Strategic Enterprise Architecture Aaron Tan Dani Chairman APAC

Strategic Enterprise Architecture Aaron Tan Dani Chairman, APAC - IASA aarontan@iasahome. org

Where are You ? Frozen in the past Operational & IT spending increases Limited access to information Not competitive Little flexibility Climbing out of Falling into Leading Competitive The Abyss In the Abyss Uncontrollable operational & IT spending Changes are hard to implement No Flexibility Pw. C Spending under control Flexible business operation Effective new development Architecture blueprint in place IT & Corporate Governance in place Spending focused on achieving competitive advantage Highly robust and flexible infrastructure Employing technology to support agile business operation Implemented Enterprise Architecture CONFIDENTIAL 2

Agenda • Why & What is Enterprise Architecture? • Enterprise Architecture Business Drivers • Enterprise Architecture Processes • Enterprise Architecture for Agile Business • Forming EA Team • Conclusion Pw. C CONFIDENTIAL 3

Nothing new under the SUN! Same capabilities for software development & challenges The Warfighter -User Pharaoh ”Boss- it’ll only take about 500 years, 2 billion bricks, and a million laborers. . . But, trust me when it's finished it will be a wonder of the world " Integrated Enterprise Valley of the Kings The Enterprise Team The Past, Present, and Future Douglas Schmidt Pw. C CONFIDENTIAL 4

Does Enterprise Architecture Matter? “If the Federal Government continues to do what we have done (i. e. build non-architected solutions), we will continue to get what we have (i. e. a non-interoperable, expensive, and ever challenging tangle of data, applications, and technology)” - US Federal Government CIO Council Pw. C CONFIDENTIAL 5

Today IT Project Success is Rare Failed 2005 2000 Challenged 15% 51% 23% Succeeded 34% 49% 28% Source: The Standish Group International, Extreme Chaos, The Standish Group International, Inc. , for 30, 000 software application projects Time overrun: 53% Average cost overrun: 65% Functionality delivered on average: 67% Root caused: Lack of Architecture standard: 78% Lack of Business Involvement: 90% Pw. C CONFIDENTIAL 6

The Intractable IT Architecture Problem Business Strategy: - Not promises - Not about What to do - Focus on How to do - Have execution plan - As an initial input for EA - Continues validation and verification Business, User & Functional Requirements IT Governance IT Systems/ Applications Architecture Blueprint IT Infrastructure IT Architecture Strategy Enterprise Architecture Pw. C CONFIDENTIAL 7

EA Governance defined… Plan & establish need: -Document and validate business strategy -Map business strategy to IT strategy -Layout governance plan Plan Measure & Monitor processes: -Compliance with policies -Compliance with governance -IT effectiveness metrics Pw. C Define the approach: -Define policies -Define processes -Define enforcement mechanism Define Implement Deploy incrementally: -Governance mechanism -Deployment policies -Manage organizational change CONFIDENTIAL 8

What is Architecture? “a system’s fundamental organization, embodied in its components, their relationships to each other and the environment, and the environment principles guiding its design and evolution. ” Definition as used in ANSI/IEEE - 1471 Building Architecture: IT Architecture: • • • Models & Concepts Blueprints Bills of Material Building Codes Workmanship Standards Pw. C Patterns & Frameworks Blueprint Buy Lists & Vendors Standards & interfaces Software Qualities (metrics) CONFIDENTIAL 9

Now, Enterprise IT Architecture definition “The enterprise IT architecture is the organizing logic for data, applications, and infrastructure, captured in a set of policies and technical choices to achieve the firm’s desired business goals, technical standardization and integration. ” Center for Information Systems Research (CISR) MIT Sloan School of Management Pw. C CONFIDENTIAL 10

Enterprise Architecture Components Enterprise IT Strategy Business Processes Architecture Blueprint Pw. C UI, Data, Schema & Relationship System, Network & Security CONFIDENTIAL 11

What is Enterprise Architecture? Enterprise Architecture =? = A City Architecture • Strategic Architect – Town planner Pw. C CONFIDENTIAL 12

