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EA Roadmapping

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This is a presentation I gave at the October 2007 Enterprise Architectures Conference. The presentation covers approache sto developing multi-year roadmaps for implementing business strategy.

This is a presentation I gave at the October 2007 Enterprise Architectures Conference. The presentation covers approache sto developing multi-year roadmaps for implementing business strategy.

Published in Business , Technology
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  • @hs_2050 'showing' the capabilities per application IS difficult. You need to consider that the connection is via the strategies and tactics. Then think of TWO different mappings

    1) map the tactics to the business capabilities. You can have a lot of these discreet strategies and tactics (I usually have between 150 and 500). A capability map is excellent for this. You need the list of strategy and tactic statements as rows in a spreadsheet, list the capabilities as columns (use a higher level of capabilities - keep it under 30 or so), then, for each row, mark which capabilities are impacted by the strategy or tactic. You can then use the capability map as a fort of heat map. Color in each capability based on the number of strategies and tactics that impact each capability. Then, at a glance you can tell which areas are most impacted.

    2) map the strategies and tactics to the applications. Similar to above, create a spreadsheet where the rows contain the discreet strategy and tactics statements. List the applications as the columns. Then mark which applications have to be changed in order to implement each strategy and tactics. Alternatively, you can take the opportunity to mark down the level of difficulty in changing each application to enable the specific strategy or tactic. Very helpful in building your high level business case.

    Neither of these provides a direct mapping of capabilities to applications. My best attempt at that has been listing the business capabilities, left to right, across the top of a page and then drawing Keep the capabilities at a very high level - best way to describe that would be to draw your company's value chain across the top. Then, below each capability, draw a conceptual picture of your applications, It may be helpful to divide the vertical dimension into application categories - like transactional, reporting, content management, web, whatever makes sense. this type of diagram will actually help you visually identify possible redundant applications.

    Hope this all makes sense without pictures !

    Dave
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  • @davidcbaker
    Hi David, Thanks for this information! I was able to put together some slides with your input and diagram out somethings for our ORG! thank you for this help!

    One additional question arose, which I have not been able to find a good diagram / solution for and that is that how can we show which applications provide which business capabilities? This sounds like a business capability map that overlays with our application domain road map. But I haven't been able to find anything that comes close to providing this type of a representation. Any thoughts / suggestions on this?

    Thanks!
    Hardy
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  • @hs_2050 Good question.

    - A business context diagram tries to show the entire corporation on a single page - all of its customers, channels, products, services, key processes, key information subject areas, maybe even some of the technology (systems level, not application level), physical business locations, etc. It is usually a clip art type of diagram.

    - a business capability map is typically a multilevel hierarchy diagram that lists the top level business capabilities (supply chain, R&D, Manufacturing, marketing, hr, finance, etc, etc). The top level capabilities are usually listed in some sort of value chain order - left to right each adding value until something is produced for the customer and services. Each capability is decomposed into a handful of capabilities and maybe then one more level of decomposition.

    Hopefully that helps. The business context diagram is good for use with c-level execs, the business capability diagram is good with business architects and some business SMEs.

    Dave Baker
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  • @davidcbaker Hi David, that explanation was really helpful for someone just getting started on this path in our organization. I did have a follow up question regarding the differences between business context diagram and a business capability diagram. I have a pretty good business capability map idea for our org, but wasn't sure what a business context diagram means.

    Thanks!
    Hardy.
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  • @hs_2050 Broadly speaking, the following inputs are needed before you can document your roadmap:

    1) agreed scope of overall blueprint / transformation - what operating components are in scope? Organization, processes, people, technology, products/services, corporate tax and legal structure?
    2) the business strategy for the components in question - what are the goals and objectives as well as he discreet strategies and tactics. See the Business Motivation Model for a good description of what should be in a corporate strategy.
    3) current state of the operating model - what is the baseline for the in-scope components. Their will be at least one output for each component of the current state but it typically includes conceptual drawings of each component - conceptual org model, business context diagram, business capability map, conceptual application, data, infrastructure diagrams, conceptual product and service diagrams, etc,
    4) target state of that operating model - what does the future look lie (3 to five years out). The target state is documented using the same type of outputs as the current state - only now these conceptual diagrams document what the solution should look like 3 to five years from now.
    5) list of new capabilities in each of the in-scope components (these capabilities file the gap between the current and target states). My definition of 'capability' - a unit of organization, process and technology that delivers value to the company. These capabilities should be traceable back to the corporate strategy.
    6) You need to bundle the new capabilities into manageable PROGRAMS that then get sequenced onto your roadmap.

