Maximising The Value and Benefits of Enterprise Architecture

Maximising The Value and Benefits of Enterprise Architecture

Alan McSweeney

December 4, 2010 2

Objective

• To explain the benefits of implementing Enterprise Architecture and to identify how the value of Enterprise Architecture can be measured

December 4, 2010 3

Agenda

• Enterprise Architecture

• Issues in IT

• Why Enterprise Architecture

• Enterprise Architecture Measurement Framework

• Enterprise Architecture Value Measurement Programme

December 4, 2010 4

Basis for Enterprise Architecture

• IT systems are:− Unmanageably complex and costly to maintain

− Hindering the organisation's ability to respond to business and economic changing environment

− Not integrated

• Mission-critical information consistently out-of-date and/or actually incorrect

• A culture of distrust between the business and technology functions of the organisation

• Unmanaged complexity in IT landscape leads to greater cost and less flexibility− Issues include lack of standards, redundant applications, multiple platforms, and

inconsistent data

− Enterprise architecture defines a set of tools and methods to address this complexity

− While benefits of Enterprise Architecture are generally understood, measuring value has been a challenge

• No easy answer but Enterprise Architecture approach is really worth considering as a means of addressing these issues systematically

December 4, 2010 5

Enterprise Architecture Is/Does …

• What the organisation does today in terms of IT

• What the organisation wants to do in the future in terms of IT

• The Information Technology assets implemented today

• The Information Technology assets the organisation needs to have in the future to best deliver its business goals

• Defines the framework outlining the vision for systems and technology for the organisation

• Takes the business strategy and translates it into effective change of the organisation

• Manages the Information Technology change roadmap

• Defines a set of overall principles, a future state vision and an implementation and transformation plan

• Includes standards definitions and strategies for services

December 4, 2010 6

Scope and Elements of Enterprise Architecture

Enterprise Architecture

BusinessArchitecture

Software Architecture

EnterpriseInformationTechnologyArchitecture

InformationArchitecture

Enterprise IT Information Systems Architecture

Enterprise ITTechnologyInfrastructure Architecture

Network and Communications Architecture

Storage Architecture

Enterprise Security Architecture

Enterprise ArchitectureGovernance

SolutionArchitecture

December 4, 2010 7

Key Messages Relating to Enterprise Architecture

• IT-business alignment has never been so important

• Alignment must be pursued in the context of understanding business processes and priorities

• Service-orientation is not just for applications

• Service contracts are not just about function: they encapsulate and communicate business priorities to IT delivery organisations

• Enterprise architecture needs to be more inclusive, sophisticated, flexible and integrated

• IT governance models must take all this into account

December 4, 2010 8

IT Too Often Fails to Support Changes Effectively

• Technology integration is costly, risky and complicated

• Information is everywhere but getting access to the right information at the right time is very difficult

• Modifying system behaviour takes too long and changes are difficult to communicate and implement effectively

• Much of IT system and operations expenditure is bloated and fixed where operations run with excess redundant capacity

• IT seen as a cost centre and not a source of business value

December 4, 2010 9

Business View of IT

• IT is viewed by the business as being

• Expensive

• Not connected with business strategy and operations

• Unresponsive to the changing needs of business− Viewed as a critical issue as business agility and responsiveness are essential

for competitiveness

• Undefined and unclear as a business asset− In terms of financial cost and value

− Return on investment and value for money from IT is relatively poor

− The capability the asset should deliver to the business

• Not delivering its promises

• Business change projects cost more and deliver less value than expected or promised

December 4, 2010 10

Causes of Business View of IT

• Business applications tend to be implemented on a project by project basis for specific purposes without overall context

• Project benefits and success have been measured on specific project costs, value and time to market without measuring the long term enterprise-wide cost and value

• Average 75% of total IT budget on RTB operations and 25% on new project investment

• Technology innovation has tended to deliver specific short-term benefits but in the long term of making things worse

• Just look at previous technology innovations such as client/server and 4GLs

December 4, 2010 11

Business Pressures on Information Technology

Business andTechnology

Changes

Regulation

ConsolidationChallengingEconomic

Circumstances

ServiceFocus

Transparency

Globalisation

InformationTechnology

December 4, 2010 12

Business Pressures are Driving Business and IT Change

• Globalisation− Customers, partners, suppliers and greater competition− Connectedness driving value chains

