advising on it-business alignment enabling innovation through soa ibm business centric soa event 6...

advising on IT-business alignment

mwdmacehiterward-dutton

Enabling innovation

through SOA

IBM Business Centric SOA event

6th June - London

Neil Ward-Dutton, Partner

© Macehiter Ward-Dutton 2006 www.mwdadvisors.com 2

“As often as not, I've seen the

senior business managers

questioning why the IT

organization *doesn't* use

SOA.”

- Architect, US Central Government

Agenda Business trends and pressures, and the effect on IT SOA: more than just another buzzword Learning from the leaders: lessons from the front

line

© Macehiter Ward-Dutton 2006 www.mwdadvisors.com 3advising on IT-business alignment


Business trends and pressures,

and the effect on IT


30,000 ft: Business pressures are driving business change in new ways

Globalisation– Customers, partners, suppliers – and

competition– Connectedness driving sophisticated value

chains

Transparency– Industry regulations, consumer pressure and

competition driving openness

Service focus– Differentiation and shareholder value

increasingly derived from service experience


Some local examples

Globalisation– Offshoring impacting UK tech labour market– >4000 (+400/year) UK-Sino joint ventures– UK Government to reimburse overseas treatment costs for patients (05/06)– Tesco enters mortgage market with First Active (11/04)– Vonage launches UK VoIP service (01/05)

Transparency– City of London contractor rates hit 4-year high, compliance drives demand

(02/06)– EU Data Retention Directive (02/06)– International Financial Reporting Standards (IFRS)

Service Focus– BT launches mobile music service with UBC Media and Virgin Mobile (06/05)– Amazon to underpin M&S e-commerce systems (04/05)– …and Waterstone’s insourcing e-commerce from Amazon! (05/06)


10,000 ft: The business-IT interface

Business Increasing desire for some

business activities to change direction rapidly

Desire for more flexible business models and “footprints”

The freedom to innovate and involve others in innovation

IT Shifting focus of enterprise

automation requirements– From business support

functions to product and service differentiation

– From “execution” to supporting management and strategy

Alignment of sourcing and spend with business priorities– Leveraging industry and

technology maturity for portfolio-based approaches


The killer: innovation and efficiency have to go hand in hand

Total IT budgets are not growing significantly

Investment in support of innovation can only come from successful efficiency measures

Moreover, efficient organisation of resources is a key innovation enabler

Sourcing and spend alignment

…through…

StandardisationConsolidation

IT Governance / Portfolio

managementetc

Before After

Support for differentiating processesSupport for non-

differentiating processes

Operating and maintaining existing investments

If you don’t know where you are, it’s difficult to know where you can go next!



SOA: more than just another

buzzword


Organisations are investing in SOA to improve efficiency AND flexibility

0% 10% 20% 30% 40% 50% 60% 70% 80%

More rapid and flexible IT response tochanging business needs

Enhanced ability for IT to drive and/orsupport business innovation

Cost savings from more efficient delivery ofIT

Protection of past and future IT investmentsby delaying obsolescence

Improved operational service levels to thebusiness

Experienced adoptersAll respondents

Which of the following would you regard as significant business level drivers for investing in SOA?


The IT automation focus is shifting away from structured, predictable processes

E

E

E

M

M

S

E

E

E

M

M

S

Increase

d structu

re, predict

ability

Increase

d colla

boration, a

d-hoc nature

Non-differentiating Differentiating

Shift in

focu

s

Execution

Management

Strategy


The nature of IT investment is shifting

From Towards

Build, or buy vs. build

Project implementationBuy AND build AND integrate

Back officeBusiness area investment

focusFront office and

beyond

“Personal productivity”

desktopIT access environment

Productivity desktop +

global access to resources

Data processingTechnology innovation

focus

Communication, collaboration,

integration

Outsourcing vs. in-house

delivery

Capability supply “Multi-sourcing”

Scale of IT concern: from point functions to organisations and ecosystems


The technology requirement: managing a broader scope & scale of interactions

From

Data design tightly coupled to application design, and

application design to “user requirements” – very restricted

view of process needs

B u

s i n e

s sp r o

c e s s

Towards

B u

s i n

e s

s p

r o

c e

s s

Loosely-coupled resources provide services which are

designed to support the interactions that take place within a business process

Red

uci

ng “

acc

ess

fri

ctio

n”


Architecture is more important than everIt has to be focused on efficiency AND flexibility Process integration

– Improving efficiency in the “back office” and “middle office”– Improving service quality in the “front office”

Service Oriented Architecture (SOA)– Building a common language between IT and the business– Open, integrated software systems that fit today’s needs

Data integration / Master Data Management (MDM)– Unified views of process-critical information– Customers, bills, etc

Rich user experiences– Access to information and function in a variety of contexts– “Right-sized” – offline and online; rich experience with small

management footprint– Functionality arranged around the user, not around

“applications”


There is clear value in SOA beyond technical issues

Experienced adoptersAll respondents

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Yes

Possibly

No

Unsure

Can SOA help business and IT people communicate more effectively through a common vocabulary?


