2. Agenda
• Know your model and your goals with IT
• Business architecture and strategy
• A prototypical organization
• Prioritization based on cost and value
• Architecture standards
• Differentiated service architecture
• Service management
3. Four types of business operating models
Coordination
•Shared customers, products or suppliers.
•Impact on other business unit transactions.
•Operationally unique business units or
functions.
•Autonomous business management.
•Business unit control over business process
design.
•Shared customer/supplier/product data.
•Consensus processes for designing IT
infrastructure services; IT application decisions
made in business units.
Unification
•Customers and suppliers may be local or
global
•Globally integrated business processes often
with support of enterprise systems
•Business units with similar or overlapping
operations
•Centralized management often applying
functional/process/business unit matrices.
•High level process owners design
standardized processes
•Centrally mandated databases.
Diversification
•Few, if any, shared customers or suppliers.
•Independent transactions.
•Operationally unique business units.
•Autonomous business management.
•Business unit control over business process
design.
•Few data standards across business units.
•Most IT decisions made within business units.
Replication
•Few, if any shared customers.
•Independent transactions aggregated at a
high level.
•Operationally similar business units.
•Autonomous business unit leaders with
limited discretion over process.
•Centralized (or federal) control over
business process design.
•Standardized data definitions but data
locally owned with some aggregation
High
HighLow
Low
Business process standardization
BusinessprocessIntegration
Source: David C. Robertson, Jeanne W. Ross, and Peter Weill. Enterprise Architecture As Strategy. Boston: Harvard Business School Press, 2006.
Operating models of a business can be classified based on the degree of business process
integration and standardization.
4. Business architecture processes
Innovation
Support
PLANBUILDRUN
Demand generation / portfolio planning
Project management
Value realization
IT as co-innovator in business delivery
• Directly adds to product or service
• Customer-facing service applications
• Embedded technology in products
IT as automation of business process
• Indirectly reduces COGS
• Reduces risk from compliance,
satisfaction goals
Typically not a BA function, but
generates data for planning, VR
5. PMO & portfolio
planners
Project managers
(work with non-IT
sponsors)
Project implementers
(often an SI)
CoE’s
BUILD
PLAN
An organization model
Align for managing demand
Service leaders
Operations staff
Trainers, evangelists
Help desk
RUN
Users
Businessunits
External partners (suppliers, down-streams, etc.)
Work processes (sales, R&D, HR, etc.)
demand
External liaisons
BUliaisons
WPliaisons
CIO
CTOCSO
Systems architects
(sub-systems)
Lead/strategic architects
(data, info, app dev, client systems,
SAP, extranet, platforms, integration,
PIO’s)
6. Annual planning model
Aligning different streams of value in a recurring review
Partial information on certain
aspects:
• Cost (estimated)
• Schedule
• Value (differing categories)
• Resources
• Pre-reqs and dependencies
• Impact if not started
• Alignment to major
program/business (maybe
from heatmap)
PROJECT TITLE (excludes normal operations costs and major program AA)
Joint venture IT review
Acquisition integration (small)
Windows platform definition for SAP basis
Sales and cust svc database performance tuning
Business intelligence dashboards from SOR data
Define SLAs for major services
Improve reliability of System X
Automation/monitoring improvments for Major Platform Y
R & D portfolio planning (multiple projects)
Advanced manufacturing portfolio planning (multple projects
Implement Phase 2 of sustainability project
Decrease cost to operate core capabilities by 5%
Next-generation workstation & user segmentation
Mobile app Z
Simplification project for extranet
Onboarded acquisition app reductions & app governance
Intranet rehosting and app hosting platform definition
Manufacturing systems upgrade (cloud?)
7. Core Model Relationships – A Shift in Architecture towards Business
Benefits Dependency Network
How What Why
Business Capability Model
IT Services Model
IT Portfolio Assessment
Conceptual Architecture
Roadmap
WhenValue Model
8. Funding models
Service management tells us…
• How things get paid for, matters – for operations
and projects and “architecture”
• To know if we are being good stewards of these
funds, we tie specific value to projects and
systems (program of change) and we measure
change to current value
• This value has to match the source of funding
well: commodity service may be per adoption
unit, KPI’s may be used for a business project
• Changes to services, and new services imply
change in cost to serve – know these costs
through a CMDB or formal recharge mechanism
• The other piece we need to know is the units
consumed (adoption)
• A tax per user is often abused and hard to get
meaningful numbers out of
• Without meaningful data, we cannot apply
management techniques other than “gut feel”
Source: Gartner, 12 December 2006/ID Number: G00144853
9. Responsible stewards of resources
But we’re comparing apples, oranges and spaceships!
• Differing funding sources and different definitions of value
• Business architects may represent projects with business value (in metrics aligned to VP),
can also dip into or evangelize low-cost commodity services where available, even if not
paid by the business directly
• IT architects represent current commodity services and major programs (like an SAP
migration) with benefit to all users, often focusing on per user cost savings
• External project sponsors may not even have a value proposition in quantitative terms for
many years
• Security & compliance – where do they fit?
• How do I pick a list of projects, then? Pragmatically, in part.
• Pick a balance of demand sources, to maximize return for given resources and schedule
• Just like investing, the S&P 500 is better than trying to pick favorites*
* Don’t worry, favorites (a.k.a. major programs) will still continue. The key is to make sure they get a specific funding “line”
and don’t rob from other areas and we don’t rob from them (blurring other priorities)
10. Guiding IT architecture principles
1. Safety, plant resilience (DR), complies with all regulations
2. Speed to implement (generally favor COTS over custom)
3. Available in country
4. System complexity (including vendor standardization)
5. System longevity (supported lifecycle of 10+ years desired)
6. Standard, adopted technology preferred (existing system cited or direction doc)
7. Overall system cost (including operations & maintenance)
8. Business value case for differentiation/innovation (vice outsourced)
9. Follows industry standards, where not differentiated
Priorities are often ranked by culture, and by operating model (CISR-Coordination,
Unification, Diversification, Replication) as a proxy for financial OM
11. Consistent Core versus an Agile Edge (MSIT)
•Optimize for velocity of
delivery and business
flexibility
Agile Edge
• Evaluation by relevant
governance body for
potential moving to the coreGrey area
• Optimize for re-use and cost
reduction with a focus of
delivering value to more
than one organization
Consistent
Core
• Processes
• Information
• Data
• Platforms/Services
• Architectures
Governance
Architectural Points of View inform situational decisions/governance
12. Risk premium – when do we make exceptions?
• In some areas, we build for flexibility (maybe by using two competing
solutions) or other -ilities. In these cases, we are trading off cost and
speed for a functional solution or building in a risk premium – paying for
the ability to change our mind.
• Speed of change may vary based on domain or work process.
• Domain priorities may vary in a diversified business model – one
product group/business may be moving faster than another business
• Depth (cost) of implementation may vary per domain priority – build
versus buy, extra monitoring/troubleshooting, investment for future
versions, integration with help desk, etc.
14. Feel free to contact the speaker directly with
any follow-up questions
IASA is on the web at http://www.iasaglobal.org
Be sure to check our online listings for courses,
certification events, local architecture
communities, and future webinars.
Thank you for joining us!
