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Open Group Presentation on MSBI method of creating Enterprise Architecture Core Diagrams

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This presentation describes a step-by-step process for creating a core diagram that is applicable to companies that exist within the collaboration operating model, as described by Ross and Weill in …

This presentation describes a step-by-step process for creating a core diagram that is applicable to companies that exist within the collaboration operating model, as described by Ross and Weill in their book "Enterprise Architecture As Strategy." The method produces a core diagram that preserves business agility by forcing the enterprise architect to consider the costs and benefits of reuse of processes, information, services, and systems. The resulting model supports "Capability at the Core, and Agility at the Edge."

Published in: Technology, Business

Transcript

  • 1. A. Nicklas Malik Senior Enterprise Architect Microsoft Enterprise Architecture Developing a Core Diagram of an Agile Enterprise using MSBI (Minimum Sufficient Business Integration)
  • 2. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. This is a How-To presentation. You can use this tomorrow -- Aligning around a Core Diagram Step by Step development process Useful primarily for Collaboration and Replication Model companies, but may be applicable for others as well. Please hold questions until the end of the talk, so that I can cover the method. I will leave time for questions. I’m happy to follow-up in person as well.
  • 3. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Business Agility – the ability of a business to respond more quickly and effectively than its competition to the changing demands of the marketplace.
  • 4. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Coordination -Shared customers, products or suppliers -Impact on other business unit transaction -Operationally unique Business Units (BU) -Autonomous Business Management -BU control over business process design -Shared customer / product / supplier data -Consensus processes for designing IT infrastructure services; IT application decisions made in the business units Unification -Globally integrated business processes often with support of enterprise systems -Centralized Management applying functional / process / business unit matrices -Central IT decision making -BUs with similar or overlapping operations -High level process owners design standardized processes -Centrally mandated Databases Diversification -Few shared customers or suppliers -Few data standards across business units -Operationally unique Business Units (BU) -Most IT decisions made within business units -Autonomous Business Management -Independent transactions -BU control over business process design Replication -Centralized (or federal) control over business process design -Few, if any, shared customers -Operationally similar business units -Autonomous BU leaders with limited discretion over business processes -Centrally mandated IT services -Standardized data definitions with data locally owned (some aggregation at corp). -Independent transactions (aggregated) Business Process Standardization BusinessProcessIntegration Low High LowHigh Source: Enterprise Architecture As Strategy, Ross, Weill, Robertson, HBS Press
  • 5. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. MSBI method applies primarily to these two operating models MSBI method applies primarily to these two operating models
  • 6. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Minimum Sufficient Business Integration means Integrate ONLY the minimum capabilities needed to meet shared goals. Distribute the rest. Problem: Each time you reuse a business service, process, or system, that element becomes more brittle, and slower to change. How do we create an Enterprise Architecture that avoids reusing too much? Solution: Build a Core Diagram that Illustrates Agility at the Edge, Consistency at the Core
  • 7. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. ING Direct Core Diagram (adapted from Enterprise Architecture As Strategy) Disney Company Core Diagram (circa 1957) A core diagram is a simple one-page view of the processes, data, and technologies constituting the desired foundation for execution. [It] provides the rallying point for managers responsible for building out and exploiting the enterprise architecture. For most companies, I think some kind of picture is essential for understanding the expectations for a business transformation. -- Jeanne Ross, Director, MIT CISR (e-mail to Nick Malik, 5-26-2011)
  • 8. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Socialize & Extend Socialize & Extend • Onboard individual segments to the core diagram • Demonstrate value • Report progress to build pressure to adopt • Onboard individual segments to the core diagram • Demonstrate value • Report progress to build pressure to adopt TestTest • Tangible over abstract • Clear over Comprehensive • Pilot - Test - Revise • Tangible over abstract • Clear over Comprehensive • Pilot - Test - Revise PreparePrepare DevelopDevelop • Segregate capabilities by differentiation • Address Data Mastering and Privacy • Develop Core Diagram adoption plan • Segregate capabilities by differentiation • Address Data Mastering and Privacy • Develop Core Diagram adoption plan • Socialize value and get buy-in • Create list of business models and key capabilities • Focus on the key challenge / strategy • Decide what decisions you want to support • Socialize value and get buy-in • Create list of business models and key capabilities • Focus on the key challenge / strategy • Decide what decisions you want to support
