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Managing technology in an
ever-changing environment
Using integration to
create business and IT alignment
3gamma.com
Jens Ekberg Director and Head of Solutions at 3gamma
Trond Hjorteland Senior developer and IT architect at Scienta
2
Successful companies leverage technology integration to create
a competitive advantage. Technology integration, strategically deployed
and executed with discipline, can be an enabler of cost reductions,
improved customer relationships and digital innovation.
Figure 1 – Expectations on IT
IT IS EXPECTED TO DELIVER INNOVATION AND BUSINESS DEVELOPMENT
WHILE ENSURING COST-EFFECTIVE LIGHTS ON
80 % thinks time to market has become
increasingly important for IT services…
•	 IT is struggling to keep up with the business
•	 New and updated IT services are expected with shorter intervals
•	 Readily available alternatives, e.g. cloud services,
adds additional pressure on IT
•	 The digitalization of business makes IT an integrated part
of business development
•	 IT is expected to proactively drive innovation and
improvement initiatives
•	 IT is going from business partner to business driver
•	 Stable and reliable IT operations have become a prerequisite
•	 Service quality and operational stability needs to be maintained
even during times of constant change
* 3gamma – The state of ITSM in Swedish organizations survey © 2013
TIMETOMARKETBUSINESSDRIVERSTABILITY
…while 90 % thinks IT has become an even
more critical part of business development…
…while 80 % still are under pressure to
improve operational stability*
IT is an integral part in businesses of today. It is a critical
component in a majority of business processes, from
customer interaction and support processes, to business
infrastructure and product development. IT becomes
increasingly more important as digitalisation intensifies.
The ability to manage technology in this ever-changing
environment becomes a driver for competitive advan-
tage. IT organisations need to manage an integrated,
diverse and complex portfolio of technologies delivered
both internally and via external partners. Complexity
and the rapid pace of technological change create a
need for a disciplined, structured and business-aligned
technology integration strategy.
IT organisations are faced with an increased pressure to
deliver innovation, either driven by customer require-
ments or through proactive, technology-driven busi-
ness development, as shown in picture 1. This pressure
is prevalent, to various degrees, across a wide range of
industries and IT organisations are struggling to keep
up. In this whitepaper, 3gamma and Scienta, outline
a model for using the concept of value disciplines to
define integration architectures and technology stra-
tegies to support different business requirements and
expectations. As a conclusion, a high-level approach for
transitioning to a target model is presented.
3
USING VALUE DISCIPLINES AS
A BLUEPRINT FOR BUSINESS AND
IT ALIGNMENT
In essence, there are three paths to market leadership1
.
Companies can become market leaders by excelling in
either operational excellence, customer intimacy or
product leadership. These paths, or value disciplines,
align with three generic core processes: business infra-
structure process, the customer relationship process
and the product innovation process2
.
The economics, rules of competition and culture, differ
between the value disciplines, see table 1, for compa-
nies to excel in any of the core processes, focus is key.
Rather than being good enough in all three processes,
companies should direct investments and focus on
one of these core processes. It follows that IT’s role
is different in each setting; supporting standardised,
predictable, and highly efficient (business) operations
is different from fostering creative innovation or custo-
mer intimacy. Even though this may appear obvious,
many IT organisations are oriented toward operational
excellence.
Drawing on 3gamma’s and Scienta’s experience, many
IT organisations focused on internal efficiency during
the last few decades, standardisation and cost savings
were the focus for countless IT initiatives. IT organisa-
tions became centre of excellences, providing standar-
dised generic services. IT costs were cut and processes
optimised. IT almost seemed to exist for IT’s own sake.
Even worse, it created organisational inertia, where
IT organisations became slow to adapt and unable to
innovate. Ironically, IT itself became an obstacle for the
digitalisation of business. Keeping pace with tech-
nological advancements, adopting new innovations,
and aligning them with the business strategy became
increasingly difficult.
In a digital economy, IT needs to continuously and
rapidly acquire new, advanced capabilities in order to
align with an ever-changing business3
. This impacts
on internal processes, operational models, IT sourcing
strategies and how companies manage technology.
Specifically, integration architecture has to be a top
priority for IT managers. Essentially, it is an enabler of
a company’s value discipline. Integration architecture
can, if managed and implemented wisely, contribute
to drive standardisation and cost reductions, customi-
sation and specialisation, and/or innovation. As shown
in table 2, the organisational impact, the capabilities
needed, how technology is managed, and the key
considerations for IT management differ between the
value disciplines.
Customer intimacy Product leadership Operational excellence
Economics Significant cost of customer
acquisition, focus on share of
wallet per customer, economies
of scope is key
Premium price for novel
products and services directed
at early adopters, time to
market is key
Significant fixed costs, large
volumes important to reduce
cost per unit. Economies of
scale is key
Competition Focus on scope, consolidation
with a few major players offering
a wide/full-service range of pro-
duct and services
First-mover advantages, low
barriers for new players, low
standardisation, unclear custo-
mer expectations, inside-out
Focus on scale, consolidation,
few dominant players offering
standardised services, outsi-
de-in, price competition
Culture Service-oriented, customisation
based on customer requirements
Experimental, future-driven, en-
trepreneurial, heroic, visionary
Cost-focused, process-oriented,
conformance, values standards
and efficiency
Information
technology
Customer specific integration
of various data and information
sources (internal and external)
Technologies enabling coopera-
tion and sharing
Integrated low-cost transaction
systems
Table 1 – Characteristics of strategic focuses (adopted from Hagel and Singer, and Treacy and Wiersema)
ORGANISATIONAL CHARACTERISTICS VARY DEPENDING ON STRATEGIC FOCUS
4
Customer intimacy	 Product leadership	 Operational excellence
IT organisational
impact
•	 Focus on business engagement,
define teams based on solution
requirements (scrum etc.)
•	 Clear product ownership in the
business (product owner part of
business, not IT)
•	 Can be centralised or distri-
buted depending on company
industry dynamics
•	 Focus on architecture and
life-cycle management of
innovations as they mature
•	 Build teams based on
services
•	 Product ownership in IT
•	 DevOps processes
•	 Self-organising teams
•	 Focus on orchestrating external
services
•	 Focus on service delivery, i.e.
design solution in line with
delivery setup
•	 Focus on test and quality
assurance
•	 Strong management and
well-structured governance
structure
•	 Strong process-orientation
Characteristic
IT capabilities
•	 Strategic and operational
business relationships
•	 Project portfolio management
•	 Program and project
management
•	 Business development
•	 Solution architecture
•	 Innovation
•	 Business development
•	 Enterprise/IT architecture
•	 Program and project
management
•	 Solution architecture
•	 Solution development
•	 Operational business
relationships
•	 Process management
•	 Service introduction
•	 Change management
•	 Service delivery
•	 Supplier management
•	 Contract management
•	 Risk management
Technology
impact and
characteristics
•	 Tailored solutions per customer
•	 Heterogeneous infrastructure
per solution
•	 Customised add-ons or
modifications to packaged
solutions
•	 “Dumb pipes, smart end-
points”
•	 Event-driven simple message
routing
•	 SOA 2.0/microservices
architecture
•	 Requirements-driven/
Outside-in (packaging of
internal and external
resources and services)
•	 Event-driven/smart end-
points
•	 Differentiated infrastructure
(cloud/on premise) with
fit-for-purpose service levels
•	 Enterprise application
integration (EAI) pattern
•	 Inside-out (integration of
standard services/solutions)
•	 Broker/ESB style
•	 Homogeneous infrastructure
with common service levels
•	 Automation (monitoring,
management) and focus on
transactions
•	 Automation and contingency
planning
Key
considerations
•	 IT cooperates with business
for pull-oriented innovation
processes
•	 Development occurs in de-
velopment projects through
customisation to meet business
requirements/customer-driven
innovation
•	 IT has capability for
push-oriented innovation
processes
•	 Innovation is driven bot-
tom-up, sometimes within IT
or with IT partners
•	 Innovation occurs through
integration of services
(internal and external)
•	 Development and innovation
occurs within applications, as
defined by third party roadmap
•	 Sourcing and life-cycle
management is key
•	 IT innovation primarily outside
of the company boundaries.
