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Shaun McLaurin's presentation from OTN Architect Day in Pasadena, July 9, 2009. Find an OTN Architect Day event near you: http://www.oracle.com/technology/architect/archday.html Interact with Architect Day presenters and participants on Oracle Mix: https://mix.oracle.com/groups/15511
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Rationalizing an Enterprise IT Architecture
Shaun McLaurin
Insight Program Director – North American Technology Organization
Business & IT Challenges
• Evolved through corporate,
organizational and technology
changes• Mergers & Acquisitions
• Adapted to new business processes
• Adhere to layers of regulatory
requirements
• Integrate ‘best of breed’ applications• Account for LOB IT ‘initiatives’
• Organizational and Information
silos
• Complex IT environment, multiple
skill sets, costly to operate
• Inflexible IT infrastructure difficult
(and risky) to modify
• Redundant application systems
and business processes
• Multiple versions of business data
IT Environment History Resulting in
It’s Expensive to Have Bad Information
“The value of information increases exponentially as
fragmentation is reduced.”
EllisonEllison’’s Laws Law
Reinvent IT EconomicsAn architect’s dilemma
InfrastructureInfrastructure
StrategicStrategicInvestmentInvestment
InfrastructureInfrastructure
StrategicStrategicInvestmentInvestment
SavingsSavings
AnnualIT Spend
IT Spending and Demand Survey
�80% Maintenance�20% New Projects
IT Spend for World-Class Performers is
Comparable to Their Peers…
…But, they spend it differently
World-Class Performers Reduce Complexity
• They spend 18% less on IT
• They require 36% fewer IT workers
• They need 29% fewer apps
• They finish 91% of all projects to
spec, on time and on budget
• 100% have their top IT exec on the
senior management committee
• Better IT Vendor Management
• 5% fewer hardware vendors
• 29% less contractor services
• 65% fewer software suppliers
• Standardized best practices and
good architecture
• Simplification and standardization
• Higher levels of process discipline
• Improved overall alignment with
business objectives.
• Intelligent Outsourcing
• Empowered change agent
Characteristics How Do They Do It?
Copyright ©2009 Oracle Corporation. All rights reserved. 7
Technical Architecture
Technical Architecture
Oracle Rationalized IT Portfolio
63 Financial databases 1 Financial single global instance
1 IT Support single global instance
60 IT Support databases
97 Email servers on 120 databases
1 cluster of 2 Email servers and 4 databases
501 Education servers 296 Education servers
32 IT Support servers, 600 test servers
2 IT Support servers, 30 test servers
40 Education registration systems
1 Education registration system
27 IT Support applications 1 IT Support application
>1000 applications<100 applications – standardized on E-Business Suite
40 Data Centers
2300+ Staff
1 Global IT & Governance Model
2 Data Centers + 1600 Staff
Few standard business processes
Standardized core business processes
Business Architecture
Information Architecture
Current State
App./Services Architecture
Infrastructure Architecture
Copyright ©2008 Oracle Corporation. All rights reserved. 8
The Transformation Payoff The Ability to Scale Without Increasing Costs
$0$0$0$0
$2$2$2$2
$4$4$4$4
$6$6$6$6
$8$8$8$8
$10$10$10$10
$12$12$12$12
$14$14$14$14
$16$16$16$16
$18$18$18$18
$20$20$20$20
199319931993199319941994199419941995199519951995199619961996199619971997199719971998199819981998199919991999199920002000200020002001200120012001200220022002200220032003200320032004200420042004200520052005200520062006200620062007200720072007
Billions
0%0%0%0%
1%1%1%1%
2%2%2%2%
3%3%3%3%
4%4%4%4%
5%5%5%5%
6%6%6%6%
7%7%7%7%
8%8%8%8%
9%9%9%9%
Percentage
Revenue G&A
G&A as % of revenue
Revenue in Billions
+4 acquisitions
+17 acquisitions
+14 acquisitions
Copyright ©2009 Oracle Corporation. All rights reserved. 9
Information Technology RationalizationGuiding Principles
• Driven by Business Strategy
• Standardizes & Simplifies the technical architecture
• Just enough for enterprise solutioning efforts
• Reuses best practice Business Models, Process Models and Reference Architectures from industry and commercial vendors
• Initially focused on speed-of-delivery for high level guidance
• Matures iteratively & evolutionary for breadth & depth
• Can be enforced
Copyright ©2009 Oracle Corporation. All rights reserved. 10
IT Rationalization process
Establishes the vision for business and information technology.
Involves the right mix of people for success.
Establishes objectives, “future state” and roadmap.
Provides prescriptive guidance, process and standards for Business and Information Technology.
Documents current state and path to future state.
Promotes adherence to EA guidance and plans while architecting business-driven, enterprise solutions.