    Dave
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  • 1. Getting There and Enjoying the Trip: Using Roadmaps to Turn EA into Results David Baker Chief Architect Diamond Management & Technology Consultants david.baker@diamondconsultants.com October 24, 2007
  • 2. EA typically delivers a future state that is impossible to reach in a single step Current Future ? State State Page 1
  • 3. The trouble is you cannot predict the economic climate that far in advance  Some organizations immediately start implementing the future state  Usually results in questions being asked 6 to 12 months later  Why are we doing this?  How much longer will it take?  When can I expect to get my new capabilities?  Need to do SOME economic planning  Impossible to take the time to determine the exact number (and type) of resources at the time of the EA plan  But SOME planning is absolutely necessary BEFORE mobilizing the troops Page 2
  • 4. Your EA plan MUST record your planning assumptions  Business priorities at the time of the plan  High level cost assumptions for the transformation  High level benefit assumptions for the transformation Page 3
  • 5. What goes into a roadmap? Business Capabilities Business Operations Technical Solution “I need the ability to…. …by doing…. ...with…” 1H06 2H06 1H07 2H07 Capability 01 Theme 1 Capability 12 Capability 04 Business Capability 07 When each Theme 2 Theme 3 Capabilities Capability 09 capability is Requiring IT Capability 02 delivered Support Capability 03 Capability 05 Capability 08 Page 4
  • 6. Resulting in clear answers to questions held by key stakeholders IT Business Managers wants to know want to know EA Roadmap What’s possible? Have we done this before? When do I get it? How do we get it done? How do I make sure it’s done How much does it cost / save? correctly? What are the business risks? What’s possible? Technical Staff wants to know What do I build? What do I build it with? When do I build it? Page 5
  • 7. Your EA Roadmap is NOT a project plan!  A Roadmap is a time phased set of activities but at the Program/Initiative level NOT a project level  You are planning the necessary transitions for a multi-year effort NOT planning the implementation  The Roadmap defines key objectives, and a high-level, prioritized approach to reach those objectives  Roadmaps have enough detail to test the business justification but NOT detailed sourcing or budgeting detail Page 6
  • 8. EA Roadmaps are created as part of the Strategy and Planning cycle Release Business Project Business IT Strategic Planning Strategic Execution Operations Planning (Portfolio (SDLC) Planning Mgmt) Prioritize the allocation of Develop projects that IT resources to achieve Use enterprise and business unit support businesses’ Run the business strategy, in direction and goals to drive IT plans annual and strategic business alignment with enterprise plans architecture Portfolio 1 Project Blueprints Project Enterprise Portfolio 2 Filter Project Blueprints Blueprints Project Portfolio 3 Blueprints Project Multi-Year Plans Budget Cycle Project Cycle Continuous (Roadmaps) (Project Plans) Page 7
  • 9. The Roadmapping process Input   Business Current State Identify Gaps Justification (strategy, process, technology) Future    Identify State Lay Out Themes & Mitigate Risk (strategy, process, Roadmap Initiatives technology)  Business Sequence Prioritization Initiatives Page 8
  • 10.  Identify the gaps between the current and future states  Identify the new and modified business capabilities  Consider changes to organization, processes, information and the underlying technology  Rationalize your portfolio of applications  Retire some applications  Rehabilitate some applications  Replace some applications  Eliminate some applications Page 9
  • 11.  Bundle the changes into business themes and initiatives Initiative Description Capabilities Addressed Support Enhance program through • Ability to leverage any external data to perform member Service Model improved strategies and data identification and predictive modeling Analytics analytics • Ability to leverage utilization and outcome metrics at the provider level to improve network management and help shape the network • Ability to access treatment utilization and efficacy and deliver feedback to providers Improve Financial Improve financial tracking and • Ability to provide aggregate and individual information Reporting and analytics for products and regarding utilization and ROI Analytics enable ROI calculations • Ability to track and predict medical costs and to properly allocate the contribution margin of products Support New Create and support new • Ability to meet currently identified market opportunities Products / products to serve individual through new product offerings Segments and newly identified markets • Ability to market to and service members with no plan sponsors Page 10
