A&g Magazine Bhavish Madurai Published

8/8/2019 A&g Magazine Bhavish Madurai Published

1/11

This issue 1 Bsiess Capabiit Meig: The & Pactice 4 A&G Caea 5 Maig the Case f

Etepise Itegati 8 Gagig the Vae f Stategic IT Paig a Etepise Achitecte

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Volume 5 Issue 7 magazine

MorE on PAGE 2

Business capaBiliTymodeling:

By Leonard Greski

Theory: WhaT is a Business CapaBiliTy?

Abusiness capability is an ability or capacity or acompany to deliver value, either to customers orshareholders. Business capabilities are a useul abstrac-tion because they represent the next level o detail be-neath the business strategy. A business capability consistso three major components: business processes, people,and physical assets.

There are two kinds o capabilities: customer-acingand operational. Customer-acing capabilities directlydeliver value to customers. A network o retail stores,

a product or service oering, or a transportation servicesuch as rail or air are all examples o customer-acingcapabilities. Operational capabilities deliver value toshareholders instead o customers. Examples o opera-tional capabilities include strategic planning, mergers

and acquisitions, and nancial planning.Business capabilities are extremely valuable as a

mechanism to translate strategy into action. First, theyrepresent discrete ways a business generates measurablevalue, so we can associate benets and costs with them.

T & pt
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BuSInESS CAPABIlITy ModElInG

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MorE on PAGE 3

Second, capabilities are hierarchical. They can be modeled using parent/child relationships, allowing us to understand them at multiple levels o de-tail. Third, they canbe managed as assets.

We can think aboutthem as a portolioo investments andproactively managethem to meet or ex-ceed a target returnon investment. Final-ly, business capabili-ties allow companiesto create sustainablecompetitive advan-tage through unique

combinations o peo-ple, processes, andphysical assets.

praCTiCe: Business CapaBiliTy Modeling TeChniques

Business capabilities can be modeled using a variety o simple techniques, us-ing low-cost tools. There are our steps to create a capability model:

1. Develop the capability hierarchy.

2. Identiy key relationships between capabilities and other planningelements.

3. Develop demand models or the capabilities.

4. Develop nancial models or the capabilities.

Develop the Capability Hierarchy

To complete the rst step, collect inormation about the organizations capa-bilities starting with customer-acing capabilities. Since most companies donot use the term business capabilities to describe the capabilities they bringto market, the architect may have to derive the capabilities rom other kindso inormation. Useul sources o inormation about capabilities include an-nual reports, interviews with business planners and line-o-business leaders,strategy documentation, business process models, product/service marketingmaterials, and the companys organization chart.

Review the collected inormation and identiy the capabilities, statingthem as nouns. For customer-acing capabilities, they will likely describeproduct or service oerings. Draw the hierarchy with an organization chartdiagramming tool, or build it as a team exercise using Post-It notes and alarge, empty wall to display the hierarchy. The root (or parent) node o thediagram represents the entire company. The rst level below the root lists

BusinessCapability

Processes PeoplePhysicalAssets

Business Capability Components

A set of related business processes, people, andphysical assets that deliver value directly to

customers, or are needed to run the business.
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MorE on PAGE 4

the major ways the company generates value to custom-ers and shareholders. Additional levels o decompositionbreak down the major capabilities into subcomponents.

See the example on this page, which illustrates some

o the capabilities o an Internet retailer, organized intoa hierarchy.

Identify Key Relationships

Ater drating the capability hierarchy, using a set o as-sociation matrices, dene the hierarchys relationshipswith other planning elements. List the capabilities on therow dimension o the hierarchy, and the other planningelement on the column dimension. Display the capabili-ties at the most detailed level o granularity or include alllevels o the hierarchy in an outline ormat. Start withmatrices to cover the three components o a business ca-

pability: business processes, people, and physical assets.These matrices will be used as inputs to the demand andnancial models. As needed, you can also document re-lationships between capabilities and business units and/or strategy elements.

