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Welcome
                        to Transformation and Innovation 2007
                                           The Business Transformation Conference


Chip Wilson
Chief Technology Officer
Geniant

Using Capability Modeling to Facilitate
  SOA Adoption



                                                            May 22-24, 2007    1
  The Business Transformation Conference            Washington Dulles Hilton
Four Domains of
                                     Enterprise Architecture




                                                     May 22-24, 2007    2
The Business Transformation Conference       Washington Dulles Hilton
Why Business Architecture


  The forgotten stepchild of
•
  Enterprise Architecture
• The least integrated of the four
• The four domains are interdependent
    • None should be defined in isolation
    • Necessitates a consistent approach to defining Enterprise
      Architecture
    • Need for alignment between business and IT is merely an
      alternative way of expressing this
    Too little effort has been put into creating a common
•
    model that encompasses all aspects of Enterprise
    Architecture

                                                                 May 22-24, 2007    3
                The Business Transformation Conference   Washington Dulles Hilton
What’s Wrong with
                                         Business Process Modeling

• Represents how the business operates
    at a given time
    Documents and communicates how
•
    rather than what
    Processes change frequently
•
    Optimizing for agility implies a desire to
•
    facilitate change
    Aligning IT with a business architecture
•
    that changes frequently sets a company
    up for frequent changes in the IT
    architecture
                                                               May 22-24, 2007    4
              The Business Transformation Conference   Washington Dulles Hilton
What Should We Model Instead?


• Focus on what is accomplished
• Business functions tend to remain
  stable; underlying processes may
  change radically and frequently
• Outcomes of processes typically do not
  fluctuate at all
• The level of abstraction where processes
  are defined by the purpose they serve

                                                           May 22-24, 2007    5
          The Business Transformation Conference   Washington Dulles Hilton
What Is This Approach Based On?


• A basis can be found in business literature
  addressing core competencies
• The competencies of the business are the what,
  regardless of how they are accomplished
• “Capability Modeling” is an
  emerging technique for
  analyzing a business or industry
  and modeling it in terms of
  these competencies

                                                              May 22-24, 2007    6
             The Business Transformation Conference   Washington Dulles Hilton
Capabilities are the
                                        Building Blocks of Business

• Basic outcomes of                         Capability
  business processes
• Encapsulate resources                 People
   • People
                            Technology     Procedures
   • Technology
   • Procedures                 Other Resources
   • Other resources
• Joined together in networks to create higher
  level business processes
• Composed of processes built on lower level
  capabilities

                                                                 May 22-24, 2007    7
             The Business Transformation Conference      Washington Dulles Hilton
Business Unit Capabilities


• Defines a business unit’s purpose
• Provides a black box view                                               SOA

• Hides internal implementation
• A direct input to service design
• Parallel black box approach
 encapsulates a service’s
 implementation behind its interface


                                                             May 22-24, 2007    8
           The Business Transformation Conference    Washington Dulles Hilton
Capability Model Attributes


• Capabilities
  • Purpose
  • Service level expectation
  • Customers
  • Level of granularity
• Relationships
• Boundaries


                                                          May 22-24, 2007    9
         The Business Transformation Conference   Washington Dulles Hilton
Levels of Granularity


• Multiple levels model the business in
  successively finer levels of detail
• Capability Rule of Thumb:
  • Coarse-grained enough that it remains
    constant over time
  • Fine-grained enough that all
    stakeholders understand it



                                                                 May 22-24, 2007    10
           The Business Transformation Conference        Washington Dulles Hilton
Networks of Capabilities


• Relationships are as important to the Capability
  Model as the capabilities themselves
    Dependencies between capabilities and the
  •
    information that passes between them
  • Indirect relationship via a higher level business process
  • Capabilities can serve in an oversight capacity,
    governing execution of other capabilities
  • Capabilities can gather metrics on other capabilities or
    in some way optimize their execution



                                                                  May 22-24, 2007    11
               The Business Transformation Conference     Washington Dulles Hilton
The Business Boundary
                                  Defines The Value Chain


                      Company




                    Outsourced
                     functions



                                                  May 22-24, 2007    12
The Business Transformation Conference    Washington Dulles Hilton
The Physical Boundary
                                   Defines the Corporate Entity

Environmental                                       Outsourced value
                               XYZ, Inc.
                                                     chain functions
 Capabilities




