Using Business Architecture to Drive Business Services

David Baker Chief Architect, Diamond Management & Technology Consultants

david.baker@diamondconsultants.com

March 28, 2007

What you can expect to learn

A holistic service model for the enterprise Learn the different roles of technical services and business services Discover the impact your companys operating model has on the definition of services Explore the elements of a business architecture meta-model Learn how to use business architecture to identify business services Develop a strategy to engage your business counterparts in EA planning Use your EA blueprints to govern your service implementations Learn why an SOA business case is the wrong way to justify business services
Page 2 2007 Diamond.

But, arent you really talking about SOA?

(short answer) Yes, but

(long answer)

SOA is a very broad concept and, as such, services are certainly an important sub-topic. My objective is to describe how Business Architecture provides a way to document enterprise capabilities and the services that enable those capabilities.
I am going to try to NOT say SOA again, no promise though
Page 3 2007 Diamond.

There is a continuum from Business Services to Technology Services

Presentation: Describe how information is captured and presented to the user consistent with their role, function and level of authorization

Presentation Services
Business Focus
Page 4 2007 Diamond.

Business Services

Business: Contain the logic and context required to successfully execute a business process by leveraging other available services
Enterprise: Provide those business functions which are common to multiple processes and when executed produce a simple pass or fail response

Enterprise Services
Technology Focus

Data Services

Data: Access core data stores to retrieve or set data grouped into logical objects
Infrastructure Services

Infrastructure: Provide technical services that promote reuse of IT infrastructure

Example: Financial asset management company transfer agency function

Presentation Services Business Services
Account Set-up Capture Data

Enterprise Services
Apply Validation Edits Monetary Transaction Edits

Data Services
Account Master Get Account Information Set Account Information Get Transaction Info Set Transaction Info Product Master Get Product Information Dealer Master Get Dealer Information

Account Maintenance

Change of Trustee Display Controls

Purchase

Party Set-up

Redemption

Party Maintenance Display Results Search

Settlement

...
Workflow Repository Get Routing Information Get Workflow Info Set Alert Timing Info

Generate Letter

Transaction

Workflow

Infrastructure Services

Conceptual Context Diagram - Not Exhaustive

Page 5 2007 Diamond.

There is an art to distinguishing Business Services from Enterprise Services

Business vs. Enterprise Services Leading Questions Business Initiated Activity Is the service something that would be a reason a shareholder would call in? Yes, Business Service Can the service be incorporated into the business driven processes? Yes, Enterprise Service

Enterprise Services

Fulfills the spirit of a majority of the Enterprise Service led questions.

Reusability In detailing the business processes, did the same activity, function or task emerge repeatedly? Yes, Enterprise Service Did a process or function appear to be an outlier, unrelated to others? Yes, Business Service
Scale Do future state scenarios such as a new product indicate an explosion in a particular type of business service? - Yes, Enterprise Service Would a service be a candidate for exposure through a new channel? Yes, Business Service Localization Would items like regulatory changes require updates to a large number of services? Yes, Enterprise Service

Fulfills the spirit of a majority of the Business Service led questions.

Business Services

Page 6 2007 Diamond.

Infrastructure services contain the distributed, shared enterprise services for technical infrastructure
Five Zone Service Model Infrastructure Service Examples

Messaging
Persistence
Five Zone Service Model

Security Directory services Business rules Workflow engine

Page 7 2007 Diamond.

These are some likely Infrastructure Services for our Financial Services example
Presentation Services Business Services Enterprise Services
Apply Validation Edits Sales Web Mutual Fund Transaction

Data Services
Account Master Get Account Information Set Account Information Get Transaction Info Set Transaction Info Product Master Get Product Information

Purchase

Settlement

Infrastructure Services Log Fail

Security Services e.g. SiteMinder

Messaging e.g. MQ

Transaction Broker e.g. WebSphere Business Integration

Product BoR

EAI Hub

Page 8 2007 Diamond.

How do you identify (and plan for) business services?

High

Coordination
Shared customers with highly customized products, services, and features
Business Process Integration

Unification
Consistent product design and globally integrated processes for all customers
Focus: Centrally designed and managed

Focus: Integration capabilities

Diversification
Few shared customers with highly variable product design
Focus: Localized development speed and autonomy

Replication
Few shared customers with operationally similar product units
Focus: Replication of standard capabilities and provision of APIs
High

Low
Page 9

Business Process Standardization

Source: Jeanne Ross (MIT CISR) - Enterprise Architecture as Strategy, Diamond.

