IT Strategy

IT Strategy and Enterprise Architecture

Aligning Business and IT

Chicago CIO CouncilEA CouncilNovember 11, 2005

Lloyd L. SmithPartner, Healthcare PracticeDiamondCluster [email protected]

David BakerPartner & Chief ArchitectDiamondCluster [email protected]

Page 2

IT Strategy

Enterprise Architecture

IT Strategy & EA in Action

Agenda

Page 3

An IT Strategy is a plan for managing IT, holistically, as a business

Ensuring that the IT organization is aligned

with the business throughout the cycle of

innovation, planning and delivery

Defining the technology architectures and the

processes for developing, deploying,

enhancing and supporting business

capabilities using technology solutions

Aligning the IT organization’s structure,

skills and sourcing strategy with the needs of the business, while promoting employee

learning and satisfaction

Managing IT resources and operations to

ensure effective and efficient support of

business and financial goals

Page 4

An IT Strategy examines a broad set of IT capabilities

OrganizationSkills and CompetenciesLearningHuman ResourcesFacilities and Work Environment

Aligning the IT organization’s structure, skills and sourcing strategy with the needs of the business, while promoting

employee learning and satisfaction

Organization and Skills

Current Technology PortfolioProject Portfolio ManagementIT GovernanceFinance and AccountingVendors and PartnersProgram and Project ManagementCommunications and Marketing

Managing IT resources and operations to ensure effective and efficient support of business and financial goals

Management and Governance

Strategic and Operational Business ModelsStrategic IT Planning and InvestmentBusiness/IT RelationshipUsability and Technology AdoptionBusiness/IT Service Levels

Ensuring that the IT organization is aligned with the business throughout the entire cycle of innovation,

planning and delivery

Strategy andBusiness Alignment

Defining the technology architectures and the processes for developing, deploying, enhancing and supporting

business capabilities using technology solutions

Technology and Architecture

Architecture Blueprints for standard application, data and infrastructure architecturesGuiding PrinciplesMetrics and MeasuresArchitecture Processes and GovernanceArchitecture Organization and SkillsRepositories of all technology assetsTechnology Management and Utilization

Page 5

IT Strategy



Agenda

Page 6

Enterprise Architecture is used to describe an entire organization –using both business and technical views

“The enterprise architecture is the organizing logic for a firm’s core business processes and IT capabilities captured in a set of principles, policies, and technical choices to achieve the business standardization and integration requirements of the firm’s operating model.”

- MIT Center for Information Systems Research, 2004

“A strategic information asset base, which defines the mission, the information necessary to perform the mission and the technologies necessary to perform the mission, and the transitional processes for implementing new technologies in response to the changing mission needs. An enterprise architecture includes a baseline architecture, target architecture, and a sequencing plan.”

- Federal Enterprise Architecture Framework, 1999

“Enterprise architecture is the capture of all behavior that goes on in an organization: the data that is processed, who does what, where everything is, and why everything is done. In a sentence, the who, what, why, when, where, and how of the business at every level from high-level corporate goals to the code of low-level programs that implement business processes used to achieve those goals.”

- The Open Group

“Enterprise” may be a whole organization, that organization plus its external customers/suppliers, or a segment of an organization. However, “enterprise”

ALWAYS refers to the combination of business and technical views.

Page 7

Enterprise Architecture answers key questions for IT stakeholders

Have we done this before?How do we get it done?

How do I make sure it’s done correctly?What’s possible?

Businesswants to know

ITManagers

want to know

How can I innovate?How quickly can I get it?

How much does it cost / save?What are the risks?What’s possible?

TechnicalStaff

wants to know

What do I build?What do I build it with?


Enterprise Architecture is the broker between Business and IT. It provides the benefit of knowing why we need to build, what to build,

when to build it, and how to build it.