• Transparency− Industry regulations, consumer pressure and competition driving openness

• Service Focus− Differentiation and shareholder value increasingly derived from service experience

• Challenging Economic Circumstances− Need to cut costs and demonstrate real savings− Justify technology investments

• Consolidation− Mergers, acquisitions, takeovers of failing companies

• Regulation− Increased regulation and governance - business is turning to IT to help and IT struggling to respond

in many cases

• Business and Technology Changes− IT becoming commoditised - growth of standards-based technology means that proprietary

solutions provide less differentiation− Speed of technology change− Outsourcing where the right outsourcing decisions require an understanding of how systems

contribute to the business

December 4, 2010 13

Why Enterprise Architecture

• Enterprise Architecture is part of a continuum and not a project− Emerging technologies influence direction of architecture

− Must be subject to change management and governance

− Enterprise Architecture and IT governance should be considered together

• Principles of architecture should override IT hype and transient technology − SOA may be dormant but services and an architectural component continues

− Cloud computing is just another step along the IT/Architectural evolution and another perspective on the future state

• Need better understanding of integration of enterprise and solutions architecture

• Enterprise Architecture is about achieving a common language between business and IT

• Enterprise Architecture driven out of the business strategy provides the enterprise with the highest degree of alignment between the business and IT

• The concept of Enterprise Architecture has expanded well beyond the traditional notion of technology architecture− Now the architecture of the whole enterprise

December 4, 2010 14

Enterprise Architecture - Achieving a Common Language Between Business and IT

• IT-business alignment requires collaboration between the business and the IT organisation to align investment and delivery with business goals and to manage business and technology change

• A common, agreed representation of business activity and goals

• A common, agreed view of how current and future IT provides structured support to the business

• Key requirements and deliverables:

− Investment prioritised in terms of business need

− Systems that deliver value to the business

− Clear direction from the business about focus, strategy

− Collaborative approach to implementing business change

December 4, 2010 15

Enterprise Architecture and Strategy

• Provides the fundamental technology and process structure for an IT strategy

• Provides a strategic context for the evolution of enterprise IT systems in response to the constantly changing needs of the business environment

• Allows individual business units to innovate safely in their pursuit of competitive advantage within the context of an integrated IT strategy

• Enterprise Architecture is designed to ensure alignment between the business and IT strategies, operating model, guiding principles, and the software development projects and service delivery

• By taking an enterprise-wide, perspective across all the business services, business units, business processes, information, applications and technology, Enterprise Architecture ensures the enterprise goals and objectives are addressed as a whole way across all the system acquisition/application development projects and their deployment into production

• Organisations use a business strategy driven architecture approach that focuses on translating the key components of the business strategy into a future state vision and an architecture road map they can implement

• Enterprise architecture is integrated with other strategic planning disciplines, such as programme/project and application portfolio and management

• Enterprise Architecture ensures that the long-term vision of the business is preserved as the enterprise builds new business capabilities and improves on old ones

December 4, 2010 16

Why Manage Enterprise Architecture?

Unmanaged Complexity in IT

Landscape Increased Cost

Reduced Flexibility

Delays in Delivering Changes

Duplication in Resources to

Develop, Operate and Maintain

Business Systems

Cannot to Exploit Economies of Loading and

Scale

Longer Design, Build, Test and Delivery Time

Complexity Causes

Difficulties and Uncertainties

Leads To ..

… Thus Negatively

Impacting on Business

Performance …

December 4, 2010 17

Why Manage Enterprise Architecture?


Provides a Set of Tools and Methods

Need to Measure Effectiveness of

Enterprise Architecture In

Order to Maximise Business Value

Provides…

… To Address This Complexity …

But

December 4, 2010 18

Value of Enterprise Architecture

Appropriate and Effective


… Promotes Actions and

Decisions That …

Align Information Technology Plans and Investments with Business Priorities and Requirements

Result in More Integrated Operations Responsive to Customer and Business Requirements

