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Enterprise SOA Governance

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Presentation at SOA SIG Spring Seminar, May 17, 2010

Presentation at SOA SIG Spring Seminar, May 17, 2010

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  • 1. Enterprise SOA Governance
    Janne J. Korhonen
    SOA SIG Spring Seminar, May 17, 2010
  • 2. Customer Service and
    Niche Marketing Economy
    Production
    Economy
    Distribution and
    Sales-Driven Economy
    Quality and Mass
    Marketing Economy
    ‘Customers of One’
    Economy
    1950
    1960
    1970
    1980
    1990
    2000
    The Frequency and Amplitude of Change are Escalating
  • 3. Complexity
    Effectiveness
    Integrity
    Efficiency
  • 18. IT Governance Traditional Definition
    “IT governance is the responsibility of executives and the board of directors, and consists of the leadership, organisational structures and processes that ensure that the enterprise’s IT sustains and extends the organisation’s strategies and objectives.”– IT Governance Institute; CobiT 4.1 (2007)
  • 19. Basic CobiT Principle
    drive the
    investment in
    that are
    used by
    CobiT
    that areused by
    to deliver
    Source: CobiT 4.1
  • 20. CobiT Follows Top-Down Approach
    Source: CobiT 4.1
  • 21. Conformance
  • 22. Is this enough?
  • 23. Complexity
    Effectiveness
    Integrity
    Efficiency
  • 36. Highly
    Aligned
    Alignment
    Less Aligned
    Effectiveness
    Highly Effective
    Less Effective
    The Path to IT-Enabled Growth
    ”Alignment Trap”
    11 % of respondents
    +13 % IT Spending
    -14 % 3-year Sales CAGR
    ”IT-Enabled Growth”
    7 % of respondents
    -6 % IT Spending
    +35 % 3-year Sales CAGR
    Source: Bain Analysis
    ”Maintenance Zone”
    74 % of respondents
    +0 % IT Spending
    -2 % 3-year Sales CAGR
    ”Well-Oiled IT”
    8 % of respondents
    -15 % IT Spending
    +11 % 3-year Sales CAGR
    n = 504
  • 37. Higher cost
    All Too Common:
    Higher cost
    No change of impact
    Higher Growth:
    Higher cost
    Higher impact
    Today’s
    situation
    Stable Cost:
    Same (current) cost
    Higher impact
    Cost
    IT improvement
    zone
    Sweet Spot:
    Lower cost
    Higher impact
    Typically Undesirable:
    Lower cost
    Lower impact
    Reduced Cost:
    Lower cost
    Same (current) impact
    Adopted from Benson, Bugnitz & Walton (2004): From Business Strategy to IT Action
    Lower cost
    Impact
    Higher impact
    Lower impact
    Goal of IT Governance: Reducing Costs and Improving the Bottom-Line Impact
  • 38. Strategic Alignment Model
    Business Strategy
    IT Strategy
    Business
    Scope
    Technology
    Scope
    External
    Distinctive competencies
    Business Governance
    Systemic competencies
    IT Governance
    Strategic Fit
    Source: Henderson & Venkatraman (1991)
    Admin Infrastructure
    Architectures
    Internal
    Processes
    Skills
    Processes
    Skills
    Organizational infrastructure and processes
    IS infrastructure and processes
    Information
    Technology
    Functional Integration
    Business
  • 39. 1. Strategic Execution
    Business Strategy
    IT Strategy
    Business
    Scope
    Technology
    Scope
    External
    Distinctive competencies
    Business Governance
    Systemic competencies
    IT Governance
    Strategic Fit
    Admin Infrastructure
    Architectures
    Internal
    Processes
    Skills
    Processes
    Skills
    Organizational infrastructure and processes
    IS infrastructure and processes
    Information
    Technology
    Functional Integration
    Business
  • 40. 2. Technology Potential
    Business Strategy
    IT Strategy
    Business
    Scope
    Technology
    Scope
    External
    Distinctive competencies
    Business Governance
    Systemic competencies
    IT Governance
    Strategic Fit
    Admin Infrastructure
    Architectures
    Internal
    Processes
    Skills
    Processes
    Skills
    Organizational infrastructure and processes
    IS infrastructure and processes
    Information
    Technology
    Functional Integration
    Business
  • 41. 3. Competitive Potential
    Business Strategy
    IT Strategy
    Business
    Scope
    Technology
    Scope
    External
    Distinctive competencies
    Business Governance
    Systemic competencies
    IT Governance
    Strategic Fit
    Admin Infrastructure
    Architectures
    Internal
    Processes
    Skills
    Processes
    Skills
    Organizational infrastructure and processes
    IS infrastructure and processes
    Information
    Technology
    Functional Integration
    Business
  • 42. 4. Service Level
    Business Strategy
    IT Strategy
    Business
    Scope
    Technology
    Scope
    External
    Distinctive competencies
    Business Governance
    Systemic competencies
    IT Governance
    Strategic Fit
    Admin Infrastructure
    Architectures
    Internal
    Processes
    Skills
    Processes
    Skills
    Organizational infrastructure and processes
    IS infrastructure and processes
    Information
    Technology
    Functional Integration
    Business
  • 43. Fundamental System Perspectives
    ”Black Box”
    Functional
    Teleological
    Control-oriented
    Design irrelevant
    ”White Box”
    Constructional
    Ontological
    Change-oriented
    Design essential
  • 44. Performance
  • 45. Enterprise Governance:Equal Weight on Performance
    Enterprise Governance