Page 8

Enterprise Architecture helps organizations manage IT complexity and make better investment decisions

• Ensure architectural alignment with business goals– Include business strategy and operations as enterprise architecture models

• Ensure architectural alignment across enterprise initiatives– Integrate enterprise level blueprints with individual project execution (SDLC)

• Realize savings through optimal usage of the organization’s architecture– Define, and monitor compliance with, enterprise shared services

• Maintain architectural quality standards across enterprise initiatives– Integrate enterprise architectural oversight into the Software Development Lifecycle

• Assess an organization’s architectural health– Establish enterprise architecture measurements and dashboards

Enterprise Architecture requires the use of multidisciplinary expertise and frameworks.

Page 9

Establishing an EA capability is a multi-faceted endeavor

Architecture Guiding Principles serve as guideposts for strategic and tactical technology decision-making and are a necessary communication tool to unite business and technology constituencies.

Architecture Governance is a comprehensive set of policies, processes and procedures that ensure proper, yet flexible, guidance and approval checkpoints for architecture.

Organization & Skills details the structure, capabilities and qualifications needed at the various levels of the organization to build, maintain, and implement the architecture.

The Architecture Repository is the control point for all architectures assets –blueprints, processes, metrics. The repository is accessed and managed thru the architecture toolset.

Metrics & Measurementsdescribe the quantitative and qualitative goals for the enterprise architecture to ensure that value is measured and communicated.

ArchitectureProcesses

ArchitectureBlueprints

Arch.Guiding

PrinciplesOrganization & Skills

Planning andTechnology

Strategy andPlanning Solutions Technical

ArchitectureTechnology Resaerch

Planning andTechnology

Strategy andPlanning Solutions Technical

ArchitectureTechnology Resaerch

ArchitectureRepository

Metrics & Measurement

Architecture Governance

Blueprints describe the business requirements and technology components in a way that enables their linkages to be traced from business owner to system developer.

Architecture Processes document how architecture design is performed and how architecture is communicated and implemented in the organization.

Page 10

IT Strategy



Agenda

Page 11

EA plays a critical role in the overall IT Lifecycle and is a primary element of any IT Strategy

Blueprinting brings engineering discipline to strategic planning and identifies the underlying, enabling technologies to implement the strategies.

BusinessStrategicPlanning

EnterpriseArchitectureBlueprinting

Release Planning

(Portfolio Mgmt)

ProjectExecution

(SDLC)

BusinessOperations

Metrics

EA Governance

Objectives & Measurement Indicators

Business Benefit Results

Architecture Benefit Results

As-Built Architecture

Approved Projects

Page 12

Business, Systems, and Technical Blueprints articulate the linkage between business strategies and IT assets

BusinessArchitecture

SystemsArchitecture

TechnicalArchitecture

The Business Architecture describes and

interrelates mission, vision, goals,and strategies with core processes,

constituents, and interactions.

The Systems Architecturedescribes, in a platform

independent way, the high-levelprocesses, applications, data,

and technology that enable thebusiness architecture

Business D

riven Technology Strategy The Technical Architecture describes the

physical implementation of thetechnology, including standards

• Strategic Business Architecture

• Operational Business Architecture

• Process Architecture• Application Architecture• Information Architecture• Infrastructure Architecture• Integration Architecture

• Enterprise standards and architecture services

• Domain level physical inventories and wiring diagrams

Blueprints provide the foundation for creating an actionable EA and therefore, an actionable IT Strategy

Page 13

The blueprinting process delivers both current and future state views of the business and supporting systems

BusinessArchitecture

SystemsArchitecture

1H05 2H05 1H06 2H06

Theme 1

Initiative 01Initiative 12Initiative 04Them

e 2

Initiative 07Initiative 09Initiative 02Them

e 3

Initiative 03Initiative 05Initiative 08

Technical architecture (standards and reference architectures) are delivered as part of the projects identified in the roadmap.