                          Operational
                          Capabilities

      Everything outside the business boundary
                                                              May 22-24, 2007    13
           The Business Transformation Conference     Washington Dulles Hilton
Core Competencies
                                    Define Strategic Capabilities

• Delineate core competencies
  (capabilities) from non-strategic
  capabilities
• Core competencies converge with
  physical boundary in an ideal business
  architecture
  • Retain core competencies within the
    corporate entity
  • Outsource non-strategic capabilities

                                                            May 22-24, 2007    14
           The Business Transformation Conference   Washington Dulles Hilton
Capability Boundary
                                                          Defines the Interface

Outside the capability
  - Black box view of the capability
  - What it does rather than how it does it




                                    Inside the capability
                                          - Implementation of the capability
                                          - Irrelevant to the capability model


                                                                        May 22-24, 2007    15
                 The Business Transformation Conference         Washington Dulles Hilton
Business Context Diagram




                       Bu
                          sin
                             es
                                s
                              Bo
                                un
                                  da
                                     ry




                                                      May 22-24, 2007    16
The Business Transformation Conference        Washington Dulles Hilton
Enabling Agile
                                                       Business Architecture

    Decouple business processes from IT systems




• Allow each to change independently from the other
• Reconfigure rapidly to respond to a changing competitive
  landscape
• Evolve systems on their own lifecycle, without affecting
  business processes

                                                                     May 22-24, 2007    17
              The Business Transformation Conference         Washington Dulles Hilton
Enabling Agile
                                                 Application Architecture

• IT systems must be decoupled from each other

     Allow each system to
   •
     evolve independently of
     others
   • Swap out entire
     systems without
     impacting dependent
     systems

• System interfaces must be decoupled from their
 implementation
                                                                  May 22-24, 2007    18
              The Business Transformation Conference      Washington Dulles Hilton
Benefits of Decoupling

• Flexibility
• Reduced IT development costs
• Facilitates outsourcing non-core
  competencies
• Orchestrating services from multiple
  systems enables business process
  automation
• Business analysts can implement new
  business processes and automate
  existing processes
                                                                May 22-24, 2007    19
            The Business Transformation Conference      Washington Dulles Hilton
Benefits of a
                                                  Single Point of Contact

• Consistent self-service experience for all
• Keep systems and processes that provide
  competitive advantage
• External users receive self-service
  environment designed specifically for
  their needs
• Improves employee visibility into
  company operation
• Facilitates collaboration between remote
  teams

                                                                  May 22-24, 2007    20
             The Business Transformation Conference       Washington Dulles Hilton
Requirements for Success




Executive Sponsorship
Communication between Business and IT
Business Focused IT




                                                         May 22-24, 2007    21
        The Business Transformation Conference   Washington Dulles Hilton
Executive Sponsorship

• An SOA adoption program needs
    appropriate sponsorship
    Requires a strong vision grounded in
•
    SOA best practices
                                                                            SOA
    Must be led from the top down
•
    Create a common vocabulary between
•
    business and IT
    Capability Modeling creates
•
    tremendous synergies – aligns the
    entire Enterprise Architecture stack
    from top to bottom
                                                                      May 22-24, 2007    22
              The Business Transformation Conference          Washington Dulles Hilton
Communication Between
                                                       Business and IT
  IT must understand the strategic business direction
•
• An ongoing dialogue on business process will:
    • Provide a business context for Enterprise Architecture
    • Give the business community a suite of tools to automate,
      improve, or even redesign business processes
    Business processes:
•
    • Are an important part of the alignment of IT and business
    • Should not be the basis for a common understanding




                                                                 May 22-24, 2007    23
                The Business Transformation Conference   Washington Dulles Hilton
Ensuring IT is Business Focused

• The technical organization needs to:
   • Have a solid grounding in the company’s
     history
   • Understand why the business operates
     the way it does
   • Identify opportunities for greater efficiency
• Technical community must be willing and able
  to keep communication channels open to:
     Keep abreast of the competitive landscape and
   •
     the operation of the business
   • Identify opportunities to leverage technology to
     further business strategy
                                                                May 22-24, 2007    24
               The Business Transformation Conference   Washington Dulles Hilton
Adoption Process


• Enterprise Assessment
  • Current State – Identify
    systems, processes and capabilities
  • Future State – Envision ideal
    systems and capabilities
  • Gap Analysis – Develop a roadmap for
    aligning the IT environment with the
    business objectives
• Implement the roadmap

