Your Mobile Phone’s Bundled Services
Apps Software Services
ICT Network Services
Call Centre
Services
Reseller Services
Phone Supply
Services
Your Mobile Phone’s Service Architectural Components
Eg SayTelstra EA Specs for its Mobile Phone Product Lines
Remember our discussions about business service configuration ?
EA Specs of other Product Lines
There will be various EA of say Telstra’s products of its different Business Units, all collectively functioning to support some underlying strategic programs
Your Service Oriented Mobile PhoneProduct
Understanding EA Value starts with understanding What is IT Generated Value?
ICT Business Activities
IT as an Resource Value is:1. Featured in its• Hardware • Software• Supported business
processes• People skills
2. Measured by productivity, on-time & quality indicators
The interaction of IT & Bus creates business value, which:
1. Is of an economic and/or strategic nature;
2. Has different facets, depending on business priorities;
3. Can be measured using different metrics (KPI + measures) relevant to the appropriate business contexts;
4. Are created via projects of BUs
Adapted from: http://www.mckinsey.com/insights/business_technology/how_cios_should_think_about_business_value ;
http://docs.health.vic.gov.au/docs/doc/EF8861765B99DB1ECA257B19007DBA75/$FILE/understanding_program_logic.pdf
http://evaluationtoolbox.net.au/index.php?option=com_content&view=article&id=30&Itemid=136
EA Value translation into Business Value
EA = STRATEGY + BUSINESS + TECHNOLOGY
ICT Business Activities
EA creates sustainable Business Value when its compliance ensures:1. ICT resources are used efficaciously in strategic and improvement projects
contributing to competitive business service affordability & quality2. ICT enabled services are configured and sustained in the provisioning of
business services to create & sustain strategic and/or operating value
The Value of EA as an Enterprise Service Resource
EA Strategy Planning
EA as an in-house service needs to be used efficaciously:
• Its co$t of development & on-going maintenance must be affordable
• Its compliance in projects that create strategic advantage and/or operating improvements in business value must be effective, including easier & least time needed to comply & update if needed
The Value of EA as an Enterprise Service Resource
EA Strategy Planning
In strategy (and any other levels of) planning activities, EA provides a whole of organisational perspective of how IT can be infuse with other resources to configure value adding business service. EA does this by:1. Giving clarity in projects of what business value their development of ICT
enabled business services can bring to contribute to strategic & business operating goals
2. It improves strategy planning because it aligns strategy with business and technology development and operating capabilities
3. It improves decision making by clarifying what is involved in configuring and using resources to create value adding ICT enabled business services
4. It improves communication by having a common and shareable documentation approach and artefacts to convey & change service configurations for strategic and improvement reasons
KPI is a metric system for qualifying or quantifying resource and business value
Key Performance Indicator (KPI)
Measure
Objective
Corporate level
Business Level ICT Level
is measured by 1..n
Measures 1..n
Quantifies/qualifies 1..n
Is quantified/qualified 1..n
Sub-classifies
Corporate Strategy Core Competency Service
Business Strategy Service Technology Strategy Service
Eg Financial indicators can include:• Different types of costs• Different financial ratios
Eg Financial cost indicators can include:• Labour costs, which is measured annually
or quarterly or monthly in the currencies of regions/countries a firm operates in
Eg Strategic objective is create cost advantage in regions A, B, C
Example of KPI + Measures
Source: http://www.dpcd.vic.gov.au/__data/assets/pdf_file/0009/206694/LGPRF-Indicator-Workbook-Version-3.1.pdf
Example: Business Value created by use of EA
Source: http://davidfrico.com/rico07a-s.pdf
Case Study – Project that aligns the ICT of USA federal, state & local governments. The cost-benefit analysis findings (business value):
1. Financial Cost Savings2. Service Provisioning Improvements3. Lesser Duplications & Waste4. Higher economic growth building capacities5. Consistent community services independent
of political changes
Example: Business Value created by use of EASame Case Study – More in-depth analysis of cost savings by each USA state
Source: http://davidfrico.com/rico07a-s.pdf
EA Risks
1. Financial risks: cost too much to build & maintain EA capacity
2. Lack of Acceptance by Power Brokers
3. Lack of Key EA Personnel
4. Project Delays additional EA development & compliance
5. EA Documentation complexity in maintaining synchronised current & future EA views
Source: http://eapad.dk/ea3-cube/book/section1/chapter-3-the-value-and-risk-of-creating-an-enterprise-architecture/
Risk Management
Example of a typical Risk Management Process Model Source: https://ppl.app.uq.edu.au/content/1.80.01-enterprise-risk-management
1. Risks Prevention2. Risks Mitigation3. Risks Recovery
Risk Management
Risk - the effect (positive or negative) of uncertainty on objectives. Risk is considered with reference to possible consequences and likelihood of occurrence (ISO definition)
The actual consequences of risks are often called problems and issues
Objective Target KPI
Below KPI
Above KPI
Aims for
Over achieves
Under achievesRisk Occurrence results in KPI variances & other unforseen effects
Risk Assessment:1. ID the uncertainty causes of KPI
variances & other dangers2. Measures the impacts of risks3. ID the appropriate risk prevention,
mitigation (containment) and recovery strategies
If EA is to enable the creation of value adding ICT enable services, then think of what causal factors (risks) that can erode the work performance of this intent.
