Applying Enterprise Architecture

David Woelfle Enterprise Architect CTO, EDS Canada

/ June 2007 / Copyright EDS Canada

Enterprise Architecture
Enterprise Architecture is viewed variously as either the Holy Grail of computing and a critical component in driving the strategy of the Enterprise, or it is perceived as an expensive boondoggle driven by ivory tower academics.

How do you effectively apply Enterprise Architecture to improve organizational results? This session will discuss how several large organizations have achieved significant business results through the proper application of architecture principles and strategies.

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Agenda
Examples will highlight: How establishing the architecture early in the project cycle can reduce project costs and help control scope How the application of architecture can reduce the cost of operations in the mid to long term How when done badly architecture can have catastrophic consequences for the enterprise
Applying Enterprise Architecture
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What is Enterprise Architecture?

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An Architecture Example
Data Sources Operationa l Data
Data Marts

Data Subscriptions

Data Warehouse

Data Distribution

Analytics Support

Information Delivery
Information Consumers

ETL
D W
External Data

ETL

Cubes

Metadata Management

Source Applications

Transformations

Data Models

Business Rules

Administration/Stewardship

Data Management Services Systems Management

Organizational Framework

Data Normalization Business Rules Mgmt Process Controls & Analytics Processing Statistics Information Transport Routing Control Security & Administration Plan Monitor Tune Audit Backup / Recover Training Operation Security Support SSO

Administration

Development

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Presentation / Desktop Access Presentation

OD S

Applications / Tools

Staging DB

Zachman Graphic

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EDS Rightstep
Business Strategy
Business Vision Industry Architecture Templates, Current Business Business Objectives Business and Technology Trends, and IT Operating Principles and Market Conditions Environment Business Drivers

Business Context and Direction

Performance Gaps Business Drivers for Change

Business Processes
Transition Strategies IT Gaps Individual Programs, Decisions, and Change Management

Systems Management

Information Architecture

Application Architecture

Approach Initiatives Value Schedule

IT Direction
IT Objectives Guiding Principles IT Standards IT Selection Infrastructure Architecture

Enterprise Architecture (Target)

Current Environment

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Bottom Line: The Value of Architecture

Paradoxically, enterprise architecture has no intrinsic value, despite the fact that the information coursing through it is profoundly valuable.

The value of information is determined by the competitive advantage gained through its use.
Source: Meta Group Enterprise Architecture Strategies

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Challenges of Enterprise Architecture?

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What comes first?

Single system? Data Model? Infrastructure? WAN? Process Model?

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Complexity
Regulatory Body

Lender/Leasing Company
Collateral Reports File of Loan Data Request for Insurance Notices Insurance Notices Escrow & Insurance Policy Request for Insurance Coverage Request for Insurance Coverage Policy Information Un-identified Notices Verification of Coverage Request for Coverage Insurance Correspondence Invoice Billing Interest

Endorse Renewal Cancel

Tracker

Purchase

Billing Notice Payment

Consumer
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Cost
High cost Lots of manpower Lots of time Lots of delays

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Management buy-in

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Linking to the business

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Some living examples of Enterprise Architecture Applied

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Applying Architecture early improves results

Example #1

Challenge:
Canadian financial institution needed a new web site for direct traded brokerage accounts Wanted to be operational in 3 months Recognized a need for ongoing enhancements and releases to meet all of the functional objectives

Business Objectives:
Contain cost Fast realization Steady stream of new functionality over time (3 year roadmap) Flexibility
Applying Enterprise Architecture
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How was Architecture applied?

Defined overall application and infrastructure architecture first Exercise took the team just 3 weeks Focus was on defining:

Logical boundaries of each section Cross-functional services (identity, authorization, logging, audit)

Isolating each of the major trading product families (equity, funds, bonds, cash accounts)

Simplifying linkages to key other bank applications by isolating communications into one set of components (today we would have used an EAI like Biztalk, but then ..)

Applying Enterprise Architecture

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Results
Logical architecture still intact 10 years later
Many functions updates within their elements EAI tool introduced 5 years after design with only minor modifications

Initial site up ahead of schedule and under budget

Improved speed to market of new services

Release every 2 to 3 months Critical functions identified by early users added as add-on to first upgrade release with few issues
Applying Enterprise Architecture
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Architecture done right means.

