EA & IT Value
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This document discusses the value propositions of enterprise architecture (EA) from an information technology perspective. It outlines perspectives within and outside an enterprise that can benefit from EA, including executive management who value business control, users who value productivity and mobility, and customers who value new products and services. The document also discusses IT alignment with a business, measures of EA value, and constraints on realizing EA value. Planning for value, relevant external research, and EA lifecycles are part of the EA value proposition. The nature of a business drives its information priorities, like capability solutions in certain domains.
![EA Value Propositions
October 2011 V1
From an IT Perspective
© BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 1](https://image.slidesharecdn.com/eaitvalue-120107091218-phpapp02/85/EA-IT-Value-1-320.jpg)
![Office of the CIO
Overview of the Value Discussion
The IT IT Alignment
EA & IT
Value BAE What is EA?
Governance
Proposition Example
Planning for
Value
Relevant
Value EA Value
External The EA Value
Within a & Investment
Value Proposition
Market Lifecycles
Research
Measures of Constraints
Value On EA Value
© BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 2](https://image.slidesharecdn.com/eaitvalue-120107091218-phpapp02/85/EA-IT-Value-2-320.jpg)
![Planning for Value
Apply some principles:
- All EA work should be driven by the pursuit of Value:
- Do what we do today better
- Do New Things (well)
- Remove Waste
- Only make architectural decisions when we need to
- Model in Detail when it meets today’s/next day’s needs
- Present in terms of value outcomes
Suggestions on process are in the supplemental slides (at the end)
Some Clues about where to look for Value …
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![MIT CISR Architectural Standardisation
MIT CISR define 4 stages of Architectural Maturity:
Business Silos Standardised Optimised Core Business Modularity
Technology
LOCALLY IT EFFICIENCY OPERATIONAL STRATEGIC AGILITY
OPTIMISED EFFICIENCY
IT apps serve local Technical Standards Standardised data & Business Processes
needs limit choice and raise processes increase Plug & Play
efficiency organisational increasing agility
discipline
Executive Satisfaction
= 2.0 (out of 5) = 2.7 = 3.5 = 3.8
Relative IT Spend
= 100 = 85 = 75 = 120
N.B. this fits with claims of up to 25% running cost reductions from EA & APM
Enterprise Architecture As Strategy: Creating a Foundation for Business Execution, Jeanne W. Ross, Peter Weill & David C. Robertson
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![Complexity Optimisation
Source: The Global Simplicity Index 2011
10.2% - the hidden cost of complexity
By Simplicity & Simon Collinson (Warwick
Business School)
Based on:
1. The no & variety of components in the
organisation
2. The interrelationships between the
components
3. The pace of change of these relationships
Note: none of the components are IT based …
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![Implication For Global Companies
The
Same
Everywhere
Govern / Manage The Business
Do The Business
Standardise Market Sector 1
By Sector
Localise Market Sector 2
.
Customer .
Facing .
Capabilities Market Sector N
Share & Support The Business
Standardise
By
Geography
Issue: requires political will and appropriate ownership structure
to achieve
© BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 21](https://image.slidesharecdn.com/eaitvalue-120107091218-phpapp02/85/EA-IT-Value-21-320.jpg)
![Supplemental
- Where do we start /
- Which techniques practices do it for us
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EA & IT Value
- 1. EA Value Propositions October 2011 V1 From an IT Perspective © BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 1
- 2. Office of the CIO Overview of the Value Discussion The IT IT Alignment EA & IT Value BAE What is EA? Governance Proposition Example Planning for Value Relevant Value EA Value External The EA Value Within a & Investment Value Proposition Market Lifecycles Research Measures of Constraints Value On EA Value © BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 2
- 3. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value The IT Value Proposition 3
- 4. Value Perspectives FROM: Within the Enterprise Outside the Enterprise 4
- 5. Perspectives Within the Enterprise Insight: •Performance, •Analysis, •Forecast, •Simulation Executive Value: Business Control Enable: •Org Change, Enforce: •M&A, Processes: •Standards, •New Business Tensions & Trade-offs •Repeatable, Models, •Policies, •Robust, •Limits, •Efficient, •Consistency •Effective, •Scalable, •New Capability Levels Management Value: Organisational Delivery Team Building & Enablement: •Communications, •Sharing Knowledge & Practices, •Extended Team Interaction, •Same Payroll, Access Control, etc. User Value: Consumer Benefits •Builds Shared Culture Personal: •Access External Innovation •Productivity, •Mobility, Flexibility & Home Working, •Ability to Do Job Easily •Access to e-Training 5
- 6. Perspectives Outside The Enterprise Customers: Talent: • New Products / Services • Modern Image • Better Buying Experience • Wider pool of Recruitment • Better Support • Rapid Innovation which Addresses Their Problems Digital Media: • Reputation • Promotion • Industry Debate 6
