Business Architecture Case Studies

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  • 1

    Enterprise Business Architecture

    Case Studies

  • 2

    EXECUTIVE SUMMARY

    In the context of todays demanding market companies are experiencing the

    need for multi layered change. The additional challenge to this environment is

    addressing the speed of required change, both from a customer and technology

    perspective, using dated tools and techniques. These forces at work are driving

    organizational impact which reaches far beyond conventional thinking. IAG

    believe architecting the business, through strategic planning, understanding the

    holistic enterprise and collective change agendas, is the way forward.

    Having a viable business strategy is fundamental to the success of organizations

    facing increased competition, shifting customer demands, globalization, new

    markets and economic pressures. But having a strategy is not enough.

    Organizations must be able to execute against that strategy and demonstrate

    quantitative, measurable value.

    The challenge facing executive is how to turn business strategy into actionable

    results. Business architecture provides a vehicle for interpreting business

    strategy in concrete ways that can be deployed as coordinated, clearly

    articulated business initiatives.

    Executive require a different kind of dashboard. One which is provided through

    the tools and techniques deployed in the context of building and practicing

    business architecture. This whitepaper discusses business architecture in

    practice and the benefits realized by the firms who used their own business

    architecture to achieve the desired business outcomes.

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    CONTENTS Executive Summary ....................................................................................................................... 2

    CONTENTS ..................................................................................................................................... 3

    Case Study Overview .................................................................................................................... 4

    Human Capital Management Transformation: ........................................................................... 5

    Divisional Non-Core Outsourcing ................................................................................................. 6

    Centralization FTE and Enterprise Restructuring study ........................................................... 7

    Spans of Control Cost Study capability/function, FTE, role ..................................................... 8

    Data and Process Ownership ....................................................................................................... 9

    Strategic Project Portfolio Development ................................................................................... 10

    Strategic Alignment ...................................................................................................................... 12

    Portfolio Management .................................................................................................................. 12

    Closing Thoughts ......................................................................................................................... 14

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    CASE STUDY OVERVIEW

    Business Architecture methods and techniques really come into their own when

    applied to a broad range of critical business problems. At the same time,

    methods and techniques comprising the discipline of business architecture

    continue to evolve.

    The following Case Studies are not an exhaustive list yet illustrate the vast

    number of ways where value has been driven through the use of the business

    architecture collateral to the benefit of achieving the strategic objectives. The

    discipline of business architecture applies to multiple common business drivers

    some of which are customer centricity, financial planning, lower operating

    costs, optimized application portfolio, modernization and program management

    Mature and successful Business Architecture practices work collaboratively with

    business leaders, IT Architects, and executives to address current and future

    challenges. Adoption and acceptance of Business Architecture, in strategic

    planning, has led to an increase in the maturity of the discipline and a business-

    centric architecture that focuses on the needs of the business.

  • 5

    HUMAN CAPITAL MANAGEMENT TRANSFORMATION:

    A Large Tier 1 bank engaged the use of the capability model to transform the HR

    function to a future state operating model with the strategic objectives of

    outsourcing non-core capabilities, process redesign, and process distribution

    across centers of excellence, with Online Delivery and Contact Centre channels.

    They strategically defined what Human Resources will provide in future

    state services, support and built a capability model

    Using the capability model they designed the organization around what

    functions HR does

    Then decided where those business functions and organizations would

    be located

    Knowing the location preferences, to drive lower cost operating models,

    they decided which functions could be performed by a 3rd Party

    Outsourcing arrangement

    Researching the vendor catalogue leveraged existing relationships and

    Offshoring strategies to reduce costs

    Remaining business functions determined the organizational structure

    and roles based on spans of control / management and shared services

    In the delivery of those business functions Value Streams where

    produced to understand how they would flowed through the organization

    Process Ownership was assigned to ensure future state process were

    optimized, efficient and effective with appropriate controls and metrics

    Business Model was fully deployed in less than 2 years with supporting

    technologies driven off the business needs and design.

  • 6

    DIVISIONAL NON-CORE OUTSOURCING

    Organizations quite often look at parts of their business which are non-core, are

    necessary to be managed but not necessarily provided internally, as they are not

    a core strength. In this regard they look at other organizations, with highly

    developed specific capabilities, which can be provided at a lower price point, or

    can fill a short-term skills gap.

    Using the business architecture to deconstruct the business to functions and

    process exposes the dimensions of the capabilities, you might consider

    outsourcing, or clarify the best options for alternative capability sourcing.

