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Performance Driven Architecture V2 August 2010

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    Performance Driven Architecture   V2 August 2010 Performance Driven Architecture V2 August 2010 Presentation Transcript

    • Booz & Company Canberra, August 2010 PerspectivePerformance-Driven ArchitectureA strategy-led approach to focus and align an organisation’s architecturecapabilities to create business valueThis document is confidential and is intended solely forthe use and information of the client to whom it is addressed.
    • OverviewStrategy by DesignBooz & Company ApproachOur Experience 1 Performance Driven Architecture - v2 August 2010.ppt
    • This document outlines a strategy-led approach to focus and alignan organisation’s architecture capabilities to create business value Document Overview For years, many companies have experienced a problematic tension between their IT departments and business units - one approach to close the distance is the discipline called ‘architecture’ which can be Background described as the logical framework and design that establishes the links between strategy and organisational structures, business processes, information and underlying technologies Whilst organisations have been heavily investing in architecture over several years and many consider it Strategy by core to their strategic advantage, senior business & IT executives still question the value it actually delivers. Design Many also question the role of an architecture capability within an organisation in terms of its accountability across the enterprise, domain and solution levels To this end, Booz & Co. recently completed a global study by surveying executives across a mix of financial Our Global services and government organisations to determine how much value architecture can contribute to the Study business and to understand the key challenges and best practices adopted by mature organisations The results of the study are revealing - the amount of value realised through architecture was clearly linked Linking Maturity to the organisation’s architecture maturity level, however, many organisations struggle to manage their & Value performance. This was particularly evident in terms of measuring and communicating to the business, the effectiveness of their architecting capabilities and the impact of their design decisions Performance- To address these challenges, Booz & Co. have developed a comprehensive framework aimed at enabling a driven strategy-led approach to focus and align an organisation’s architecture capabilities and demonstrably create Architecture business value including revenue generation, customer intimacy, reduced costs, increased agility, reduced risks and lower complexityNote: These are the highlights of a recent Booz & Company viewpoint, released in June 2009; For more information, see http://www.booz.com/media/file/Enterprise_Architecture.pdfBooz & Company 2 Performance Driven Architecture - v2 August 2010.ppt
    • OverviewStrategy by DesignBooz & Company ApproachOur Experience 3 Performance Driven Architecture - v2 August 2010.ppt
    • Organisations have been investing in architecture to address key challenges in the current economic environment Challenges & Themes (1) Description 1 Cost pressures and across-the-board budget cuts forcing organisations to Optimisation of operations & infrastructure do ‘more-with-less’ including leverage and re-use of existing assets Optimisation of operations and infrastructure including standardisation, consolidation and integrated portfolio planning between business & IT 2 Achievement of integrated customer services & products across multiple Customer intimacy & speed to market delivery channels with a strong focus on meeting customer’s preferences Increased agility / speed to market with customer service and new products 3 Changes to industry structures and consolidation of market following mergers and acquisitions Changes to business models Evolution and readjustment to develop new business models and emergence of new value chains 4 Increased focus on corporate governance and enterprise risk management Increased focus on risk & compliance New regulatory and legislative requirements will increase role of compliance and interactions with key regulatory bodies 5 Many organisation’s driving major transformation programs to upgrade or replace their core business platforms Core systems replacement New platforms will drive changes in business processes, systems and structures including the broader IT operating model required to support them (1) Sourced from Senior Business Executives & CIO interviews with over 60 Financial Services & Government organisations in Australia, US, Middle East. UK & GSABooz & Company 4 Performance Driven Architecture - v2 August 2010.ppt
    • However, architecture remains a fuzzy concept in modern corporatestrategic planning - no common industry definition exists Definitions of Architecture The organising logic for business processes and IT infrastructure reflecting the integration and standardization requirements of the firm’s operating model The structure of a business, or the documents and diagrams that describe that structure; the business methods that seek to understand and document that structure; a business team that uses EA methods to produce architectural descriptions of the structure of an enterprise A complete collection of artifacts to describe the logical organization of business strategies, metrics, business capabilities, business processes, information resources, business systems, and networking infrastructure within the enterprise. The process of translating business vision and strategy into effective enterprise change by creating, communicating and improving the key principles and models that describe the enterprise’s future state and enable its evolution Architecture is the fundamental organisation of a system embodied in its components, their relationships to each other and to the environment, and the principles guiding its design and evolution Source: MIT Sloan Information Systems Research Centre, Wikipedia, The Open Group, Gartner, ANSI/IEEEBooz & Company 5 Performance Driven Architecture - v2 August 2010.ppt
