Rethinking enterprise and infrastructure architecture

1. Rethinking enterprise and infrastructure architecture Microsoft Infrastructure Architect Forum 28 March 2006 Neil Macehiter, Partner

2. Key messages for today • IT-business alignment has never been so important • Alignment must be pursued in the context of understanding business processes, priorities • Service-orientation is not just for applications • Contracts aren’t just about function: they encapsulate and communicate business priorities to IT delivery organisations • Enterprise architecture needs to be more inclusive, sophisticated • IT governance models must take all this into account © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

3. Agenda • Business and IT: new tensions • IT-business alignment • Alignment principle #1: service-oriented IT • Alignment principle #2: understanding business processes and their priorities • Enterprise architecture must reflect IT-business alignment principles • A governance model for service-oriented IT • Recommendations © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

4. A brief introduction to MWD • Strategic advice and consulting • Focus on issues concerning IT-business alignment • Driving more business value out of enterprise IT • Core: three highly experienced industry analysts / practitioners • Admiral, Alcatel, Deloitte Consulting, IDC, Oracle, Ovum, Sun, Sybase • Based in UK, Europe-wide focus © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

5. Business and IT: new tensions advising on IT-business alignment © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

6. Business pressures are driving change in new ways • Globalisation • Customers, partners, suppliers – and competition • Connectedness driving sophisticated value chains • Transparency • Industry regulations, consumer pressure and competition driving openness • Service focus • Differentiation and shareholder value increasingly derived from service experience © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

7. Common resulting business/technology change projects/scenarios • Managing and proving regulatory compliance • Refinement of approaches to business and technology outsourcing • Integration of processes horizontally across organisations • Integration of processes, products and offerings between organisations © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

8. The challenge: IT often fails to support these types of changes effectively • Technology integration is costly, risky and complicated • Information is everywhere, but getting access to the right information at the right time is very difficult • Modifying system behaviour takes too long and changes are difficult to communicate and implement effectively • Much of IT system and operations expenditure is bloated and fixed - operations run with excess redundant capacity The result: IT seen as a cost centre, not a source of business value © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

9. Three fractures: information management, process support and user experience Structured information (customer records, order & fulfilment records, accounts, etc) Unstructured information (office documents, web content etc) Stable, predictable processes (accounting, order fulfilment, HR, logistics, etc) Dynamic, collaborative processes (product innovation, marketing, strategy setting, etc) Desktop user experience (office productivity, communication/ collaboration, etc) Web user experience (increasing numbers of ERP/CRM applications, content management, etc) Information management Strong heritage of management; BUT tends to be application-specific Little heritage of formal management; storage is fragmented Process support Strong heritage of management; BUT tends to be application-specific Little structured automated support from IT User experience Familiar, highly interactive BUT tends to be application-specific Open and accessible environments but usability can be poor © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

10. IT-business alignment advising on IT-business alignment © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

11. IT-business alignment: multiple angles It’s not just about “building stuff that the business will use” Business Investment in capability Change capabilities, limitations Change implications Delivery of value IT © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

12. A common language is the essential starting point “Investment prioritised in terms of business need” “Systems that deliver value to the business” “Clear direction from the business about focus, strategy” “Collaborative approach to implementing business change” A common, agreed representation of business activity, goals + A common, agreed view of how current and future IT provides structured support to the business in this context Business ? IT © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

13. Alignment demands that IT becomes a service provider Business B U S I N E S S S T R A T E G Y Business process Business process Business process Business process Business process Managed IT service Managed IT service Managed IT service Managed IT service Managed IT service A P P L I C A T I O N S & I N F O R M A T I O N I N F R A S T R U C T U R E IT Business processes form the foundation of a common language IT defines and delivers “business level” services which support the right processes, the right way © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

14. Alignment principle #1: understanding service-oriented IT advising on IT-business alignment © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

15. So what is an IT service? Line of business perspective IT operations perspective Developer perspective “Provide automated support for my sales force” “Update customer details” “CRM database” © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

16. Managed IT services – aligned with business processes Users’ experiences of “managed IT service” Infrastructure services Providing the platform Lifecycle services Managing the lifecycles of business functions and infrastructure Business function services Automating business functions © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

17. Contracts bring obligations for suppliers and consumers Message Format Message Sequence Functions Security Response Time Throughput Usage Cost Liability Clauses Trust QoS Terms Functional Terms Commercial Terms © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

18. Alignment principle #2: understanding business processes and their priorities advising on IT-business alignment © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

19. A universe of business processes [1] A hierarchy of business processes “Strategy” processes – instances oversee instances of management processes S “Management” processes – instances oversee instances of execution processes M M M “Execution” processes – instances handle particular units of work within business activities E E E E E © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

20. A universe of business processes [2] Contribution to competitive differentiation S S M M M M E E E E E E Non-differentiating (focus should be on efficiency) Differentiating (focus should be on flexibility) © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