Business processes should be listed in the matrix ata level o detail that is consistent with the detail lev-el in the capabilities hierarchy. The people side o thecapabilities/people matrix can be a list o roles that areassociated with the business processes, or the dierentdepartments that support the capabilities. Instead o us-ing an X in the cells to mark a relationship, enter the

head count (or total cost o head count) in each depart-ment that directly supports a capability. For the capabili-ties/physical assets matrix, group the physical assets intocategories that are meaningul to the business stakehold-ers, and use the annual expense cost or the asset value

Example

Internet Retailer Capability Hierarchy

InternetRetailer

Online Store

Direct SalesThird Party /

Reseller Sales

ElectronicMedia Reader

ReaderHardware

ElectronicContent

Fulfillment Web Services

InfrastructureServices

PaymentServices

MerchantServices

WorkforceServices

to represent the relationship between a capability andassociated physical assets.

Develop the Demand Model

The next step in the capability modeling process is de-veloping a demand or utilization model or the capa-bilities. Work with the business partners to identiy thethings the business does to generate demand or usage ora specic capability, such as advertising or promotions.Use known conversion actors (e.g., shoppers entering astore converting to orders) to relate the demand generat-ing activities to utilization o the capability and its com-ponent business processes. Enter this inormation intoa spreadsheet, illustrating the relationship between de-mand generation activities and requency counts o thebusiness processes on a monthly basis.

Another approach to generating the demand modelor customer-acing capabilities is based on historicaltrending o a capabilitys business processes. Gather therevenue growth orecast or a capability and requencycounts or its business processes over a 12 to 24-monthperiod. Identiy relevant conversion actors between therevenue orecast and the business processes, and modelthe process utilization on a monthly basis, using the his-torical data and growth actor to project past utilizationinto the uture.

Develop the Financial Model

Organize the inormation collected in previous steps intotwo categories: benets and costs. Create a statement ocash fows to illustrate the relationship between benets


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and costs associated with the capability. Both ongoingand one-time benets and expenses (e.g., capital invest-ments, gain rom sale o assets, etc.) associated with thecapability should be included in the model.

using The CapaBiliTy Model To Make deCisions

Capability modeling helps business people visualize con-sequences o business plans and decisions by highlightingthe things that are impacted by changes in the business.For example, i a company changes its strategy, it canevaluate the impact o strategy change on the existingportolio o capabilities. What capabilities must changeto support the new strategy? What capabilities are nolonger needed? Are there any new capabilities that mustbe developed in order to execute the strategy?

The capability model can also be used to manage on-

going operation o a capability. Using the demand andnancial models, one can estimate the impact o changesin planning assumptions on the business processes, peo-ple, and physical assets associated with the capability.For example, as demand grows, what processes or assetsare at risk o ailure? Where will costs increase at a levelgreater than acceptable levels as demand grows? I de-mand alls, where will xed costs jeopardize protabilityo the capability?

Capability models are also useul to support merger

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and acquisition activity. Acquisition targets can be eval-uated in terms o the capabilities they provide and theoverlap between target and acquirer. What capabilitiesmust be integrated to generate sucient synergies to

make the acquisition protable? Conversely, a companycan review the capability model and identiy the pro-cesses, people, and assets that would be lost through adivestiture.

Finally, managers can use the model to evaluate in-vestments across capabilities. By knowing the returnsgenerated by each capability, managers can ocus invest-ments on the highest perorming capabilities and restrictinvestment in lower perorming capabilities. A&G

leonard greski

cmm

a W.W. g,

i. h

[email protected].


