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

Developing a Core Diagram of anAgile Enterprise using MSBI(Minimum Sufficient Business Integration) A. Nicklas Malik Senior Enterprise Architect Microsoft Enterprise Architecture

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.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.Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Coordination Unification -Shared customers, products or suppliers -Globally integrated business processes often -Impact on other business unit transaction with support of enterprise systemsBusiness Process Integration -Operationally unique Business Units (BU) -Centralized Management applying functional High -Autonomous Business Management / process / business unit matrices -BU control over business process design -Central IT decision making -Shared customer / product / supplier data -BUs with similar or overlapping operations -Consensus processes for designing IT -High level process owners design infrastructure services; IT application decisions standardized processes made in the business units -Centrally mandated Databases Diversification Replication -Few shared customers or suppliers -Centralized (or federal) control over business -Few data standards across business units process design -Operationally unique Business Units (BU) -Few, if any, shared customers -Most IT decisions made within business units -Operationally similar business units Low -Autonomous Business Management -Autonomous BU leaders with limited -Independent transactions discretion over business processes -BU control over business process design -Centrally mandated IT services -Standardized data definitions with data locally owned (some aggregation at corp). -Independent transactions (aggregated) Low High Business Process Standardization Source: Enterprise Architecture As Strategy, Ross, Weill, Robertson, HBS PressPresentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Problem:Each time you reuse a business service,process, or system, that element becomesmore brittle, and slower to change.How do we create an Enterprise Architecturethat avoids reusing too much?Solution:Build a Core Diagram that IllustratesAgility at the Edge,Consistency at the Core Minimum Sufficient Business Integration means Integrate ONLY the minimum capabilities needed to meet shared goals. Distribute the rest.Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

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) Disney Company Core Diagram (circa 1957) ING Direct Core Diagram (adapted from Enterprise Architecture As Strategy) 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.Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Socialize & Prepare Develop Test Extend• Socialize value • Segregate • Tangible over • Onboard and get buy-in capabilities by abstract individual differentiation segments to the• Create list of • Clear over core diagram business models • Address Data Comprehensive and key Mastering and • Demonstrate • Pilot - Test - capabilities Privacy value Revise• Focus on the • Develop Core • Report progress key challenge / Diagram to build strategy adoption plan pressure to adopt• Decide what decisions you want to supportPresentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Key Partners Key Activities Value Customer Customer Proposition Relationship Segments Resource / Asset Business Model Canvas Key Channels demands Resources Required Finance and Competency Rev enue Models drives Cost input to Structure Revenue Streams Value Proposition Customer Demands and Relationships has supports targets drives Partner Type affect Products and Customer Type Business Model Serv ices delivered targeted An organized approach to describe one way in affect through to may Geographies and Distribution include which an enterprise Locales affect and demand Channels targets delivers value and meets its goals Source: Enterprise Business Motivation Model 3.5 http://motivationmodel.comPresentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

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 Required COA systems, Assets Digital Distribution XBox Negotiated Systems Game Volume License Fee on a Revenue Per-item basis Model Licensing Licensing Required Individual License Competencies Tracking & Invoicing OEM Collaborative Customer Installed Strategic Value development of Expectations Software Consulting proposition Improve Sales of software to Sales Services OEM hardware by amplify the value including licensed of innovative operating hardware Partner software Type Products / Svcs Bricks and OEM and Authorized Replicator + Software Online Mortar Hardware Secure Print Vendor + Advertising Retail Component Software Keys Manufacturer Locales Channels Customer Online EMEA, LATAM, APAC, Secure Electronic Type Platform Business NorthAm Distribution as a App Service Services OEM Installed Software Sales Business ModelPresentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Porter’s Value Chain Core Processes Microsoft Enterprise Value Chain Lead To Order Awareness to Fulfillment To Ideation To Availability Fulfillment Customer Order To Value Lead Plan to Earnings Release Hire to Retire Supporting Processes Info Strategy to Service Response Counsel to ResolvePresentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

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 Track + Invoice each license Accounts Receivable OEM Secure OEM Collaboration Product Data Management Installed Software Agreement-Specific Pricing * Business Intelligence Sales Secure Online Licensing Lic to Customer Activation WFPresentation 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 Physical Digital Content Availability Ideation to R&D R&D R&D Agile “Edge” R&DBusiness Capabilities Core Consistent “Core” Capabilities Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Agile “Edge” Lines of Business biz Customer Fulfillment Type #1 Order To biz biz biz Consistent “Core” Capabilities biz Core biz Customer Type #2 biz biz biz Customer Type #3 biz biz bizPresentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Consistent “Core” Capabilities Core HR IT Legal Finance Agile “Edge” Support FunctionsPresentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Division. A Division. B Division. C Division. DOrder To Segment XFulfillment R+D#1 R+D#2 ABC MktgDept Delta #1 DEF Ideation To Availability Segment Z Mktg GHI #2Dept Gamma Sys #1 Sys #2 Sys #3 Common Awareness to Lead 123 Customers Accounts Products Transactions Budgets Digital Origin Lead To Order Region N Service Req Earnings Collateral AB2 Contacts Royalties Catalogs SalesDept Beta #1 DE2 Fulfillment To Supporting Customer Value Sales Region E GH2 Functions #2 CRM IVRDept Alpha HR/Ben CMDB Fin Rpt Web Chat Call Ctr Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

Names of Business Name of Units Business Process Specific System Names Centralized Data Facets Groups of SystemsPresentation 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 stakeholdersPresentation 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 IteratePresentation 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/nickmalikPresentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

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

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