    “The set of responsibilities and practices exercised by the board and executive management with the goal of providing strategic direction, ensuring that objectives are achieved, ascertaining that risks are managed appropriately and verifying that the organisation’s resources are used responsibly.”
    − Information Systems Audit and Control Foundation (2001)
    Corporate Governance
    i.e. Conformance
    Business Governance
    i.e. Performance
    Accountability
    Assurance
    Value Creation
    Resource Utilisation
    Source: IFAC (2004)
  • 46. Enterprise Governance: My Definition
    Enterprise Governance defines the requisite roles, accountabilities and policies to effectively design and operate an enterprise in continually shifting contexts.
    The word governance derives from the Greek verb κυβερνάω [kubernáo]: to steer
  • 47. To Optimize the System, One Needs to Pareto-Optimize the Sub-Systems
  • 48. ”Structure Follows Strategy”
    – Alfred Chandler
  • 49. VII-VIII Long-term sustainability
    V-VI Innovation, transformation
    III-IV Effectiveness
    Board Member,
    Super Corporation CEO
    I-II Efficiency
    VI+ Executive Leadership
    Strategic organizational leadership: culture, values, vision; business portfolio
    VIII
    Conceptual-Abstract
    Dialectical
    VII
    Corporate CEO
    Corporate EVP
    VI
    Business UnitPresident
    V
    IV−V General ManagementBusiness models,
    products, services
    General Manager
    IV
    Symbolic-Verbal / Logical
    III
    Unit Manager
    I−III Operations
    Day-to-day work, supervision, first-line management, departmental management
    First-Line Manager;Specialist
    II
    I
    Supervisor; Operator
    Requisite Organization as Metadesign
  • 50. Business Domain
    Service Economy
    Vision
    Service Ecosystem
    Business Portfolio Model
    Value Proposition
    Business Model
    Service Portfolio
    Product / Service Mix
    Service Offering
    Business Process / Capability
    Service
    Activity
    Event or
    Transaction
    ClientInteraction
    Internal
    External
    VII
    VI
    V
    IV
    III
    II
    I
    I
    II
    III
    IV
    V
    VI
    VII
    ServiceInvocation
    ServiceInstance
    Service Implementation
    Service Interface
    Service Definition
    Service Design
    Service Contract
    Service Analysis
    Service Strategy
    Service Architecture
    Korhonen, Hiekkanen & Heiskala (2010):
    ”Map to Service-Oriented Business and IT”
    IT Domain
  • 51. Agile Governance Model 1.1
    Strategic
    Steering
    Strategic,external
    StrategicDecision-Making
    Enterprise
    Coordination
    Strategic,internal
    Tactical Decision-Making
    Domain Coordination
    Tactical
    Operational Decision-Making
    Operations
    Planning &
    Support
    Operational
    Real-Time
    Adapted from Korhonen, Hiekkanen & Lähteenmäki (2009)
    Development and Execution
    Design, Planning and Support
  • 52. Benefits of SOA at Different Levels
    • Business modularity  Agility
    • 53. Outsourcing
    Business
    Strategy
    Business Processes
    • Rapid service development
    • 54. Agile business processes
    Information Systems
    • Composite applications
    • 55. Process automation
    Application Infrastructure
    • Reusability
    • 56. Interoperability
    Technology Infrastructure
    • Technology virtualization
  • Levels and Dimensions of Enterprise SOA
  • 57.
    • Who governs What?
    • 58. Who owns what and how? What events trigger policy enforcement?
    • 59. Who is responsible for enforcing what?
    • 60. Who provides services? Who consumes services?
    SOA Governance Strategy and Goals
    SOA Principles and Policies
    • What behavior do we need?
    • 61. How do we incentivize that behavior?
    • 62. What rewards, penalties and reinforcement mechanisms will work for us?
    • 63. What metrics are needed?
    SOA Governance Organization and Stakeholders
    • Govern What and Why?
    • 64. What must be governed now?
    • 65. To what end?
    • 66. SOA goals, principles, and policies
    Governance Processes
    Governance Performance Mgt
    Define/Enforce Policies
    by Governance Tiers
    Funding and Budgeting Models
    Governance Roles and Responsibilities
    Governance Behavior and Reinforcement Model
    Governance Metrics and Process Performance
    Governance Enabling Technology & Implementation
    SOA Governance Reference Model
    Source: Marks (2008)
  • 67. Agile Governance Model Applied to SOA Governance
    • Strategic Management
    • 68. Budgeting and funding
    • 69. Enterprise Architecture
    • 70. Business and Technology Alignment
    • 71. Compliance
    Enterprise/ Strategic Governance
    SOA Architecture Governance
    SOA Operating Model Governance
    • SOA Opportunity Management
    • 72. Service Portfolio Management
    • 73. Service Promotion/Demotion
    • 74. Management Reviews
    • 75. SOA Reference Architecture
    • 76. Services Reference Architecture
    • 77. SOA Platform Architecture
    SOA Services Governance
    SOA and Services Lifecycle Governance
    • Service Identification
    • 78. Modeling, Design
    • 79. Publishing
    • 80. Composition, Orchestration
    • 81. Services Reference Model
    • 82. Design Patterns and Standards
    • 83. Runtime Standards
    • 84. Versioning/Naming Conventions
    SOA Governance Enabling Technologies
    SOA Projects / Operations
    • SOA Development
    • 85. QA/Testing
    • 86. Execution and monitoring
    • 87. Maintenance
    • 88. Development Tools
    • 89. Registries and Repositories
    • 90. Policy Engines
    • 91. Distributed Policy Enforcement
    Planning, coordination,
    support
    Implementation,
    operations, control
  • 92. http://www.requisiteremedy.com/