - a study of perspectives– What is valuable depends on Who is valuing

• What IT values likely is different from what Operations, Logistics, Finance, etc., separately find of value

• Perspective is Very Important for Enterprise Capital Investment Decisions– EA promises to positively affect and deliver value to

the entire Enterprise• Thus, EA is an Enterprise Capital Investment

– So, who are it’s Stakeholders? - “The Business”– And What Does “The Business” Find of Value?


Business Value Chain

• Porter Value Chain– How company creates

customer & shareholder value

– Similar model for non-profit & government entities

– Value Creation:• Transform raw materials

into finished products or service of “value”

• Margin: perceived value exceeds cost to produce

• Two Key Elements:– Primary (Core) Business

Areas– Support Business Areas

• For Enterprise Architecture to be Valued by the Business, it must support all Business Areas

Support Business Areas

Primary (Core) Business Areas

Margin

Marg

in

Infrastructure

HR Management

Information Technology

Procurement

Inbound Logistics Operations Outbound Logistics Marketing & Sales Service

Inventory Space Compliance

Facilities Management

Finance & Accounting

PayrollHuman

ResourcesEmployee Benefits EAP

Workmans Comp Timekeeping

Enterprise Architecture

Web Dev

Help Desk PMO

Network Engineering

Data Center Operations

BI Sys Dev & Support

Application Test & QC

Data Quality

Training

Administrative Support

Legal Services

Public /Investor Relations

Order Desk

Vendor Relations

Order Management Office Supplies Tool & Die

Receiving

Inventory Management

Sales

Pack & Ship

Marketing

Web Ordering

Returns Processing

Customer Relations

Kitting

Die Casting

Standard Assembly

Custom Assembly

Quality Control

Picking

Product Development


Delivering Business Value

• Support Core and Support Value Chain Business Areas together

• Improve Positive Cash Flow– Provide means to increase revenues, decrease costs

• Improve Efficiency• Improve Sustainability

– Extend the life of assets that today continue to deliver value exceeding the cost of replacement

• Improve Governance• Don’t under-estimate value of knowing how

Executives make their bonuses!


EA Delivering Business Value

• Extend Principles for Delivering Business Value to Enterprise Architecture– EA both a Discipline and Plan supported by one or

more systems and processes• Becomes an organizational change agent when used

effectively• Enables rapid adaptation to changing business

environments• EA is not just an IT tool, nor is it solely about

technology


Demonstrating EA Value•Mission Performance–Supporting Core & Support Value Chain Business Areas together?

–What Business changes are really needed?

–Where are dramatic performance improvements? How do I know?

–Opportunities & risks for program collaboration, data sharing, and shared business processes?

–Governance Improvements?

•Investment Performance–Do investments support Core/Value Chain Business Areas?

–Do investments supporting critical business needs?

•HR Performance–What is the target level of resources I need to have in place, and where?

–How can I move back office resources into mission functions?

•IT Performance–Where do I have redundancies? Inefficiencies?

–Where am I over/under invested? How do I know?

–What metrics do I need for measuring business value?


