Strategic EA: The Bridge Between
Business and IT Strategy


   Anne Lapkin


   Gartner Webinar


   5 November 2008
Notes...
Multiple Strategic Initiatives:
A Recipe for Brownian Motion

                                 Business Process        Bus...
Key Issues
1. What is the business context, and how do I
   build the business context for my enterprise?
2. How do you le...
A Coherent Context for Strategic Initiatives
 Adds Value All Across the Enterprise
                                       ...
A Shared Business Context Helps
Strategic Initiatives Work Together

                                                   Sh...
Business Context Defined
• The business context describes — through
  requirements, principles and models:
   - The strate...
Integrate Planning Within the Envelope of
 Shared Implications and Assumptions
                                     The Li...
What's In the Business Context?
1. A common requirements vision — a process for
   documenting and capturing:
    - The bu...
Creating the Business Context Is an
Iterative Process
   Validate           Validate            Validate           Validat...
It's Not Enough to Acknowledge External
Trends — Acknowledge Their Impact Too

      Trend                 Impact         ...
Derive Your Requirements
Business change requirements —
How must the business change?
                                    ...
Create Your Principles
Principle: Customer information is accessible across all
lines of business, regardless of the produ...
Create an Anchor Model of the Enterprise
The Business Context Informs BPI Initiatives

                         A BPI Framework for Success
 Strategic       Organi...
The Business Context Informs
Competency Centers
                    Business
                       skills
               ...
The Business Context Provides Goals, Objectives
and Performance Criteria for Managing the Portfolio



                   ...
My Enterprise Doesn't HAVE a
Business Strategy

                    Stop Whining!
At the end of the day, the important par...
The Gartner Business Value Model — Making
Implications and Assumptions Explicit
What Is Our      How Will It
 Strategy?   ...
Where Governance and Portfolio
Management Fit
                               Business       Strategic Response
Enterprise ...
Management Imperatives
CIOs and enterprise architects should:
  In the short term (when you get back to your desk)
   - As...
Gartner for IT Leaders – Enterprise Architecture
                                               • Gartner advice in the
  ...
Gartner Reduces IT Cost in Four Distinct Ways