Promote a More Efficient and Effective IT Infrastructure

Facilitate Cross-Organisational Sharing of Enterprise Information

Recognise Innovations and Best Practices Across the Enterprise

Ensure Traceability of Decisions Back to Principles and Rules

December 4, 2010 19

Enterprise Architecture Development and Implementation Process

Architecture Change

Management

Implementation

Governance

Migration Planning

Opportunities and Solutions

Technology Architecture

Information Systems

Architecture

Business Architecture

Architecture Vision

Requirements Management

Data Architecture

Solutions and Application Architecture

December 4, 2010 20

Key Elements/Subsets of Enterprise Architecture

• There are four key architectural subsets of an overall enterprise architecture

− Business/Business Process Architecture - this defines the business strategy, governance, organisation, and key business processes

− Data and Information Architecture - this describes the structure of an organisation's logical and physical data assets and data management resources

− Solutions/Applications Architecture - this kind of architecture provides a blueprint for the individual application systems to be deployed, their interactions, and their relationships to the core business processes of the organisation

− Technology and Infrastructure Architecture - this describes the logical software and hardware capabilities that are required to support the deployment of business, data, and application services and includes IT infrastructure, middleware, networks, communications, processing, standards, etc.

December 4, 2010 21

Issues in Key Elements/Subsets of Enterprise Architecture

• High variability and lack of standardisation across business units (such as ERP templates), driven by changes in business strategy, governance, organisation and process

Business and Business Process

Architecture

• Inconsistent data definitions, multiple databases, releases and configurations which result in duplication of licenses, duplicate and inconsistent information, complexity in testing

Data and Information Architecture

• Multiple vendors, multiple instances and versions which add complexity in procurement, development and release management, resulting in higher costs and longer time to market

Solutions and Applications Architecture

• Multiple operating environments, multiple hardware vendors and types, leading to higher maintenance and personnel costs, greater instability and time-to-fix

Technology and Infrastructure Architecture

December 4, 2010 22

Benefits of Enterprise Architecture

• Align IT and business for planning and execution purposes

• Optimise resources - technology, people and processes

• Increase business interoperability

• Reduce complexity in IT infrastructure

• Improve business agility to support dynamic change

• Drive re-usability of architecture models and best practices

• Streamline informed decision making

• Standardise IT for cost effective delivery of services

• Eliminate duplication and redundancy and reduce cost of ownership and return on investment

• Reduce risks for future investment

• Faster, simpler and cheaper procurement

• Manage information/data and knowledge as a corporate asset

• Manage change based on a clear understanding of its impact

December 4, 2010 23

Risks of No Enterprise Architecture

• Inability to rapidly respond to challenges driven by business changes

• Lack of commonality and consistency due to the absence of standards

• Lack of focus on enterprise requirements

• Lack of common direction and savings due to synergies

• Incomplete visibility of the current and future target enterprise architecture vision

• Inability to predict impacts of future changes

• Increased gaps and architecture conflicts

• Dilution and dissipation of critical information and knowledge of the deployed solutions

• Rigidity, redundancy and lack of scalability and flexibility in the deployed solutions

• Lack of integration, compatibility and interoperability between applications

• Complex, fragile and costly interfaces between applications

• Fragmented and ad hoc software development driven by a tactical and reactive approach

December 4, 2010 24

Issues in Developing Enterprise Architecture

• Issue 1 - Concentrate on the Plan

− Focus too intently on analysis and strategy

−Avoid committing to implementing solutions

−Architecting inhibits value delivery

• Issue 2 - Jumping to the Solution

− Engineering solutions and data implementation

− Technology has difficulty aligning with enterprise

− Reinforces gap between business and IT

• Challenge is to balance evolving strategy, goals, constraints with technology solutions

December 4, 2010 25

Justifying Investment in Enterprise Architecture

Investment in Enterprise

Architecture

Different Investment Approaches

Needed Across Enterprise

Architecture

Longer Term Payback than

Other IT Investments

Reasons for Technical

Decisions Difficult to Communicate

… Involves Challenges …

Impact of Investment in

Enterprise Architecture Difficult to Measure

December 4, 2010 26

Risks Inherent Investment in Enterprise Architecture

�� Enterprise Architecture Investment Spectrum ��

Investment in Enterprise

Architecture is Sufficient to Deliver

Results Without Imposing Unnecessary

Restrictions or Overhead

Too Much Means Enterprise

Architecture Inhibits Flexibility and Imposes Too

Many Constraints -IT Becomes Inefficient

Too Little or On Wrong Areas Means

Operating Costs Increase as

Architecture is Too Complex, Ineffective, Old and Expensive to Operate and Support