- 7. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value IT Alignment 7
- 8. The Nature of Our Business Drives Its Information Priorities Transplanting Capability What We Do Strategic Themes Solution Home Markets Simplification Domain Specific Cost Reduction Solutions Projects Engineering Services Agility & Investment (Incl. IT) Alignment Sectors Customer Intimacy New Products Customer Requirement Insight Involves Intensive Use of Information. Knowledge & IPR Sustainability Harvesting In Service as well as Communication Knowledge Cyber External Declining Increasing Increasing IT War Products Compliance Cyber Commodit- For Innovation, Context: UK/US Spend Needs Threat isation Talent SVR & Partnering IM&T Issues: Sustainable IT Security Mobility, Information Social IM&T IM&T Skills Continuity Collaboration Virtualisation Governance Media Reputation & Sourcing & Risks & Cloud 8
- 9. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value What is EA? 9
- 10. What is Enterprise Architecture? Enterprise Architecture is the Practice of applying high level Design techniques to a Business’s overall Organisation and Technology Assets; This is an essential Governance Practice; It is applied to Planning for Business Change, Managing the Creative Aspects of Business Change and the On-going Exploitation of Existing Assets; IT adopts Enterprise Architecture to integrate its Governance with that of the other functions within a business and to provide a framework for technical decision making. EA & Governance are both concerned with Value
- 11. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value EA & IT Governance 11
- 12. Best Practice Suggests IMT Governance Involves ISO 38500 – IT Governance Standard framework CoBIT - 5 IMT Governance Practices which complement these principles: Corporate Business governance Business needs pressure of IMT Strategic Alignment Value Delivery Evaluate Risk Management Performance Measurement Direct Monitor Resource Management proposals conformance Performance policies ITIL & ISO20000 for Service plans Management which underpin governance implementation. In the context of overall business IT Projects IT Operations governance Underpinned by 6 principles : Responsibility Performance Simply put: a framework for Strategy Conformance appropriate decision making Acquisition Human Behaviour (to optimise value) Redrawn from the standard, with “IT” replacing “ICT” 12
- 13. Our Picture IT Risk & Defined Strategy Value Opportunity Opportunities Management Enterprise Priorities Architecture for Value Implementation Standards Opportunities Of & Roadmaps Design Technical Scope Informed & Content Dependencies Value Judgements IT BBS New & Improved KPIs Capabilities Application Project Portfolio Portfolio Management Value / Candidate Management Benefit Decisions Projects Ongoing Delivery Maintenance Investment Of New Value & Enhancement Of delivered Management & Benefit Value IT Vendor Tracking Operational Relationship Processes Management 13
- 14. Joint Interactive Planning (IT & Business) Leads to Results From Gartner Paper “Realizing the Benefits of Project & Portfolio Management” PPM benefits – Other sources: !0% improvement on ROI - from review of architectural dependencies and coherent alignment - Alfabet white papers Achieving ROI on Enterprise Architecture and Using Enterprise Architecture to Achieve Effective IT Cost Management 20% reduction in costs from eliminating duplication and low priority projects can be obtained without adverse affect - “IT Portfolio Management Step-by-Step”, Bryan Maizlisch and Robert Handler, Wiley 2005 Up to 40% reduction in project spend from the pre-budget position - Best Practices in IT Portfolio Management - MIT Sloan Management Magazine, Spring 2004, Mark Jeffrey & Ingmar Lelireid 14
- 15. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value Planning For Value 15
- 16. Planning for Value – Evolutionary Trajectory Quo Vadis? Efficiency Effectiveness Engagement Stability & Sophistication & Learning Predictability New Capability Surviving Chaos Automation & Agility & Loyalty & Control Innovation Responsiveness Communic- Information Records & Reputation ation & & Insight Search & Intimacy Collaboration 1970s 1990s 1990s 2010s Data Documents Connection Social Processing & Messages & EDI 1960s 1980s 1990s 2000s 16
- 17. Planning for Value Apply some principles: - All EA work should be driven by the pursuit of Value: - Do what we do today better - Do New Things (well) - Remove Waste - Only make architectural decisions when we need to - Model in Detail when it meets today’s/next day’s needs - Present in terms of value outcomes Suggestions on process are in the supplemental slides (at the end) Some Clues about where to look for Value … © BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 17
- 18. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Relevant External Value Measures of Value Constraints On EA Value Research 18