        Visit gartner.com/economy now to see
       exactly how Gartner ...
Contact Information
• Please follow up with your Gartner Account
  Executive if you have additional questions,
  comments ...
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  1. 1. Strategic EA: The Bridge Between Business and IT Strategy Anne Lapkin Gartner Webinar 5 November 2008 Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via e-mail: vendor.relations@gartner.com. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
  2. 2. Multiple Strategic Initiatives: A Recipe for Brownian Motion Business Process Business Intelligence Enterprise Information Improvement Management Competency Center Program Management SOA Competency Center LEAN ITIL Portfolio EA Management
  3. 3. Key Issues 1. What is the business context, and how do I build the business context for my enterprise? 2. How do you leverage the business context for strategic initiatives in the enterprise? 3. How do you engage with business leaders to drive EA as strategy?
  4. 4. A Coherent Context for Strategic Initiatives Adds Value All Across the Enterprise Transform the Business Grow the Business • Translate business vision and strategy Run the Business • Understand into effective discontinuities enterprise change • Identify common between business areas • Ensure coherence goals and objectives across across multiple • Exploit multidimensional strategic programs interdependencies change programs • Identify synergies and between business opportunities for areas collaboration and sharing
  5. 5. A Shared Business Context Helps Strategic Initiatives Work Together Shared Goals and Objectives Common Constraints Shared Business Context Synchronized Road Maps Coherent Execution Source: scottdesignworks.com
  6. 6. Business Context Defined • The business context describes — through requirements, principles and models: - The strategic intent of the enterprise and its implications - The effect of external trends on the enterprise - The high-level constraints that will guide decision making to ensure consistency with the strategic intent of the enterprise - The functional components of the enterprise, their relationships with one another and with the enterprise ecosystem • The business context informs the subsequent architecture work and ensures alignment of the strategic initiatives and governance mechanisms with the business strategy
  7. 7. Integrate Planning Within the Envelope of Shared Implications and Assumptions The Linchpin! Implications? Develop Annual Operating Plan 3-5 Year Biz Biz Strategy Strategic Business Operational Execution Goals Creation Intents Planning Plan Adjust Operating Model Assumptions? All functional entities impacted by strategic intent must share and compare implications, assumptions and proposals using a consistent methodology.
  8. 8. What's In the Business Context? 1. A common requirements vision — a process for documenting and capturing: - The business strategies of the enterprise - The effect of environmental factors on the strategies of the enterprise: 1) market pressures; 2) regulatory pressures; and 3) technology pressures - The implications of the business strategy and environmental factors on: 1) the processes the business performs; 2) the people who perform the processes and how they are organized; 3) the information the business uses; and 4) the technologies that the business employs 2. A set of principles - Constraining architectural, implementation and governance decisions to best support the business strategy 3. A functional model of the business
  9. 9. Creating the Business Context Is an Iterative Process Validate Validate Validate Validate Document Document Derive Derive Create the strategies implications requirements principles anchor model and trends Business Context BPCC BICC SOACC PPM ITIL EA
  10. 10. It's Not Enough to Acknowledge External Trends — Acknowledge Their Impact Too Trend Impact Implication The market wants Banking and financial We need a single view of an integrated view services customers are the customer across all demanding more internal systems and of accounts visibility across their customer-facing services accounts, with greater ease of use Compliance Regulatory compliance We must reduce regulations are has forced us to compliance costs as a increase the percentage of revenue, becoming more expenditure on and while leveraging the stringent effectiveness of internal internal audit and controls controls, resulting in to identify process increased cost efficiencies and customer experience improvement opportunities
  11. 11. Derive Your Requirements Business change requirements — How must the business change? Institute personal bankers and • Process account management process for • Organization high-net-worth customers • Finances • Culture Business information requirements — what new types of information will be Customer profitability by individual required ? customer and channel Information technology requirements — Enterprise data warehouse and what new technology capabilities must analytics be provided? Business solution requirements — what Customer analytics: retention and segmentation to evaluate the programs will support our strategic profitability of customers, market objectives? segments and product lines
  12. 12. Create Your Principles Principle: Customer information is accessible across all lines of business, regardless of the product relationship to the customer. Justification: Our strategy requires us to develop deeper, more-profitable relationships with customers by offering a one-stop resource for all of their financial services — personal as well as business. Implications: • All lines of business must have a single, consistent data source for customer information • We must have information and processes for assessing customer profitability
  13. 13. Create an Anchor Model of the Enterprise
