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• British Aerospace - Mechanical Engineer
• Active Intranet plc – CTO and Chief Architect
• Aviva – Lead Enterprise Architect in Central Services, supporting Life and Pensions business
• Capgemini UK and Sweden – Enterprise Architect and lecturer on Capgemini Integrated Architecture Framework (IAF) at Capgemini global university
• HP/EDS – Client facing CTO, Retail Sector
• IBM – Technology Solution Executive in Nordic Strategic Outsourcing
• ISG – Principle consultant for large outsourcing transactions and Nordic lead for Service Integration
• Sandvik – Director of CIO Office, responsible for Strategy, Risk Management and Enterprise Architecture
Director – CIO Office, Sandvik AB Stephen Brown B.Eng (Hons)
Mobile: +46 702 401159 [email protected] se.linkedin.com/in/steveb63/
•What should we get from Architecture and why do we do it? •Capgemini’s Integrated Architecture Framework •Examples of EA in practice
•Example 1 – Business Case •Example 2 – Business Process Harmonization and System consolidation •Example 3 – Financial Transformation – UK Retailer •Example 4 – 2020 Business Operating Model Strategy
Agenda
Sandvik IT 3
• Two key words: •Structure •Visibility
•Three simple purposes: •Governance •Decision making •Communication
What should we get from Architecture and why do we do it?
Sandvik IT 4
Rudyard Kipling’s six honest men: • Where are we and where do we want to be? • Why do we want to change? • When do we want to change? • How will we get there? • What are the costs, risks and dependencies? • Who will it involve and who will it impact
• Which products and services are delivered to the customers?
• What is the business & its interaction?
• How is the business (ideally) structured?
• How are the products and services delivered?
• With what resources are the products and services delivered and at what location?
• Which parts of the business will change?
• What are the costs and cost drivers?
A1 Fx
A2 V1
Capgemini Integrated Architecture Framework A Service Based Architecture Framework
• What information must be recorded and exchanged in support of the business?
• How is the information structured?
• How is it recorded, retrieved and exchanged?
• Which processes us the data? • On which systems is the data
mastered?
• What repositories are used? • Who owns the data? • What are the costs and cost
drivers?
Capgemini Integrated Architecture Framework A Service Based Architecture Framework
• What IS service is required & what is their interaction
• How are the Information System systems (ideally) structured
• Which packages & bespoke software are required and where?
• What are the costs and cost drivers?
SAP FI
Roads Other
SAP HR
Capgemini Integrated Architecture Framework A Service Based Architecture Framework
• Which services must the infrastructure deliver in support of the applications and the business?
• How is the infrastructure configured and structured?
• At what locations are the infrastructure components implemented and what resources are used?
• What are the costs and the cost drivers?
DB
SAN
DB
Capgemini Integrated Architecture Framework A Service Based Architecture Framework
Example 1: Supporting Global Manufacturer’s Business Process and System Consolidation Program using EA to support the Business Case Benefit Logic Tool
Reduced cash out
Increased cash in
Less working capital
OsA P
rogramm
e
Reduce fees to Capgemini AM
Reduce fees to IBM
infrastructure
Reduce internal ABB costs
Reduce basic services
Reduce extended services
Reduce # of servers
Rightshore strategy
Reduce IT costs
Reduce business cost
Re-negotiate contracts
Reduce # of installations
Coordination with other LBU
Consolidate applications
Renegotiate contract with IBM
Reduce IT personnel
Make use of systems efficient
Reduce # of processes
Reduce # of service requests
Effective organization
Transformation of processes
Enterprise Architecture
Process harmonization
Maturity
PMO
Governance
Business Case
Reduce complexity
Reduce will to change
Improve governance
Effective organisation
Coordination
Reduce complexity
Reduce project cost
Reduce licence costs
Reduce costs for AM
Reduce costs for infrastructure
Improve knowledge
sharing
Rightshore AM
Reduce # of systems
Optimize application
usage
Renegotiate contracts
Reduce functional support
Reduce application enhancement
Coordination Increase stability
Politics
Fewer processes
Fewer systems
Standardize user support
Improve governance and
coordination
Centralize administration
Greater volumes
Security
Governance
Conceptual
Logical
Physical
B I IS TI
Contextual
DB
SAN
DB
SAP FI
Roads Other
SAP HR
A1 Fx
A2 V1
• Identify which processes and business will be effected, and how they will change
• Shows changes in Business costs
Using EA to help develop the business cases in OsA
• Derive which applications are involved and how they will change
• Shows changes in Application costs
• Shows changes in operational costs
• Derive which infrastructure is involved and how it will change
• Shows changes in hardware costs
• Look at growth through new services and revenue opportunities
A1 Fx
A2 V1
SAP FI
Roads Other
SAP HR
DB
SAN
DB
Example 2: Using EA to help drive process harmonisation and system rationalisation in OsA
• What business processes and information are handled by which LBUs
• What applications are used
• Which IS processes are involved
• What systems support the applications?