    An Investment division, of a large tier 1 bank, focused on operational provisioning

    and used the business architecture mapping of capability, business functions,

    locations, processes and vendors to deconstruct the business. This analysis

    exercise:

    Exposed several outsourcing possibilities from Real Estate Operations to

    Documentation Archive and Retrieval processes

    Brought clarity to the opportunity of consolidation of current multi-vendor

    relationships

    Produced Cost of Ownership analysis to support the business case

    Enabled the RFP to be very specific as to the capabilities, business

    functions and processes which needed to be contracted.

    CEO was impressed with the speed of discovery and the foundational basis for

    decisions.

  • 7

    CENTRALIZATION FTE AND ENTERPRISE RESTRUCTURING STUDY

    Good organizational design is built on the basis of functional alignment, spans of

    control and the right balance between distributed and centralized capabilities.

    Distributed capabilities support agility and centralizing capabilities will grow

    expertise, reduce cost and address complexity.

    Using the business architecture a retail organization wanted to know what was

    being done, where, by who and what was the driver of effort.

    A socialized and executive agreed business functional model was available. This

    was used as the foundation for a global survey of the business unit managers.

    The FTE data set, by business unit, by location was extracted from the HR

    system and aligned to the business functions being performed.

    Additionally the business processes were catalogued against the business

    functions.

    Survey was structured to reflect Business Function- Business Unit-Location-

    Business Processes, number of FTE. A drop down was provided to discover

    what events where drivers of effort.

    The Survey resulting analysis drove a global off-shore, near-shore and

    centralization location strategy with approximately 30% reduction in cost base.

  • 8

    SPANS OF CONTROL COST STUDY CAPABILITY/FUNCTION, FTE, ROLE

    Finance Transformation, of a large Tier 1 bank, used the business architecture

    mapping of capability to business function to business process to role.

    It was quickly discovered the number of managers to staff members was on

    average 3 to 1. The Spans of control for Industry best practice was a ratio of 6-9.

    Adding the dimensions of transactional Time, Frequency and Volume, to

    determine the correct number of FTE required to complete the processes, the

    business units were Right Sized to the number of people necessary to perform

    the work and organized to reflect the industry benchmark number of staff

    members to manager ratio.

    Sales & Marketing Products & Services Operations & ProcessingRisk & Financial

    ComplianceStrategy & Governance

    Market Research &

    AnalyticsProduct Development Resource Planning Regulatory Advisory Business Strategy Mgmt

    Customer Mgmt

    Strategy

    Product Research &

    Analytics

    Operations Policy &

    ProcedureAlliance Planning

    HR Planning &

    Governance

    Segment Analysis &

    PlanningChannel Mgmt Channel Mgmt Risk Mgmt

    Programme & Change

    Mgmt

    Marketing Mgmt Business ContinuityFinancial Accounting

    & Reporting

    Regulatory &

    Compliance Policy

    Brand Mgmt Information Tech Decision Support Mergers & Acquisition

    Sales & Contract

    Monitoring

    Product Catalogue

    Mgmt

    Central Service

    ManagementBalance Sheet Project Mgmt Office

    Relationship MgmtProduct & Service

    MonitoringVendor Management Credit Oversight Audit

    End to End Service

    Level Perf MonitoringChannel Performance Statistics & Measurement Legal Advisory

    Business Policy

    Oversight

    Authorization/ApprovalsRisk & Financial

    Control

    Compensation &

    Benefits

    Auth & Limits Delegation Financial Data MgmtRegulatory Compliance

    Monitoring

    Client Acquisition &

    Referrals

    Transactional

    ProcessingCustomer Data Mgmt

    Accounts Payable /

    ReceivablesProject Cost Acct

    Contact Mgmt Order Mgmt Statement Prep InvestigationsLearning &

    Development

    Compliant Mgmt Document Mgmt Collections &

    RecoveryRegulatory Reporting

    Prospecting & Sales Credit ProcessingCredit Approval &

    ProcessingBusiness Procedures

    Campaign Execution Fees & Billing MgmtFinancial

    ConsolidationM&A Due Diligence

    End Consumer Sales Payments Tax Reporting Vendor Mgmt

    Strategic

    Control

    Execute

    CAPABILITY MODELILLUSTRATIVE

    Product Performance

    Mgmt

    Campaign

    Management

    Pricing Policy

    Channel Delivery

    Mgmt

    Product

    Configuration Mgmt

  • 9

    DATA STEWARDSHIP: GOLDEN SOURCE,

    OWNERSHIP, RATIONALIZATION, MI REPORTING

    Data stewardship is of primary focus in these days of privacy yet regulatory

    transparency. Organizations are looking to produce single version of the truth

    data sets to streamline redundant information, improve business intelligence and

    provide effective reporting.