Innovation equates continuous
improvement
Table 2 – Aligning technology with value discipline
IT SHOULD ALIGN PEOPLE, PROCESSES AND TECHNOLOGY WITH
THE ORGANISATION’S STRATEGIC FOCUS
INTEGRATION ARCHITECTURES FOR
OPERATIONAL EXCELLENCE
Operational excellence is about achieving standardised,
cost-effective and predictable products and services.
Companies following this value discipline are not
unaffected by digitalisation and are non-dependant on
IT innovation. However, it means that the application
of IT technology within the company is different, it is a
supporting the capability to achieve the overall goal of
operational excellence. IT needs to adhere to a pre-de-
fined, controlled formula. Typically, an IT organisation
supporting an operational excellence focuses on:
•	 Limited set and standardised set of services
•	 High expertise in defined services
•	 Limited to moderate frequency of change through a
pre-defined release calendar
•	 Cost-efficient, predictable, high-volume operations
through standardised IT processes
•	 Continuous improvements to existing services
•	 Consolidated IT environment and/or a limited set of
standardised applications
•	 Often a single-vendor outsourcing or a layered (infra-
structure/application maintenance) outsourcing with
few service providers
5
Key capabilities include: process management, service
introduction, service delivery and supplier manage-
ment. Starting from a technology point of view, critical
success factors are standardisation and keeping appli-
cations and infrastructure as homogenous and ’off the
shelf‘ as possible. The simplest and most cost-effecti-
ve way of integrating such Commercial Off-the-shelf
(COTS) systems – cloud or on premises – is by applying
classic Enterprise Application Integration (EAI). The ad-
vantage is, that very little customisation is required to
the systems, centralising most of the logic and custom
code in the broker. This is then deployed in a hub-
and-spoke type topology (see figure 2). Centralisation
requires that the organisation build core competence
in integration infrastructure and take responsibility for
orchestrating business processes and implementing
core business logic.
Different broker systems can be employed, most com-
monly a high-end integration platform with support for
business activity monitoring and process management,
these brokers are often classified as enterprise service
‘buses’. Nevertheless, given their central role in the
architecture they become mission-critical business
applications, rather than pure integration infrastructu-
res. Ergo, IT organisations must have skilled personnel
with deep business knowledge, as they become a
critical factor in the IT maintenance and development
process. This should be considered when developing
the IT sourcing strategy.
Managing technology in this context, is about mana-
ging and aligning the strategic vendors’ roadmaps (the
applications illustrated in figure 2) with the internal
need for business development. The integration archi-
tecture should act as the intermediary that creates the
customisation required to meet business requirements
and create operational excellence. The role of IT stra-
tegists and IT architects, is to work closely with service
managers to cater for the introduction of new standard
functionality into production. IT sourcing is critical and
long-term partnerships with a few select service provi-
ders should be considered, as reduction of transaction
costs relating to sourcing is an important factor. The
role of the contract is to govern and control deliveries
with clearly articulated service level agreements and
predicable costs.
INTEGRATION AS AN ENABLER
OF OPERATIONAL EXCELLENCE
– THE CASE OF A BANK
In order to improve quality of their IT delivery,
the bank was transitioning from a single-sour-
cing to a multi-sourcing setup. The rationale
was to improve operational stability, gain access
to standard applications’ roadmaps and reduce
the cost of customisation.
The bank opted for a model with:
•	 Standard application delivered by strong part-
ners, focused on achieving economies of scale
by aligning with their product roadmaps
•	 Setup of an integration competence centre
delivered as a service with a strong partner
delivering integration design, integration
development and maintenance services,
focusing on integrating standard applications/
services
•	 An internal governance model centred
around service managers (delivery) and
Chief IT architect (architecture)
The result
•	 Improved flexibility in the sourcing of busi-
ness-critical IT services
•	 Cost-effective access to new features through
improved access to standard functionality
	
INTEGRATION
HUB
APPLICATION
APPLICATION
APPLICATION
APPLICATION
Figure 2 – Hub and spoke topology
6
INTEGRATION ARCHITECTURES FOR
CUSTOMER INTIMACY
Customer intimacy is about interacting with the custo-
mer to deliver customised, broad solutions to create
high-value and long-time relationships with customers.
Customer intimacy builds on the ability to understand
and respond to customer requirements. Typically, an IT
organisation supporting customer intimacy focuses on:
•	 A wide range of services
•	 A flexible and agile delivery organisation, typically
controlled by product owners in the business organi-
sation
•	 A moderate to high frequency of changes within the
IT environment/IT services
•	 A diverse IT environment, often with significant
customisations in applications or as complementary
applications
•	 A multi-sourcing environment with several vendors
or a significant in-house IT footprint
Key capabilities include: strategic and operational busi-
ness relationships, project portfolio management, pro-
gram and project management, business development
and solution architecture; from a technology point of
view, the ability to customise is critical. It is imperative
to cater for best of breed solutions and integration of
these with standard packaged solutions and custom
development.
The importance of IT depends on industrial context, for
example, in a manufacturing company IT is likely to be
focused on integration of COTS with limited customisa-
tion, both in the integration and the systems them-
selves. In this setting, the technology strategy share
a number of traits with operational excellence. The
competitive advantages will most likely lie in the way
the organisation is involved with the customer, and
the level of adaptability of each system to meet each
customer’s specific requirements. The customisation
typically originates from the complementary services
offered; for service-based industries, where the
business is driven by providing services that are tailo-
red to the customer needs, a much more specialised
IT portfolio is required to gain competitive advantage.
Pure COTS may still be a good choice for certain parts,
but it is likely that custom-developed applications or
significant adaptations are required to support the
business.
One way to manage the inherent complexity arising
from customisation, is to employ domain-driven design
(DDD). Clearly defined domains and service-orientation
can be used to enforce a loosely coupled set of highly
cohesive business services. The service boundaries
should be viewed as logical, modelling all, both custom
and commercial systems, into groups that match the
business areas, e.g. sales, customer support, marke-
ting, inventory, shipping, and billing. Each of these
business areas, or services, can contain several systems
and components from different layers, e.g. databases,
DOMAIN
DOMAIN
DOMAIN
Service boundaries – limited and loosely coupled interactionsFigure 3 - The concept of loosely coupled domains that encapsulates
all data and functionality needed for the business service improves
flexibility and reduces operational dependencies
7
middleware and front-end applications and their
interaction with other services should be few and
as loosely coupled as possible.
Ideally, each service should be able to deliver its
business functions, neither needing data nor support
from others. One way to achieve this is to distribute
the data, letting each service own its own data and get
all the reference data it needs from others when state
changes occur. A service is hidden behind the bounded
context as defined in DDD, an essential concept when
designing a system of highly autonomous services
aligned with the core business capabilities. By making
the services as autonomous as possible, they can have
individual life-cycles and therefore be better suited to
meet ever-changing business requirements.
This setup will, as opposed to the operational ex-
cellence case, have as little logic and functionality
in-between the services as possible. Logic between
services create coupling and reduces service auto-
nomy. In this scenario, ’dumb pipes, smart endpoints‘
are required. Integrations should be purely technical,
and preferably broker-less, thereby avoiding any leaka-
ge of business functionality across the service bounda-
ries. The integration architecture should be based on
messaging systems that simply route messages from
one endpoint to another. Some choose to use web
services or REST4
, while others take it to the ultimately
loosely-coupled approach and enforce event-based
integrations only. Such an event-driven approach
implies no request/response between services and
any state changes are propagated as simple messages,
similar to a finite state machine. Such an approach will
require a high degree of maturity in the service design,
but will at the same time make integration as simple as
network routing.
