IT Pressures Felt by Most Businesses Today

1. IT Pressures Felt by Most Businesses Today • How do we respond more quickly to business requirements? • Flexibility • Interoperability • How do we get more for our IT dollar? • Reduce IT operating costs • Minimize capital investment • Deliver more “new” capabilities for less • How do we manage complexity in IT? • Maintain skills for multiple technologies • Enforce standards and compliance

2. Do More With Less: but HOW? The Agile Business 30% New Capability Increases Value Creation 45% New Capability 70% Sustaining & RunningExisting Capability Decreases Maintenance & Delivery 55% Existing Capability Today’s IT Desired IT Source: Accenture I.T. Spending Survey

3. With Infrastructure that is driven by Technology Architecture Enterprise Architecture Framework Strategy Application Portfolio Information Architecture Technology Architecture Business Architecture Business Process Applications Information Infrastructure Source: META Group

4. What is architecture? “a system’s fundamental organization, embodied in its components, their relationships to each other and the environment, and the principles guiding its design. IEEE Standard 1471-2000 Buildings: • Models & Concepts • Blueprints • Bills of Material • Building Codes • Workmanship Standards IT Systems: • Frameworks & Models • Patterns • Standards & interfaces • Buy Lists • Qualities (metrics) Would you build a house without architecture? Then why Infrastructure? Source: Forrester

5. Does your Infrastructure look like this? …if so, you need architecture

6. How does Technology Architecture help? Tool for Risk Management • Architecture is based on requirements • Architecture helps you to make decisions • Translates IT decisions into business consequences Tool for Project Management • Classic” project management focuses on time and money -Functionality pays the price • Architecture guards the functionality • “Design authority” • Architecture gives insight into the consequences of decisions as they impact on the requirements Planning Tool • Provides early insight into all relevant items • Helps to analyze the consequences of decisions • Develops standards and guidelines

7. Architecture Matters “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)” - Federal CIO Council Source: Federal Enterprise Architecture Framework V1.1

8. JetBlue “Some people say airlines are powered by jet fuel,but this airline is powered by its IT infrastructure” - President Dave Barger WalMart “Accelerated growth could not have been achieved without our state-of-the-art computer systems” - WalMart ISD IT Infrastructure NASDAQ “Highly scaleable infrastructure handles 1.8 billion real-time messages per day and 50K trades per second” - TIBCO State Street “the architectural review process adds value by identifying issues before they impact a project.” - Amy Gutschen, SVP IT IT Architecture as Competitive Advantage

9. Best Practices of Leaders “Drive simplicity and flexibility throughout the technology environment by setting architectural standards and closely scrutinizing the true costs and benefits of exceptions.” “Tackle complexity by reducing the number of technologies and platforms they deploy and by designing architectures to increase the flexibility and ease of implementation.” “Take into account commercial aspects such as industry standardization and the likely future support of technologies because of the enormous costs of obsolescence.” Source: McKinsey

10. The MIT Study: Leaders have ‘High Capability’ IT Infrastructure • Analyzed 180 electronically based business initiatives in 89 top performing enterprises Common thread among leaders: “IT Architecture & Standards”

11. Where Are You? Leading Competitive Spending focused on achieving competitive advantage Highly robust and flexible infrastructure Organization skilled at employing technology to support business value Frozen in the past Distributed computing environment - robust & simple Effective new development Mainframe based application portfolio Little flexibility In the Abyss Too many technologies & inconsistent policies Ops and maintenance dominate budget Ineffective new development Source: McKinsey

12. Good Technology Architecture Focuses on Infrastructure as well as Applications Traditional Architectures Architectures for the Future By design Business-driven Infrastructure focus Revenue-gen and efficiency Alternatives By default IT-driven Application focus Cost-savings and control Buy lists Application development without = Failure Technology Architecture Source: Gartner

13. Good Architecture means: Formalize - Implement: Start EA Planning Focus on: Define Enterprise Architecture Technology Architecture Building Blocks High Capability IT Infrastructure Drives business alignment Use a framework or your own process System Concepts Principles Rules Patterns Interfaces & Standards Scaleable Reusable Interoperable Sustainable Secure Reliable Sources: Gartner, Meta, Giga, MIT

14. Questions CEOs & Executives must ask: Define Enterprise Architecture Technology Architecture Building Blocks High Capability IT Infrastructure Do we have an EA planning process? How do we know it’s working? Do we have formalized & agreed upon Technology Architecture? Is this in line with business objectives? How do we know? Are we reducing IT operating costs through IT Infrastructure investment? ROI? What architectural standards, platforms & patterns maximize agility and interoperability? Which will help us compete on productivity growth? Source: The Arnold Group

15. What Benefits Leaders Reap from Architecture-driven IT Infrastructure Investments • Lower IT Operating Costs • Giga: implementing Architecture yields 20% savings in annual IT operating budget • Gartner: Architecture can provide savings of 10% to 20% of infrastructure costs • Giga: non-standard technology architecture increases costs by 10% & time by 25% • Increased Strategic Agility • Gartner: Enterprise IT Architecture gives 30% improvement in ability to deal with changing external drivers. • MIT: Correlated top performers with high capability IT infrastructure & standards • Increased Productivity • Forrester: 40% productivity gap between leaders and laggards in IT investment

16. 1. Lower IT Operating Costs with Enterprise IT Architecture Source: Gartner

17. 2. Increased Strategic Agility & Growth • Interoperability GE: Well-architected IT infrastructure enables them to integrate so many diverse businesses so well. Source: CIO Insight • Scalability Dell: Flexible architecture and IT Infrastructure allowed them to grow dramatically … and plan for another doubling. Source: Forrester • Faster Time-to-Benefit/Faster Time-to-Market FedEx Ground: ‘Poster child’ for the Agile Enterprise; entered ground delivery market to become #2 in 12 months. Source: Fortune, Information Week • Cross-boundary Security H&R Block: Uses secure, integrated architecture to avoid overtaxing partners, staff, and the IRS. Source: H&R Block

18. 3. Increased Productivity • Technology-driven productivity gap is widening • 1975 productivity gap between average firms and tech leaders was 15% -- rising to 40% by 2000 • Architecture and IT Infrastructure are key components * • Tech-cautious firms are losing competitiveness • Leaders get productivity and profit results by outspending their competitors on new IT projects by more than 60% • Productivity leaders are consolidating their industries • Architecture and IT Infrastructure are key components * Examples: • CEMEX – FY 2001 profits of 16% compared with competitors' 3% as a result of technology and IT infrastructure investments • Dell - Compaq vs. Dell -- produces only 8% more revenues than Dell with 75% more assets and 85% more employees Source: Forrester, The Arnold Group*

19. Develop Enterprise & Technology Architecture Competency WalMart writes the Book. Competition is in Chapter 11. Return on Assets Create ‘High Capability’ IT infrastructure FedEx soars. Competition is grounded. Strategic Agility Deploy Flexible, Standardized Infrastructure Services Interoperability with Value Chain CVS tracks in real time. Competition is stuck with too many track shoes. You Can’t Wait … Action Benefit Example