Competitive advantage High Low
Low
High
Value
Optimize
Harmonize ?
? • Process in this region can be harmonised, and the effects on IS and the organisation understood and decided upon
• IS can be simplified • Hardware decommissioned
• This area requires more detailed analysis using SOA methods
Example 3: Supporting Financial Transformation in UK Tier 1 Retailer
•Detailed architectural study of existing system landscape and business systems to analyse root causes of program failures and options to move forwards
•Continued “best of breed” integrated approach or migration to single integrated suite •Changes is behaviour and governance in the relationship between Business and IT
Security
Governance
Conceptual
Logical
Physical
B I IS TI
Contextual
0 1 2 3 4 5 6 7 8 9 10
Assetts
Other Ledger - Depreciation
Planning
Store Details
Cash
Other Ledger - GL Postings
Bank Details
Customer details
Other Ledger - AP postings
Other Ledger - AR Postings
Other Ledger - P&L Postings
Sales
Stock/Waste
Credit
Expenses
Other Ledger - Audit
Other Ledger - Debit Note
Other Ledger - Journal entry
Credit Control
Currency
Other Ledger - Accruals
Payment
Tax
Vendor Details
MI & Reporting
Other Ledger - 6 Part Keys
Purchase
Type
s of
Dat
a O
bjec
t
Number of Systems Mastering Data
85% Of Key Data Is Mastered In More Than One System
Ideal Position
• The target for any integrated system is for a given data object to be mastered in only one system
• Client Finance has many examples of many systems mastering the same data
• In an ideal world each system is compatible with the others
• Client has several key systems which are incompatible and require complex hard-coded mapping e.g: -
•FICs •ePS •E-Xpenses
• In an ideal world each business process is supported by one system or a number of compatible systems with full accountability and authorisation
• Client as several systems that have many points of data entry and authorisation for the same data objects, e.g: -
•NMP •MP (Food)
• The target for any integrated system is that data only needs reconciling because of business requirement
• Client has to use analysts in order to gather and reconcile data, spending more time doing this than adding value analysing the data
Unsustainable number of systems mastering same data
Technology Platforms at M&S
0
0.5
1
1.5
2
2.5
3
3.5
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Year Implemented
Mainframe
Windows 2000
Web based
Technology Platforms deployed in Client Finance (Size of bubble indicates value to business)
Tactical Approach Over Last 5 Years Has Driven Up TCO Dramatically • Strategic Systems over 10 years old and do not provide all retail functions
• Additional Systems implemented in tactical fashion, so are not all compatible
• 300 plus interfaces to link systems together, but referential integrity lost as systems work differently
• Many Systems Duplicate Functionality: - • For example IPS and IMS • Leads to many systems being master for
same data types • Inability to control, allocate and audit spend
• Wide Technology Base • Not eliminating older technologies as
newer ones implemented • Increasing point to point interface burden
as new systems implemented • Many systems out of support • High resource requirement to maintain
systems, difficult to consolidate due to diverse nature of skill base
• Diminishing ROI • Many projects with increasing costs and
over-spend, reducing in returns, taking longer and longer to deliver with increasing risk of failure
• e.g. eFSA, Food Marging Browser • Many projects dropped at initiation as
business case show costs outweigh benefits
• e.g. POS to GL cash rec
Over 40 systems including eSFA, IPS, IMS, ePS, Dashboard, BankRec, FMB, GMB, MySpend etc…
Last strategic investment in mid-90s. About 12 main systems including GEAC, CFAR, SPA and FTP
Only way to regain control is to consolidate applications around a new strategic platform designed for retail, eliminating incompatibilities and consolidating systems, data and skill base
• Fin IT “run the business” figure is approx. £X+Y M pa
•£Y M to run mainframe •£X M to run distributed systems
• Original Mainframe spend unknown • Distributed project spend over 2002
to 2005 was about between £Z M pa
£1M pa
£4M pa
Very Fragmented Data • No referential Integrity • Inaccurate Data • Lack of trust in data by all users • Incomplete Picture • Inability to properly audit and reconcile e.g: -
• Till loss to Cash Position • AP to Asset Register • Food Margins
• Unkown positions e.g: - • Cash in tills • Inaccurate Stock Position
• Sub-optimal decision making • Increased resource requirement
Data
• More than 80 poorly integrated (53 core) Financial IT systems
• 12 core mainframe systems costing £1M pa to run • 41 core distributed systems costing £4M pa to run
• Over 300 Interfaces • About 150 Access DBs and 1000s of spreadsheets