Enterprise Architecture ~ City Council Continue… • Security Architect – Police • Information/Data Architect – National Registry – Highway • Solution Architect – Corporations – Factories Pw. C CONFIDENTIAL 13

Enterprise Architecture ~ DBKL Continue… • Network/Infrastructure Architect – Water Supply – Electricity – Sewerage, etc • Software Architect – Building Architect • Application Architect – Golf course designer – Theme park designer Pw. C CONFIDENTIAL 14

Lesson learned from City planning principles for IT architecture • Target IT architecture blueprint • City planning principles 1. Create modular zones: Follow a long-term city plan that defines the key components of the city, such as residential, industrial, and nature preserves • Domain 2. Reuse and integrate assets: Exploit the assets that exists already in the city and create connectivity • Integration backbone 3. Evolve Step by step: Manage change by evolving the city stepby-step; revolutionize only where necessary 4. Federal Governance: Have a central zoning board, but allow local decisions in different zones • Domain Pw. C • Domain CONFIDENTIAL 15

Agenda • Why & What is Enterprise Architecture? • Enterprise Architecture Business Drivers • Enterprise Architecture Processes • Enterprise Architecture for Agile Business • Forming EA Team • Conclusion Pw. C CONFIDENTIAL 16

Once upon a time in the IT department…. Chooser Architecture / Technology Choice Pw. C CONFIDENTIAL 17

Impact of choosing the wrong architecture & technology choices …. CIO CTO Chooser Architecture / Technology Choice Pw. C Architecture / Technology Impact CONFIDENTIAL 18

… businesses suffer and loose agility, IT loose credibility … CEO, COO CFO, CMO Chief Chooser Architecture / Technology Choice Pw. C CIO CTO Architecture / Technology Impact CONFIDENTIAL 19

Architect thinking & considerations …. and its impacts Chief Architect Cx. Os =? Architecture / Technology Choice Pw. C Architecture / Technology Impact CONFIDENTIAL 20

3 Key Drivers & 8 Factors for related enterprise architecture decision making Tangible Costs Life Expectancy riv D os t C Cu s be tom ne er fit & dr us ive er rs ivers User Functionality requirements try dr Timeliness Indus er s Skills Availability Third Party Product & Services availability Standards & Methodology fit Customer/Business Requirements Pw. C CONFIDENTIAL 21

Complexity is not in Technology but in Business-IT Alignment The complexity lies not in the comprehension or availability of IT but …… Pw. C …… in how successfully IT can be leveraged and aligned to changing business demands that are often “moving targets”. Need for business involvements & requirements Based on portfolio-based prioritization CONFIDENTIAL 22

Business-IT Alignment Example Business Performance Drivers Responsiveness Quick-time-to-market Business Strategies Process Standardization & Interoperability Initiatives / Projects Digitization (‘e-enablement’) Transparency & Accessibility of Information Info Supply-chain Automation Integrated Communication & Collaboration BI / Reporting Business Information Supply-chain Processes (for Supervision & Regulation dept) Internal Business Architecture Business External Industry Reportin Process Operations view of the key activities, flows and performance measurements Reporting Analysis g Activities Business IT Services Solution n Solution 2 Solution 1 …. Capabilities IT Internal Operations Engagement-facing Review FI practices Policymaking Monitor FI key activities Prepare FI …. . . Initiate approval Services/Solutions Architecture reports workflow Present report to FI Analyze & profile …. . . benchmarks Capability view of the business/IT domains, services, and interfaces Workflow & Routing Mobile connectivityunderlying technologies Reporting tools IW productivity tools independent of Data cleansing (*also Content management Content indexing & search includes the Information Architecture) Data mining & visualization tools E-Knowledgebase Alerts Notification Application Services Portal/Dashboard Extranet portal ERP Role-based secure access Reporting Analytical tools Enterprise & desktop generators search Technology Architecture Intranet portal Event notification ……. Content delivery Infrastructure Services view of the technologies used to provision the services Remote Data Implementation Workflow Directory access transformation Authentication OA desktop tools Web services Pw. C CONFIDENTIAL 23

Agenda • Why & What is Enterprise Architecture? • Enterprise Architecture Business Drivers • Enterprise Architecture Processes • Enterprise Architecture for Agile Business • Forming EA Team • Conclusion Pw. C CONFIDENTIAL 24