�� “Goldilocks” Zone ��

December 4, 2010 27

Enterprise Architecture and Enterprise Architecture Management

Defines a framework outlining the vision for

systems and technology for an organisation

Defines a set of overall principles, a future state

vision and a transformation plan

Include standards definitions and strategies for

individual IT services

Provides the models and practices for defining,

planning and managing the business and IT capabilities

Includes business, data, applications and technology models and principles that support assessments and

investment trade-off decisions, as well as tactical,

project-level designs and decisions

Enterprise ArchitectureEnterprise Architecture

Management

December 4, 2010 28

Relationship Between EA Implementation and Operation Components



Implementation and Operation

Enterprise Architecture Management


Function/ Capability

Function Develops

EA

EAM Measures and Manages the Extent and Operation of the EA and

Provides Governance

Function Implements

EA

December 4, 2010 29

Outcomes of Effective Enterprise Architecture Implementation and Operation

• Specification application architecture requirements

• Definition of architecture methodology

• Standardisation of information elements shared between systems

• Modeling of information relationships and lifecycles

• Deployment integration infrastructure

• Standardisation of hardware and core software platforms

• Building of reusable application components

December 4, 2010 30

Enterprise Architecture Linked to Overall Business Strategy

• Enterprise Architecture aligns business strategy, business processes and IT and provides governance to ensure business value and competitive advantage is delivered

• Enterprise Architecture creates alignment, consistency and unity between objectives at various levels

Business Objectives

BusinessOperational

Model

EnterpriseArchitecture

SolutionDelivery

ServiceDelivery

Business Processes

Business Systems

ProjectArchitecture

DomainArchitecture

Business Strategy

December 4, 2010 31

Enterprise, Domain and Project Architectures

• Enterprise Architecture defines and manages overall organisation architecture

• Domain Architecture(s) are subsets of Enterprise Architecture to enable individual business unit/domain objectives and targets to be met

• Project Architecture(s) enable project level objectives to be met


Project Architecture

DomainArchitecture

Overall Business

Strategy and Objectives

Individual Business

Unit Objectives

Enabling IT Projects

Enabling IT Projects

December 4, 2010 32

Enterprise Architecture Capability

• The function that enables an organisation to create, adapt, enforce and develop enterprise architecture− Equally a part of the business as it is part of IT

− Role is as much about controlling and focusing IT expenditure as it is about identifying necessary change

• Ensures that the IT landscape is aligned to the business vision and continues to be aligned to the business strategy and operational needs

• Ensures that IT solutions can continuously react to the changing needs of the business

• Ensures that the business and financial case for change is made

December 4, 2010 33

Subsets of Overall Enterprise Architecture


Architecture

Data andInformationArchitecture

ApplicationAnd SolutionArchitecture

Technology andInfrastructureArchitecture

December 4, 2010 34

Layers of Enterprise Architecture


Architecture

Data and Information Architecture

Solutions and Applications Architecture

Technology and Infrastructure Architecture

ConceptualView DefinesWhat IsRequired

LogicalView HowIt Should BeImplemented

PhysicalView DefinesWhat Should BeImplemented

Overall Enterprise Architecture Context, Security, Governance

Business and Shared Services

Business ProcessesDesigns

Business Processes

Information Services

Data Sources, Targets and

Flows

Database and Message Designs

Application Designs

Business Applications

Application Designs,

Specifications

Overall Network and

Infrastructure Design

InfrastructureServices and Components

Technical Designs and

Specifications

December 4, 2010 35

Enterprise Architecture Management

• Enterprise Architecture needs be a guided strategy that is aligned with the needs of the business

• Enterprise Architecture Capability enables an organisation to create, adapt, enforce, and develop its technical architecture

• Enterprise Architecture Management provides a means to measure the effectiveness of Enterprise Architecture and assist organisations increase business value delivered by IT systems

• Enterprise Architecture Management is a capacity rather than a programme or an end state architecture

• Enterprise Architecture Management provides a capability model with maturity levels for an organisation to achieve desired level of Enterprise Architecture maturity and value

• Enterprise Architecture Management provides a systematic coherent approach to defining, planning, and measuring an organisation's IT assets over time