• Client probably need less. For example: - • 1 Merchandising Procurement System, not 3 • 1 NMP/Purchasing, not 4 • 1 system processing expenses, not 5 • 1 system processing “card” purchasing, not 3 • 1 Master data system, not many • 1 Core Accounting system not 4 • 1 On-line Dashboard style system, not 5 • 1 MI/Reporting system, not many
Systems
• Forced tactical spend rather than strategic investment, leading to proliferation of distributed systems
• Silo project thinking separate from Business Strategy
• Systems not meeting customer requirements and the response has been to enhance current, or build new systems, rather than fix root causes
Causal Factors
• Current Constraints on the Business: • Impossible to change a single system to meet BU
requirements e.g: - •eSFA, Food Margin Browser
• Difficult for Finance to invest in IT as a result, as costs can quickly outweigh benefits e.g:-
• POS to GL cash reconcilliation • Constraints on Finance Transformation Programme:
• Needs a single point holistic solution in order to make a measurable difference to the business
• No easy integration method or integration tool to bring all data together to solve issues
Constraints
Client system problems contribute to the excessive amount of activity on gathering data and supporting systems
•Working with president and senior management team of two BAs •Creating outline strategy to support IT enabled business transformation on program of change to 2020
•Facilitating business decisions regarding ambition to standardise business processes and information
Supporting major business change program in two BAs Example 4: Business Operating Model
Sandvik IT 17
Business Process Standardization Low High
Deg
ree
of S
hare
d In
form
atio
n Lo
w
Hig
h
Coordination • Shared customer, products or suppliers • Impact on other business units transactions • Operationally unique business units • Autonomous business management • Business unit control over business process design • Shared customer/supplier/product data • Consensus processes for designing IT Infra-
structure services; IT application decisions made in business units
Operational models drives standardization strategy, different strategies can be applied at different organisational levels
Diversification • Few, if any, shared customers
or suppliers • Independent transactions • Operationally unique business units • Autonomous business management • Business unit control over business process
design • Few data standards across business units • Most IT decisions made within business units
Replication
• Few, if any, shared customers
• Operationally unique business units
• Independent transactions aggregated at a high level
• Autonomous business unit leaders with limited discretion over processes
• Centralized or federated control over business process design
• Standardized data definitions but data locally owned with some aggregation at corporate
• Centrally mandated IT Services
• Customers and suppliers may be local or global • Globally integrated business processes often
with support of enterprise systems • Business Units with similar or overlapping
operations • Centralized management often applying
functional, process, business units matrices
Unification
• High-level process owners design standardized processes
• Centrally mandated information • IT decisions made centrally
Enterprise Architecture as Strategy Harvard Business School Press
Rig / vehicle assembly
Engineered equipment assembly
Manufacturing (machining,
heat treatment)
Raw material (steel, carbide)
Transportation, installation,
commissioning
Transportation, installation,
commissioning
Distribution
Products A, B & C
Products D & E
Products F
Spare Parts
Configure/assemble -to-order
Engineer-to-order
Make-to-stock
Deliver stocked items
Example products
Manufacturing(machining,
heat treatment)
Raw material (steel, carbide) Transportation
Products G & H Mass customization
Commercial components
Machined components
Proprietary components
Distribution
Sales & Marketing
(Order, Deliver)
Sourcing (Source)
Buying (Buy)
What is the standardisation in the value streams?
18
Manufacturing (Engineer, Order, Plan, Make)
Distribution (Deliver)
XX
PA
ZZ
XX
YY
ZZ
YY
Installation, commissioning
Project management
Supplier selection and management
Outsourced manufacture &
assembly
Aftermarket Services (Service, Contract)
Forecast & Order
Equipment
Engineer-to-order Products I
YY
Supplier selection and management
Supplier selection and management
Supplier selection and management
Supplier selection and management
Supplier selection and management
Forecast & Order Parts
Forecast & Order Tools
Forecast & Order CC
Forecast & Order
Workshop & field service
Workshop & field service
Performance Contracts
Contracts
Inspection & service
Spare parts Supplier
selection and management