Business IT alignment in the GRAAL project Pascal van

Business/IT alignment in the GRAAL project Pascal van Eck, Roel Wieringa (Dept. of Computer Science, Information Systems Group) SIKS course ‘Information & Organization’, Dec. 6 -8, 2004, Vught, The Netherlands 1

Goal of this presentation • Present a theoretical perspective on business/IT alignment – … and introduce a few concepts from strategic management • Present the GRAAL framework as a means for alignment research • Present case study observations about alignment in practice 2

Agenda • Goal of this presentation • Theory: alignment according to Henderson & Venkatraman • The GRAAL project and framework • Case study observations • Conclusion 3 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

What is business/IT alignment? • Business/IT alignment: Allocation of IT budgets such that business functions are supported in an optimal way 4 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Strategy (and tactics) 1/2 • Strategy: external position of the organization – Product/market combinations – Make-or-buy decisions – Human resources • Impact of decisions: years 5 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Strategy (and tactics) 2/2 • Tactical level: realizing the strategy by internal means – Impact of decisions: month(s) – 1 year – Example: organization structure • Operational level: day-to-day decisions – Impact of decisions: day(s) – month(s) – Example: hire temps in case of sudden increase in sales 6 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Beware: strategy hierarchy • One person’s tactical problems are another person’s strategic problems – E. g. , corporate tactics become strategic goals of business units … – … and so on, and so on. 7 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Taken from: Henderson, & Venkatraman, (1993). Strategic alignment: Leveraging information technology for transforming organisations. IBM Systems Journal, 32(1): 472 -484. Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion 8

Henderson & Venkatraman’s take home message • Similar to business strategy, IT strategy has to consider both internal as well as external aspects • Both internal/external alignment as well as functional integration must be taken into account. Only one of them is not sufficient 9 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

10 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Agenda • Goal of this presentation • Theory: alignment according to Henderson & Venkatraman • The GRAAL project and framework • Case study observations • Conclusion 11 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Project GRAAL • Guidelines Regarding Architecture ALignment • Goal: discovery of patterns in enterprise -level application architecture • Based on case studies in Dutch financial service organizations and large government organizations Project page: http: //is. cs. utwente. nl/GRAAL Goal Henderson & Venkatraman The GRAAL framework 12 Observations Conclusion

What is a system? • A system is an assembly of components that behaves as a whole – There is synergy between components … – … and this synergy results in emergent properties – A product is a system with properties that are useful for someone • Examples – The system of law – The Dutch national soccer team uses a 3 -3 -4 system – ‘A systematic way of working’ 13 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

System dimensions • System aspects: externally observable properties • Aggregation hierarchy: system composition in terms of components • System life cycle: from conception to disposal 14 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

System life cycle Conception Acquisition (build or buy) Usage Disposal Time Maintenance (Corrective and perfective) • Typical stages in the life of a system • During design, we should deal with all stages 15 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Software product aspects SW product aspect The only aspect peculiar for symbol-manipulating systems Services Behavior Quality Communication Meaning For user For developer Usability Efficiency Security. . Maintainability Portability. . . • Aspects are what observers can observe • Service = interaction – Behavior: in what sequence (time) – Communication: with whom (space) – Meaning: about what Goal Henderson & Venkatraman The GRAAL framework Observations 16 Conclusion

Aggregation Behavior Composite Communication Meaning system Quality External entity Behavior Communication Meaning Quality . . . System Behavior Communication Meaning Quality External entity Behavior Communication Component Meaning Quality . . . Aspect and aggregation are independent 17 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