  • 12.  Use the prioritized capabilities to determine priority order of the initiatives  There are many ways to prioritize the list of capabilities  Prioritize them directly in a business workshop (hard)  Map them to the prioritized business goals (easy)  Use weights, Harvey balls,  Assign each initiative the average priority of its associated capabilities (or weight them, or . . . ) Initiative Priority Capability Priority Support Service Model Analytics M Capability 1 H Capability 2 M Capability 3 L Improve Financial Reporting and Analytics H Capability 4 H Capability 5 H Support New Products / Segments M Capability 6 H Capability 7 L Page 11
  • 13.  Create business justifications for each initiative Element Description Example Problem statement Defines the reason for the project idea “Cannot provide customers with to exist in the first place real-time information” Project Goals What is the project trying to accomplish; “Enhance operating costs by real- must address the problem time handling of claims information” Market opportunity What is the total size (people, “$3M claims processed per year” revenues) of the potential market for this project? Value proposition For each target group, what is the “Provide Call Reps with real time value? information” Capital costs Upfront investment “$10M in systems” Operating Costs Ongoing investment “$1.5M annually in labor, data analysis, maintenance” Benefits Increased revenues, decreased costs “Reduce customer turnover“ Risks / Mitigants Will conditions change to fundamentally “Data in other projects will be change the need for this project? negatively impacted” Page 12
  • 14. Use scorecards to show traceability amongst EA elements INITIATIVE DESCRIPTION BENEFITS DESCRIPTION  Enhance medical management programs through improved  Sales: Client has been rejected for bids in the past because of strategies and data analytics an inability to leverage data from external carriers and on all services available to a member  Medical Costs: Improved ability to identify members and CAPABILITIES ADDRESSED  approach them with treatment options tailored to their needs and Ability to leverage all client and any available external 1 eligibility will increase the use of highly effective, low cost experience information to perform member identification and services and will increase medical offset. Incorporating data, in predictive modeling  particular, can have benefits from being be the first experience in 4 Ability to leverage utilization, outcome, and satisfaction metrics the benefit path and may become aware of high risk members at the provider level to improve network management and help before they are known elsewhere in the company (e.g., shape the network  substance abuse pregnant woman). The benefits might not 5 Ability to analyze the results of integration and Care accrue, but they will accrue to the company as a whole in terms Management programs to validate medical offsets, help direct of medical cost reductions program improvements, and develop new programs  7 Ability to assess treatment utilization and efficacy and deliver feedback to providers AFFECTED IT COMPONENTS BUSINESS PRIORITY  High  Enterprise Data Warehouse  Financial Books of Record  Compliance Systems  Provider Portal DEPENDENCIES/CONSTRAINTS RANGE FOR BENEFIT, DURATION & COST  Project XYZ for integration of member data and enhanced Benefit Range Duration Cost Range individualization (2Q06) $0 - $499,000 1-3 months $0 - $250,000 $500,000 - $1,999,000 3-6 months $250,000 - $499,000 $2,000,000 - $4,999,000 6-9 months $500,000 - $999,000 $5,000,000 - $7,999,000 9-12 months $1,000,000 - $4,999,000 $8,000,000 + 12 months + $5,000,000 - $10,000,000 Page 13
  • 15. A word about costs and benefits  There is no need to do a rigorous cost/benefit analysis at this point in the lifecycle  A roadmap is NOT a budget  The subsequent portfolio management phase will drive the detail to a budget level (mobilize resources and costs)  The costs and benefits estimated during the roadmap phase are an additional tool for determining the overall multi-year sequence  Do “just enough” estimation  Have business subject matter experts estimate the benefit ranges  Have architects use engineering estimation techniques to develop cost ranges Page 14