  • 9. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Turn by Turn directions
  • 10. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. BusinessModelCanvas Key Partners Key Activities Value Proposition Customer Relationship Customer Segments Key Resources Channels Cost Structure Revenue Streams Business Model An organized approach to describe one way in which an enterprise delivers value and meets its goals Required Competency Partner Type Value Proposition Customer Demands and Relationships Products and Services Distribution Channels Geographies and Locales Finance and Revenue Models Customer Type Resource / Asset input to delivered through affect and demand targets drives demands supports affect affect drives may include has targeted to targets Required Competency Partner Type Value Proposition Customer Demands and Relationships Products and Services Distribution Channels Geographies and Locales Finance and Revenue Models Customer Type Resource / Asset input to delivered through affect and demand targets drives demands supports affect affect drives may include has targeted to targets Source: Enterprise Business Motivation Model 3.5 http://motivationmodel.com
  • 11. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. OEM Installed Software Sales Business Model XBox Game Licensing Our initial effort at a core diagram started with the collection of 23 business models (only 8 are named here). Example: OEM Installed Software Sales OEM Installed Software Sales Online Advertising Platform as a Service Negotiated Volume Licensing Strategic Consulting Services Online Business App Services Bricks and Mortar Retail COA systems, Digital Distribution Systems Individual License Tracking & Invoicing Improve Sales of OEM hardware by including licensed operating software License Fee on a Per-item basis Collaborative development of software to amplify the value of innovative hardware OEM and Hardware Component Manufacturer Software + Software Keys Secure Electronic Distribution Authorized Replicator + Secure Print Vendor EMEA, LATAM, APAC, NorthAm Value proposition Required Competencies Required Assets Revenue Model Customer Expectations Customer Type Partner Type Products / Svcs ChannelsLocales
  • 12. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Porter’sValueChain IdeationTo Availability Awarenessto Lead LeadToOrder OrderTo Fulfillment FulfillmentTo Customer Value Plan to Earnings Release Hire to Retire Info Strategy to Service Response Counsel to Resolve Supporting Processes Core Processes MicrosoftEnterpriseValueChain
  • 13. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Accounts Receivable Product Data Management Business Intelligence Lic to Customer Activation WF Some capabilities create DIFFERENTIATION in the marketplace. These capabilities will change frequently. Rapid change is essential for BUSINESS AGILITY Business Model Key Differentiators Key Non-Differentiators OEM Installed Software Sales Track + Invoice each license Secure OEM Collaboration Agreement-Specific Pricing * Secure Online Licensing
  • 14. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. bizbizbiz Digital R&D Core Agile “Edge” R&D Business Capabilities Consistent “Core” Capabilities Ideationto Availability bizbizbizbizbizbiz Content R&D Physical R&D
  • 15. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. biz biz biz biz biz biz biz biz biz biz biz biz Customer Type #1 Customer Type #3 Customer Type #2 Agile “Edge” Lines of Business Consistent “Core” Capabilities OrderTo Fulfillment Core
  • 16. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Core Consistent “Core” Capabilities HR IT Legal Finance Agile “Edge” Support Functions
  • 17. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Sys #1 Sys #2 Sys #3 Customers Transactions Service Req Contacts Accounts Budgets Earnings Royalties Products Digital Origin Collateral Catalogs R+D#1 R+D#2 Division. A Division. B Division. C Division. D Ideation To Availability Awareness to Lead Lead To Order Order To Fulfillment Fulfillment To Customer ValueSupporting Functions Common 123 ABC DEF GHI AB2 DE2 GH2 DeptAlphaDeptBetaDeptGammaDeptDelta SegmentZSegmentXRegionERegionN Web Chat Call Ctr Mktg #1 Mktg #2 Sales #1 Sales #2 CRM IVR HR/Ben CMDB Fin Rpt
  • 18. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Name of Business Process Name of Business Process Names of Business Units Names of Business Units Centralized Data Facets Centralized Data Facets Specific System Names Specific System Names Groups of Systems Groups of Systems
  • 19. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Test the diagram with stakeholders Simplify if necessary Does it work during rationalization? Pilot with one area of the business / segment Onboard business areas / segments Indicate which systems are “approved” and which are “de-facto” Explain it to business stakeholders
  • 20. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. For collaboration-model companies – Focus on information to be integrated Integrate to the minimum sufficient level for agility Use your company’s process model if possible Be simple, clear, and specific Gain buy-in through adoption Test and Iterate
  • 21. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Your Presenter A. Nicklas Malik Senior Enterprise Architect Microsoft IT Enterprise Architecture nick.malik@microsoft.com Inside Architecture blog: http://blogs.msdn.com/nickmalik LinkedIn: http://linkedin.com/in/nickmalik
  • 22. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved. Image intentionally blurred
  • 23. © 2009 Microsoft Corporation. All rights reserved. This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.

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