Business Alignment Model

S t r a t e g i e s

R i s k M a n a g e m e n t

I n f r a s t r u c t u r e

L i f e c y c l e &

E n v i r o n M g t

B u s i n e s s V a l u e G o v e r n a n c e

I n i t i a t i v e s

M e t a d a t a

C o m p o s i t i o n

B u s i n e s s

S e r v i c e s

R o a d m a p s

F S A B l u e p r i n t sI n v e s t m e n t s

B u d g e t sR e p o s i t o r i e s

A c t i v i t y /

E v e n t M g t

B u s i n e s s

L o g i c

B u s i n e s s

P r o c e s s e s

M e s s a g i n g S e c u r i t y

T e c h n i c a l

G o v e r n a n c e

S e r v i c e s A r c h i t e c t u r e

C o m m P l a n s B u s i n e s s C o n t e x t

S t r a t e g i e s

R i s k M a n a g e m e n t

I n f r a s t r u c t u r e

L i f e c y c l e &

E n v i r o n M g t

B u s i n e s s V a l u e G o v e r n a n c e

I n i t i a t i v e s

M e t a d a t a

C o m p o s i t i o n

B u s i n e s s

S e r v i c e s

R o a d m a p s

F S A B l u e p r i n t sI n v e s t m e n t s

B u d g e t sR e p o s i t o r i e s

A c t i v i t y /

E v e n t M g t

B u s i n e s s

L o g i c

B u s i n e s s

P r o c e s s e s

M e s s a g i n g S e c u r i t y

T e c h n i c a l

G o v e r n a n c e

S e r v i c e s A r c h i t e c t u r e

C o m m P l a n s B u s i n e s s C o n t e x t

S e r v i c e

O r i e n t e d

A r c h i t e c t u r e

( S O A )

E n t e r p r i s e


( E A )

S e r v i c e

O r i e n t e d


( S O A )

E n t e r p r i s e


( E A )

T e c h n i c a l , I n f o

& S o f t w a r e

A r c h i t e c t u r e s

S o l u t i o n

M a n a g e m e n t

B u s i n e s s


V a l u e

M a n a g e m e n t

T e c h n i c a l , I n f o

& S o f t w a r e

A r c h i t e c t u r e s

S o l u t i o n

M a n a g e m e n t

B u s i n e s s


V a l u e

M a n a g e m e n t


Business Decision Axes

Business Value

IT E

ffic

ienc

y

Fina

ncia

l

Attrac

tiven

ess

How well the investment will use or enhance the existing infrastructure (Y Axis)How well the investment will use or enhance the existing infrastructure (Y Axis)

The corporate impact of an investment on business strategy and priorities. (X Axis)

The corporate impact of an investment on business strategy and priorities. (X Axis)

The financial aspects of the investment including level of investment required, cost/benefit ratio, and net present value. (Z Axis)

The financial aspects of the investment including level of investment required, cost/benefit ratio, and net present value. (Z Axis)


Business Intelligence

Business Intelligence describes a set of concepts and methods to improve business decision making by using fact-based support systems

•Dashboards

•Executive Information Systems

•Reports

BI Demands Another Dilbert!


BusinessProcess

System

PolicyFDE

Scope

Process

Application

Entity B/F/S/T Requirement

Organization

Table

Component Node

Objective

Data Flow

Role

Location

Project

Architecture

PPM

Project Portfolio& AnalysisIntegrate

across sources of record

Integrate across sources of record



Measuring the Efficiency of the Business Architecture

• Multiple Dimensions of Measurement• Architectural Analysis based on Qualitative and Quantitative measures


Business Viewpoint (Decide/Inform)


Data Dimension

242424


Dimensions of Measuring Data

Revenue ImpactoInability to identify and manage quota gapsoIncreased difficulty to identify high net worth customers by locationoMissing information for sales reps (products) impacts cross-sellingExposure/Compliance ImpactoIncreased revenue leakageoNot meeting “Do not solicit” complianceoRegulatory audits are ad hoc and unpredictableoIncreased difficulty identifying and selling customer loyalty discounts correctlyProductivity ImpactoMarketing analysts spend 75-80% of their time accumulating data and building reportsoLoss of manager time spent manually entering dataoInaccurate counts leads to time spent reconciling reportsoNo “early warning” for key indicators and metricsOperational Efficiency ImpactoIncreased costs and complexity of cleansing data or processing corrections (“25 step process”)oErrors in systems introduce need for significant rewind and reworkoNo reduction in licensing costs for address standardization and correctionoNeed manual data cleanup processes outside business streamCustomer Experience ImpactoIncreased time to find all information for customer due to data accessoInability to provide consistent view of billing to customers


Data Quality reduxGiGo: garbage in, garbage out‘Cos it’s in the computer, don’t mean it’s right

It’s not the things you don’t know that matter, it’s the things you know that aren’t so.