- 19. MIT CISR Architectural Standardisation MIT CISR define 4 stages of Architectural Maturity: Business Silos Standardised Optimised Core Business Modularity Technology LOCALLY IT EFFICIENCY OPERATIONAL STRATEGIC AGILITY OPTIMISED EFFICIENCY IT apps serve local Technical Standards Standardised data & Business Processes needs limit choice and raise processes increase Plug & Play efficiency organisational increasing agility discipline Executive Satisfaction = 2.0 (out of 5) = 2.7 = 3.5 = 3.8 Relative IT Spend = 100 = 85 = 75 = 120 N.B. this fits with claims of up to 25% running cost reductions from EA & APM Enterprise Architecture As Strategy: Creating a Foundation for Business Execution, Jeanne W. Ross, Peter Weill & David C. Robertson © BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 19
- 20. Complexity Optimisation Source: The Global Simplicity Index 2011 10.2% - the hidden cost of complexity By Simplicity & Simon Collinson (Warwick Business School) Based on: 1. The no & variety of components in the organisation 2. The interrelationships between the components 3. The pace of change of these relationships Note: none of the components are IT based … © BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 20
- 21. Implication For Global Companies The Same Everywhere Govern / Manage The Business Do The Business Standardise Market Sector 1 By Sector Localise Market Sector 2 . Customer . Facing . Capabilities Market Sector N Share & Support The Business Standardise By Geography Issue: requires political will and appropriate ownership structure to achieve © BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 21
- 22. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value Value Within A Market 22
- 23. Market Model – we all swim within at least one “market sea” Owners & Regulators Reduce New Overheads / New Capabilities / ? Innovation Complexity Product / ? Of Compliance Service Opportunities & Reporting Opportunities Govern / Manage Improve Do Customer Suppliers Experience / Customers Leverage Support Supplier Value Capabilities The Business Look & Capital For Common Industry Indirect Solutions Customer Use: (cost reduction Exploit Value Engagement Map, & customer Competitor Too SWOT & PEST convenience) Weaknesses For each relationship To identify Trends, Big Competitors Rules & Opportunities 23
- 24. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value The EA Value Proposition 24
- 25. Benefits of Enterprise Architecture Business Driver Value Outcome IT Strategy Addresses Business Value with Integrated Solutions; Business Strategy, Priorities and Needs Innovation Drives Competitiveness; Drive IT Strategy Business IT Investment Areas Targeted Rationally; Alignment IT Contributes to Business Strategy IT Can Articulate Strategy and its Relevance; Stakeholders Understand Issues; Need for Confidence in Solutions Understanding & Analysis Deepens Understanding; Communication Impacts of Business Changes Are Clear Technical Project Content is Known; Risk Reduction Technical Dependencies Are Dependable Value Delivery Identified; Security Risks Are Addressed; Continuity Is Addressed; Process Fit Improvement; Optimisation Obsolescence Adaptability Management; Simplification; Re-use. Date/reference/classification 25
- 26. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles EA Value & Investment Measures of Value Constraints On EA Value Lifecycles 26
- 27. Based on a Presentation by Chris Potts EA Value SD PM Strategy Investment Appraisal Lifecycle Idea Appraisal Implement Harvest Retire Based on a Presentation by Chris Potts, Author of “FruITion” and “RecrEAtion”, at Troux 360, 2011 27
- 28. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value Measurement of Value 28
- 29. Outcomes not Artefacts Each business should have some strategic KPIs which reflect its performance The trends and relationships of these can be examined to determine the trend in UNIT PERFORMANCE. This gives a clue about either whether EA is needed or alternatively it is succeeding. Examples: EBITDA / Revenue, Annual Unit Management Cost per customer account Average time to market for new products IT and EA value is ultimately measured in these terms Other BBS style measures can also be used to facilitate diagnosis of - Where EA should focus next - How EA can improve its own effectiveness 29
- 30. The IT IT Alignment What is EA & IT Value BAE EA? Governance Proposition Example Planning for Value Relevant EA Value Value The EA External & Within a Value Value Investment Market Proposition Research Lifecycles Measures of Constraints Value On EA Value Constraints on EA Value 30
- 31. Constraints on EA Value Forrester’s EA Archetypes Model Does being outside the top right corner of the Model reflect: (a) Limitations in IT Executive Imagination/Knowledge? (b) Lack of a Business Strategy to align with? (c) Failure of a Business to prioritise structural integration? (d) Response to economic / business cycles? (e) The reputation of IT within a business? Constraints: • Top Team dysfunction • Lack of £s / resources • Continuous rapid M&A • Continuous change of CEOs (and direction) • Immature IT team • Market turbulence / No time to focus on the future • Reporting to the wrong Executive / at the wrong level • Where IT is in its relationship cycle with the rest of the Business Gartner analyses suggest that high performing businesses are engaged with IT to manage for value. IBM Research presented in the IBM Systems Journal in the 1990s stated that IT Strategy cannot deliver results If a business does not have a coherent business strategy (explicit or implicit).