Better requirements management

Scope control

Alignment of solution to business requirements early

Better management of release map

Reduced complexity

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Good architecture can drive savings

Example #2

Challenge:
Major global manufacturer needed to overhaul engineering and design practices globally Core was going to be new tool sets for CAD / CAE / Simulation / CIE

Business Objectives:
Reduce model development time from 60 months to 24 to 30 months Reduce development cost for a new model by 30% and a model revision by 50% Shift to Virtual development methods and away from physical testing / design paradigms
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How was architecture employed?

First steps:
Architecture scope was defined to align with the corporate process model Functional work task decomposition identified the major subprocesses that needed to be addressed Cost analysis identified the heavy hitters in terms of cost benefit against functional area

Architect applied:
Functional decomposition used to build logical architecture model Application architecture developed against the logical architecture to align application acquisitions and reduce functional overlap Initial transformation projects mapped to identify time to benefit
Applying Enterprise Architecture
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Structural Challenges
Global Effort

Three major engineering centres, five testing facilities, 24 major outsourced providers of services, 4 continents

Resistance to change

After all engineers are smarter than anybody else, right.

Funding

Project had to be self-funding after the first 12 months, and provide payback in less than 30 months

Applying Enterprise Architecture

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Results
Performance improvement
Engineering / design operations costs reduced by 1/3 in just two years. Project payback in 18 months Design cycle time reduced to 36 months after 18 months, and 30 months after 36 months Product quality improvement of over 15% (measured by reductions in defects per thousand units of output)
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How did architecture help?

Provided the common framework for discussion Divided the project into logical working elements that allowed for rapid ramp-up of activity ramp Well defined interfaces between elements provided assurance of functionality while elements were being developed / evaluated separately Costs contained by constraining choices / strategies thanks to pre-defined framework
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When Architecture goes wrong ..

Example #3 North American division of a large global manufacturer needed a new ERP solution Didnt have time for a full architecture Decided to develop the architecture as each business function of the ERP was implemented Phase I (classic ERP approach) was finance and administration Meanwhile the overall business was redeveloping their entire process model Neither the PMO, nor the architect caught the developing conflict
Applying Enterprise Architecture
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And the loser is ..

Project was two years late and double the projected budget

(55 Million up to 120 Million)

Multiple key requirements missed

Initial scope missed linkages to key corporate processes Financial activities that affected other areas such as purchasing were missed

2nd release required a complete rework of the solution increasing cost of that effort from 25 Million to 45 Million

Scope was significantly changed 2/3s of the business processes were reworked No new functionality in the 2nd release (missed 30 original planned enhancements)

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Some suggested approaches.

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Start with creating / choosing a framework

A basic framework to divide the overall architecture into logical units can help with:

Establishing boundaries Definitions Communication Limiting duplication

A framework should:

Define shared elements and services Help with prioritization Be simple

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An example ..

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Then divide and conquer

You cant do it all at once Chunk it up and pick areas to deal with first Assign different projects key elements to work on, especially for shared services if possible Recognize that:

This effort takes the average organization 5 to 10 years Measures success mostly by long term cost avoidance

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Policies and Standards are a key foundation

If you have good policies and standards you will:

Limit variability Reduce cost Simply architecture Reduce choice

Success in this space requires strong organizational support Pick your battles carefully Infrastructure (hardware, OS, network) is often the easiest place to start to gain success

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Prioritize Pain First or Hot Project First

Two ways to begin Pain First or Hot Project First Pain first

What is your most significant pain point in the organization Tackle it to reduce the pain and demonstrate success Benefit High Payoff Risk High visibility Fail and you are done on your first effort

Hot Project first

Addresses the organizations first priority Brings value in multiple parts of your Enterprise Architecture Benefit Puts new work in the right framework Risk Slowing down the Hot Project

Applying Enterprise Architecture

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EDS 33 Yonge Street Toronto, ON M5E 1G4 416-814-4571 David.Woelfle@eds.com or eds.com

EDS and the EDS logo are registered trademarks of Electronic Data Systems Corporation. EDS is an equal opportunity employer and values the diversity of its people. 2007 Electronic Data Systems Corporation. All rights reserved.

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/ June 2007 / Copyright EDS Canada