                                                               May 22-24, 2007    25
            The Business Transformation Conference     Washington Dulles Hilton
Enterprise Application Map




                                                 May 22-24, 2007    26
The Business Transformation Conference   Washington Dulles Hilton
Read More




                                    • Align Journal
                                    • Jan/Feb 2007 issue




                                                    May 22-24, 2007    27
The Business Transformation Conference      Washington Dulles Hilton
Thank You
Chip Wilson
Chief Technology Officer
Geniant
cwilson@geniant.com
www.geniant.com




                                                   May 22-24, 2007    28
  The Business Transformation Conference   Washington Dulles Hilton

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Using Capability Modeling to Facilitate SOA Adoption

  • 1. Welcome to Transformation and Innovation 2007 The Business Transformation Conference Chip Wilson Chief Technology Officer Geniant Using Capability Modeling to Facilitate SOA Adoption May 22-24, 2007 1 The Business Transformation Conference Washington Dulles Hilton
  • 2. Four Domains of Enterprise Architecture May 22-24, 2007 2 The Business Transformation Conference Washington Dulles Hilton
  • 3. Why Business Architecture The forgotten stepchild of • Enterprise Architecture • The least integrated of the four • The four domains are interdependent • None should be defined in isolation • Necessitates a consistent approach to defining Enterprise Architecture • Need for alignment between business and IT is merely an alternative way of expressing this Too little effort has been put into creating a common • model that encompasses all aspects of Enterprise Architecture May 22-24, 2007 3 The Business Transformation Conference Washington Dulles Hilton
  • 4. What’s Wrong with Business Process Modeling • Represents how the business operates at a given time Documents and communicates how • rather than what Processes change frequently • Optimizing for agility implies a desire to • facilitate change Aligning IT with a business architecture • that changes frequently sets a company up for frequent changes in the IT architecture May 22-24, 2007 4 The Business Transformation Conference Washington Dulles Hilton
  • 5. What Should We Model Instead? • Focus on what is accomplished • Business functions tend to remain stable; underlying processes may change radically and frequently • Outcomes of processes typically do not fluctuate at all • The level of abstraction where processes are defined by the purpose they serve May 22-24, 2007 5 The Business Transformation Conference Washington Dulles Hilton
  • 6. What Is This Approach Based On? • A basis can be found in business literature addressing core competencies • The competencies of the business are the what, regardless of how they are accomplished • “Capability Modeling” is an emerging technique for analyzing a business or industry and modeling it in terms of these competencies May 22-24, 2007 6 The Business Transformation Conference Washington Dulles Hilton
  • 7. Capabilities are the Building Blocks of Business • Basic outcomes of Capability business processes • Encapsulate resources People • People Technology Procedures • Technology • Procedures Other Resources • Other resources • Joined together in networks to create higher level business processes • Composed of processes built on lower level capabilities May 22-24, 2007 7 The Business Transformation Conference Washington Dulles Hilton
  • 8. Business Unit Capabilities • Defines a business unit’s purpose • Provides a black box view SOA • Hides internal implementation • A direct input to service design • Parallel black box approach encapsulates a service’s implementation behind its interface May 22-24, 2007 8 The Business Transformation Conference Washington Dulles Hilton
  • 9. Capability Model Attributes • Capabilities • Purpose • Service level expectation • Customers • Level of granularity • Relationships • Boundaries May 22-24, 2007 9 The Business Transformation Conference Washington Dulles Hilton
  • 10. Levels of Granularity • Multiple levels model the business in successively finer levels of detail • Capability Rule of Thumb: • Coarse-grained enough that it remains constant over time • Fine-grained enough that all stakeholders understand it May 22-24, 2007 10 The Business Transformation Conference Washington Dulles Hilton
  • 11. Networks of Capabilities • Relationships are as important to the Capability Model as the capabilities themselves Dependencies between capabilities and the • information that passes between them • Indirect relationship via a higher level business process • Capabilities can serve in an oversight capacity, governing execution of other capabilities • Capabilities can gather metrics on other capabilities or in some way optimize their execution May 22-24, 2007 11 The Business Transformation Conference Washington Dulles Hilton
  • 12. The Business Boundary Defines The Value Chain Company Outsourced functions May 22-24, 2007 12 The Business Transformation Conference Washington Dulles Hilton