The service-oriented approach will create a more
manageable IT portfolio, which is aligned with the busi-
ness organisation and its needs. The portfolio will also
be highly adaptable to frequent business requirement
changes, but it will require organisational changes to
IT. Teams need to be built around the services and they
need to take full ownership of the services’ systems,
applications and business capabilities.
Managing technology, in this context, is about main-
taining a clear view of the technology landscape and
continuously managing the application life-cycle across
all business processes. Maintaining an understanding
of the applications and their underpinning infrastructu-
re, including all integrations, is key to enabling custo-
misation and controlling the cost and risk. Complexity,
arising from both technology and the vendor portfolio,
is inevitable and IT must be capable in managing it. The
role of the outsourcing contract is to govern collabo-
ration and additions/changes in a clearly defined way,
underpinned by a set of goals and objectives that are
shared between the customer and the vendor5
.
MANAGING APPLICATION
PORTFOLIO COMPLEXITY AND
LEGACY TRANSFORMATION
– THE CASE OF A MEDIA COMPANY
The media company was undergoing a major
transformation arising from digitalisation. The
company wanted to rapidly transform its legacy
environment to meet new business require-
ments. The product and service development
were driven by product owners in the business,
while IT was tasked with balancing require-
ments from several business stakeholder and
modernising the company’s application portfo-
lio concurrently.
The media company opted for
a model with:
•	 A virtual integration competence centre
spanning across several development teams,
with the majority of integration work perfor-
med in-house. External resources were added
as needed to each team. The focus was on
balancing the need for operational excellence
in the legacy environment while allowing for
business-driven customisation for new digital
services.
•	 Two integration platforms:
•	 An enterprise-class platform for integration of
legacy back-end applications
•	 A simpler, lean platform for integration of
online application and high-throughput
integrations
•	 A governance model primarily based on
governing principles for integration that was
regularly revisited in common forums and
communicated by the central IT architecture
team
The result
•	 Improved time to market for new initiatives
•	 Improved performance of online services
•	 Reduced operational dependencies between
applications
•	 Improved flexibility for customisation
8
INTEGRATION ARCHITECTURES
FOR PRODUCT LEADERSHIP
Product leadership is about delivering new and
innovative product services to the market ahead of
the competition. IT is often an integral part of the
innovation and business development process6
.
Product leadership requires IT to be a proactive
business driver. Typically, an IT organisation
supporting product leadership focuses on:
•	 Limited set of high-end/strategic IT services
•	 Standard services for non-core business functions
/processes
•	 Advanced capabilities within project portfolio
management
•	 High frequency of change
•	 Autonomous, self-organising teams with ’good
enough‘ processes
•	 Modularised IT architecture, solution components
and systems
•	 Non-standardisation, both from a process/
governance point of view and a service point of view
•	 A mix of multi-sourcing and in-house IT
Key capabilities include innovation, business develop-
ment, enterprise/IT architecture, program and project
management, solution architecture, IT development,
and testing. Additionally, IT needs to scan the market
for new competitive capabilities and technologies to
incorporate into its portfolio to proactively define and
execute on new business opportunities.
For companies focusing on product leadership, a
highly distributed service-oriented IT landscape is a
necessity. Flexibility and parallelism are required to
deliver new services and components without affecting
ongoing operations. In this setting, service-orientation
is mainly a top-level architecture and maps to a limited
set of well-defined business areas. As for customer
intimacy, each service will typically be broken-up into
a large number of small and autonomous business
components, each owning and running specific parts
of the service’s responsibilities. While each service in
the customer intimacy path may contain large COTS
and small custom-made applications, this approach
requires a more fragmented setup. Many refer to
this approach as microservices. The idea is, that each
service within a service is as small as possible in order
to be able to create, change, and retire them quickly
and with as little impact to existing components as
possible.
Integration between each of these components may be
done in different ways, both using request/response,
shared state (e.g. session objects) and message-pas-
sing. As for top-level services, using events creates
the least amount of coupling. However, this must be
balanced with the need for composability of various
components from different services in one or several
business processes. In such situations, shared state is a
good choice, e.g. by using UI composition, and sharing
state using session cookies.
A highly fragmented and distributed IT landscape will
raise the expectations on the IT organisation. Each
team must take full ownership of the life-cycle of each
service and its components, from initiation to retire-
ment. In essence, this means that when employing a
microservices architecture, DevOps7
is the preferred
way to go in order to get safe, stable and cost-effective
operations. Innovation, especially outside the bounda-
ries of existing operations, requires dedicated teams8
.
“Outside-in architectures would begin with the
challenge of organizing IT resources across a large
ecosystem of individual and institutional participants
[…] There won’t be any single control point from which
the designers of such an architecture could mandate
adoption of specific applications”9
.
Managing technology in this context, is about mana-
ging innovation. From an internal perspective, innova-
tion is likely to occur through collaboration, cross-func-
tional and dedicated teams with external partnerships/
inputs. Innovation initiatives typically require an ad
hoc organisational model and a well-defined learning
and feedback process10
. IT outsourcing requires special
attention is this setting, as it cannot be focused on ope-
rational excellence. Innovation thrives from variety and
experimentation, things that are not easily captured in
9
a contract. The role of the contract is to outline the use
of resources in the innovation process, be it techno-
logical development, sales or consulting. Innovation
clauses in the contract that define upfront the expecta-
tions on innovation are contradictory to the logic of
innovation, as it cannot easily be standardised through
definition of predictable and repeatable processes.
These type of clauses are suitable for continuous
improvements, not innovation.
DELIVERING INNOVATION
THROUGH INTEGRATION – THE CASE
OF A TELECOM COMPANY
The telecom company had reached a point
where central and critical IT components had
grown into large and unwieldy monoliths.
Increased focus on reducing cost, faster time
to market and tighter service level agreements,
put a large strain on these big systems, as well
as being a rather unfriendly environment for
innovation and outsourcing.
The telecom company opted for:
•	 Breaking apart the monolith into distinct  
business modules, matching the main core
business areas and thereby aligning it with
the business
•	 Each module, or business service, was further
broken down into distinct runtime compo-
nents, each handling a concrete business
functionality
•	 Every individual component was made as au-
tonomous as possible, with few connections
to other systems
The result
•	 Improved time to market for new initiatives
•	 Individual service level agreements
•	 Considerably safer delivery of changes
•	 Faster on-boarding, both for local and
offshore IT developers
•	 Safe and fertile ground for experimentation,
innovation and modernisation
TAKING A STRATEGIC APPROACH TO
MANAGING TECHNOLOGY AND
INTEGRATION TO ENSURE BUSINESS
ALIGNMENT
To address multifaceted business customers, IT needs
to create a toolbox for meeting differentiated require-
ments. Integration management and technical archi-
tecture are at the heart of that toolbox:
•	 Improve time to market for new services by using
information and functionality across applications and
services and by operationalising processes for inte-
gration development, including providing supporting
tools and processes
•	 Improve stability and robustness of business servi-
ces through minimised operational dependencies
between applications and integration technologies,
e.g. queue management technologies and monito-
ring services
•	 Enable IT sourcing aligned with business objectives
by decoupling sourcing objects, i.e. keep them sepa-
rated to make it possible to align the sourcing model
per object, rather than applying a one-size-fits-all
approach
•	 Enable innovation and development within each
sourcing object/functional area/business process in a
flexible way. Integration can make it possible to rely
on the functional roadmap of the business appli-
cations, rather than having to drive development
internally.
•	 Optimise operational costs and reducing complexity
across the application and infrastructure portfolio
by implementing the right functionality in the right
application and keeping applications ’as standard
as possible’
•	 Enable scaling of individual services and defining
specific service level agreements per service to meet
new non-functional requirements, e.g. to manage
monitoring in an internet of things context
Companies need an approach to managing technology
that is aligned with IT’s strategic direction. The IT capa-
bilities and the IT support needed by the business need
to guide the IT architecture and integration
strategy, as illustrated in figure 4.