5/11

A services model utilizes the logical-level deliver-ables provided by the other architectures (business andinormation), expanding a platorm-independent view othe business processes with associated data and presenta-tion requirements, and using this to develop a platormand technology-dependent model, taking cognizanceo technologies and utilizing a services platorm withcommon components and services. Approaches gainingsignicant traction in this area o SOA are enterpriseclass communications backbone like ESB, Model DrivenArchitecture, and adoption o rameworks like TOGAF.

guiding prinCiples for iT TransforMaTion

Many organizations look to guiding principles to estab-lish consistency across their IT transormation initia-tives. The most important are:

sy: There is a delicate balance between accept-able risk and usability. It is vital that an enterprisesinormation is adequately protected. Security willbecome a precondition o doing business in theuture, especially with the inextricable move towarde-business and e-government.

apy: In ever-altering internal and externalenvironments, solutions have to be fexible, cateringto changes in requirements, procedures, processes,and organization. An important acet o architecturemust be the use o modularity to enable continualadaptation, meet changing business needs, and allowreuse o sotware.

m t cf et

ittSme Giig Picipes f Steeigy IT Tasfmati

By Bhavish Kumar

Enterprise architecture (EA) can mean dierentthings to dierent people, depending upon the role

and responsibility o the individual within the organiza-tion and depending upon the context o the organization(either being a consultancy or an end user). To many it isa ramework, while others view it as a collection o rules,or a methodology or dening and designing inrastruc-ture services. However, the common aims are to improvealignment o the IT inrastructure with business goalsand to attempt to bring stability to an ever-changing,chaotic, and complex situation.

EA provides the essential backbone or blueprint or

the communication, interpretation, and implementa-tion o corporate objectives throughout the organizationand enables the evolution o a strongly aligned IT en-vironment. A plausible way o achieving this would bethrough creation o a number o interconnected archi-tecture views. The various available rameworks (com-mercial and/or noncommercial) break the denition oenterprise architecture into a dierent number o modelsand artiacts. EA at the most consists o three main ele-ments: business, inormation, and operations.

An eective and pragmatic EA relies on having acommon platorm and systems inrastructure on which

to base the organizations products and services. Whatwe see is, an increasing need or convergence o multipletechnologies into a platorm providing components orbuilding, managing, and deploying services. The conver-gence platorm should be centered on loosely coupledintegration at all levelssystem, applications, inorma-tion, processes, and peopleand the ability to quicklyrecongure these elements to react to threats and oppor-tunities in an organizations environment.


MorE on PAGE 6


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MAkInG THE CASE For EnTErPrISE InTEGrATIon

A&G

s: Open interaces and data models deliv-ered through an enterprise-wide governance rame-work are crucial i an EA approach is to succeed.The use o standards extends urther than just being

used or interoperability. Openness shields againstsupplier dependency and is important or protectingIT investments. The move to more componentiza-tion relies on standardization.

Pm: As with security, it is costly to add scal-ability as an aterthought. Systems need to maintaineciency and service levels regardless o demand.The whole operation relies on the perormance othe weakest link! The architecture must supportthe increase in users, transaction volumes, and datacapacity and prevent bottlenecks.

Mm: Management o the complete architec-ture process is another important actor. The needor eatures such as version control, end-to-end vis-ibility, and monitoring become even more critical.

oBservaTions on ea and enTerprise

inTegraTion

When implementing EA and enterprise integration ap-proaches in support o IT transormation, it is importantto understand, position, and execute these disciplinesconsistent with industry best practices. These key ob-

servations have helped many EA and integration teamsachieve results quickly while avoiding costly mistakes.

Enterprise Architecture

A number o organizations have implemented an EA.Approaches vary rom top down or bottom up.

An EA model can have our levels: business archi-tecture, inormation architecture, applications andsystems architecture, and technical architecture.

It is important to have a common vision o wherethe business is going. This greatly infuences applica-

tion and hardware strategy.

Key: Model the business based on its servicesthrough templates; processes can then be modeled.

Aim or reusability. Identiy interdependencies.

EA is the technique or communicating with thebusiness. Methodologies and tools help this.


MorE on PAGE 7

Tools can be used to document applications andbusiness processes (not necessarily in one tool).

Important: Consider how the inormation rom thetool will be used to ensure it is t or its purposes and

aids communication. Plans: Make sure the business strategy translates into

the IT strategy.

Have a planning period covering three years.

Review and update the plan regularly.

Have a decommissioning plan.

Expose projects at an early stage.