Roadmap

The Current State Architecture provides the context for designing the To-Be solution

The Future State Architecture defines the target architectural solution

The Roadmap provides an actionable way to move from the Current State to the Future State solution and articulates the costs

and benefits of the future state architecture

Page 14

Blueprints are created in an incremental fashion, accumulating until the entire enterprise is described

Project / ReleaseBusiness Domains / LOBsEnterprise

Enterprise level models

Domain 1 models

Domain 2 models

Domain n models

Project / Release Architecture









. . .

EA Repository

Developing a full enterprise architecture takes time, as various models are developed in an incremental fashion.

Page 15

IT Strategy



Appendix – DiamondCluster International

Agenda

Page 16

DiamondCluster is a global management consulting firm focused on combining strong industry experience with deep expertise in leveraging the strategic value of technology

How We WorkWe deploy SMALL, MULTIDISCIPLINARY teams of experienced professionals

We have strong INDUSTRY PRACTICES to ensure experience in specific industries: insurance is our largest industry practice

Who We AreA GLOBAL FIRM serving clients in over 35 COUNTRIES

We have OVER 600 PROFESSIONALS in 10 offices across North America, Europe and Latin America

Our SERVICE OFFERINGS build new strategic capabilities and create business/IT alignment to ensure successful implementation and achievement of business objectives

BARCELONA

DÜSSELDORFLONDON

PARIS

MÜNCHEN

SÃO PAULO

LISBOA

MADRIDSAN FRANCISCONEW YORK

CHICAGO

BOSTON

STOCKHOLM

BARCELONA

DÜSSELDORFLONDON

PARIS

MÜNCHEN

SÃO PAULO

LISBOA

MADRID

CHICAGO

STOCKHOLM

Page 17

Business Operations

Stra

tegy

& A

naly

tics

Systems Integrators/OutsourcersEx

ecut

ion

Technology

Functional or Industry-Specific

Consultants

Traditional Strategy Consultants

Ex Big 5 Consulting Practices

DiamondCluster: Business and

Technology Strategy

Our firm is uniquely positioned in the management and advisory space – combining business strategy and information strategy with strong insurance industry expertise

We believe that combining deep industry expertise, change management leadership and information technology skills is critical to creating and sustaining high-performing business

models and innovative customer value propositions.

Page 18

Small, experienced, MULTIDISCIPLINARY teamsIntegrated, collaborative, and hands-on approach to problem solving and delivery

Deep skills in analytics, technology, business operations, and transformation

PRAGMATIC AND OBJECTIVE adviceInformed and unbiased recommendations

No incentive to recommend specific products or services

Practical solutions, grounded in reality

Rapid delivery of TANGIBLE RESULTS AND MEASURABLE VALUE

4-16% improvement of annual EBITDA

60-70% improvement in delivered project value

15–25% reduction in IT operating costs

30–45% improvement in IT productivity

Collaboration between a small, senior and objective DiamondCluster team and the client personnel, results in greater value and lasting impact.

We support this positioning with a distinct way of deploying our people and working with clients

Staffing Model

Staffing Levels

Expe

rienc

e Le

vel

Diamond vs. standard pyramidal staffing model

Page 19

DiamondCluster helps clients ask and answer the right questions and then find and successfully implement optimal solutions.

Helping clients address the KEY ISSUESexisting at the intersection of BUSINESSOPERATIONS and TECHNOLOGY

IT Outsourcing Advisory

IT Assessment & Strategy

Customer Value Management

Strategic Architecture

Customer Service Excellence

Multi-Channel Management

Service Offerings

Customer Relationship Management

Operations Improvement

Technology Transformation

PMO Set-Up and Execution

New Growth

How can I best align my technology investments with business strategy and goals?

How can I use technology to reach and serve my customers better? Reduce my supply chain costs?

How can I use customer data to reduce churn and increase market share?

Can I use technology to organize my firm differently?

Can my technology platform support growth plans?

How can I use technology to put more power in my management control systems?

How do I ensure IT project delivery success?

Should I outsource? What, when and how?

The work we do addresses the key issues faced today by senior executives