    • We see architecture as a key strategy to bridge the business-ITdivide and address the key challenges facing organisation’s today Key Components of Architecture Our Architecture Definition Results (for business and customer) Provides an end-to-end holistic view Business Vision and Strategies of the capabilities within an organisation at the enterprise, domain and solution levels and (Enterprise) Business Processes * supports the decision-making Strategy planning Product processing Financial management process needed to continuously Sales and marketing Account management Portfolio management Customer services Payment processing Regulatory reporting improve and transform the business Services Serves as a guiding reference and a Requirements Alignment communication bridge connecting Standards business operations with IT Organisation Information Technology Integration Structure Data architecture and Application services Roles and responsibilities management Product platforms The blueprint and the road map for Skills / competencies Business information Integration layers Performance management Customer data Infrastructure the development and management of two views: the existing enterprise, Extended Enterprise and the enterprise of the future as it Associations Third party service providers External systems is envisioned to achieve its business goals (*) Note: Example business processes. Not exhaustive.Source: Booz & CompanyBooz & Company 6 Performance Driven Architecture - v2 August 2010.ppt
    • Organisations typically focus their architecture efforts across 3distinct levels: Enterprise, Domain and Solution Architecture Capability Continuum Level of Detail Continuum Level Capability Scope Description Architecture operates across breadth of organisation (i.e. multiple lines of business) Enterprise and is aligned to the corporate strategy and Low outcomes Architecture relevant to specific business unit(s) or operating models within an Domain organisation Also referred to as segment architecture and is aligned to business strategy & outcomes High Architecture supports detailed design and Solution technology implementation relevant to support specific projects or capability outcomesSource: Booz & Company ICBooz & Company 7 Performance Driven Architecture - v2 August 2010.ppt
    • Our recent global study re-enforces the benefits of architecturethrough the compelling link of architecture maturity and value Architecture Maturity & Value Link between Architecture Maturity & Value Results of Booz & Company Global Study Over 60% surveyed mature organisation’s realise all 4 sources of value through architecture Organisations that report little or no value through their architecture capabilities are all within the ‘Emerging’ maturity level Agility is the most challenging source of value through architecture and is ultimately the product of realised reduced complexity & innovation to enhance the speed to market for new products & servicesBooz & Company 8 Performance Driven Architecture - v2 August 2010.ppt
    • The drive business value, organisations should focus on three keyvalue drivers across both architecting and architecture disciplines Value Drivers Architecting Architecture Architecting refers to the Architecture refers to the actual effectiveness and role of the products, artifacts & decisions Maturity Elements architecture function within an created by the architecting organisation operating at the capability within the organisation Strategic Alignment enterprise, domain and solution Process levels Competency Performance Organisation To drive business value, organisations should focus on maturing three key value drivers1: 1). Strategic Alignment, 2). Competency & 3). PerformanceBooz & Company 9 Performance Driven Architecture - v2 August 2010.ppt
    • Our research highlights many organisations face challenges inmaximising the performance of their architecture capabilities Challenge Optimal End State Organisation’s have significant Fully operationalise the architecture investment in architecture (people, function by maintaining role in Operationalised process and tools) but outputs are strategic planning whilst also informing architecture often limited to the definition of day-to-day operations and technology theoretical end states and are function investment decisions within the contained within an “Ivory Tower” business and projects Formalise accountability through the Emphasis on the architecture function definition of metrics and targets. being a necessary evil and input to Measured Measure value attributed through either co-design, governance and/or outcomes architecture and communicate the compliance processes realisation of the target state over time Integrate function across domains - enterprise, domain and solution Conflicting strategies and tension architecture functions integrated at a between the enterprise and business Integration design, governance and driven “solutions”. Architectural across domains organisational level. Architecture integrity often loses and increased function taking the lead in pragramatic complexity is the outcome trade-offs between specific business demands and enterprise alignmentBooz & Company 10 Performance Driven Architecture - v2 August 2010.ppt