The classic approach to integration management is
to set-up an integration competence centre (ICC) as a
centralised function or as a unit tasked with the design,
development, maintenance, and operations of integra-
tions and underpinning infrastructure. This function
is in control of the majority of information exchanged
between applications within the portfolio. This model
fits very well with an operational excellence focus. It
establishes clear control, robust delivery processes and
a centralised body of knowledge to manage implemen-
ted business logic. It also aligns very well with a
cost-focused outsourcing (economies of scale). It is
however not suitable for neither customer intimacy
nor product leadership.
In a customer intimacy setting, the technology mana-
gement and integration are no longer about exerting
control but rather to facilitate effective customisation/
10
flexibility and to provide the necessary tools and
processes to autonomous development teams. Any
centralised function should be a small team focused
on developing common assets than can be deployed
within IT. Business logic will be implemented within the
end-points by separate teams. The division of respon-
sibilities between the central team and the distributed
development teams should be done based on time to
market requirements. The central team will also provi-
de documentation services to maintain an overview of
a complex, customised environment.
Product leadership is based on innovation. Central
control, or even common processes and technologies,
could be detrimental to IT’s innovation capabilities.
Hence, there shouldn’t be any central unit/function
governing and controlling integration. Technology
management and integration should be guided by a
set of principles that are created by and communica-
ted across self-organising development teams. New
ideas and thought leadership (note, not best practices)
are disseminated through common forums. Commu-
nication of principles, coaching, and forums may be
facilitated by a central function.
These blueprints for technology management and inte-
gration also give guidance for companies following an
operational excellence strategy that strives to drive an
innovation initiative. The innovation initiative cannot
be forced to adhere to the well-honed IT delivery pro-
cesses currently in operation. Exceptions are needed
and a customised organisational model and integration
architecture should be not only allowed, but encoura-
ged. What got you here will not get you there.
TRANSITIONING INTO A NEW
APPROACH TO STRATEGIC
INTEGRATION MANAGEMENT
The key to unlocking the value of integration, is under-
standing the company’s strategic focus (or, in some
cases, focuses). Integration and the associated organi-
sation are not for IT’s sake, it’s for the business’.
1.	 Perform a gap analysis:
•	 Map each business process to one of the value
disciplines (operational excellence, customer
intimacy or product leadership), understand its
dynamics and value drivers
•	 Assess the current baseline, understand IT’s
ability to deliver according to the business requi-
rements, preferably using a capability model and
integration maturity assessment
•	 Analyse the trade-off needed between meeting
all requirements and the cost of meeting these,
choose a primary focus. The most critical focus
from a holistic portfolio perspective needs to be
defined
2.	 Map the preferred position to the generic roles
for integration (see figure 4) to define the primary
purpose and ensure business alignment
3.	 Define performance indicators for integration
within the company, e.g. in the dimension discus-
sed earlier - time to market, stability and/or cost
4.	 Prioritise areas where nothing happens, even
though where what happens is in conflict with the
business direction in question. Create roadmap of
initiatives
5.	 Implement the IT architecture and integration using
iterative methodologies, i.e. incremental value
realisation, to avoid a big-bang approach. Measure
continuously and provide feedback across the orga-
nisation, both to business customers and within IT
6.	 Continuously improve the IT and integration archi-
tecture through feedback and learning mechanisms
and by revisiting the assumptions for the design
regularly (frequency depending on the frequency of
business change)
Integration is an enabler of cost-effectiveness, flexibili-
ty, robustness and time to market. Technology mana-
gement and integration are skills that directly impacts
IT’s alignment with the business strategy. To deliver
value the integration/technical architecture strategy
needs to be aligned with the organisation/capabilities,
processes and governance, as well as the sourcing
setup. A key tool for achieving this alignment is inte-
gration and preferred integration patterns deployed
within the environment.
INTEGRATION
INTEGRATION
Driving
Controlling
Facilitating
PRODUCT
LEADERSHIP
CUSTOMER
INTIMACY
OPERATIONAL
EXCELLENCE
Figure 4
– The strategic role of the integration
ABOUT THE AUTHORS
Jens Ekberg, Director and Head of Solutions at 3gamma Sweden.
Jens’s focus on developing 3gamma Sweden’s offerings across IT
strategy, IT sourcing lifecycle, IT legal advisory, IT risk and assurance,
IT operational excellence and IT project management and delivery.
Jens has significant experience working with integration architectu-
re across several industries. Jens can be reached at
jens.ekberg@3gamma.com
Trond Hjorteland, senior developer and IT architect at Scienta.
Trond has significant experience from working with integration in
a wide range of industries, with a special focus on modularisation,
domain driven design and event-driven service orientation
(EDA and SOA). Trond can be reached at trond@scienta.no
BIBLIOGRAPHY
1. 	 M. Treacy and F. Wiersema, Customer intimacy and other value disciplines, Harvard Business Review (Jan-Feb, 1993)
	 and M. Treacy and F. Wiersema, The discipline of market leaders, Basic books (1995)
2. 	 J. Hagel III and M. Singer, Unbundling the corporation, Harvard Business Review (Mar-Apr, 1999), see also
	 http://edgeperspectives.typepad.com/ for additional discussions on the topic
3. 	 J. Ekberg and L. Narvselius, Unleashing IT’s potential – delivering corporate value through agile IT sourcing, 3gamma (2014)
4. 	 Representational state transfer, http://en.wikipedia.org/wiki/Representational_state_transfer
5. 	 See e.g. K. Vitasek, Vested Outsourcing, Second Edition: Five Rules That Will Transform Outsourcing, Palgrave McMillian (2013)
6. 	 3gamma, The state of IT service management in agile organisations survey, 3gamma (2013)
7. 	 DevOps is the practice of operations and development engineers participating together in the entire service lifecycle,
	 from design through the development process to production support (http://theagileadmin.com/what-is-devops/)
8. 	 Govindarajan and Trimble, The other side of innovation, HBR Press (2010), p. 51-
9. 	 Hagel III, Brown and Davisson, The power of Pull, Basic Books (2012), p. 200
10. 	Govindarajan and Trimble, The other side of innovation, HBR Press (2010), p. 23
11. 	J. Ekberg and L. Narvselius, Unleashing IT’s potential – delivering corporate value through agile IT sourcing,
	 3gamma (2014) and J. Ekberg, The state of IT service management in agile organisations, 3gamma (2013)
COPYRIGHT NOTICE:
No part of this document may be reproduced, distributed, stored in a retrieval system or translated into any language, including
but not limited to electronic, mechanical, magnetic, optical, photocopying, manual or other form of reproductions, without the
prior written permission of 3gamma AB. For additional copies of this document, please contact 3gamma AB.
This document contains proprietary information of 3gamma AB and is protected by copyright law. All Rights Reserved. The
information in this documentation is subject to change without notice and is provided “as is”. 3gamma AB reserves the right
to revise the contents or withdraw access to them at any time. 3gamma AB makes no warranty of any kind to this document
and shall in no event be liable for errors herein.
Copyright © 3gamma AB 2014
11
STOCKHOLM
3gamma Sweden AB
Drottninggatan 92-94
SE-111 36 Stockholm
Sweden
Phone: +46 8 748 0330
GÖTEBORG
3gamma Sweden AB
Drottningtorget 5
SE-411 03 Göteborg
Sweden
Phone: +46 31 309 7910
MALMÖ
3gamma Sweden AB
WTC Teknikportalen
Skeppsgatan 19
SE-211 19 Malmö
Sweden
Phone : +46 40 627 04 05
FINLAND
3gamma OY
Sentnerikuja 2
FI-00440 Helsinki
Phone +358 50 3 748 371
USA
3gamma Americas LLC
4 Rupells Road
Clinton, NJ 08809
USA
Phone: +1 908 894-5126
DENMARK
3gamma ApS
Frederiksborggade 15
DK-1360 Copenhagen K
Phone: +45 53 700 400
ENGLAND
3gamma Ltd
Suite D, Silk Point
Hulley Road Macclesfield
Cheshire SK10 2LL
Phone +44 161 219 8240
ABOUT 3GAMMA
3gamma is a leading professional services firm focusing on IT management.