The meaning of aggregation • C is a component of A if – C provides service to A – A encapsulates C • If we drop encapsulation, we get layering C A 1 B C A 2 A 1 A 2 B C 18 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Architecture layers Primary service provision • Layer structure crosses worlds • This is not possible with encapsulation Business environment Social world Business software Symbol world SW Infrastructure Physical infrastructure Physical world 19 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Primary service provision Structure of the business system layer Business environment Social world Business systems serve Applications: Functionality particular user groups Information systems: Data SW Infrastructure Symbol world Physical infrastructure 20 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Structure of the SW infrastructure layer Primary service provision Business environment Social world Business Infrastructure Business systems Office SW, Browser, . . . serves Middleware all user DBMS, WFMS, Directory server, Web server, . . . groups OS, Network software Physical infrastructure Symbol world Physical world 21 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Primary service provision The physical world is BIG! Business environment Social world Business software Symbol world SW Infrastructure Processors, peripherals, UI devices, wires, electromagnetic waves, wireless access points, . . Radio network, electricity network, telephone network, water supply network, gas supply network, sewage network, road network, . . Buildings, . . . machine tools, . . Goal Henderson & Venkatraman The GRAAL framework Observations Physical world 22 Conclusion

The framework Disposal Usage & Maintenance Acquisition Conception System life Quality Services Service provision Behavior Communication Meaning Usability. . . Maintainability. . . Business environment Social world Business SW (applications & information systems) SW infrastructure (OS, NW, MW, DBMS, WFMS, . . . ) Physical infrastructure (Computers, network, access points, . . . ) Goal Henderson & Venkatraman The GRAAL framework Aspects Observations Symbol world Physical world Conclusion 23

Agenda • Goal of this presentation • Theory: alignment according to Henderson & Venkatraman • The GRAAL project and framework • Case study observations • Conclusion 24 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Documents studied 25 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Main findings • Development of application level and infrastructure level are different – Application level: • Event-driven • Structured according to user groups – Infrastructure level: • Time-triggered • Structured according to technology domains • Structure development org. should follow structure of client organization 26 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Application alignment 27 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Goals 28 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Problems 29 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

30 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Two perspectives Business strategy 2 IT strategy 1 2 Business processes 1 Business infrastructure IT applications IT infrastructure 31 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

IT development organization and client organization: observation • Development organization before reorganization: – One department per client group – Per department: subdepartment per development phase (account managers, architects, designers, programmers) • Development organization after reorganization: – One department per development phase – Per department: subdepartment per client group 32 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Conway • Conway’s Law: – “Structure of designed artefact is isomorphic to structure of development team” • Consequence of restructuring: – Structure development organization no longer fits architecture (not isomorphic) – Clients miss their point of contact – Old structure re-emerges in ad-hoc fashion Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion 33

Agenda • Goal of this presentation • Theory: alignment according to Henderson & Venkatraman • The GRAAL project and framework • Case study observations • Conclusion 34 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Conclusion • GRAAL provides simple framework for studying business/IT alignment • Case study observations: – More than one alignment perspective, this often results in mis-alignment – Isomorphism between development organization and client organization desirable 35 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Literature • ‘Strategic Alignment Model’: – • Henderson, & Venkatraman, (1993). Strategic alignment: Leveraging information technology for transforming organisations. IBM Systems Journal, 32(1): 472 -484. http: //researchweb. watson. ibm. com/journal/sj/382/henderson. pdf Extension of ‘Strategic Alignment Model’: – Maes, R. , Rijsenbrij, D. , Truijens, O. and Goedvolk, H. (2000). Redefining business–IT alignment through a unified framework. Prima. Vera Working Paper 2000 -19, Univ. of Amsterdam, Dept. Accountancy and Inf. Mngt. http: //imwww. fee. uva. nl/~maestro/PDF/2000 -19. pdf • GRAAL results: – Eck, P. van, Blanken, H. and Wieringa, R. (2004). Project GRAAL: Towards Operational Architecture Alignment. Int. J. of Cooperative Information Systems, 13(3): 235 -255. http: //is. cs. utwente. nl/GRAAL/eck_blanken_wieringa_ijcis 04. pdf 36 Goal Henderson & Venkatraman The GRAAL framework Observations Conclusion

Pascal van Eck Department of Computer Science University of Twente P. O. Box 217 7500 AE Enschede The Netherlands Email: vaneck@cs. utwente. nl http: //www. cs. utwente. nl/~patveck 37