The Architecture-Driven approach Architecture Team Responsibilities Management of the complexity Distribution of responsibilities Accommodation for future changes Business Requirements Business Architecture Scenarios Pw. C Solution Architecture Scenarios System in Production Technical Architecture CONFIDENTIAL 25

Basic Principles – Architecture Layering Architecture Team Responsibilities Management of the complexity Distribution of responsibilities Accommodation for future changes Comprehension of the system “Divide & Conquer” Pw. C CONFIDENTIAL 26

Basic principles - Abstraction & Encapsulation Architecture Team Responsibilities Management of the complexity Distribution of responsibilities Accommodation for future changes Responsibilities Collaborations Parallel development Incremental approach Pw. C CONFIDENTIAL 27

Basic principles - Design for change Architecture Team Responsibilities Management of the complexity Distribution of responsibilities Accommodation for future changes Future modifications Anticipated Change Cases Unanticipated Generic Behavior Robustness Flexibility Pw. C CONFIDENTIAL 28

Enterprise Architecture processes Understand Drivers thru Scenarios Create Architecture Evaluate & Decide IT Architecture Strategy DRIVERS Business goals & Strategy Business scenarios Characteristics of business Risks Architecture needs Scenarios Architecture goals Application requirements Integration needs Business Strategy Architecture Creation Risks Scenarios Change characteristics Execution scenarios Architecture Evaluation & Decision Reviews, change scenarios, prototypes Pw. C IT Governance Architecture Blueprint Enterprise Architecture CONFIDENTIAL 29

IT efficiency • Target Path to EA: Migrate via managed evolution Typical IT path returns: – Long lead time to delivery with little business impact during the interim – Solution likely not well aligned with business needs • Cityplanning approach • Target to-be: Enterprise Architecture is to balance between IT & Business impact to achieve high efficiency Architectural Version 3 Typica l. IIT path Architectural Version 2 Typical business path • Current Architectural Version 1 • Current • Business impact Pw. C Typical Business path: – creates an inefficient IT architecture – Unrealistically fast IT response required to deliver business value – Results in unsupportable “spaghetti” IT systems • Target CONFIDENTIAL 30

Agenda • Why & What is Enterprise Architecture? • Enterprise Architecture Business Drivers • Enterprise Architecture Processes • Enterprise Architecture for Agile Business • Forming EA Team • Conclusion Pw. C CONFIDENTIAL 31

Why corporations are forced to rethink their Enterprise IT strategy? Sustaining business growth requires technology leadership Increasing business margins requires operational efficiency Achieving business agility requires agile IT architecture IT investment must provide the price/performance response “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change” Charles Darwin To win the competitions requires Enterprise Architecture Strategy Pw. C CONFIDENTIAL 32

What major Analysts say on the business benefits of EA? 1. Lower IT Operating Costs 1) 2) 3) Giga: +20% savings in annual IT operating budget Giga: +10% savings of project cost and +25% savings of project elapsed time with non-standard architecture Gartner: +20% savings in infrastructure costs 2. Enabled Strategic Agility & Growth 1) 2) Gartner: + 30% improvement in ability to deal with changing external drivers MIT: Correlated top performers with high capability IT infrastructure & architecture standards 3. Higher Productivity through well architected IT & infrastructure 1) Forrester: 40% productivity gap between leaders and laggards in IT investment Pw. C CONFIDENTIAL 33

1. Lower IT Operating Costs with Enterprise Architecture Reduce Capital Outlays Reduce Support Costs • Consolidation of hardware • Consolidation of software licenses • Volume purchase agreements • Shared know-how • Less training • Fewer and easier upgrades • Faster problem solving • Less vendor administration Enable Superior Operations Improve System Management • Backup and recovery • Software asset management • Effective Test and validation • Efficient Help Desk Standard & Policy • Efficient Capacity planning • Better Performance management • Improved Security management • Simpler Configuration management Pw. C CONFIDENTIAL 34