Build governance rom the board down. A strongCIO is needed to get support rom the business.

Identiy the IT elements o business budgets and ag-gregate them. This shows a total cost o IT.

Have some orm o EA policing/auditing/review.Always review pilots.

Achieving control: Make the adoption o gover-nance part o personal appraisal objectives.

Enterprise Integration

Increase the access to and ability to change the ap-plication services (based upon business need):

Open published interace standards includingXML data ormats, Web Services, JMS, FTP, andHTTP; WSDL and W3C Schemas as servicedenition language; and SOAP as the messagingprotocol language.

The capability to selectively store messagedata in an external data store as it traverses themiddleware.

Reduced impact o changes to IT business servicesto the business.

Improve the availability and reliability o the ap-

plication services:

Access to additional (existing) services.

Generic high availability interconnects acilitybetween all supported system components.

Reduced technical risk o supporting IT businessservices.


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MAkInG THE CASE For EnTErPrISE InTEGrATIon

A&G


WhaT To Consider When foCusing on enTerprise inTegraTion

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(either system based or through human workow). The solution should provide for technical orchestration of business

services out of the box, most preferably through a BPEL workow and engine.

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could be a composite service containing many underlying services such as Order Creation, Order Fullment, etc.

epilogue

This article deals with some o the basics around whyorganizations are giving a serious thought to enterprisearchitecture and how these considerations play a majorrole in linking to initiatives like enterprise integration.

While it is important to ocus on immediate programsat handit is becoming increasingly imperative to alsotake a step back and view the enterprise rom an aircratpilots viewpoint to enable stronger linkage o IT initia-tives to business goals, strategies, and measures.

Enterprise integration through traditional EAI meth-ods need to ocus on distributed/ederated architecturesthat span multiple geographies and disparate businessprocesses. A clear view on the denitions, policies, and

standards or EA and requirements or EI will help thearchitect on the ground to saely steer this ship to thetarget destination. A&G

Bhavish kumar pp

py p w cz ty

Solutions. He is a certifed TOGAF

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[email protected].


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g t v f

stt iT p etatt

Did you know that 80 percent o all enterprise archi-tecture (EA) initiatives are not completed becausethey ail to demonstrate value added to current busi-ness practices? I recently attended the Troux DirectionsFederal Users Conerence, which made some excellentpoints on the theme: How does EA add value?

Here are some take-away notes rom the conerence

that may help with your Strategic IT Planning (SITP)initiatives and show you how a mature EA can add valueand perhaps generate some continuing dialogue.

presenTaTions

At the Washington conerence, the Department oHomeland Security (DHS) presented its EA methodol-ogy and how it uses Troux or its strategic IT planningeorts. DHS is moving onto a phase where the enter-prise architects are collaborating with DHSs strategicplanning oce, which is consistent with the notion that

EA and SITP are inseparably interrelated. DHS also hasplans to move to a ederated architecture, which it hopeswill create a movement in the EA and IT space and allowDHS to share inormation between agencies and organi-zations. To this end, DHS willingly shares its constructsor data structures with other agencies and industries. Itpresented a great template or how you can gather valu-able inormation.

In addition, there were many more briengs on EA

value-added by the USMC CIO oce, the Departmento Health and Human Services (DHHS), EDS, CA,SRA, and ManTech, which added to the ollowing listo observations.

The ea landsCape

Developing an enterprise architecture using PowerPointpresentations and Excel spreadsheets is a thing o thepast. Sophisticated tools are available and uniquely po-sitioned to bring IT planning to a new level o strategicimplementation and orecasting. I you nd yoursel bur-dened by regular use o homespun spreadsheets to man-age large volumes o inormation, with multiple tabs andhyperlinks to documents, other spreadsheets, Web sites,presentations, etc. to access inormation, and then haveto manually digest and analyze the inormation into aworkable presentation or decisions on the enterprise,you are overdue or adopting more advanced EA and

SITP tools or automating these same processes.It may take several years or large agencies to adopt

an EA approach to strategic planning or create a culturethat is EA-minded. Thereore, EA customers need some-thing they can deploy quickly and get value rom astand oten. Business intelligence needs to be transormedthorough the EA into intelligent business practice. The

By Vinny DiGirolamo


MorE on PAGE 9


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GAuGInG THE VAluE oF STrATEGIC IT PlAnnInG And EA

A&G

reality is that it takes time and resources to generate auseul model so agencies can learn rom one anothersbest practices, successes, and ailures.