Identify the Business Strategy
Establish Enterprise Architecture Program
Define “Future State”Architecture
Define Rationalization Roadmap
Establish EA Governance
11
33
22
55
44
Copyright ©2009 Oracle Corporation. All rights reserved. 11
Identify the Business Strategy
Establish Enterprise Architecture Program
Define “Future State”Architecture
Define Rationalization Roadmap
Establish EA Governance
11
33
22
55
44
Reduce Costs
Faster to Market
Innovate
Globalize
Business Goals
Copyright ©2009 Oracle Corporation. All rights reserved. 12
Globalized Operational Excellence Oracle Transformation Drivers
Lower Costs Better Information, Governance
• Global information visibility
• Global consistency of process, policy & data
• Strong internal controls
• Easier compliance
• Fewer data centers
• Self service processes
• Labor & transaction cost efficiencies
• Shared service centers
• Offshoring
Increase Speed
• Streamline applications change management
• Fast integration of new acquisitions
Improve Customer Service
• Improved quality and service
• One customer experience
The Global Transformation Payoff for OracleAbility to drive profitable, sustainable growth
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Percentage
Operating Margin %
Operating Margin %
(14.4% in 1993)
(40.8% in 2007)
Achieved through global processes, consolidation, simplification and shared services
Note:Figures based on non-GAAP results. GAAP to non-GAAP reconciliations are available on the Oracle Investor Relations website at www.oracle.com/investor.
We grow our operating cash flow 3 times faster than five years ago.Safra Catz, CFO
Oracle Q3 Earnings Report, March 2008
Copyright ©2009 Oracle Corporation. All rights reserved. 14
• Executive Sponsors
• Business Stakeholders
• Chief Enterprise Architect
• Program Manager
• Business Architects & Industry Experts
• Information Analysts
• Solution Architects
• Strategic Vendors
TASKS
PEOPLE
• Establish goals, leadership and resources
• Define scope and the next iteration of work product
• Gain Executive sponsorship and support
• Conduct Stakeholder analysis
• Establish plan for an EA Governance Board
• Develop a communication plan
Identify the Business Strategy
Define “Future State”Architecture
Establish EA Governance
11
33
22
55
44
Establish Enterprise Architecture Program
Define Rationalization Roadmap
Copyright ©2009 Oracle Corporation. All rights reserved. 15
How do you…
• Stay current with technology and applications,
• Implementing best practice business models,
• Yet be able to integrate these business processes
• To improve business visibility, agility and efficiency
Identify the Business Strategy
Define “Future State”Architecture
Establish EA Governance
11
33
22
55
44
Establish Enterprise Architecture Program
Define Rationalization Roadmap
Copyright ©2009 Oracle Corporation. All rights reserved. 16
Defining “Future State” Architecture
Business Business StrategyStrategy
Business Business Requirements Requirements & Objectives& Objectives
Architectural Architectural PrinciplesPrinciples
Business ArchitectureBusiness Architecture
Application ArchitectureApplication Architecture
Technical ArchitectureTechnical Architecture
EA Views
EA Views
EA Artifa
cts
EA Artifa
cts
Business Process & GRC Models
Data/Info Objects & Models
Technology Standards & Reference Models
Industry Industry Best PracticesBest Practices
& Models& Models
EA Inputs
EA Inputs
EA/Solutioning Process & Guidance
Information ArchitectureInformation Architecture
Capability & Service Descriptions
Leverage ‘Common Use Applications’ Architecture
Copyright ©2009 Oracle Corporation. All rights reserved. 17
Integrated Logistics
Integrated Financial Controls
Multi Channel Order Management
RetailRetail
Trade Promotion Execution
Trade Promotion Management
Demand Management
Consumer Consumer GoodsGoods
Account Origination with Core Banking
Multi-Channel Customer Service
Banking IRM
BankingBanking
Order to Bill
Revenue Management
Customer Care
CommunicationsCommunications
Order to Cash
High Tech Distribution
Product Lifecycle Management
High High TechnologyTechnology
Best Practice Industry ProcessesExample Industries…
Conceptual Business Model : Retail
CustomerDemand &Enterprise
AnalyticsAnalytics CRM & MarketingCRM & Marketing Loyalty Call Center Sales Field Service
Marketing Order Mgmt Pricing CTOWeb Store
Supply ChainPlanning
Supply ChainExecution
Business OperationsBusiness Operations
Merchandise Planning& Optimization
Merchandise Operations
Store Operations
InfrastructureInfrastructure
Integration and Collaboration
Enterprise Infrastructure
Corporate AdministrationCorporate Administration
Indirect Procurement Projects
EPM Financials
Compensation
Human Resources Real Estate
ITITHRHRHelpdesk
Store Inventory Mgmt
Point-of-Sale
Workforce Scheduling
Learning Mgmt
Store Helpdesk
Workforce Comms
TransportationManagement
ReplenishmentOptimization
Sourcing
Warehouse Management
Home Delivery
Advance InventoryPlanning
Supply NetworkOptimization
Value Chain Allocation
Value ChainCollaboration
PIMMerchandiseFinancial Planning
Assortment Planning
Item Planning
Category Mgmt