  • 16.  Consult your architecture models to understand and mitigate risks  Consult your EA plan to understand the type of architecture risks involved  New technology - risky  System replacements – complex and costly  Lack of skilled resources – risky  Foundational technologies - impact the schedule  Compliance requirements – schedule pressure  Sequence the architecture changes into slices  Account for technology dependencies  Account for architecture risks  Eat the elephant one bite at a time! Page 15
  • 17.  Use your work to sequence the initiatives Sequenced Initiatives Page 16
  • 18. You can also use any number of cash based indicators to adjust the sequence (or to rule out individual initiatives) Definition Pros Cons • Net Present Value • Measure of value • Difficulty / uncertainty in • Discounted sum of all cash flows creation… should lead to choosing discount rate • Does not account for NPV for the project good (best) investment • Invest where NPV > 0 decisions amount of investment required • Internal Rate of Return • Easily scaleable by • Can lead to bad • Discount rate that produces an investment decisions… investment size IRR NPV of zero use with care! • Invest where IRR is greater than an established “hurdle” rate • Point in time where cumulative net • Under uncertain ´flight to • Can often lead to bad cash flow = 0 quality´ stock market investment decisions Payback / • Amount of time required to recoup conditions, Payback can Breakeven the original investment from a become the indicator project • The maximum negative cumulative • Appropriate to its • …the nature of the net cash flow over the lifetime of objective funding is a whole other Peak the project issue... Funding • Represents the total amount of money required to be put into the project • Return on Investment • Allows for easy • Does not take into ROI • The total returns of the project comparison across account the amount of divided by the total cash outflow projects capital needed Page 17
  • 19. Initiatives can also be sequenced into stages based on business need and dependency to deliver incremental capability Portfolio Management Strategy Costs of achieving capabilities  Non-optional level of investment  Address regulatory Stay in Illustrative environment, align with current 1 Cost business projects, keep current on software releases, etc. Stage 4  Enable initial capabilities  Establish foundation for Build Stage 3 2 realizing additional capabilities foundation in stages 3 and 4 Stage 2  Delivers additional capabilities in response to pain points Stage 1 Improve effectiveness  Dependent on stage 2 3 Capability  Delivers efficiency focusing on migrating capabilities to new Improve 4 strategic platforms efficiency  Dependent on stage 2 Page 18
  • 20.  Lay out the roadmap 2006 2007 2008 2009 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Theme▼ System Foundation & Information Management 1 4 High Quality Data Capture & Information 2 Exchange Dynamic Processing & Workflow 5 Advanced Analysis & Reporting 3 6 Multi-Channel Access 7 9 Integrated Organization & Communication 8 IT Portfolio Management & Strategic Enterprise Architecture Milestones Interim Solution Analytics Tools Re-architecture 6 1 Electronic Receipt/ Submission and Data Validation Core View 7 2 Reporting Tool Re-architecture Training Tools Re-architecture 8 3 End-to-End Solution External Constituent Integration 9 4 End-to-End Workflow 5 Page 19
  • 21. Another example 2006 2007 2008 2009 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q THEME / INITITIVE▼ • Define High-Level Process Flows • Define Data Architecture Strategy Retire: Fsystem 1, System 2, SF & IM • Create Book of Record System 3 • Implement Interim Solution • Select Vendor Package Retire: System 4 • Implement Enhanced Tool • Retire Acquisition and Data Collection Apps Dyn Proc HQDC & • Develop Business Information Model Info Ex. Retire: System 5, System 7 • Define Process Flows • Define Integration Strategy Re-architect / Retire: System 8 • Implement Electronic Receipt & Submission • Provide Automated Data Validation & WF • Optimized Business Process (OBP) • Select Technology Tools • Implement WF & BR Process Improvements Retire: System 9, System 10, • Define Process Flows System 11 • Define DW/DM