The use o SITP is on the rise as evidenced by morethan 200 participants to this User Group Conerence,and agencies mentioned more than once a need orederated modeling and data standards so they canshare data when appropriate (i.e., crisis response) be-tween agencies.

EA teams are relatively small (typically ve to sixprincipals) regardless o the agency, and include op-erational, logistics, engineering, modeling, nancial,and architectural savvy team members.

Considering rice bowls, inter-agency cultures, andother inherent roadblocks, EA requires an eective

champion to produce or obtain the data, mandate theprocess, or infuence and make budgetary decisions re-garding its use. Be sure to nd a champion rst. Some-one must see the value added and be willing to osterEA initiatives.

ea value added

Quick success may ensure the value o EA initially,but the long-term value is in using EA or StrategicIT Planning. You can achieve both simultaneously,which will be important to your champion, your advo-

cate, and resource sponsor.CIOs, program managers, capability portolio

managers, operators, engineers, and nancial manage-ment personnel can customize their own dashboardsto have daily insights rom the EA, according to theirown preerences or perspectives. Basically, they all runinto similar problems like access to inormation, rel-evancy, integration, etc.

Buy-in rom agencies contributing data or userso the EA is absolutely essential to its success. Author-itative and reliable sources o inormation need to beidentied early in the build process and then partnered

with or the success and credibility o the enterprise.However, be prepared to cross cultural boundar-

ies between organizations as you identiy and evalu-ate their contributing potential to your EA and SITPinitiatives; not everyone likes to share.

The EA data reresh mechanism must be automat-ed to the greatest extent possible. I not, data is lesslikely to be kept up-to-date, and then it becomes a

more burdensome governance issue. I someone is notgenerating the data, dont get into the data generatingbusiness. EA will never replace the man-in-the-loopsince not everything can or will be automated, espe-cially analysis.

Optimum perormance o the EA would includemaximum use o automated, cyclical data mining oexisting databases (reliable, veriable, and authorita-tive). Many relevant databases exist and can be tiedto architectures with relatively little eortpush andpull capability is available now. Your real challengemay be nding authoritative data sources that are alsoreliablethey are not mutually exclusive.

There are also security and access issues that mustbe addressed up ront. When does the collection o

data become classied? Who has or controls access tothe data? Where does the data reside? There are no se-curity classication guides to my knowledge that spellout when the volume o inormation in the enterprisecompromises the security o the enterprise, unless, ocourse, the data in the enterprise dictates the securitylevel. You need to be cognizant o that turning pointand act with prudence and oresight.

Generating data and views rom existing data isstandard business practice. Relating disparate inor-mation in the EA environment lends itsel well toclearer understanding. Although not discussed in de-

tail, obtaining useul SITP inormation rom architec-tural artiacts has produced some success in this area.

Visualization o the enterprise (programs, process-es, data, relationships, assessments) is supremely im-portant and quickly adds value to enterprise partnersby keeping everyone on the same page during dynamicevolutions o the architecture. While there may be animmediate ROI with out-o-the-box capabilities inreports, dashboards, etc., one view does not t theneeds o all o the stakeholders. An applications abil-ity to customize the ront-end view to suit the needso the echelon stakeholder is supremely important to

getting the maximum value out o the EA.The EA needs to talk the language o the agency,

business, unit, or level o client it serves. The objec-tive o EA tools is to deliver purposed inormation to avariety o stakeholders. You will need to customize theviews or it to be useul and used, or else it will be anexercise in utility.