2. Enable Strategic Agility & Growth • Improve Interoperability For example, GE: Well-architected Enterprise IT infrastructure enables them to integrate so many diverse businesses so well. Source: CIO Insight • Better Scalability For Example, Dell: Flexible architecture and IT Infrastructure allowed them to grow dramatically … and plan to double their sales. Source: Forrester • Faster Time-to-Benefit/Faster Time-to-Market For example, Fed. Ex Ground: ‘Poster child’ for the Agile Enterprise Architecture; entered ground delivery market to become #2 in 12 months. Source: Fortune, Information Week Pw. C CONFIDENTIAL 35

3. Higher Productivity through well architected IT & Infrastructure Source: Forrester, The Arnold Group* • Technology-driven productivity • Tech-cautious firms are losing competitiveness 1) IT Architecture and Infrastructure are key components * - For example: In the stiff competition, CEMEX – Profits of 16% from revenue compared with competitors' only 3% as a result of STANDARD in technology architecture and IT infrastructure investments 1) Leaders get 60% more productivity and profit results from their competitors - For example: Compaq vs. Dell – Compaq produces only 8% more revenues than Dell with: - 75% more assets and - 85% more employees Pw. C CONFIDENTIAL 36

Agenda • Why & What is Enterprise Architecture? • Enterprise Architecture Business Drivers • Enterprise Architecture Processes • Enterprise Architecture for Agile Business • Forming EA Team • Conclusion Pw. C CONFIDENTIAL 37

The Key Stakeholders of Enterprise Architecture team CEO/COO/CMO/CFO Vice Presidents Directors Business Strategies Business Managers Business Analysts Business Strategy Team CTO/CIO Strategic Architect Security Architect Information/Data Architect Solutions Architect Infra/Network Architect Software Architect Application Architect IT Governance team Enterprise Architecture Strategy Team Enterprise Architecture Team Pw. C CONFIDENTIAL 38

Enterprise IT budget to support business agility IT project budget Percentage on the entire company budget ~ 10 "Grow" 25 “IT Run the company” “IT Support the company” IT Budget reallocation from "Run the Company" to “Support the Company" by … … refocusing on projects which drive “metrics that matter” ~ 90 75 … establishing clear architecture governance linked to business initiative portfolio … Architecture blueprint to standardize the technology, platform & processes … retiring redundant applications • Today • Target Pw. C … stopping messy projects early CONFIDENTIAL 39

Next Step for Enterprise Architecture-EALC Get Top Form EA Biz & IT Management Team Alignment Supports Establish IT Governance Architecture Implement EA Enabler Blueprint • Get Top Management Support • Form EA team as part of IT & Business Strategy Team • • – Agree on EA is important – Support the business strategies and operations – Set business KPI to achieve Business & IT Alignment – Measure KPI and doing alignment to business drivers & strategy Come up with IT Governance as part of Corporate Governance – Rules, Policies, Guidelines & Enforcement Come up with Architecture Blueprint i. e. standard practices – Business Architecture – Services (Information/Data) Architecture – Technology Architecture Implement EA Enabler – Service Oriented Architecture, etc – Infrastructure, hardware and software consolidation Pw. C CONFIDENTIAL 40

Agenda • Why & What is Enterprise Architecture? • Enterprise Architecture Business Drivers • Enterprise Architecture Processes • Enterprise Architecture for Agile Business • Forming EA Team • Conclusion Pw. C CONFIDENTIAL 41

Key Questions Cx. Os & Executives must ask Enterprise Architecture Framework Technology Architecture Effectiveness High Capability IT Infrastructure 1) Do we have an EA planning process? 1) Do we have formalized 1) Architecture Blueprint? 2) Do we have IT governance in place? 2) Do the IT & Architecture elements match how we run our business? 3) Who are the EA stakeholders? 4) How do we know it’s working? 3) 2) How do we know that our technology investment support our 3) business? Are we reducing IT operating costs through an IT Infrastructure investment? ROI? Are architectural standards, platforms & patterns maximized agility and interoperability? Can the IT infrastructure support the agile business? Source: The Arnold Group Pw. C CONFIDENTIAL 42

Thank You This presentation is for informational purposes only. IASA MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Pw. C CONFIDENTIAL 43