SOA: the foundation for bridging the gap between IT and business

Business

IT

Busin

ess pr

oces

s

Busin

ess pr

oces

s

Busin

ess pr

oces

s

Busin

ess pr

oces

s

Busin

ess pr

oces

s

ManagedIT

serviceManage

dIT

service

ManagedIT

serviceManage

dIT

service

ManagedIT

service

A P P L I C A T I O N S & I N F O R M A T I O NI N F R A S T R U C T U R E

B U S I N E S S S T R A T E G Y

Business processesform the foundationof a commonlanguage

IT defines and delivers“business level” serviceswhich support the rightprocesses, the right way


Four steps to maximise SOA business value

Flexibility

A service-based approach creates modular systems which are easier and quicker to change

1

End-to-end management of the service lifecycle which “joins up” activities from

design to operation

Value visibility

A service-based approach enables an environment in which system value can be

readily understood by the business4

An architecture approach that promotes service

designs which are business-meaningful

Comprehensibility

A service-based approach enables an environment in which IT capabilities can be easily

understood and specified by business analysts

3

Reusability

A service-based approach creates software assets which can be reused across projects, making systems cheaper and lower-risk to build

2

A development lifecycle that promotes

reuse of services



Learning from the leaders:

lessons from the front line


“Keep the faith and avoid the

buzzword soup.”

- Architect, Swiss Bank


Making the SOA business case

“Focus on the benefits of reuse and

reduced TCO, not the technological /

definition arguments.”

“Focus on the benefits of reuse and

reduced TCO, not the technological /

definition arguments.”

“SOA isn't an investment - it's an architectural decision. If the system justifies the architecture and the business case can be made then it is the right thing. SOA isn't and shouldn't mean a sweeping replacement of systems.”

“SOA isn't an investment - it's an architectural decision. If the system justifies the architecture and the business case can be made then it is the right thing. SOA isn't and shouldn't mean a sweeping replacement of systems.”

“Talk about how IT will be given a clear and concise mapping to business needs that just wasn't possible before with other architectural approaches.”

“Talk about how IT will be given a clear and concise mapping to business needs that just wasn't possible before with other architectural approaches.”

“Stress agility and the ability of business to comprehend what IT is delivering.”

“Stress agility and the ability of business to comprehend what IT is delivering.”

“Align SOA with a business activity: either a new opportunity or improve an inefficient one to prove the benefits, then deploy more widely, and don't underestimate the formal methods and tools required.”

“Align SOA with a business activity: either a new opportunity or improve an inefficient one to prove the benefits, then deploy more widely, and don't underestimate the formal methods and tools required.”

SOA is not like many technology investments: the case must be made from both a project and an architecture perspective


Key challenges associated with SOA adoption

“Mainly political issues. SOA is a leveller and threatens people who like to build little empires in an organization.”

“Mainly political issues. SOA is a leveller and threatens people who like to build little empires in an organization.”“Loss of momentum

after the initial enthusiasm. Reversion to perceived faster time to market traditional approaches.”

“Loss of momentum after the initial enthusiasm. Reversion to perceived faster time to market traditional approaches.”

“S-E-C-U-R-I-T-Y.”

“S-E-C-U-R-I-T-Y.”

“Poor communication to stakeholders.”

“Poor communication to stakeholders.”

“In a large IT organisation, with a command and control structure, it is difficult to break through the comfort barrier.”

“In a large IT organisation, with a command and control structure, it is difficult to break through the comfort barrier.”

“Changing funding models to support shared services rather than one-off projects. Establishing governance structures.”

“Changing funding models to support shared services rather than one-off projects. Establishing governance structures.”

“Funding necessary infrastructure in a project-based cost model.”

“Funding necessary infrastructure in a project-based cost model.”

“Getting consistent policy and standards across projects.”

“Getting consistent policy and standards across projects.”

Overwhelmingly, the main challenges cited relate to good governance



Thank you

www.mwdadvisors.com

www.freeformdynamics.com

advising on it-business alignment enabling innovation through soa ibm business centric soa event 6...

Documents

business pressures

business change

business activities

business alignmentsoa

flexible business models

senior business managers

uk voip service

mobile music service