Price Optimization
Promotion Planning& Optimization
Trade Management
Invoice Match
Merchandise Management
Price Management
Sales AuditDemand Forecasting
Returns Management
Copyright ©2009 Oracle Corporation. All rights reserved. 19
Information / Data ArchitectureDecomposed
Information ArchitectureInformation Architecture
ERP Data ModelsERP Data Models
Process Data ModelsProcess Data Models
Data HubsData Hubs
Industry Data ModelsIndustry Data Models
…
Customer
ProductHealthcare
Copyright ©2009 Oracle Corporation. All rights reserved. 20
Technical ArchitectureDecomposed
Technical ArchitectureTechnical Architecture
SOA & Integration ArchitectureSOA & Integration Architecture
Data & Information Mgmt ArchitectureData & Information Mgmt Architecture
Security ArchitectureSecurity Architecture
Infrastructure ArchitectureInfrastructure Architecture
Application Development ArchitectureApplication Development Architecture
Business Intelligence ArchitectureBusiness Intelligence Architecture
Copyright ©2008 Oracle Corporation. All rights reserved. 21
EA Future State:
Applications, Technology
EA Transformation Focus:
Operational Excellence(Business, IT)
Enterprise Solutioning:
Business-Driven Initiatives
IT Rationalization is an iterative journey
EA Transformation Focus:
Management Excellence
Identify the Business Strategy
Define “Future State”Architecture
Establish EA Governance
11
33
22
55
44
Establish Enterprise Architecture Program
Define Rationalization Roadmap
Rationalization Deliverables
Current State Gap &Opportunity Analyses
High Level Roadmap
Targeted Benefits
Target architecture and process model that defines the
applications, services, information and infrastructure required to
satisfy key business goals and requirements
High level, multi track program of phased actions, initiatives and
implementations that provides a framework for planning and
managing the future state migration
Identification of potential cost savings and other benefits to be
derived from the future state
Future State Vision
Key findings and conclusions including targeted analyses of the
current state environment and its key performance gaps and
opportunities
Copyright ©2008 Oracle Corporation. All rights reserved. 23
• Chief Information Officer
• Chief Enterprise Architect
• At least one Executive Sponsor
• At least one major Business Executive
• At least one Business Architect
• Lead Solution Architects pulled in on an as-needed basis
RESPONSIBILITIES
BOARD MEMBERS
• Establish an EA Governance model and an Architecture Review Board
• Promote the EA agenda and adherence to “Future State” EA Prescriptive Guidance:
• Review IT project designs
• Review proposed enterprise solution architectures and major initiatives
• Provide direction
Identify the Business Strategy
Define “Future State”Architecture
Establish EA Governance
11
33
22
55
44
Establish Enterprise Architecture Program
Define Rationalization Roadmap
8 Strategies for Transformation
Composite Business ProcessesComposite Business Processes
8
IT Standardization StrategyDriven by business model
Common Processes
Common Data
Accelerate Transformation BenefitsLeverage Integration and BI platforms
Common Enterprise Information Model
Composite business processes
and business analytics accelerate
business resultsComposite Business ProcessComposite Business Process
�No single source of truth
�Redundant applications
�Incomplete and conflicting data
�Labor intensive compliance
Long-term goal: Standardize processes, consolidate redundant applications and eliminate data silos
Application & Data Silos
�Common view of information
�Key Performance Indicators
�Business reporting and analytics
�Compliance reporting
�End-to-end visibility
�Unified workplace
�Compliance
• Deploy standardized business processes over legacy application silos using standards-based services.
• Improve process management and controls enforcement.
• Improve visibility through common enterprise information model.
• Improve business analytics using out-of-the-box analytics capabilities.
• Publish key performance indicators
• Shelter users from changes to underlying systems as they are consolidated over time.
Enterprise Software Architecture
Analytics
Applications
Customers Employees Partners
Business Integration
Data & Content
Application Development
Scale & Continuity
Enterprise Management
Security & Compliance
Intelligence & Analytics
3rd Party Applications
Legacy Applications
Existing Technology
CRMERP IndustriesHCM
Composite Industry Processes
Documents
Collaboration
User Interaction
Applications
Technology
Architect a More Competitive Enterprise
• Mergers & Acquisitions : Guide strategic fit assessment and post-merger consolidation
• Business Processes : Provide insights into gaps or redundancies ; Enhance customer service
• Compliance & Audit : Facilitate transparency across applications ; Manage users & applications life-cycle management
• Enterprise Architecture : Consolidated technical infrastructure ; Reduced costs & Increase agility
• Vendor Management : Negotiate terms ; Risk Reduction
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