MorE on PAGE 10


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Metadata standardization, interoperability, andartiact reuse not only saves time and resources, butopens venues or ederated use o architectural inor-mation between agencies using dierent tools. For thisto eectively work, data latency and business rulesneed to be identied, thoroughly vetted, and under-stood through metadata tagging. This is also key tomaintaining a living architecture and or accomplish-ing accurate analysis within your enterprise.

Time and resources spent on the datas pedigreeup-ront will help establish the credibility o the ar-chitecture as an authoritative source or enterprisepartners and participants. The ederations success isdependent on accurate, timely, and relevant inorma-tion rom the enterprise and an established, veriable

pedigree rom whence it came. I you plan to tap intoanother enterprises data sources, the mechanism orrereshing and/or maintaining its vitality must also beconsidered.

EA will continue to grow at its own pace untillegislation mandates its use or IT planningthen itwill grow more exponentially. Just like the cash reg-ister wasnt popular until Congress changed the lawsto value the receipt as a legitimate contract and ortax return claims. EA policy guidance and reportingrequirements already exist.

A mature EA provides real-time enterprise in-

ormation to multiple stakeholders delivered in userspecic views, via a central repository. It also providestraceability o capabilities to requirements and allowsinvestment analysis, decision support, identicationo cross-component capabilities, and perormanceanalysis.

Denition o an EA use case: inormation theusers are interested in knowing. To determine whatinormation is paramount to the EA, questions re-lated to governance, business processes, data (needs,existence, organization, source, etc.), analysis views,technical, programmatics, resourcing, and unctional-

ity need to be addressed across the enterprise. Users o

GAuGInG THE VAluE oF STrATEGIC IT PlAnnInG And EA

A&G

the EA may be small in number or diversely large anddispersed geographically so the EA Framework mustbe useul and visible to all potential users.

No one can learn everything about the enterprise,and not everyone is an enterprise architect with theirhands on the data rom day to day. So you need toknow what youre looking or and how to get to it. EAin a metadata-rich environment provides one mecha-nism to locate, assess, display, and use authoritative,pedigreed data or more inormed decision making tothe nth degree. EA and SITP tools are designed to a-cilitate that end.

suMMary

Agencies and industry are most interested in the bot-tom-line o EAwhat value-add can be derived romits eorts. The ROI must show that EA will outweighthe expense o creating and maintaining it. A ullyunctional EA may take several years to accomplish,so to maintain advocacy, the EA and SITP teams mustquickly show the value add.

Ultimately, a mature, well-administered EA hasthe potential to acilitate a vision and aect positivechanges in programs, policies, resources, and sched-ules, providing unilateral continuity and saving timeand resources while building a more capable enter-

prise. I done right, the enterprise architecture usedor strategic IT planning will help answer questionsbeore they are asked. A&G

vinny digirolamo, afcea s

fw Naval Command

and Control: Policy, Programs,

People and Issues,

cp ivm ty

c (www.2.m)

mp ea sitP

v dpm

d y.


11/11

Manage the Shifting Sands of Change

Gartner Enterprise Architecture Summit 2009

europe.gartner.com/ea

1415 September 2009 | Royal Lancaster Hotel, London, UK

The ability to predict and respond to change has become the most critical success factor in any

business and enterprise architecture is fast becoming the defining discipline.

Today, you are pulled in two directions: containing costs for the tough times while positioning thebusiness for tomorrows inevitable return to growth.

There is only one Enterprise Architecture Summit that

gives you the independent authority and expert advice.

Join us.

Book your place today.


No matter where you are in yourEA learning curve, there is plenty

of insight and practical advice for

you: the foundation principles; the

leading trends and cutting edge

technologies; and the latest ideas

in the revolt against frameworks.

The Gartner Enterprise Architecture Summit

is here to help, with new research, analysis and

case studies on the essentials of EA. Three

powerful tracks help you accelerate your EA

plans, deepen your understanding and connect

your strategy to related disciplines.

Register Now


Tel: +44 (0)208 879 2430

Email: [email protected]
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Documents

A&g Magazine Bhavish Madurai Published