2007 Diamond.

The choice of operating model is reflected in the level of service standardization

High
Prsntn Svcs

Coordination
Business Services Enterprise Services Data Services Prsntn Svcs

Unification
Business Services Enterprise Services Data Services

Business Process Integration

Infrastructure Services

Infrastructure Services

Diversification
Prsntn Svcs Business Services Enterprise Services Data Services Prsntn Svcs

Replication
Business Services Enterprise Services Data Services

Infrastructure Services

Infrastructure Services

Low
Page 10 2007 Diamond.

Business Process Standardization

Not Std Partial Standard

High

Identification of operating model (and therefore services) must happen in the planning stage
Business Strategic Planning IT Strategic Planning Release Planning
(Portfolio Mgmt)

Project Execution
(SDLC)

Business Operations

Use enterprise and business unit direction and goals to drive IT plans

Prioritize the allocation of IT resources to achieve business strategy, in alignment with enterprise architecture
Project Project

Develop projects that support businesses annual and strategic plans

Run the business

Portfolio 1 Blueprints
Enterprise Blueprints Portfolio 2 Blueprints Portfolio 3 Blueprints Filter

Project Project Project

Multi-Year Plan
Page 11 2007 Diamond.

Budget Cycle

Project Cycle

Continuous

A business-capability driven blueprint is integral to planning for business services

Business Architecture
Business strategy and capabilities are key to identifying the operational model
Business Strategy Business Operations

Desired Business Capabilities

Functional decomposition is key to identifying top level Business Services

Solution Architecture
Service Model Information Model System Model Infrastructure Model Interface Model

Planning Building

Technology Architecture
Data Models App Models Development Models Execution Models Operations Models Network Models Security Models

Page 12 2007 Diamond.

Engage the Business by documenting, and driving additional detail into, the business strategy
Strategic Business Architecture

MISSION

A comprehensive statement covering the major functions and operations that the program addresses An inspirational, forward-thinking view of what the program wants to achieve The top priorities that would achieve the vision A set of realistic outcomes tracked by performance indicators that collectively support goal attainment

KEY DRIVERS & GUIDING PRINCIPLES

VISION

GOAL GOAL GOAL GOAL

OBJECTIVE
PERFORMANCE INDICATORS

CAPABILITIES

A description of what the business needs to do to achieve the objectives A description of how the capabilities should be implemented

REQUIREMENTS

Page 13 2007 Diamond.

Engage the Business by documenting, and avoiding excessive detail in, the business operations
Operational Business Architecture
BUSINESS CONTEXT
Level 0 Business Architecture

Business Functional Diagrams

FUNCTION

ORGANIZATION

SUB-FUNCTION

STAKEHOLDER

LOCATION

Business Process Diagrams

Level 1 Process Design

PROCESS / SUB-PROCESS

Process design usually done AFTER a blueprint exists, as part of a funded project.

TASK

Page 14 2007 Diamond.

Example: Our Transfer Agency example model expressed as a business architecture

Business Context

Business Architecture (partial)

Transfer Agency

Level 0 Functions == Business & Enterprise Services

Account Set-up Party Set-up Transaction

Purchase

Generate Letter

Settlement

Redemption

Apply Validation Edits

Monetary Txn Edits

Workflow

Solution Architecture (partial)

Master Data == Data Services

Account Master Product

Infrastructure Services
Rules Engine Workflow Engine

Page 15 2007 Diamond.

A business architecture helps avoid common pitfalls when starting a service based architecture
Start with operational model and capabilities, not requirements
Requirements are good for implementation but bog down the planning process Capabilities provide a manageable level of detail for prioritization and release planning

Start with functions, not with processes

Process engineering requires a tremendous amount of detail Functions allow coarse-grained prioritization and justification for follow-on detailed process work

Hold off on reference architectures until a couple blueprints exist

Ensure you are working on the highest priority business and enterprise services
Page 16 2007 Diamond.

