Transcript SD08
Gartner’s Pace-Layered Application Strategy
Michael Guay This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
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Pace Layering: A New Beginning
• • • Business strategy and market conditions change faster than IT systems can adapt. In 2010, Gartner introduced the pace-layered application strategy framework This presentation will review the concept and provide guidance on adoption, governance and change management.
Pace Layering: Key Issues
1.
What are the key aspects of a pace-layered application strategy?
2.
How should application leaders implement a pace-layered application strategy without creating chaos?
3.
How can you use a pace-layered strategy to help your organization drive sustainable differentiation and increased innovation?
Why Is a New Application Strategy Needed?
The Conversation Between Business and IT Leaders Is Not Working!
Better Ideas Alternative Business Models New Ideas Business Leader Common Ideas One Size Fits All Apps/IT Leader Improved Processes
The Pace-Layered Application Concept
• • • • • Most organizations have a heterogeneous portfolio of business applications.
The applications range from mainframe to iPad, data center to cloud, and critical to casual.
The business processes they support may change every few years or every few days.
No single strategy or governance model can be appropriate for all applications.
The problem is only getting worse…
A Pace-Layered View of Applications
New Ideas Competitive Threats Better Ideas Greater Efficiency Systems of Innovation Systems of Differentiation Systems of Record Common Ideas Unique Processes
A Public Sector Pace Layered View of Systems
Pace Layered Application Strategy ™
“I don’t know exactly what I want. I need to experiment.” Systems of Innovation Systems of Differentiation* Systems of Record “I know what I want and it doesn’t have to be unique.” *Also referred to as “Uniqueness” want, but my needs are unique and there are no packages.”
Characteristics of Layers
Characteristic Record Differentiation Process Characteristics
Structured, repeatable Configurable, autonomous
Data/Information
Highly structured, well managed, mainly internal, audited
Content
Static/Stable
Change Control / Governance
Strict Control and Testing
Business Engagement
Formal Governance Process Part of the Team
Innovation
Dynamic, ad hoc Internal and external, some unstructured; more dynamic Structured and unstructured data; heavy reliance on external data Both More Streamlined Dynamic Ad Hoc Doing the Work
Planning Horizon
7+ years 1-2 years 2-3 months
Systems of Record: Core "Records" and Common Processes
• Employee Records • Benefits • Payroll • Accounts Payable • General Ledger • Budget • Tax, Treasury • Vendors • Requisition to Order • Inventory
Human Resources Financial Procurement
• • • •
Stabilized and Lower TCO: Invest in Differentiation and Innovation
Processes: Common processes — incremental improvement Information: Core records — very high quality/audit, reporting Systems: Core ERP/SCM/CRM suites or legacy systems Change Drivers: Long-term shifts, regulatory change, trickle down
Unstable Foundations Lead to Failure
Systems of Differentiation: Unique Processes and Information
Key Question:
What are the real business differentiators for your enterprise?
Human Resources Processes & Info.
• Recruit to Retire • Benefits / Payroll • Self - Service Finance Processes & Info.
• Transactional (AP/AR) • General Ledger • Budgeting Procurement Processes & Info.
• Req to Check • eCommerce (SCM) • Inventory • • • •
Processes:
Unique/differentiating processes, rigorous/detailed, medium pace of change
Information:
Analytics and forecasting — often combining system of record data and other data
Systems:
Best-of-breed, SaaS, sometimes modules of a suite
Change Drivers:
Successful innovations, commoditization, competitive pressures
Systems of Innovation: New Processes and Information
Web Social Mobile Multichannel • • • •
Processes:
Emerging processes, experiments/proofs of concept, often fairly manual/basic processes, process "lite"
Information:
Increasingly external, advanced analytics/models, scenario planning
Systems:
Experimentation "sandbox": - Portals, content management & collaboration - "Lite" Application Development — mashups, Web, social, mobile -
QR codes
Change Drivers:
New ideas, innovation
Pace Layering: Key Issues
1.
What are the key aspects of a pace-layered application strategy?
2.
How should application leaders implement a pace-layered application strategy without creating chaos?
3.
What should public sector organizations be aware of when implementing a pace-layered application strategy?
Use FACT to Determine Optimal Deployment Choices
• • •
Finance
Assess TCO for the option: calculations and assumptions should be transparent Source of cost data and assumptions should be documented COA should be developed to show and continually account for cost components • • •
Agility
Agility characteristics for deployment options need to be compared to the requiremenst for the software system May be difficult to ascertain unless you have been measuring over time The ability to adapt the application easily over time must be a crucial design constraint • •
Control
Software needs to be managed at many levels (data, security, change (code) control), requires management time More dynamic and involved governance to deliver appropriate control • • •
Technology
Need to assess the operational load impact of a specific deployment option (Ex: SaaS solution may create significant additional loading on external network connectivity, on premise may place more burden on existing servers) Determine “connective tissue” products and architecture Identify the impact of a specific deployment decision on current and planned enterprise architectures.
Interaction Between the Layers Requires "Connective Tissue"
System of Innovation System of Differentiation System of Record
VS.