    • OverviewStrategy by DesignBooz & Company ApproachOur Experience 11 Performance Driven Architecture - v2 August 2010.ppt
    • To address these challenges, the Booz & Co. Performance DrivenArchitecture Framework can be used to manage performance… Booz & Company Performance Driven Architecture Framework Business Value Unlock and deliver … by applying an … and developing integrated core capabilities business value… operational lifecycle … spanning people, process, governance & technology Business Value Lifecycle Discipline Capability Continuum LevelBooz & Company 12 Performance Driven Architecture - v2 August 2010.ppt
    • … by providing the capabilities necessary to align architecturalefforts within an organisation and unlock business value Booz & Co. Performance Driven Architecture Framework Overview Delivers a robust and transparent framework to effectively manage the performance of architecture at all levels: Enterprise, Domain and Solution Aligns to the typical operational lifecycle of capability development within an organisation and provides an integrated view of core Business capabilities required to manage performance Value spanning people, process, governance & technology Formalises the accountability of the architecture capability and provides the basis reduce risk and increase business value associated with architectural decisions and strategyBooz & Company 13 Performance Driven Architecture - v2 August 2010.ppt
    • The framework outlines a capability toolkit and sample outputs toassist architecture practitioners across the performance lifecycle Performance Driven Architecture Capability Toolkit 1. Align Business 2. Define 3. Capture Data 4. Communication 5. Continuous Objectives Measures & Reporting Improvement Identify strategic business Determine how the Ensure mechanisms are Implement a performance Implement a capability Objectives objectives across the realisation of business used to capture / collect management framework that will drive continuous organisation including objectives and value metric data in an effective that provides clear improvement of Business Value those within individual within the organisation efficient manner providing visibility & transparency of architecture by providing business units will be measured in both the information necessary the performance / value the mechanisms to qualitative and to facilitate performance delivered through manage change and track quantitative terms management architecture the results delivered Our Approach Map alignment between Define and align Develop a data collection Establish a governance Embed the concept of the business units and the measures across the approach within projects, model to communicate continuous improvement corporate strategy enterprise, domain and operations & forums to performance across the across the architecture Identify key value drivers solution levels measure performance continuum using agreed continuum by develop Highlight any trade-offs Utilise lead and lag across the lifecycle and communication methods revised measures and and prioritise business measures that address architecture continuum tailored to stakeholders stretch targets each year objectives architecting and Highlight data quality & needs architecture disciplines availability constraints Corporate & Business Balanced Scorecard Data collection processes Monthly or Quarterly Post project reviews Example Outputs Strategy Framework & tools Architecture Heartbeat Annual architecture Value Chain Business Benefits Proxy data based on Report (underpinned by a maturity assessment Strategy Map Realisation Plan industry-specific balanced scorecard Scenario-based reviews Architecture benchmarks and best performance and before-and-after Performance & Value practices management framework) impact assessments of Metrics / KPIs key design decisions Benefits Delivered Ensures a “top-down” and Alignment across Enables early Fosters accountability and Enables remedial actions enterprise approach to architecture levels linked identification of root senior leadership to and key decisions to be performance to business objectives causes and potential flow- achieve outcomes taken on a timely basis Fosters alignment across Accountability and on effects which may Reinforces cultural Measures value delivered the C-suite on the priorities transparency of impact performance and changes required to from changes made of the business as performance - agnostic objectives manage / improve Enables understanding of opposed to managing of organisation Highlights constraints and performance across the architecture impact on performance within structures and business availability of data to architecture function business outcomes individual business units or unit constructs manage performance Measures effectiveness of functional silos decisions madeBooz & Company 14 Performance Driven Architecture - v2 August 2010.ppt