Will Rogers, Famous Okie GI specialist

“But there are also unknown unknowns: the ones we don't know we don't know.” Donald Rumsfeld

“Fast is fine, but accuracy is everything.” Wyatt Earp


27

CORRECT - The fields are complete, valid, accurate data, and correct for that transaction (e.g. BT does not enter their own name and address when they intend to resell the equipment)

ACCURATE - The fields do not contradict (e.g. the city is not Moscow and the country UK or the Company is BT but the address is the end user’s)

VALID -The fields are filled with valid entries (e.g. address line 1 does not contain “TBD” or the company name is not “Unknown”)

COMPLETE - The required fields are filled with data

At What cost or value to the business? (another axis?)

At What cost or value to the business? (another axis?)

Metrics for Quality End User Data –

Building Blocks


Data Principles at a glance

Data is an asset

Data is accessible

Data Privacy

Data Security

Data Definitions &Common Vocabulary

Data Trustee

Data Quality

Single Source Of Truth

Data Steward



Systems Dimension

303030


Systems Model



System Application Analysis




Process Dimension

363636


Business Process Models


Measure & Analyze

383838


Determining the IntangiblesTools such as Survey Questionnaires, and pair comparisons are used to capture non deterministic values of areas such as risk, and efficiency


Determining the Intangibles

The IT Portfolio is composed of the Application Portfolio and the Project Portfolio. Each can be developed separately and then analyzed as a whole to assure the best enterprise fit.

41Enterprise Data World 20103/16/20109/18/2009 TVAR Solutions/Wells Landers Group Proprietary

Effective Arch. and Portfolio Measurement - not point-in-time, but how well you do over time. You should be able to ask questions such as:“How is value tracking overtime versus efficiency and risk?”


Long Term Plan

• Long-term planning – advance EA Maturity– Plan for next maturity level – Increase Value

Incrementally

• Revisit BusinessValueContributors– Adjust with

changes in Business

StrategicEnterprise

Focus

IT-CentricFocus

Admiting Chaos – Need for

Managing IT Assets

Visualize Dependencies , Relationships

Implement EA Processes ,

Procedures , & Methodologies

EA Used for Managing

Business & IT Assets

Strategic EA –

Business Enablement & Optimization

Stage 0

Stage 1

Stage 2

Stage 3

Stage 4


Do We Have Alignment?

Objectives?

Processes?

Strategies?

Value?

Objectives?

Processes?

Strategies?

Value?

IT Projects?

Application Portfolio?

Technical Infrastructure

IT Costs?

IT Projects?

Application Portfolio?

Technical Infrastructure

IT Costs?

Business IT…does business mean? …does IT mean?

Business Unit Viewpoint?

Finance Viewpoint?

CED Viewpoint?


Inventory (Build and Maintain Inventory) Application identity and basic information

Financial (Analyze and Manage Portfolio) Detailed application-level costs and cost-effectiveness analyses

Assessment (Analyze and Manage Portfolio)

Risk, Operational Performance, Architectural Fit

Alignment (Optimize Portfolio) Process Inventory, contribution, function association Core Business Drivers, priorities, process

contribution

Level I

(Ste

p 1

)

Level II

(S

tep

s 2

an

d 3

)

Level II

I (S

tep

s 2

an

d 3

)

Level IV

(S

tep

4)

InitialDeploymentFocus

Portfolio Management Maturity


BusinessProcess

System

PolicyFDE

Integrated Business Architecture


Demonstrating Architecture Value

• Identify Business Value Contributors of Architecture• Set Business Value Goals to obtain• Determine How, When, and for Who to Measure

– Be sure to tailor measurement for each stakeholder

• Define Actionable Metrics– What Needs Attention– What to Do– Who To Call

• Measure, Map Progress, Attend to Constraints– Regularly Review with Stakeholders– Meeting Their business value needs demonstrates Success

48Enterprise Data World 20103/16/20109/18/2009 TVAR Solutions/Wells Landers Group Proprietary

Questions & Follow-UpBill [email protected] 318 5550