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Are Your Architecture plans meeting business needs?

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A presentation from Enterprise Data World (DAMA) on how to measure the value of your architecture.

A presentation from Enterprise Data World (DAMA) on how to measure the value of your architecture.

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  • 1. How Do You Know Your Architecture Plans are Meeting Business Needs? Techniques and Guidance William A. Wimsatt, Wells Landers Group
  • 2. 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
  • 3. Agenda
    • Introductions
    • Historical View of Enterprise Architecture
    • The Value of EA to the Organization
    • The Value of EA definition Efforts
    • Quality of Data Collected
  • 4. Wells Landers Group, LLC
    • Small Business Professional Services firm
      • Federal and Commercial customer base
      • Sister company to TVAR Solutions
    Technical Architecture & Analysis Technical Architecture & Analysis Technical 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
  • 5. IT Paradox More Capacity More Capability Find Cost Reductions Find Efficiencies Find Opportunities Find Why? Cost Reductions Martin Curley, Intel Corp. Help Enable Growth Positive Growth Help Improve Margins Flat Growth Help Reduce Costs Negative Growth IT Budget Revenue Demand for IT Services
  • 6. 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.
  • 7. The Integrated Enterprise
  • 8. 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.” Transition Plans Current State Business Process Organizational Relationships Data IT Capabilities Target State Business Process Organizational Relationships Data IT Capabilities
  • 9. 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?
  • 10. 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
  • 11. 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?
  • 12. 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?
  • 13. 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
  • 14. 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!
  • 15. 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
  • 16. 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?
  • 17. Business Alignment Model
  • 18. Business Decision Axes Business Value IT Efficiency Financial Attractiveness 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 financial aspects of the investment including level of investment required, cost/benefit ratio, and net present value. (Z Axis)
  • 19. 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!
  • 20. Scope Integrate across sources of record Business Process System Policy FDE Process Application Entity B/F/S/T Requirement Organization Table Component Node Objective Data Flow Role Location Project Architecture PPM Project Portfolio & Analysis
  • 21.  
  • 22. Measuring the Efficiency of the Business Architecture
    • Multiple Dimensions of Measurement
    • Architectural Analysis based on Qualitative and Quantitative measures
  • 23. Business Viewpoint (Decide/Inform)
  • 24. Data Dimension
  • 25. Dimensions of Measuring Data
    • Revenue Impact
    • Inability to identify and manage quota gaps
    • Increased difficulty to identify high net worth customers by location
    • Missing information for sales reps (products) impacts cross-selling
    • Exposure/Compliance Impact
    • Increased revenue leakage
    • Not meeting “Do not solicit” compliance
    • Regulatory audits are ad hoc and unpredictable
    • Increased difficulty identifying and selling customer loyalty discounts correctly
    • Productivity Impact
    • Marketing analysts spend 75-80% of their time accumulating data and building reports
    • Loss of manager time spent manually entering data
    • Inaccurate counts leads to time spent reconciling reports
    • No “early warning” for key indicators and metrics
    • Operational Efficiency Impact
    • Increased costs and complexity of cleansing data or processing corrections (“25 step process”)
    • Errors in systems introduce need for significant rewind and rework
    • No reduction in licensing costs for address standardization and correction
    • Need manual data cleanup processes outside business stream
    • Customer Experience Impact
    • Increased time to find all information for customer due to data access
    • Inability to provide consistent view of billing to customers
  • 26. Data Quality redux GiGo: 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. Metrics for Quality End User Data – Building Blocks Difficult to Measure Complete Valid Accurate Quality of Data Correct 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?)
  • 28. Data Principles at a glance Single Source Of Truth Data is an asset Data is accessible Data Privacy Data Security Data Definitions & Common Vocabulary Data Trustee Data Quality Data Steward
  • 29.  
  • 30. Systems Dimension
  • 31. Systems Model
  • 32.  
  • 33. System Application Analysis
  • 34.  
  • 35.  
  • 36. Process Dimension
  • 37. Business Process Models
  • 38. Measure & Analyze
  • 39. Determining the Intangibles Tools such as Survey Questionnaires, and pair comparisons are used to capture non deterministic values of areas such as risk, and efficiency
  • 40. 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.
  • 41. 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?”
  • 42. Long Term Plan
    • Long-term planning – advance EA Maturity
      • Plan for next maturity level
      • Increase Value Incrementally
    • Revisit Business Value Contributors
      • Adjust with changes in Business
  • 43. Example EA Maturity Stages Stage Organization Characteristics Characteristic EA Activities & Benefits 0 Chaos – no IT architecture or architecture management; No one knows about, is responsible, or knows where to look for all business processes, applications, data sources, technical components, etc. None 1 Basic application and data architectures captured using a common modeling tool or graphical diagramming tool. Architectures may exist in different files and different servers. However, everyone generally knows who to contact. Some business processes are captured. IT able to visualize major dependencies and relationships, though the visualization step may be tedious and time consuming.
    • Major applications modeled in Visio; Able to identify major applications
    • Primary data sources modeled in Visio or a system architecture tool (i.e., Erwin); Able to identify major data elements for information consumption
    2 Basic EA processes, procedures and methodologies are implemented and practiced. Primary high-value applications, data and business processes are documented using more sophisticated tools.
    • Same as Stage 1 PLUS:
    • Common methodologies and best practices documented
    • Primary data sources and applications modeled in common EA tool; Easy Access
    • High value business processes documented; Easy Access
    3 EA used by Business to manage assets and plan future acquisitions. EA is implemented with clear business purpose and goals. High-value processes, applications and data are mapped into common EA repository with relevant architecture details; Financials associated with each asset. Gaps between current and desired future states easily visualized; reports identify compliance with EA initiatives and procedures. Business processes, applications and data inter-dependencies mapped and visualized.
    • Same as Stage 2 PLUS:
    • High-value business processes, applications and data models integrated and captured in common repository; dependencies modeled
    • Metadata used by business to manage, plan
    • Dashboards display EA metrics of value
    • All EA activities have clear purpose, add business value
    4 EA is Organizational Change Agent; enables rapid adaptation to rapidly changing market. Used for mapping , planning future enterprise. Architecture enables new business ventures; new acquisitions are integrated seamlessly; Optimization is a daily activity - candidate process, application and data candidates optimized; Integrated EA & portfolio management aligns architecture to corporate strategy; processes inventoried for contribution and function association; core business drivers identified, prioritized, and correlated to contributing processes
    • Same as Stage 3 PLUS:
    • Senior Execs use EA dashboards for monitoring progress toward strategy; use for planning new strategies;
    • IT uses EA data reports to optimize for revenue, cost, efficiency;
    • EA reports identify gaps between current/future
    • Integrated portfolio updated instantaneously with changed planning, strategies, applications, data, processes
  • 44. Do We Have Alignment? Objectives? Processes? Strategies? Value? IT Projects? Application Portfolio? Technical Infrastructure IT Costs? Business IT … does business mean? … does IT mean? Business Unit Viewpoint? Finance Viewpoint? CED Viewpoint?
  • 45. Portfolio Management Maturity
    • 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 (Step 1) Level II (Steps 2 and 3) Level III (Steps 2 and 3) Level IV (Step 4) Initial Deployment Focus
  • 46. Integrated Business Architecture Business Process System Policy FDE
  • 47. 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
  • 48. Questions & Follow-Up
    • Bill Wimsatt
    • [email_address]
    • 720 318 5550