    DATA AND PROCESS OWNERSHIP

    Large Tier 1 Insurance Company Enterprise Architecture team used the business

    architecture capability model to map the application inventory.

    Each application was reviewed for business value and the data was catalogued

    to the business capability it underpinned. The analysis revealed the opportunity

    to rationalize, or componentize the data, to a Golden Source and the applications

    which would consume or provide data to it. It also identified the logical business

    owner and stewardship.

    Strategy & Governance

    Business Architecture &

    Operating Model

    Global MIS

    Strategy

    Governance

    Business Strategy Management

    Alliance Planning Mgmt

    End to End Service Level Management

    Executive & Stakeholder

    Management

    IT Architecture

    Risk

    Operational Risk Control

    Management

    Balance Sheet Management

    Treasury Management

    Financial Accntg & Reporting

    Decision Support

    Financial

    Internal AuditRegulatory & Compliance

    Compliance

    Sales/ProductMonitoring

    Sales, Market & Relationships

    Market Management

    External Corporate

    Comms

    Marketing Management

    BrandManagement

    Client Relationship Management Sales & Distribution

    Independent Asset

    Management

    Electronic Service

    Channel Management

    Market Risk Control

    Management

    Settlement Risk Control

    Management

    Legal Awareness & Compliance

    Regulatory & Legal Doc.

    Management

    Products & ServicesBusiness resource & sales planning

    Client mkt research &

    analytics

    Branch Telephone Post Online Email IntermediaryPDA

    Hedge Funds Management

    Securities Product

    Management

    Funds Product Management

    Trade Services Management

    Product / Servicing Sourcing

    FX & MM Management

    CashManagement

    Structured Product

    Management

    Card Product Management

    Insurance Products

    Management

    Operations & Processing

    Merchant Operations

    Corporate Actions

    Management

    Client Tax Reporting

    Performance Measurement

    Safe Keeping Management

    Payments CustodyNostro Cash

    ManagementMarket Data Management

    Involved 3rd Party

    Maintenance

    Specific Product Processing

    Credit Processing

    Securities Processing

    Card Processing

    Fund ProcessingFX & MM

    Processing

    Structured Products

    Processing

    Trade Services Processing

    Insurance Processing

    Hedge Fund Processing

    Product Management Service Management

    Product & Services Support

    Execution Management

    Trade Reporting

    Order Management &

    Grouping

    Execution Services

    Confirmation & Matching

    AllocationsProduct & Service

    Control

    Processing & Execution Support

    Research & Analysis

    Customer & Transaction Services

    Client Support

    Customer Insight

    Customer Management

    Strategy

    Business Policies and Procedures

    Operations strategy & policy

    Correspondent Banking

    Authorisations

    Cash Services Rewards Admin

    Securitisation (incl.

    Syndications)

    Segmented Servicing

    Credit Risk Control

    Management

    Contact Management

    Relationship Management

    Client Acquisition & Referrals

    Counter/ Branch

    Services

    Product Catalogue

    Management

    Credit Management

    Client Account Admin

    Reconciliation

    Credit Approval

    Management

    Document Management

    Fees & BillingManagement

    Client Accounting &

    Reporting

    Operational Monitoring

    Clearing

    Settlement

    Segment Analysis & Planning

    Customer Behaviour

    Models

    Collections and Recovery

    Collateral Handling

    Prospecting & Sales

    Sales ExecutionSales Force

    Management

    Group / PB Advisory Services

    Client Risk Profiling

    Discretionary Portfolio Mgt

    Services

    Family Office Services

    Trust & Estate Planning

    Strategic Asset Allocation

    Tactical Asset Allocation

    Cross-Product/Service Client Facing Processing

    Design apps & IT infrastructure

    Build apps & IT infrastructure

    Operate & maintain apps &

    IT i/f

    Business continuity

    Security

    Information Technology

    Legal

    Programme & Change

    Management

    Facilities Operation & Maintenance

    Procurement HR & PayrollInternal Comms (excl. cust...

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