As an independent specialist in IT management, 3gamma provides advisory,
consulting services and fact-based insights to many of the world’s most
respected companies. 3gamma operates globally from offices across the
Nordics and UK. 3gamma is a knowledge firm that bases its expertise of six
core capabilities:
• IT strategy and governance
• IT sourcing lifecycle
• IT legal advisory
• IT risk and assurance
• IT operational excellence
• IT project management and delivery
3gamma has, in a series of whitepapers, explored how companies employ
agile methodologies and innovative approaches to IT sourcing to become
more aligned with the businesses’ needs and requirements11
.
ABOUT SCIENTA
Scienta offers fact-based consulting services to help our clients succeed with
their IT investments. Scienta is on-top of the latest research and industrial
practice within software delivery and use systematic methods for collecting
and analysing available empirical data. Scienta’s service areas include
enterprise architecture, cost and benefit estimation, quality assurance and
process improvements. Scienta works with the development of some of
Norway’s most complex and critical software systems on a daily basis.

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Using integration to drive business alignment

  • 1. Managing technology in an ever-changing environment Using integration to create business and IT alignment 3gamma.com Jens Ekberg Director and Head of Solutions at 3gamma Trond Hjorteland Senior developer and IT architect at Scienta
  • 2. 2 Successful companies leverage technology integration to create a competitive advantage. Technology integration, strategically deployed and executed with discipline, can be an enabler of cost reductions, improved customer relationships and digital innovation. Figure 1 – Expectations on IT IT IS EXPECTED TO DELIVER INNOVATION AND BUSINESS DEVELOPMENT WHILE ENSURING COST-EFFECTIVE LIGHTS ON 80 % thinks time to market has become increasingly important for IT services… •  IT is struggling to keep up with the business •  New and updated IT services are expected with shorter intervals •  Readily available alternatives, e.g. cloud services, adds additional pressure on IT •  The digitalization of business makes IT an integrated part of business development •  IT is expected to proactively drive innovation and improvement initiatives •  IT is going from business partner to business driver •  Stable and reliable IT operations have become a prerequisite •  Service quality and operational stability needs to be maintained even during times of constant change * 3gamma – The state of ITSM in Swedish organizations survey © 2013 TIMETOMARKETBUSINESSDRIVERSTABILITY …while 90 % thinks IT has become an even more critical part of business development… …while 80 % still are under pressure to improve operational stability* IT is an integral part in businesses of today. It is a critical component in a majority of business processes, from customer interaction and support processes, to business infrastructure and product development. IT becomes increasingly more important as digitalisation intensifies. The ability to manage technology in this ever-changing environment becomes a driver for competitive advan- tage. IT organisations need to manage an integrated, diverse and complex portfolio of technologies delivered both internally and via external partners. Complexity and the rapid pace of technological change create a need for a disciplined, structured and business-aligned technology integration strategy. IT organisations are faced with an increased pressure to deliver innovation, either driven by customer require- ments or through proactive, technology-driven busi- ness development, as shown in picture 1. This pressure is prevalent, to various degrees, across a wide range of industries and IT organisations are struggling to keep up. In this whitepaper, 3gamma and Scienta, outline a model for using the concept of value disciplines to define integration architectures and technology stra- tegies to support different business requirements and expectations. As a conclusion, a high-level approach for transitioning to a target model is presented.
  • 3. 3 USING VALUE DISCIPLINES AS A BLUEPRINT FOR BUSINESS AND IT ALIGNMENT In essence, there are three paths to market leadership1 . Companies can become market leaders by excelling in either operational excellence, customer intimacy or product leadership. These paths, or value disciplines, align with three generic core processes: business infra- structure process, the customer relationship process and the product innovation process2 . The economics, rules of competition and culture, differ between the value disciplines, see table 1, for compa- nies to excel in any of the core processes, focus is key. Rather than being good enough in all three processes, companies should direct investments and focus on one of these core processes. It follows that IT’s role is different in each setting; supporting standardised, predictable, and highly efficient (business) operations is different from fostering creative innovation or custo- mer intimacy. Even though this may appear obvious, many IT organisations are oriented toward operational excellence. Drawing on 3gamma’s and Scienta’s experience, many IT organisations focused on internal efficiency during the last few decades, standardisation and cost savings were the focus for countless IT initiatives. IT organisa- tions became centre of excellences, providing standar- dised generic services. IT costs were cut and processes optimised. IT almost seemed to exist for IT’s own sake. Even worse, it created organisational inertia, where IT organisations became slow to adapt and unable to innovate. Ironically, IT itself became an obstacle for the digitalisation of business. Keeping pace with tech- nological advancements, adopting new innovations, and aligning them with the business strategy became increasingly difficult. In a digital economy, IT needs to continuously and rapidly acquire new, advanced capabilities in order to align with an ever-changing business3 . This impacts on internal processes, operational models, IT sourcing strategies and how companies manage technology. Specifically, integration architecture has to be a top priority for IT managers. Essentially, it is an enabler of a company’s value discipline. Integration architecture can, if managed and implemented wisely, contribute to drive standardisation and cost reductions, customi- sation and specialisation, and/or innovation. As shown in table 2, the organisational impact, the capabilities needed, how technology is managed, and the key considerations for IT management differ between the value disciplines. Customer intimacy Product leadership Operational excellence Economics Significant cost of customer acquisition, focus on share of wallet per customer, economies of scope is key Premium price for novel products and services directed at early adopters, time to market is key Significant fixed costs, large volumes important to reduce cost per unit. Economies of scale is key Competition Focus on scope, consolidation with a few major players offering a wide/full-service range of pro- duct and services First-mover advantages, low barriers for new players, low standardisation, unclear custo- mer expectations, inside-out Focus on scale, consolidation, few dominant players offering standardised services, outsi- de-in, price competition Culture Service-oriented, customisation based on customer requirements Experimental, future-driven, en- trepreneurial, heroic, visionary Cost-focused, process-oriented, conformance, values standards and efficiency Information technology Customer specific integration of various data and information sources (internal and external) Technologies enabling coopera- tion and sharing Integrated low-cost transaction systems Table 1 – Characteristics of strategic focuses (adopted from Hagel and Singer, and Treacy and Wiersema) ORGANISATIONAL CHARACTERISTICS VARY DEPENDING ON STRATEGIC FOCUS
  • 4. 4 Customer intimacy Product leadership Operational excellence IT organisational impact •  Focus on business engagement, define teams based on solution requirements (scrum etc.) •  Clear product ownership in the business (product owner part of business, not IT) •  Can be centralised or distri- buted depending on company industry dynamics •  Focus on architecture and life-cycle management of innovations as they mature •  Build teams based on services •  Product ownership in IT •  DevOps processes •  Self-organising teams •  Focus on orchestrating external services •  Focus on service delivery, i.e. design solution in line with delivery setup •  Focus on test and quality assurance •  Strong management and well-structured governance structure •  Strong process-orientation Characteristic IT capabilities •  Strategic and operational business relationships •  Project portfolio management •  Program and project management •  Business development •  Solution architecture •  Innovation •  Business development •  Enterprise/IT architecture •  Program and project management •  Solution architecture •  Solution development •  Operational business relationships •  Process management •  Service introduction •  Change management •  Service delivery •  Supplier management •  Contract management •  Risk management Technology impact and characteristics •  Tailored solutions per customer •  Heterogeneous infrastructure per solution •  Customised add-ons or modifications to packaged solutions •  “Dumb pipes, smart end- points” •  Event-driven simple message routing •  SOA 2.0/microservices architecture •  Requirements-driven/ Outside-in (packaging of internal and external resources and services) •  Event-driven/smart end- points •  Differentiated infrastructure (cloud/on premise) with fit-for-purpose service levels •  Enterprise application integration (EAI) pattern •  Inside-out (integration of standard services/solutions) •  Broker/ESB style •  Homogeneous infrastructure with common service levels •  Automation (monitoring, management) and focus on transactions •  Automation