Transcript Enterprise architecture: aligning IT and business

IT-Business Alignment –
Challenges, Strategic/Operating
Planning
advising on IT-business alignment
Aligning IT and
business
advising on IT-business alignment
IT-business alignment: multiple angles
It’s not just about “building stuff that the business will use”
Business
Change
implications
Investment
in capability
Delivery
of value
IT
Change
capabilities,
limitations
Why now- Reasons
 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
Example -from a UK perspective
 A healthy economy – albeit growing at a low rate
– Spurred by public sector investment
– With a knock-on effect on the IT market
 Globalisation
– >4000 (+400/year) UK-Sino joint ventures
– Vonage launches UK VoIP service (01/05)
– Tesco enters mortgage market with First Active (11/04)
 Transparency
– Corporate Responsibility (CORE) coalition
– Government initiatives e.g. Extractive Industries Transparency Initiative
– International Financial Reporting Standards (IFRS)
 Service Focus
– BT launches mobile music service with UBC Media and Virgin Mobile (06/05)
– Amazon Services Europe to underpin M&S e-commerce systems (04/05)
The real world
From
Towards
Build, or buy vs.
build
Application implementation
Buy AND build AND
integrate
Back office
Business area investment focus
Front office and
beyond
IT access environment
Productivity
desktop + global
access to resources
Data processing
Technology innovation focus
Communication,
collaboration,
integration
Outsourcing vs.
in-house delivery
Capability supply
“Multi-sourcing”
“Personal
productivity”
desktop
Older approaches fail to capture reality re: integration,
communication, collaboration, supply complexity
A common language is the essential
starting point
Business
?
IT
“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
Reflecting the environment in IT-business
alignment
Business
BUSINESS
ST R AT E GY
Business processes
form the foundation
of a common
language
IT defines and delivers
“business level” services
which support the right
processes, the right way
IT
Managed
IT service
Managed
IT service
Managed
IT service
Managed
IT service
Managed
IT service
A P P L I CAT I O N S & I N F O R MAT I O N
I N F RA ST R U CT U R E
Understanding
business processes
advising on IT-business alignment
The challenge
Business process
Applications
The business
Activities, processes
Data
The real world doesn’t “decompose” nicely – and IT isn’t
just about things you build in-house
Providing structured support for business processes
means understanding scope & scale of interactions
Towards
Business
process
Data design tightly coupled to
application design, and application
design to “user requirements” – very
restricted view of process needs
Business process
From
Loosely-coupled resources provide
services which are designed to support
the interactions that take place within a
business process
Support scenario: a
mesh of interactions
Business process
IT approaches must consider business process support
more broadly
Transactional
services
Information
services
Communication
& collaboration
services
We have to model more than just transactional applications
A universe of business processes [1]
A hierarchy of business processes
“Strategy” processes –
instances oversee instances
of management processes
“Management” processes
– instances oversee
instances of execution
processes
“Execution” processes –
instances handle particular
units of work within
business activities
A universe of business processes [2]
Contribution to competitive differentiation
Non-differentiating
Differentiating
(focus should be on efficiency)
(focus should be on flexibility)
Observations on the nature of business
processes
Non-differentiating
Differentiating
(focus should be on efficiency)
(focus should be on flexibility)
A wider view of technical architecture
Collaboration tools
High
“Management”
business processes
Business intelligence
tools
Simple portal
Low
“Traditional” app.
Development tools &
frameworks
Level of process abstraction
“Strategy”
business processes
“Execution”
business processes
Workflow
Non-differentiating
“Pure” BPMS
Composite service-based
application development &
integration
Differentiating
Business functions
Understanding
managed IT services
advising on IT-business alignment
So what is an IT service?
“Provide
automated
support for my
sales force”
“Update
customer
details”
“CRM
database”
Line of business
perspective
Developer
perspective
IT operations
perspective
Managed IT services – aligned with
business processes
Lifecycle services
Managing the lifecycles of business functions and infrastructure
Business function services
Automating business functions
Infrastructure services
Providing the platform
Users’ experiences
of “managed IT service”
Contracts bring obligations for suppliers
and consumers
Message Format
Message Sequence
Functions
Security
Response Time
Throughput
QoS
Terms
Functional
Terms
Usage Cost
Liability Clauses
Trust
Commercial
Terms
An organising model for service-oriented
IT in the context of IT-business alignment
Functional contract
aspects
Quality-of-Service
contract aspects
Business
function
services
How can we align flexibility /
reusability requirements for
business software functions,
to business needs?
How can we trade-off
flexibility / reusability of
business function services
with efficiency / openness
requirements?
How can we ensure that the
right consumers get the right
kind of experience from
these services, and do so
cost-effectively?
Infrastructure
services
How should infrastructure
elements provide their
services to different business
functions? How should
infrastructure be optimally
managed?
How can QoS responsibility
be delegated to infrastructure
in a way that is easily flexed
in response to changing
requirements?
How can we minimise the
cost and risk of overall
process support while
creating an business support
environment with more
moving parts?
How should we differentiate
lifecycle service levels for
different kinds of business
function, infrastructure?
How should we define and
enforce development, faultfix and change-request
priorities?
How can we demonstrate the
overall value of the services
that the IT organisation and
its resources provide to the
business?
Lifecycle
services
Commercial
contract aspects
An example – business function service
design
Level of process abstraction
“Strategy”
business processes
High
“Management”
business processes
Reusability
importance
increases
“Execution”
business processes
Activity functions
Low
Technical functions
Non-differentiating
Differentiating
(focus should be on efficiency)
(focus should be on flexibility)
Business activity role
Summary
 Today’s business environment brings IT-business alignment to
the fore
– In terms of investment, delivery and change
 Business processes provide a common language
– But the organisational context of real-world business processes is
complex
 Managed IT services must align with business process
priorities
– It’s about more than business function services
 Services and their contracts provide an organising model for
service-oriented IT
Business-IT alignment
Source: http://bill-poole.blogspot.com/2008/08/business-it-alignment.html
Business-IT alignment
Business-IT alignment
 IT Strategy
 As with business strategy, IT strategy involves
identifying the long term view of the IT function of
the business. It identifies the direction and scope of
the IT function over the long term in order to
achieve advantage for the organisation through its
configuration of IT resources within a challenging
environment to meet the needs of the business
and to fulfil stakeholder expectations.
 Business Architecture
 Business Architecture is the process of defining the
business functions, processes, capabilities, services,
roles and reporting relationships that make up a
business. Here, we are referring to Business
Architecture applied at the enterprise level, rather
than the solution level.
 IT Architecture
 IT Architecture is often expressed as Information
Architecture, Application Architecture and
Technology Architecture. I'll describe these
architecture domains in more detail in future posts.
In short, IT Architecture is the process of organising
IT and information assets to support the business
architecture and IT strategy.