Common Elements of Connective Tissue
•
Master Data Management
•
Process and Data Integration
•
Business Service Repository
•
Integrated Composition Technology
•
Common Security Architecture
•
Integrated Monitoring and Management
•
External Connectivity
Governance Differences Between the Layers
System of Record System of Differentiation System of Innovation Process Change
Strict Change Control Experimentation
Architecture
Traditional Alternate Platforms Investment Pool
Funding
Capital Process
Development Practices
Agile Practices Waterfall Doing the Work
Business Engagement Planning Horizon
Formal Process 7+ years 1-2 years 2-3 months
Establish Realistic Process and Data Integrity Requirements
Ambiguous, and Highly Flexible
Process Integrity Data Integrity
Modest Expectations
Facebook Campaign Prospect Web Visit System of Innovation
Scenario Models Social Database
Sales Interaction Quotation Order Entry System of Differentiation
Budgeting, Planning, Forecasting Direct Marketing Database
Shipping Invoicing Cash Receipt
Well Understood, Tightly Controlled
System of Record
Audit and Compliance Reporting, Reconciliation High Integrity
Recommendations for Layers
Characteristic Record Differentiation Strategic Focus
Improve execution Better design
Life Span
10 to 20 years 3 to 5 years
Pace of Change Sourcing
Infrequent
Process Viability Data Integrity
Understood and stable High
Support Requirements
75% technical 25% business More frequent; configurability is key Understood and dynamic Moderate 50% technical 50% business Integrated packaged application suite Best of breed
Technical Deployment
On-premises cloud emerging
Investment
Capital asset On-premises or SaaS Capital or expense
Innovation
New idea 6 months to 3 years Very frequent; "throwaway" customization Ambiguous and dynamic Limited 25% technical 75% business Custom, orchestrated, open innovation Any, but typically on premises Expense
Example: Pace Layered Applications Large Enterprise in 2012
Supply Base Management CLM Supplier E-invoicing MDM of Supplier Data Spend Analysis
Systems of Innovation
E-Catalog Procurement Network — South America Strategic Sourcing E-Procurement — ERP #1 Contingent Workforce Management Procurement Network — North America Procurement Network — Western Europe AP Invoice Automation X
Systems of Differentiation
E-Procurement — ERP #1 Purchasing #2 — ERP Purchasing — ERP #3
Systems of Record
Purchasing — ERP #X
Example: Pace Layered Applications Large Enterprise in 2016
Global P2P Network MDM of Purchased Part Data Service Procurement
Systems of Innovation
Supply Base Management CLM Regional Procurement Network(s) Strategic Sourcing Contingent Workforce Management Spend Analysis MDM of Supplier Data
Systems of Differentiation
Purchasing — ERP #1 Purchasing — ERP #3 E-Procurement With E-Catalog Purchasing — Shared Service
Systems of Record
How to Build a Pace-Layered Strategy
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3.
4.
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Create a panel of business users and IT application experts.
Decompose existing suites into individual applications.
Associate each application with the
business process
it supports. Analyze the characteristics of each application and process.
Use the pace-layered application characteristics as a starting point to assign the application to a layer.
Adapt your application governance model to fit the objectives and needs of the three layers.
Establish a set of connective technologies to facilitate the interoperability of the application within and between layers.
Build awareness of pace layers throughout the organization.
Encourage users to think about applications and processes based on their probable rate of change.
Pace Layering: Key Issues
1.
What are the key aspects of a pace-layered application strategy?
2.
How should application leaders implement a pace-layered application strategy without creating chaos?
3.
How can you use a pace-layered strategy to help your organization drive sustainable differentiation and increased innovation?
How Can Pace Layers Enable Differentiation?
• Provide a process to consider individual
business activities
rather than application categories.
• Create a framework to support the coexistence of integrated suites and “best-of-class” apps.
• Establish a governance process that allows departments to specify, justify and even purchase their own applications.
• Encourage a dialogue between business and IT leaders about which activities are (or should be) truly differentiating.
• Introduce the idea that differentiating applications change at a faster pace.
• • • •
How Can Pace Layers Encourage Innovation?
Create a category of "Innovation Applications" with a budget and governance process.
Establish a development environment with tools and resources to make innovative apps. faster and easier to develop.
Use the pace layers model to shift some funding from systems of record apps. to Innovation apps.
Develop "connective tissue" that allows innovation apps. to access master data and call Web services without compromising data integrity or security.
Pace Layer Recommendations
Move away from a monolithic application strategy, and categorize current and planned applications by layer.
Develop a differentiated strategy for each layer: • • • Budgeting Selection criteria Architectural standards ● Maintenance and support ● Data management ● Deployment model Establish standards for connective tissue across the layers: governance, integration and integrity.
Conduct regular pace layer reviews with the business to consider recategorizing applications.
Overhaul — rationalize, standardize, simplify, modernize — applications from the bottom layer up.
Drive "new idea"-style innovations from the top layer down by providing a system of innovation.
Pace Layer Recommendations
Use service-oriented architecture (SOA) concepts as the connective tissue between layers.
Deploy systems of record at the lowest total cost of ownership (TCO) to the business.
Do not intrusively customize purchased applications.
Deploy built or composite applications for systems of differentiation.
Top Public Sector Risk Issues
• • • • • • Organization and Project Leadership Turnover Organizational Autonomy Funding Process Governance (ownership, change control) Treating Integration As a Separate Issue Excessive Customization...
- Trying to replicate old systems and processes - Trying to add unique capabilities needed by agency
Public Sector Specific Recommendations
• • • • • • Secure Political Support for Transformation First Figure out how to keep it for life of project Make sure political appointees and civil service have been convinced it is important Agree on standard processes Segregate COTS and unique capabilities Build benefits realization process tied to incentives
Related Gartner Research
Application Deployment Options Through the Pace Layer Lens
Matthew Hotle, Andy Kyte (G00235531)
Gartner's Application Pace Layer Model: Governance and Change Management
Bill Swanton (G00211809)
Connecting Technology for a Pace-Layered Application Strategy
Dennis Gaughan (G00211492)
What Can Gartner's Pace Layered Application Strategy Do for an Enterprise's Business?
Alex Drobik Jim Shepherd (G00215750)
ERP Strategy: Why You Need One, and Key Considerations for Defining One
Nigel Rayner, Jeff Woods (G00210356) For more information, stop by Gartner Solution Central or email us at [email protected]
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