- 32. Supplemental - Where do we start / - Which techniques practices do it for us © BAE Systems (insert Home Market) 2011 BAE Systems [INTERNAL USE ONLY/IN STRICT CONFIDENCE] Date/reference/classification 32
- 33. The Nature of Value e.g. New markets, Seek new sources of New Products The Value Value Service Innovation Staircase Helps Identify e.g. support programmes Business Value Deliver things which add provide control & insight Streams automate processes, value respond quickly e.g. avoid: Avoid things which unnecessary complexity, duplication of investment or activities, Erode Value nugatory investments Do Things which e.g. Risk Mgt, Security, Protect the Business Business Continuity Pre requisites which give e.g. Security & Compliance with export controls us the right to trade 33
- 34. For Each Value Stream As well as Identify the EA continuously design Activities & practices, an optimised & EA solutions which architecture for the help Value assets, oversee Stream asset choices & review legacies Have realisation Are addressed by Objectives Objectives Activities IT (& other) Which deliver value Services & Are affected by Assets: Systems Are addressed by Solution Options Data Which enhance Infrastructure CSFs CSFs enablers and limit (other assets) CSFs inhibitors N.B. only some f the activities & solution options concern EA, many are business activities and business solutions supported by services and assets 34
- 35. Prioritise According to Need & Level of Opportunity Businesses respond to changes in their marketplaces as well as in leadership. This means that value stream priorities Are constantly changing. EA needs to prioritise in line with these changes As well as avoiding over focus on one area (i.e. don’t flog dead horses) De-Centralisation Centralisation New Markets Cost cutting Product Innovation Rationalisation Acquisition Focussing Business Cycles 35
- 36. Enterprise Architecture Layers ENTERPRISE ARCHITECTURE KEY LAYER SECTOR ENTERPRISE SYSTEMS ISSUES SPECIFICS ARCHITECTURE Industrial •Products •Market & Business Models •Positioning Environment •Branding •Legislation & Trends •Reinvention •Turbulence •Stakeholder Agenda & Strategy •Performance •People Capabilities & Security Management •Organisation & Control •Partners Business •Skills •Processes •Boundaries & Services •Facilities •Locations •Flexibility System •Behaviour •Applications •Enablement •Materials •Data & Knowledge •Security & IPR •Flows •Events •Responsiveness Infrastructure •Transport •Networks •Scalability •Technologies •Systems Software •Innovation •Assets •IT Equipment •Obsolescence 36
Editor's Notes
- #2: Rambling for EAsUnashamedly IT centric, as an IT audience, but much can be adapted to other functions / BANot meant to be the complete answer, but to provoke discussion
- #3: The route map around the ramble …
- #5: Value propositions depend upon the audience, but several dimensions should be considered
- #6: Internally, we need to understand what motivates people to deliver value as much as where priorities lie Similar perspectives apply to other functional areas / BA
- #7: Increasingly, external views are relevant
- #11: Emphasises that EA is essentially about optimising long term valueThe term Design is used instead of engineering, as it is about more that just structure, its about value insight and aligning IT with the CEO(cf the 3 axes of orientation daiagram)
- #13: IT governance is performed within a business governance context to optimise value
- #15: Where business executives agree that IT is aligned with their needs – company performance is demonstably above average
- #17: IT and industry in general is on a value journey. Currently cloud, social computing and consummerisation are the hot issue that we are all trying to understandNo one knows where we will be tomorrow …Some of what we need to do is manage boundaries – especially as we react to chaos and turbulence
- #18: So we need focus on principles.Outcomes are important – business communication, alignment, value focus (measures may vary contextually with geography, time etc.)The value staircase at the end is intended as an example tool to help with “where do we start?” or “what is important today / here?”
- #22: Complexity adds value in different market sectors and localising to geographic needs.Also some need to think about innovation and what we let people chose (boundaries & sandpit areas in process / capability)Everyone’s an architect …
- #24: N.B. Markets may also have standard solutions, technologies, processes, knowledge, behaviours, “big rules” Not all customers want to access service / products in the same way or be treated in the same way Where we appear in other people’s processes is just as important as our own
- #28: A similar picture appears in his book RecrEAtion
- #30: BBS may be too limited. It fails to cover “sustainability” issues, e.g. compliance, risk, ethics or architectural complexity and relate them to performance
- #34: Not intended to be exhaustive