  14. 14. The Business Context Informs BPI Initiatives A BPI Framework for Success Strategic Organizational Workforce Governance Methods & Tools & Plans Behaviors Issues & Standards Templates Technologies Strategic Change Process skills Process Six Sigma, BPA requirements management change Lean, Kaizen, Roles and management Rummler- Visio Process Communications responsibilities Brache and hierarchy defined Process more Paper/Post-Its Performance ownership Process management SCOR, Performance KM or improvement Compliance RosettaNet plan and process asset objectives Competency incentive Agile IT repository centers alignment Reporting Process Simulation/ BPMS performance Program Training Notation optimization metrics management standards algorithms ESB ABC BPI initiative Project SOA …. business management standards Balanced case scorecard
  15. 15. The Business Context Informs Competency Centers Business skills Business needs Organization and processes Define Control Business needs vision funding Manage Establish programs standards Organization Develop CC and processes user Build Tools and skills Organize technology methodology applications blueprint leadership Integration Business needs Tools and and management applications Statistical and Data management process skills and integration Analytic IT skills skills Source applications
  16. 16. The Business Context Provides Goals, Objectives and Performance Criteria for Managing the Portfolio J Increasing Value Increasing Value J F F A G A G C M C H M Increasing Risk Increasing Risk As-Is Portfolio Target Portfolio Size of circle = Project cost Color = Project health On target At risk In trouble
  17. 17. My Enterprise Doesn't HAVE a Business Strategy Stop Whining! At the end of the day, the important part of the business strategy is the four to six things that the enterprise wants to do differently in order to be more successful: • Target high-growth markets • Attract high-value customers with comprehensive online services • Deepen the customer relationship • Grow through mergers and acquisitions A strategy articulates a vision or objective, and bounds the options for attaining it.
  18. 18. The Gartner Business Value Model — Making Implications and Assumptions Explicit What Is Our How Will It Strategy? Impact Us? How Will We Execute? Business Aggregates Aspect (desired business outcomes) Primes (leading performance indicators) Target Market Market Coverage Market Share Opportunity/Threat Market Index Index Index Index Responsiveness Product Portfolio Channel Configure-ability Index Profitability Index Index Demand Sales Opportunity Sales Cycle Sales Close Sales Price Sales Index Index Index Index Management Effectiveness Cost of Sales Forecast Customer Index Accuracy Retention Index Product Development New Products Feature Function Time-to-Market R&D Success Effectiveness Index Index Index Index On-Time Order Fill Material Service Customer Delivery Rate Quality Accuracy Responsiveness Service Customer Care Agreement Transformation Performance Performance Effectiveness Ratio Supply Supplier On-Time Supplier Order Supplier Material Supplier Service Supplier Delivery Fill Rate Quality Accuracy Management Effectiveness Supplier Service Supplier Care Supplier Agreement Supplier Trans- Performance Performance Effectiveness formation Ratio Operational Cash to Cash Conversion Asset Sigma Efficiency Cycle Time Cost Utilization Value Recruitment Benefits Skills Inventory Employee Human Effectiveness Index Administration Index Index Training Index Resources HR Advisory HR Total Responsiveness Index Cost Index Support Information Systems IT Support Partnership Service-Level Performance Performance Ratio Effectiveness Services Technology New Projects IT Total Responsiveness Index Cost Index Finance and Regulatory Compliance Accuracy Advisory Cost of Service Responsiveness Index Index Index Index
  19. 19. Where Governance and Portfolio Management Fit Business Strategic Response Enterprise Governance Strategy and Functions 1 … n Compliance Intent Management Future-State Requirements Principles, models, standards, guidelines Core Change Assumptions Business Value Current-State Assessment Assessments Model Gap Analysis Business metrics, Go pre-/postmortems to add to Slide Master client's name, project # Portfolio Management Project Alternative Analysis Management Road Map Proposed Initiatives Design, build, run
  20. 20. Management Imperatives CIOs and enterprise architects should: In the short term (when you get back to your desk) - Assess the clarity of your business context — make immediate plans for remediation if necessary - Assess the drivers of your strategic initiatives and governance programs for coherence In the medium term (within six months) - Complete the articulation of your business context • Requirements, principles AND models - Define how enterprise programs should use the business context In the long term (one year) - Assess program performance against your strategic objectives - Remix and repeat as necessary
  21. 21. Gartner for IT Leaders – Enterprise Architecture • Gartner advice in the context of your role • Dedicated portal focused on what you need to know from Gartner or the media • Analysts as coaches • Influenced by Peers • Toolkit content helps you be more efficient, effective • Access to all 8 Roles Let Gartner make you successful Follow up through your Account Executive or email us at gartnerwebinars@gartner.com today
  22. 22. Gartner Reduces IT Cost in Four Distinct Ways Visit gartner.com/economy now to see exactly how Gartner takes cost out of IT
  23. 23. Contact Information • Please follow up with your Gartner Account Executive if you have additional questions, comments or requests. • If you need help with who that is, please e-mail: gartnerwebinars@gartner.com. • If you would like a copy of today’s presentation, e-mail us at: gartnerwebinars@gartner.com.

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