Business services require greater management maturity than technical services

Infrastructure Services Such as:

- Single sign-on - Logging - Standard ETL - Performance - Messaging Instrumentation

Data Services
- Create / Read / Update / Delete Master Data

Business & Enterprise Services

- Business process support - Enterprise-wide process support

SOA Management Maturity

Technology Services

Business Services

Page 17 2007 Diamond.

 and increased complexity of the underpinning technology

Level 3: Business & Enterprise Services
Service Registry Version Resolution Metadata Mgmt Extensibility Service Aggregation Process Mgmt

Level 2: Integration and Data Services

Translation Transformation Request Routing Transaction Mgmt Security Communication Quality of Infrastructure Service Monitoring Management

Level 1: Shared Technology Services

Error Handling Logging Security Instrumentation Data Access Robust APIs

Shared technology services centrally implement enabling technologies and tools that can be used by all other services and channels. These include but are not limited to workflow engines, translation services, business rules, and communication.
Page 18 2007 Diamond.

Integration services enable the automatic synchronization of data between operational systems using a standardized application integration approach. Integration services also provide the foundational architecture for delivering business services.

A business service is an implementation of a unit of work that is well defined, self contained and does not depend on the context or state of other services. A business service provides a distinct function and has the following technical characteristics: discoverable and dynamically bound self-contained and modular stress interoperability loosely coupled network-addressable interface

MIT Center for Information Systems Research (CISR) maturity model

Capabilities build on other capabilities Ongoing service delivery is the required foundation for all other capabilities Expecting agility without having the other capabilities hurts performance

Page 19

Source: Adapted from IT Leadership and Agility, George Westerman, MIT CSR

2007 Diamond.

CIO/CxO relationship and Governance are key components enabling business services
How will SOA impact your IT operations? Similar impacts as moving to shared platforms (servers, etc) Do you have the right skills to manage SOA? Are your systems meeting expectations?
How should your IT delivery organization change to support SOA How to economically deliver enterprise-wide services Generating line of business (LOB) blueprints and business capability roadmaps identifies Business and Enterprise services How do you use architecture governance to ensure economical re-use? How do you build the right service, at the right time, for the right cost? How do you use Business Architecture to establish needed CxO / CIO rapport and trust? How do you transform IT to understand the desired business capabilities?

Service Management

Project Delivery

Governance / Alignment

CIO / CxO Relationship

Page 20 2007 Diamond.

Develop a strategy to engage the business in service identification*

IT must have a foundation of trust with the business
Manage IT assets very well (high uptime, low unit cost) Help the business provide effective IT oversight (financial transparency, performance management, etc) Build and continuously enhance credibility and trust

Importance of a unified IT operating model

Establish clear business roles in planning, building, and running IT

Business drives the need (and owns some services)

Engage the business in THEIR priorities, model solutions using business architecture Establish a business function to own business/enterprise services

Services cannot come before governance, project delivery, and these relationships
* Adapted from: Business Agility and IT Capabilities, George Westerman, MIT CSR from an analysis of 1400 responses to the Fall 2004 Gartner CIO survey

Page 21

2007 Diamond.

Services should be integrated with existing EA governance mechanisms

Service governance should be integrated into existing EA governance
Define a centralized application and architecture design review board Enforce consistent standards across development frameworks Enforce consistent implementation across applications Integrate review process with the IT operating model (plan, build, run) Define a centralized operations and architecture design review board

Service specific technologies can assist the governance activities

Share future state models via Enterprise Architecture repository Service repository Run-time monitoring

Page 22 2007 Diamond.

Neither business nor technical is a SOA business case

1st Business Domain 2nd Business Domain Nth Business Domain

Engage the Business

Business-driven business cases for business services

We need services!
1st Business Services 2nd Business Services

Build services

Nth Business Services

Build and deliver Infrastructure services

Page 23

Cost-reduction / avoidance business case for infrastructure services

2007 Diamond.

Key Takeaways
Adopt a holistic model for service identification
Separate technical infrastructure services from business services

Use Business Architecture methods to identify business services

Engage the business to determine the prevalent operating model Helpful to identify business process specific services separate from enterprise-wide shared business services

Realize the level of maturity required to reach business service delivery

Ability to build and operate services Ability to govern identification, development, and use of services IT must have a foundation of trust with the business

Page 24 2007 Diamond.

Thank You

Questions?

Page 25 2007 Diamond.