21. Observations on the nature of business processes Increased collaboration, ad-hoc nature Increased structure, predictability S S M M M M E E E E E E Non-differentiating (focus should be on efficiency) Differentiating (focus should be on flexibility) © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

22. Implications for business function service design Reusability importance increases “Strategy”business processes Openness, flexibility demands increase High “Management”business processes Level of process abstraction “Execution”business processes Efficiency demand increases Activity functions Low Technical functions Non-differentiating (focus should be on efficiency) Differentiating (focus should be on flexibility) Business activity role © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

23. Enterprise architecture must reflect IT-business alignment principles advising on IT-business alignment © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

24. The real world Buy AND build AND integrate Application implementation Front office and beyond Business area investment focus Productivity desktop + global access to resources IT access environment Communication, collaboration, integration “Multi-sourcing” Technology innovation focus Capability supply From Towards Build, or buy vs. build Back office “Personal productivity” desktop Data processing Outsourcing vs. in-house delivery Older approaches fail to capture reality re: integration, communication, collaboration, supply complexity © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

25. A “traditional” view of EA [1]: The Zachman framework Source: John Zachman, ZIFA © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

26. A “traditional” view of EA [2]: TOGAF ADM Source: Open Group © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

27. The good and the bad of EA frameworks The good The frameworks give us a useful “language” for communicating and sharing ideas about how IT systems can/should support business needs Methodologies like the TOGAF ADM give solid templates for EA process work Starting to consider more dynamic aspects of EA as-is, to-be, vision views The bad The roots of most frameworks are in the creation or change of transactional information processing systems The real world of IT is much more ugly and complicated Still documentation-oriented – not focused on the process of architecture evolution & governance © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

28. The challenge Business process Applications Activities, processes Data The business The real world doesn’t “decompose” nicely – and IT isn’tjust about things you build in-house © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

29. Providing structured support for business processes means understanding scope & scale of interactions Towards B u s i n e s s p r o c e s s Loosely-coupled resources provide services which are designed to support the interactions that take place within a business process From B u s i n e s s p r o c e s s Data design tightly coupled to application design, and application design to “user requirements” – very restricted view of process needs © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

30. EA approaches must consider business process support more broadly Transactional services Information services Communication & collaboration services B u s i n e s s p r o c e s s Support scenario: a mesh of interactions We have to model more than just transactional applications © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

31. An alternative enterprise architecture model Historically the focus of architecture has been here Historical disconnect here • Business architecture • activities, entities • goals, strategy, differentiation Process architecture -roles, flows, resources Business function service architecture Transactional / information management Analytics, discovery, reporting Communication, collaboration • Infrastructure architecture • security, identity management • resource management © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

32. Enterprise Architecture and IT Governance advising on IT-business alignment © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

33. Enterprise architecture… Needs to be driven in partnership with the business Business IT Lifecycle Business function Infrastructure Functional QoS Commercial • Should follow a service-oriented model – but one which is about more than application functionality • Should consider all the different views of service provision – not just functional considerations © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

34. These perspectives are the key dimensions for IT governance, too Business processes, priorities Change Relationships Delivery Investment Business function Service types Infrastructure Lifecycle QoS Functional Commercial Contract aspects © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

35. Enterprise architecture and IT governance should be considered together Captures the iterative process of architecture change Business architecture Process architecture Change Relationships Delivery Investment Business fn architecture Business function TX/IM A/R C/C Service types Infrastructure Infrastructure architecture Lifecycle QoS Functional Commercial Contract aspects © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

36. You can use the model to… • Identify strengths and weaknesses in your current IT governance approach • Identify the contributions made by particular technologies to business objectives • As above for IT vendors • Consider the dimensions that affect sourcing decisions © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

37. A worked example: the role of DSI advising on IT-business alignment © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

38. DSI: the “design for operations” approach today… Change Capability today is in designing business function services with explicit reference to runtime QoS directives and validate them against a static infrastructure model Relationships Delivery Investment Business function Service types Infrastructure Lifecycle QoS Functional Commercial Contract aspects © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

39. DSI: with planned “Longhorn wave” technology With planned future capabilities, design-time QoS directives form the basis of a “live model” which is interpreted and maintained by server infrastructure to perform goal-oriented infrastructure monitoring and management Change Relationships Delivery Investment Business function Service types Infrastructure Lifecycle QoS Functional Commercial Contract aspects © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

40. A call to action • For architecture to contribute to IT-business alignment, you have to follow a holistic approach • Not just applications but infrastructure and lifecycle services • Proactively consider the links between all three • Look for technologies and patterns which support the linkages • Set up an architecture governance practice which doesn’t just allow change, but promotes it • Not a project-focused approach but an ongoing process with senior level sponsorship • Close links to business stakeholders and their priorities • Think about using contracts, policies and processes as the foundation of a common language © Macehiter Ward-Dutton 2006 www.mwdadvisors.com

41. Thank you Want to know more? http://www.mwdadvisors.com/articles/index.php advising on IT-business alignment © Macehiter Ward-Dutton 2006 www.mwdadvisors.com