and contingency planning Key considerations •  IT cooperates with business for pull-oriented innovation processes •  Development occurs in de- velopment projects through customisation to meet business requirements/customer-driven innovation •  IT has capability for push-oriented innovation processes •  Innovation is driven bot- tom-up, sometimes within IT or with IT partners •  Innovation occurs through integration of services (internal and external) •  Development and innovation occurs within applications, as defined by third party roadmap •  Sourcing and life-cycle management is key •  IT innovation primarily outside of the company boundaries. Innovation equates continuous improvement Table 2 – Aligning technology with value discipline IT SHOULD ALIGN PEOPLE, PROCESSES AND TECHNOLOGY WITH THE ORGANISATION’S STRATEGIC FOCUS INTEGRATION ARCHITECTURES FOR OPERATIONAL EXCELLENCE Operational excellence is about achieving standardised, cost-effective and predictable products and services. Companies following this value discipline are not unaffected by digitalisation and are non-dependant on IT innovation. However, it means that the application of IT technology within the company is different, it is a supporting the capability to achieve the overall goal of operational excellence. IT needs to adhere to a pre-de- fined, controlled formula. Typically, an IT organisation supporting an operational excellence focuses on: •  Limited set and standardised set of services •  High expertise in defined services •  Limited to moderate frequency of change through a pre-defined release calendar •  Cost-efficient, predictable, high-volume operations through standardised IT processes •  Continuous improvements to existing services •  Consolidated IT environment and/or a limited set of standardised applications •  Often a single-vendor outsourcing or a layered (infra- structure/application maintenance) outsourcing with few service providers
  • 5. 5 Key capabilities include: process management, service introduction, service delivery and supplier manage- ment. Starting from a technology point of view, critical success factors are standardisation and keeping appli- cations and infrastructure as homogenous and ’off the shelf‘ as possible. The simplest and most cost-effecti- ve way of integrating such Commercial Off-the-shelf (COTS) systems – cloud or on premises – is by applying classic Enterprise Application Integration (EAI). The ad- vantage is, that very little customisation is required to the systems, centralising most of the logic and custom code in the broker. This is then deployed in a hub- and-spoke type topology (see figure 2). Centralisation requires that the organisation build core competence in integration infrastructure and take responsibility for orchestrating business processes and implementing core business logic. Different broker systems can be employed, most com- monly a high-end integration platform with support for business activity monitoring and process management, these brokers are often classified as enterprise service ‘buses’. Nevertheless, given their central role in the architecture they become mission-critical business applications, rather than pure integration infrastructu- res. Ergo, IT organisations must have skilled personnel with deep business knowledge, as they become a critical factor in the IT maintenance and development process. This should be considered when developing the IT sourcing strategy. Managing technology in this context, is about mana- ging and aligning the strategic vendors’ roadmaps (the applications illustrated in figure 2) with the internal need for business development. The integration archi- tecture should act as the intermediary that creates the customisation required to meet business requirements and create operational excellence. The role of IT stra- tegists and IT architects, is to work closely with service managers to cater for the introduction of new standard functionality into production. IT sourcing is critical and long-term partnerships with a few select service provi- ders should be considered, as reduction of transaction costs relating to sourcing is an important factor. The role of the contract is to govern and control deliveries with clearly articulated service level agreements and predicable costs. INTEGRATION AS AN ENABLER OF OPERATIONAL EXCELLENCE – THE CASE OF A BANK In order to improve quality of their IT delivery, the bank was transitioning from a single-sour- cing to a multi-sourcing setup. The rationale was to improve operational stability, gain access to standard applications’ roadmaps and reduce the cost of customisation. The bank opted for a model with: •  Standard application delivered by strong part- ners, focused on achieving economies of scale by aligning with their product roadmaps •  Setup of an integration competence centre delivered as a service with a strong partner delivering integration design, integration development and maintenance services, focusing on integrating standard applications/ services •  An internal governance model centred around service managers (delivery) and Chief IT architect (architecture) The result •  Improved flexibility in the sourcing of busi- ness-critical IT services •  Cost-effective access to new features through improved access to standard functionality INTEGRATION HUB APPLICATION APPLICATION APPLICATION APPLICATION Figure 2 – Hub and spoke topology
  • 6. 6 INTEGRATION ARCHITECTURES FOR CUSTOMER INTIMACY Customer intimacy is about interacting with the custo- mer to deliver customised, broad solutions to create high-value and long-time relationships with customers. Customer intimacy builds on the ability to understand and respond to customer requirements. Typically, an IT organisation supporting customer intimacy focuses on: •  A wide range of services •  A flexible and agile delivery organisation, typically controlled by product owners in the business organi- sation •  A moderate to high frequency of changes within the IT environment/IT services •  A diverse IT environment, often with significant customisations in applications or as complementary applications •  A multi-sourcing environment with several vendors or a significant in-house IT footprint Key capabilities include: strategic and operational busi- ness relationships, project portfolio management, pro- gram and project management, business development and solution architecture; from a technology point of view, the ability to customise is critical. It is imperative to cater for best of breed solutions and integration of these with standard packaged solutions and custom development. The importance of IT depends on industrial context, for example, in a manufacturing company IT is likely to be focused on integration of COTS with limited customisa- tion, both in the integration and the systems them- selves. In this setting, the technology strategy share a number of traits with operational excellence. The competitive advantages will most likely lie in the way the organisation is involved with the customer, and the level of adaptability of each system to meet each customer’s specific requirements. The customisation typically originates from the complementary services offered; for service-based industries, where the business is driven by providing services that are tailo- red to the customer needs, a much more specialised IT portfolio is required to gain competitive advantage. Pure COTS may still be a good choice for certain parts, but it is likely that custom-developed applications or significant adaptations are required to support the business. One way to manage the inherent complexity arising from customisation, is to employ domain-driven design (DDD). Clearly defined domains and service-orientation can be used to enforce a loosely coupled set of highly cohesive business services. The service boundaries should be viewed as logical, modelling all, both custom and commercial systems, into groups that match the business areas, e.g. sales, customer support, marke- ting, inventory, shipping, and billing. Each of these business areas, or services, can contain several systems and components from different layers, e.g. databases, DOMAIN DOMAIN DOMAIN Service boundaries – limited and loosely coupled interactionsFigure 3 - The concept of loosely coupled domains that encapsulates all data and functionality needed for the business service improves flexibility and reduces operational dependencies
  • 7. 7 middleware and front-end applications and their interaction with other services should be few and as loosely coupled as possible. Ideally, each service should be able to deliver its business functions, neither needing data nor support from others. One way to achieve this is to distribute the data, letting each service own its own data and get all the reference data it needs from others when state changes occur. A service is hidden behind the bounded context as defined in DDD, an essential concept when designing a system of highly autonomous services aligned with the core business capabilities. By making the services as autonomous as possible, they can have individual life-cycles and therefore be better suited to meet ever-changing business requirements. This setup will, as opposed to the operational ex- cellence case, have as little logic and functionality in-between the services as possible. Logic between services create coupling and reduces service auto- nomy. In this scenario, ’dumb pipes, smart endpoints‘ are required. Integrations should be purely technical, and preferably broker-less, thereby avoiding any leaka- ge of business functionality across the service bounda- ries. The integration architecture should be based on messaging systems that simply route messages from one endpoint to another. Some choose to use web services or REST4 , while others take it to the ultimately loosely-coupled approach and enforce event-based integrations only. Such an event-driven approach implies no request/response between services and any state changes are propagated as simple messages, similar to a finite state machine. Such an approach will require a high degree of