December 4, 2010 36

Why Invest in Enterprise Architecture

Reduced IT Costs

Increased Business

Value

Solutions will be delivered at lower

implementation and operational costs

IT projects will have a greater success –

delivered on time, on budget and to user

requirements – reducing cost through avoidance

of rework

Enable faster response to business changes and new demands at lower

cost

Enable faster and easier collaboration through application and data

integration

Increased Success in Solution Delivery

Reduced IT Costs

Increase Use of IT

Enable Greater Business

Agility and Flexibility

December 4, 2010 37

Why Invest in Enterprise Architecture

• Business cannot understand why relatively straightforward business changes are costly, risky and slow to implement

• Run The Business improvements and Change The Business initiatives are restrained or prevented by the IT function because to the delay and high cost of implementing changes

• Lack of Enterprise Architecture means operational and support costs of solutions are kept high− Reduces budget available to be used elsewhere

• Situation worsened by projects attempting to deliver in an isolated fashion to bypass inhibitors resulting in further constraints for subsequent projects in the medium term

Solution Implementation

Costs

Post Implementation Costs – Support,

Operation

Solution Lifecycle Costs

December 4, 2010 38

What Manage Enterprise Architecture Value?

• Understand the current state of Enterprise Architecture − Create an accurate view of the current capabilities

− Define the activities to be worked on in partnership with the business

− Create a flexible Enterprise Architecture framework that will govern future initiatives

• Validate Opportunities to Create Business Value− Define the initiatives that will create the most value

− Define a realistic and achievable set of objectives

− Define value measurement to justify commitment and investment

• Develop a a Flexible Initiative and Project Portfolio− Define the set of initiatives and projects that achieve objectives

− Positively vet programmes and projects for value

− Create programmes of work that are justified, measured and managed for value

• Recognise that Enterprise Architecture is strategic rather than tactical− Requires the participation in partnership of business and IT

− Reach of Enterprise Architecture may extend beyond the organisation

December 4, 2010 39

Framework for Enterprise Architecture Management

• Framework provides a means for assessing the Enterprise Architecture maturity level within an organisation

• Can be used to achieve a target level of organisational Enterprise Architecture maturity and therefore value

• Provides a means for continuously assessing and adjusting Enterprise Architecture efforts

• Development of Enterprise Architecture needs be a focussed and managed strategy aligned with the business

December 4, 2010 40

Using Enterprise Architecture Management Framework

• Define the scope and role of Enterprise Architecture and its management within your organisation

• Understand your current capability maturity level

• Systematically develop and manage key capabilities for effective and appropriate enterprise architecture management that adds business value

• Evaluate and manage progress over time using a consistent set of value-oriented metrics

December 4, 2010 41

Using the Enterprise Architecture Management Framework

Define the scope and role of Enterprise

Architecture and its management within your

organisation

Measure and understand your current capability

maturity level

Systematically develop and manage key

capabilities for effective and appropriate

enterprise architecture management that adds

business value

Evaluate and manage progress over time using a consistent set of value-

oriented metrics

December 4, 2010 42

Dimensions of Enterprise Architecture Management Framework

• Measure state of Enterprise Architecture along three dimensions

− Practices

− Planning

− People

• Define facets of each dimension

• Measure each facet in terms of:

− Associated processes and their state of development

− Scope or extent within the organisation


Practices


Planning


Personnel

December 4, 2010 43

Measurement of Value of Enterprise Architecture

• Direct link between Enterprise Architecture and real value can be difficult to demonstrate

• There is a time lag between implementation and results

December 4, 2010 44

Measurement of Value of Enterprise Architecture

• Define Enterprise Architecture value measurement areas

• Identify measurement process

• Measure

− Establish current baseline

−Define target

−Measure results against baseline and target

December 4, 2010 45

Measurement Framework for Enterprise Architecture Management

Enterprise Architecture Management Framework

EAM Dimension 1 -Enterprise Architecture

Practices


Planning


Personnel

1.1 Architecture Framework

1.2 Architecture Processes

2.1 Strategic Planning

2.2 Architecture Planning

3.1 OrganisationStructure and Skills

3.2 Communication and Stakeholder Management

1.3 Architecture Governance

1.4 Architecture Value

December 4, 2010 46


Managing communication and expectations with business and IT stakeholders interested in or influenced by architecture management

Communication and Stakeholder

Management

Defining, planning, and managing roles, responsibilities and skills for architecture management