Examine the value creation of EA in text and think of the reverse and what may cause it
Strategic or operational
Cost Drivers of EA
SETUP + COMPLIANCE + UPDATE
1. EA Staffing & Consultant Costs
2. EA Activity Costs
3. EA Equipment/Tools’ Costs
4. Involvement of other Stakeholders – the costs of their time, resource provided, etc
In Projects
Cost Drivers can be potential Cost Risks – How?
Strategy Planning 101
Corporate Level Strategy Planning
Strategic BU Strategy Planning
Operating BUStrategy Planning
Core Competencies (Strategic Service)
Development Projects’ Plans
Business Service Improvement Projects’ Plans Strengthened by
higher operating efficacy
Delivered by strategic projects’
outcomes
The Devil is i
n the details
Global strategiesRegional strategiesMulti-domestic strategies
EA in the Alignment of Strategy, Business & Technology
Corporate BU Market strategy plans
Product & Service Lines
RealisedBusiness Results
Product & Service Configurations
Ensures Strategy influence business &
ICT decisions, changes & project scope &
outcomes
Ensures business requirements are
captured and modelled appropriately to guide ICT project & operations work
& outcomes
Strategic Requirements Target Market Share Outcomes
Evaluates Outcome
Variances to identify causes in resource/service
quality & configuration
An (over simplified) view of how corporate level strategy influences all other levels of strategy planning to value adding service development
Corporate Strategy Contexts
Must drive
Need to understand
which service configuration
design components & packaging
are strategically
& operationally value adding
Case Study Analysis
1. What is the potential value of DMC EA proposal?
2. What are the possible risks in the DMC EA proposal?
3. How can EA can help develop views of this business’s strategic direction and goals; business services and supporting resources?
Q8 Do you agree with the need for an EA program in the case study?
Kate Jarvis (COO)
Sales & Inventory Tracking System(SITS) – ~2 years RoI, $3mio++
Integrate info across• Sales• Inventory• Production
Cost Accounting ModuleWELLCO ERP System18 months RoI, <$600K
Sam Young(CIO)
Jim Gorman(CFO)
Capacity to compete with competitorMitigate production inefficiency
Improve cost management
Decision Options: Buy 1, Buy 2?
Rob Danforth(CEO)
Gerald Montes(Chief Council)
SCENE 1
Lily Jefferson
System Analyst
VinceThe Albright
Architect
Sales & ProductionDepartment
FinanceDepartment
Analyse Kate & Jim’s System Requirements
Infer DMC’s Strategic GoalsEg New Custom Order Line of
Business for Next Year
What is the value in terms of cost savings & scalability of
solution?
EA will align each current & future departments,
increase cost savings into the future, BUT will cost
additionally $121,600 & 2 months ......
1What is DMC
organisation culture?
3 Discuss the merits and limitations of the CIO’s (Sam) EA Plan for Financial and Production Segments?
2Can you describe
DMC organisation structure?
SCENE 2
EATeam
Given the mandate to develop 2 segments of DMC’s EA.First deliverable: business case & EA Dev project plan
2 Critical Success Factors1. Inclusive stakeholder involvement2. Agreed EA Methodology
DMC EA Plan: Financial & Production Segments
Report
Produced
Elaborate the EA Approach / Methodology proposed in report
• EA Development timeline• EA modelling steps involved• Planning & decision making information specs, including preferred
documents’ formats• Selection of EA modelling techniques & tools• EA scenarios – Current & Several Future views• Agreement of planning assumptions• Evaluation of Kate/Jim’s systems and retrofit in EA scenarios• Explanation of how the EA methodology’s framework to structure DMC
EA and guide its various EA modelling/ documentation activities
Meeting Discussion Highlights
Meeting Outcomes: Agreed EA Methodology & EA Documentation FrameworkNext Meeting Goals: Understand how the 2 outcomes are used to document the current & future
models of Jim + Kate’s business units/departments
SCENE 3
EATeam
Given the mandate to develop 2 segments of DMC’s EA.First deliverable: business case & EA dev project plan
DMC EA Plan: Financial & Production Segments
Report
Produced
Inferred Methodology Contents• EA Development timeline• EA modelling steps involved• Planning & decision making information specs, including preferred
documents’ formats• Selection of EA modelling techniques & tools• EA scenarios – Current & Several Future views• Agreement of planning assumptions• Evaluation of Kate/Jim’s systems and retrofit in EA scenarios• Explanation of how the EA methodology’s framework to structure DMC
EA and guide its various EA modelling/ documentation activities
This Meeting’s Goals Achieved: To Agree the proposed EA Methodology & EA Documentation Framework
Inferred Business Case Contents• Chosen Jim/Kate’s areas as the 2 EA segments because they
cover several lines of business (LoB)• Analyse DMC’s strategic goals, business activities &
technology capabilities• Specified the 2 areas’ business and ICT requirements
SCENE 3