maturity in the service design, but will at the same time make integration as simple as network routing. The service-oriented approach will create a more manageable IT portfolio, which is aligned with the busi- ness organisation and its needs. The portfolio will also be highly adaptable to frequent business requirement changes, but it will require organisational changes to IT. Teams need to be built around the services and they need to take full ownership of the services’ systems, applications and business capabilities. Managing technology, in this context, is about main- taining a clear view of the technology landscape and continuously managing the application life-cycle across all business processes. Maintaining an understanding of the applications and their underpinning infrastructu- re, including all integrations, is key to enabling custo- misation and controlling the cost and risk. Complexity, arising from both technology and the vendor portfolio, is inevitable and IT must be capable in managing it. The role of the outsourcing contract is to govern collabo- ration and additions/changes in a clearly defined way, underpinned by a set of goals and objectives that are shared between the customer and the vendor5 . MANAGING APPLICATION PORTFOLIO COMPLEXITY AND LEGACY TRANSFORMATION – THE CASE OF A MEDIA COMPANY The media company was undergoing a major transformation arising from digitalisation. The company wanted to rapidly transform its legacy environment to meet new business require- ments. The product and service development were driven by product owners in the business, while IT was tasked with balancing require- ments from several business stakeholder and modernising the company’s application portfo- lio concurrently. The media company opted for a model with: •  A virtual integration competence centre spanning across several development teams, with the majority of integration work perfor- med in-house. External resources were added as needed to each team. The focus was on balancing the need for operational excellence in the legacy environment while allowing for business-driven customisation for new digital services. •  Two integration platforms: •  An enterprise-class platform for integration of legacy back-end applications •  A simpler, lean platform for integration of online application and high-throughput integrations •  A governance model primarily based on governing principles for integration that was regularly revisited in common forums and communicated by the central IT architecture team The result •  Improved time to market for new initiatives •  Improved performance of online services •  Reduced operational dependencies between applications •  Improved flexibility for customisation
  • 8. 8 INTEGRATION ARCHITECTURES FOR PRODUCT LEADERSHIP Product leadership is about delivering new and innovative product services to the market ahead of the competition. IT is often an integral part of the innovation and business development process6 . Product leadership requires IT to be a proactive business driver. Typically, an IT organisation supporting product leadership focuses on: •  Limited set of high-end/strategic IT services •  Standard services for non-core business functions /processes •  Advanced capabilities within project portfolio management •  High frequency of change •  Autonomous, self-organising teams with ’good enough‘ processes •  Modularised IT architecture, solution components and systems •  Non-standardisation, both from a process/ governance point of view and a service point of view •  A mix of multi-sourcing and in-house IT Key capabilities include innovation, business develop- ment, enterprise/IT architecture, program and project management, solution architecture, IT development, and testing. Additionally, IT needs to scan the market for new competitive capabilities and technologies to incorporate into its portfolio to proactively define and execute on new business opportunities. For companies focusing on product leadership, a highly distributed service-oriented IT landscape is a necessity. Flexibility and parallelism are required to deliver new services and components without affecting ongoing operations. In this setting, service-orientation is mainly a top-level architecture and maps to a limited set of well-defined business areas. As for customer intimacy, each service will typically be broken-up into a large number of small and autonomous business components, each owning and running specific parts of the service’s responsibilities. While each service in the customer intimacy path may contain large COTS and small custom-made applications, this approach requires a more fragmented setup. Many refer to this approach as microservices. The idea is, that each service within a service is as small as possible in order to be able to create, change, and retire them quickly and with as little impact to existing components as possible. Integration between each of these components may be done in different ways, both using request/response, shared state (e.g. session objects) and message-pas- sing. As for top-level services, using events creates the least amount of coupling. However, this must be balanced with the need for composability of various components from different services in one or several business processes. In such situations, shared state is a good choice, e.g. by using UI composition, and sharing state using session cookies. A highly fragmented and distributed IT landscape will raise the expectations on the IT organisation. Each team must take full ownership of the life-cycle of each service and its components, from initiation to retire- ment. In essence, this means that when employing a microservices architecture, DevOps7 is the preferred way to go in order to get safe, stable and cost-effective operations. Innovation, especially outside the bounda- ries of existing operations, requires dedicated teams8 . “Outside-in architectures would begin with the challenge of organizing IT resources across a large ecosystem of individual and institutional participants […] There won’t be any single control point from which the designers of such an architecture could mandate adoption of specific applications”9 . Managing technology in this context, is about mana- ging innovation. From an internal perspective, innova- tion is likely to occur through collaboration, cross-func- tional and dedicated teams with external partnerships/ inputs. Innovation initiatives typically require an ad hoc organisational model and a well-defined learning and feedback process10 . IT outsourcing requires special attention is this setting, as it cannot be focused on ope- rational excellence. Innovation thrives from variety and experimentation, things that are not easily captured in
  • 9. 9 a contract. The role of the contract is to outline the use of resources in the innovation process, be it techno- logical development, sales or consulting. Innovation clauses in the contract that define upfront the expecta- tions on innovation are contradictory to the logic of innovation, as it cannot easily be standardised through definition of predictable and repeatable processes. These type of clauses are suitable for continuous improvements, not innovation. DELIVERING INNOVATION THROUGH INTEGRATION – THE CASE OF A TELECOM COMPANY The telecom company had reached a point where central and critical IT components had grown into large and unwieldy monoliths. Increased focus on reducing cost, faster time to market and tighter service level agreements, put a large strain on these big systems, as well as being a rather unfriendly environment for innovation and outsourcing. The telecom company opted for: •  Breaking apart the monolith into distinct   business modules, matching the main core business areas and thereby aligning it with the business •  Each module, or business service, was further broken down into distinct runtime compo- nents, each handling a concrete business functionality •  Every individual component was made as au- tonomous as possible, with few connections to other systems The result •  Improved time to market for new initiatives •  Individual service level agreements •  Considerably safer delivery of changes •  Faster on-boarding, both for local and offshore IT developers •  Safe and fertile ground for experimentation, innovation and modernisation TAKING A STRATEGIC APPROACH TO MANAGING TECHNOLOGY AND INTEGRATION TO ENSURE BUSINESS ALIGNMENT To address multifaceted business customers, IT needs to create a toolbox for meeting differentiated require- ments. Integration management and technical archi- tecture are at the heart of that toolbox: •  Improve time to market for new services by using information and functionality across applications and services and by operationalising processes for inte- gration development, including providing supporting tools and processes •  Improve stability and robustness of business servi- ces through minimised operational dependencies between applications and integration technologies, e.g. queue management technologies and monito- ring services •  Enable IT sourcing aligned with business objectives by decoupling sourcing objects, i.e. keep them sepa- rated to make it possible to align the sourcing model per object, rather than applying a one-size-fits-all approach •  Enable innovation and development within each sourcing object/functional area/business process in a flexible way. Integration can make it possible to rely on the functional roadmap of the business appli- cations, rather than having to drive development internally. •  Optimise operational costs and reducing complexity across the application and infrastructure portfolio by implementing the right functionality in the right application and keeping applications ’as standard as possible’ •  Enable scaling of individual services and defining specific service level agreements per service to meet new non-functional requirements, e.g. to manage monitoring in an internet of things context Companies need an approach to managing technology that is aligned with IT’s strategic direction. The IT capa- bilities and the IT support needed by the business need to guide the IT architecture and integration strategy, as illustrated in figure 4. The classic approach to integration management is to set-up an integration competence centre (ICC) as a centralised function or as a unit tasked with the design, development, maintenance, and operations of integra- tions and underpinning infrastructure. This function is in control of the majority of information exchanged between applications within the portfolio. This model fits very well with an operational excellence focus. It establishes clear control, robust delivery processes and a centralised body of knowledge to manage implemen- ted business logic. It also aligns very well with a cost-focused outsourcing (economies of scale). It is however not suitable for neither customer intimacy nor product leadership. In a customer intimacy setting, the technology mana- gement and integration are no longer about exerting control but rather to facilitate effective customisation/