    • Our approach draws on insight and expertise from other industriesthat specialise in non-IT architecture and design disciplines Cross-industry Best Practices in Architecture & Design Performance Management Examples Industry Performance Capability Description Lockheed Martin aligns its 10 functional business units to the corporate strategy through Align Business Align Business a Strategy Map and EIS. This approach ensures that business objectives are commonly Aerospace Objectives Objectives understood and aligned horizontally (across similar design capabilities) and vertically across the organisation’s functions to ensure that ‘strategy is everyone’s business’ As part of its product leadership strategy, Intel defines specific design and innovation performance measures including product development time: from idea to market. These Define Measures Define Measures Semiconductors are cascaded through a balanced scorecard across the business with a core focus on information capital (design and manufacturing), internal processes and financials GE implemented a centralised ‘digital cockpit’ to feed its balanced scorecard to enable the aggregation and capture of performance data. This approach includes the Manufacturing Capture Data Capture Data digitisation of performance data from projects, operational and decision-support repositories to capture business value (i.e. NPV, savings, operational efficiencies) Lend Lease has developed a performance reporting framework to communicate its performance to shareholders and internal stakeholders. Leading construction firms also Communication & Communication & Construction follow a industry-defined ‘Construction Design and Productivity Framework’ which Reporting Reporting outlines performance targets and benchmarks for architecture and design including re- work %, energy efficiency ratings, quality and safety Toyota follows 14 foundational management principles which underpin its “Lean Production”. A key principle for its design function includes ‘becoming a learning Continuous Continuous organisation through relentless reflection (Hansei) and continuous improvement Automotive Improvement Improvement (Kaizen)’. This includes identifying root causes in design systems and processes, scenario-based solution development, before-and-after comparisons of designs and the development of stretch improvement metrics to continually improve performanceBooz & Company 15 Performance Driven Architecture - v2 August 2010.ppt
    • We recommend a multi-phased approach to drive a typical ‘Performance-driven’ Architecture Project for an organisation Performance Driven Architecture Into Action: A Typical Project Approach Rapid Capability Design and Setup: 4-6 weeks Continuous Improvement: Ongoing (Strategy Development) (Strategy Execution) A B C DExecutive Teams Define Define Baseline Data Business Define Measures Continuous Ongoing Communication & Gathering &Architecture Teams Strategy & Data Collection Improvement Capabilities Reporting Results Alignment Approach Tools & DevelopmentTogether Framework Assessment Processes Outcomes Understand current Define agreed and Implement Establish Capture baseline Identify capability key alignment understood metrics communication & appropriate change data from defined improvement issues and define for measuring reporting management data sources opportunities business objectives architecture capabilities to capability that will Assess baseline Manage capabilities Understand and performance with communicate manage execution results to identify improvement by define key drivers key stakeholders performance of of the identified key problem areas defining changes of architecture Develop the architecture improvements Extrapolating required to execute value across the mechanisms to Establish across the insights for each of improvement continuum efficiently and governance model architecture the levels of recommendations Define core team to accurately capture / to communicate continuum architecture Capture the manage / execute collect data performance of the capability benefits of changes Performance Driven Establish sub architecture Assess overall made Architecture teams to assist with function architecture process performance Note key function maturity management constraints and drivers of value Process Led by CIO / CTO Led by senior Led by senior Led by senior Led by core team Led by core team architecture architecture architecture and executed by Embed changes as management with management with management team sub-teams - part of ongoing input from sub- input from CIO / leveraging tools architecture teams CTO and processes operating model Booz & Company 16 Performance Driven Architecture - v2 August 2010.ppt
    • OverviewStrategy by DesignBooz & Company ApproachOur Experience 17 Performance Driven Architecture - v2 August 2010.ppt
    • Booz & Company is a leading global management consulting firm,helping the worlds top businesses and other institutions 90 years of consulting experience (founded 1914) Solely owned by its 200 officers 3,300 firmwide staff Europe US$ 1.3 billion annual sales – Amsterdam – Moscow 57 offices around the world – Berlin – Munich – Copenhagen – Oslo 15 offices in growth region Asia Pacific, 4 in China – Dublin – Paris Over 10,000 clients in 75 countries - 400 of the Fortune 500 companies – Düsseldorf – Rome – Frankfurt – Stockholm Success based on client results - 85% of our assignments come from – Helsinki – Stuttgart existing clients – London – Vienna – Madrid – Warsaw – Milan – Zurich North America Asia – Atlanta – Beijing – Chicago – Hong Kong – Cleveland Middle East – Seoul – Dallas – Abu Dhabi – Shanghai – Detroit – Beirut – Taipei – Florham Park – Cairo – Tokyo – Houston – Dubai – Los Angeles – Riyadh – McLean Australia, New Zealand, – Mexico City and Southeast Asia – New York City – Adelaide – Parsippany – Auckland – San Francisco – Bangkok South America – Brisbane – Buenos Aires – Canberra – Rio de Janeiro – Jakarta – Santiago – Kuala Lumpur – São Paulo – Melbourne – SydneyBooz & Company 18 Performance Driven Architecture - v2 August 2010.ppt