Architecture Strategy • AA&R Re-architect: System 12, Implement DW/DM Structures & Feeds System 13 • Develop New Reports • Select Data Analytics Tool Re-architect: System 14, • Implement Data Analytics Tool System 15, 16 • Retire and Re-architect Reporting/Analytics • Retire: System 18, 19, 20, 21 Define Process Flows • Select Technology Tool MCA • Design & Implement Core Safety View • Define Integration Strategy • Integrate External Systems • Retire Doc Mgmt Systems & Integrated Sys • Retire: System 22, 23 Define & Deploy Communication Strategy Int Org & Comm • Establish Process Improvement Governance • Create Acquisition Assessment Framework • Institute Regulations Pipeline Management • Select & Implement Training Tools ITPM & • Program Management Office SEA • Institute IT Investment Management Re-architect: Training systems • Enhance SEA Competency Maintain: SRM Portal • Develop Arch. GPs, Governance, & Processes • Develop Strategic Architecture Blueprints Page 20
  • 22. One more example 2006 2007 2008 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ID Theme / Initiative A Support Service Model Analytics • …Leverage all Aetna and external experience data… 1 • …Leverage utilization, outcome, and satisfaction metrics… 4 • …Analyze the results of Behavioral Health integration… 5 • …Assess treatment utilization and efficacy… 7 B Support Enhanced Service Model 2 • …Identify high risk, highly actionable Members… 3 • …Monitor progress and track the adherence… 10 • …Provide constituent-targeted service experience… C Financial Reporting & Analytics 6 • …Provide aggregate and individual information… 9 • …Track and predict Behavioral Health medical costs… D Enhance Provider Web Experience 10 • …Provide constituent-targeted service experience… E Enhance Member Web Experience 10 • …Provide constituent-targeted service experience… F Enhance Plan Sponsor Experience 10 • …Provide constituent-targeted service experience… 12 • …Provide a single bill (i.e. including all products)… G Operational Improvements 8 • …Deliver flexible and customized products and services… 10 • …Provide constituent-targeted service experience… 14 • …Administer BH products in a cost effective manner… 15 • …Perform cost effective pricing for targeted business… H New Products / Segments 11 • …Meet currently identified market opportunities… 13 • …Market to and service Individuals… TOTAL COSTS ($000) $24,518 $3,856 $3,214 $3,983 $4,129 $2,864 $2,349 $1,696 $1,121 $880 $389 $0 $0 Page 21
  • 23. Remember, the level of detail is commensurate with the lifecycle stage Business IT Strategic Strategic Planning Planning Portfolio 1 Blueprints Enterprise Portfolio 2 Blueprints Blueprints Portfolio 3 Blueprints Roadmap created here Sequenced list of initiatives Page 22
  • 24. Remember, the level of detail is commensurate with the lifecycle stage Release Business IT Strategic Planning Strategic Planning (Portfolio Planning Mgmt) Portfolio 1 Project Blueprints Project Enterprise Portfolio 2 Filter Project Blueprints Blueprints Project Portfolio 3 Blueprints Project Roadmap created Filter and refine into here Projects Sequenced list of Apply resource and initiatives financial constraints Page 23
  • 25. Remember, the level of detail is commensurate with the lifecycle stage Release Business Project Business IT Strategic Planning Strategic Execution Operations Planning (Portfolio (SDLC) Planning Mgmt) Portfolio 1 Project Blueprints Project Enterprise Portfolio 2 Filter Project Blueprints Blueprints Project Portfolio 3 Blueprints Project Use prioritized Roadmap created Filter and refine into initiatives and here Projects capabilities to Sequenced list of Apply resource and govern project initiatives financial constraints execution Page 24
  • 26. A few considerations for service orientation  The move to services means that the business capabilities will be mapped to services, not systems or applications  Services will be retired, rehabilitated, rearchitected or removed  Roadmaps may have to become more granular to address the impact to services  Service-level roadmaps will be especially important during governance of implementation projects Page 25
  • 27. Recap: What is a roadmap?  Prioritized business capabilities  Prioritized initiatives  Initiative scorecards  Cost and benefit estimates, estimated duration  Risk mitigation strategies  Sequence architecture time slices  Sequenced initiatives  Input to portfolio management Page 26
  • 28. Thank You Questions? Page 27