  • 10. 10 flexibility and to provide the necessary tools and processes to autonomous development teams. Any centralised function should be a small team focused on developing common assets than can be deployed within IT. Business logic will be implemented within the end-points by separate teams. The division of respon- sibilities between the central team and the distributed development teams should be done based on time to market requirements. The central team will also provi- de documentation services to maintain an overview of a complex, customised environment. Product leadership is based on innovation. Central control, or even common processes and technologies, could be detrimental to IT’s innovation capabilities. Hence, there shouldn’t be any central unit/function governing and controlling integration. Technology management and integration should be guided by a set of principles that are created by and communica- ted across self-organising development teams. New ideas and thought leadership (note, not best practices) are disseminated through common forums. Commu- nication of principles, coaching, and forums may be facilitated by a central function. These blueprints for technology management and inte- gration also give guidance for companies following an operational excellence strategy that strives to drive an innovation initiative. The innovation initiative cannot be forced to adhere to the well-honed IT delivery pro- cesses currently in operation. Exceptions are needed and a customised organisational model and integration architecture should be not only allowed, but encoura- ged. What got you here will not get you there. TRANSITIONING INTO A NEW APPROACH TO STRATEGIC INTEGRATION MANAGEMENT The key to unlocking the value of integration, is under- standing the company’s strategic focus (or, in some cases, focuses). Integration and the associated organi- sation are not for IT’s sake, it’s for the business’. 1. Perform a gap analysis: •  Map each business process to one of the value disciplines (operational excellence, customer intimacy or product leadership), understand its dynamics and value drivers •  Assess the current baseline, understand IT’s ability to deliver according to the business requi- rements, preferably using a capability model and integration maturity assessment •  Analyse the trade-off needed between meeting all requirements and the cost of meeting these, choose a primary focus. The most critical focus from a holistic portfolio perspective needs to be defined 2. Map the preferred position to the generic roles for integration (see figure 4) to define the primary purpose and ensure business alignment 3. Define performance indicators for integration within the company, e.g. in the dimension discus- sed earlier - time to market, stability and/or cost 4. Prioritise areas where nothing happens, even though where what happens is in conflict with the business direction in question. Create roadmap of initiatives 5. Implement the IT architecture and integration using iterative methodologies, i.e. incremental value realisation, to avoid a big-bang approach. Measure continuously and provide feedback across the orga- nisation, both to business customers and within IT 6. Continuously improve the IT and integration archi- tecture through feedback and learning mechanisms and by revisiting the assumptions for the design regularly (frequency depending on the frequency of business change) Integration is an enabler of cost-effectiveness, flexibili- ty, robustness and time to market. Technology mana- gement and integration are skills that directly impacts IT’s alignment with the business strategy. To deliver value the integration/technical architecture strategy needs to be aligned with the organisation/capabilities, processes and governance, as well as the sourcing setup. A key tool for achieving this alignment is inte- gration and preferred integration patterns deployed within the environment. INTEGRATION INTEGRATION Driving Controlling Facilitating PRODUCT LEADERSHIP CUSTOMER INTIMACY OPERATIONAL EXCELLENCE Figure 4 – The strategic role of the integration
  • 11. ABOUT THE AUTHORS Jens Ekberg, Director and Head of Solutions at 3gamma Sweden. Jens’s focus on developing 3gamma Sweden’s offerings across IT strategy, IT sourcing lifecycle, IT legal advisory, IT risk and assurance, IT operational excellence and IT project management and delivery. Jens has significant experience working with integration architectu- re across several industries. Jens can be reached at jens.ekberg@3gamma.com Trond Hjorteland, senior developer and IT architect at Scienta. Trond has significant experience from working with integration in a wide range of industries, with a special focus on modularisation, domain driven design and event-driven service orientation (EDA and SOA). Trond can be reached at trond@scienta.no BIBLIOGRAPHY 1. M. Treacy and F. Wiersema, Customer intimacy and other value disciplines, Harvard Business Review (Jan-Feb, 1993) and M. Treacy and F. Wiersema, The discipline of market leaders, Basic books (1995) 2. J. Hagel III and M. Singer, Unbundling the corporation, Harvard Business Review (Mar-Apr, 1999), see also http://edgeperspectives.typepad.com/ for additional discussions on the topic 3. J. Ekberg and L. Narvselius, Unleashing IT’s potential – delivering corporate value through agile IT sourcing, 3gamma (2014) 4. Representational state transfer, http://en.wikipedia.org/wiki/Representational_state_transfer 5. See e.g. K. Vitasek, Vested Outsourcing, Second Edition: Five Rules That Will Transform Outsourcing, Palgrave McMillian (2013) 6. 3gamma, The state of IT service management in agile organisations survey, 3gamma (2013) 7. DevOps is the practice of operations and development engineers participating together in the entire service lifecycle, from design through the development process to production support (http://theagileadmin.com/what-is-devops/) 8. Govindarajan and Trimble, The other side of innovation, HBR Press (2010), p. 51- 9. Hagel III, Brown and Davisson, The power of Pull, Basic Books (2012), p. 200 10. Govindarajan and Trimble, The other side of innovation, HBR Press (2010), p. 23 11. J. Ekberg and L. Narvselius, Unleashing IT’s potential – delivering corporate value through agile IT sourcing, 3gamma (2014) and J. Ekberg, The state of IT service management in agile organisations, 3gamma (2013) COPYRIGHT NOTICE: No part of this document may be reproduced, distributed, stored in a retrieval system or translated into any language, including but not limited to electronic, mechanical, magnetic, optical, photocopying, manual or other form of reproductions, without the prior written permission of 3gamma AB. For additional copies of this document, please contact 3gamma AB. This document contains proprietary information of 3gamma AB and is protected by copyright law. All Rights Reserved. The information in this documentation is subject to change without notice and is provided “as is”. 3gamma AB reserves the right to revise the contents or withdraw access to them at any time. 3gamma AB makes no warranty of any kind to this document and shall in no event be liable for errors herein. Copyright © 3gamma AB 2014 11
  • 12. STOCKHOLM 3gamma Sweden AB Drottninggatan 92-94 SE-111 36 Stockholm Sweden Phone: +46 8 748 0330 GÖTEBORG 3gamma Sweden AB Drottningtorget 5 SE-411 03 Göteborg Sweden Phone: +46 31 309 7910 MALMÖ 3gamma Sweden AB WTC Teknikportalen Skeppsgatan 19 SE-211 19 Malmö Sweden Phone : +46 40 627 04 05 FINLAND 3gamma OY Sentnerikuja 2 FI-00440 Helsinki Phone +358 50 3 748 371 USA 3gamma Americas LLC 4 Rupells Road Clinton, NJ 08809 USA Phone: +1 908 894-5126 DENMARK 3gamma ApS Frederiksborggade 15 DK-1360 Copenhagen K Phone: +45 53 700 400 ENGLAND 3gamma Ltd Suite D, Silk Point Hulley Road Macclesfield Cheshire SK10 2LL Phone +44 161 219 8240 ABOUT 3GAMMA 3gamma is a leading professional services firm focusing on IT management. As an independent specialist in IT management, 3gamma provides advisory, consulting services and fact-based insights to many of the world’s most respected companies. 3gamma operates globally from offices across the Nordics and UK. 3gamma is a knowledge firm that bases its expertise of six core capabilities: • IT strategy and governance • IT sourcing lifecycle • IT legal advisory • IT risk and assurance • IT operational excellence • IT project management and delivery 3gamma has, in a series of whitepapers, explored how companies employ agile methodologies and innovative approaches to IT sourcing to become more aligned with the businesses’ needs and requirements11 . ABOUT SCIENTA Scienta offers fact-based consulting services to help our clients succeed with their IT investments. Scienta is on-top of the latest research and industrial practice within software delivery and use systematic methods for collecting and analysing available empirical data. Scienta’s service areas include enterprise architecture, cost and benefit estimation, quality assurance and process improvements. Scienta works with the development of some of Norway’s most complex and critical software systems on a daily basis.