  • 13. The Physical Boundary Defines the Corporate Entity Environmental Outsourced value XYZ, Inc. chain functions Capabilities Operational Capabilities Everything outside the business boundary May 22-24, 2007 13 The Business Transformation Conference Washington Dulles Hilton
  • 14. Core Competencies Define Strategic Capabilities • Delineate core competencies (capabilities) from non-strategic capabilities • Core competencies converge with physical boundary in an ideal business architecture • Retain core competencies within the corporate entity • Outsource non-strategic capabilities May 22-24, 2007 14 The Business Transformation Conference Washington Dulles Hilton
  • 15. Capability Boundary Defines the Interface Outside the capability - Black box view of the capability - What it does rather than how it does it Inside the capability - Implementation of the capability - Irrelevant to the capability model May 22-24, 2007 15 The Business Transformation Conference Washington Dulles Hilton
  • 16. Business Context Diagram Bu sin es s Bo un da ry May 22-24, 2007 16 The Business Transformation Conference Washington Dulles Hilton
  • 17. Enabling Agile Business Architecture Decouple business processes from IT systems • Allow each to change independently from the other • Reconfigure rapidly to respond to a changing competitive landscape • Evolve systems on their own lifecycle, without affecting business processes May 22-24, 2007 17 The Business Transformation Conference Washington Dulles Hilton
  • 18. Enabling Agile Application Architecture • IT systems must be decoupled from each other Allow each system to • evolve independently of others • Swap out entire systems without impacting dependent systems • System interfaces must be decoupled from their implementation May 22-24, 2007 18 The Business Transformation Conference Washington Dulles Hilton
  • 19. Benefits of Decoupling • Flexibility • Reduced IT development costs • Facilitates outsourcing non-core competencies • Orchestrating services from multiple systems enables business process automation • Business analysts can implement new business processes and automate existing processes May 22-24, 2007 19 The Business Transformation Conference Washington Dulles Hilton
  • 20. Benefits of a Single Point of Contact • Consistent self-service experience for all • Keep systems and processes that provide competitive advantage • External users receive self-service environment designed specifically for their needs • Improves employee visibility into company operation • Facilitates collaboration between remote teams May 22-24, 2007 20 The Business Transformation Conference Washington Dulles Hilton
  • 21. Requirements for Success Executive Sponsorship Communication between Business and IT Business Focused IT May 22-24, 2007 21 The Business Transformation Conference Washington Dulles Hilton
  • 22. Executive Sponsorship • An SOA adoption program needs appropriate sponsorship Requires a strong vision grounded in • SOA best practices SOA Must be led from the top down • Create a common vocabulary between • business and IT Capability Modeling creates • tremendous synergies – aligns the entire Enterprise Architecture stack from top to bottom May 22-24, 2007 22 The Business Transformation Conference Washington Dulles Hilton
  • 23. Communication Between Business and IT IT must understand the strategic business direction • • An ongoing dialogue on business process will: • Provide a business context for Enterprise Architecture • Give the business community a suite of tools to automate, improve, or even redesign business processes Business processes: • • Are an important part of the alignment of IT and business • Should not be the basis for a common understanding May 22-24, 2007 23 The Business Transformation Conference Washington Dulles Hilton
  • 24. Ensuring IT is Business Focused • The technical organization needs to: • Have a solid grounding in the company’s history • Understand why the business operates the way it does • Identify opportunities for greater efficiency • Technical community must be willing and able to keep communication channels open to: Keep abreast of the competitive landscape and • the operation of the business • Identify opportunities to leverage technology to further business strategy May 22-24, 2007 24 The Business Transformation Conference Washington Dulles Hilton
  • 25. Adoption Process • Enterprise Assessment • Current State – Identify systems, processes and capabilities • Future State – Envision ideal systems and capabilities • Gap Analysis – Develop a roadmap for aligning the IT environment with the business objectives • Implement the roadmap May 22-24, 2007 25 The Business Transformation Conference Washington Dulles Hilton
  • 26. Enterprise Application Map May 22-24, 2007 26 The Business Transformation Conference Washington Dulles Hilton
  • 27. Read More • Align Journal • Jan/Feb 2007 issue May 22-24, 2007 27 The Business Transformation Conference Washington Dulles Hilton
  • 28. Thank You Chip Wilson Chief Technology Officer Geniant cwilson@geniant.com www.geniant.com May 22-24, 2007 28 The Business Transformation Conference Washington Dulles Hilton