Organisation Structure and Skills


Defining vision and roadmap for various IT domains by anticipating business needs and trends, and developing architecture components

Architecture Planning

Using architecture principles and blueprints to align business needs with IT capabilities, define portfolio strategy and direction and allocate resources

Strategic Planning


Planning

Defining, measuring and communicating the value and impact of architecture to the business

Architecture Value

Principles, decision rights, rules and methods to drive architecture development and alignment in the organisation

Architecture Governance

Methodology for defining, developing and maintaining architecture components

Architecture Processes

Framework of standards, templates and specifications for organising

and presenting business and technical architecture components

Architecture Framework


Practices

December 4, 2010 47


• Measure in terms of

− Processes – those processes associated with Enterprise Architecture Management and their state of development – how well-defined and effective are the processes

−Reach - scope or extent of Enterprise Architecture Management within the organisation – how widely used

December 4, 2010 48

Enterprise Architecture Management Assessment Framework

Enterprise Architecture Reach


Processes

Within Individual Projects

Within an IT Domain

Across the IT Function

Across the Organisation,

Including Business and IT

Functions

Beyond the Organisation

(Suppliers, Partners,

Customers)

Ad-Hoc Processes Defined and Driven

by Individuals

Basic Processes and Associated

Collateral in Place

Processes are Repeatable and

Consistently Used Across Teams and

Projects

Processes are Managed and

There is Continuous

improvement

Processes are Optimised,

Flexible, Adaptable and Lean

December 4, 2010 49

Detailed Measurement Framework for Enterprise Architecture Management

Enterprise Architecture Management Framework


Practices


Planning


Personnel

1.1 Architecture Framework

1.2 Architecture Processes

2.1 Strategic Planning

2.2 Architecture Planning

3.1 OrganisationStructure and Skills

3.2 Communication and Stakeholder

Management

1.3 Architecture Governance

1.4 Architecture Value

Processes Reach

Processes Reach

Processes Reach

Processes Reach

Processes Reach

Processes Reach

Processes Reach

Processes Reach

December 4, 2010 50

Enterprise

Architecture

Practices

Enterprise

Architecture

Planning

Enterprise

Architecture

Personnel

ProcessesReach

Processes

Reach

Processes

Reach

Complete Measurement Framework

• Three dimensions x two aspects

December 4, 2010 51

Planning

Practices

People

Strategic Planning


Organization Structure

and Skills

Communication and

Stakeholder Management



Governance

Value and Measurement

None

Project-based

No roles,

responsibilities

Project-based

None

Project-based

processes

None / project-

based

None / project-

based

Project-based

Limited vision and

roadmap

Formal technology

roles within projects

Key stakeholders

identified and informed

Limited framework -

covers some

information

Defined processes

primarily focused on

infrastructure

Some review principles

defined for some

components

IT cost metrics

Prioritization of project

portfolio based on

roadmap

Architecture planning

process established

Formalized roles and

responsibilities

Regular consultation

with business

Covers Information and

process, but adoption not

consistent

Defined processes

across IT domains

Defined IT governance

boards and processes

IT cost performance

metrics

Architecture a key

input to joint

Business / IT planning

Continuous

improvement

Clear professional

career track

Pro-active

communication and

feedback with

business

Consistently adopted

internally

Defined processes

across business and IT

domains

Shared governance

model with Business

and IT

Defined and measured

business objectives,

performance metrics

Business / IT planning

enables efficiency, agility in

extended enterprise

Includes extended

enterprise capabilities

Pro-active development

with external input

Collaboration with

extended enterprise

Framework shared

externally

Defined processes with

clear ability to adapt and

extend

Business / IT governance

continuously improved to

respond to change

Business outcomes and IT

performance metrics

Level 1 Level 2 Level 3 Level 4 Level 5

Architecture Funding

Project-based

allocation

Central architecture

fund

Funded from efficiency

gains

Funding by margin on

servicesFunding by transaction

Enterprise Architecture Management Maturity

December 4, 2010 52

Assessing Current and Future Desired Architecture Management Maturity

5 - Optimised4 - Managed3 - Repeatable2 - Defined1 - Ad-Hoc


Management

Organisation Structure and

SkillsEnterprise Architecture

People


Strategic PlanningEnterprise


Architecture Value





Practices

Current EA Competency Maturity Level Desired Future EA Competency Maturity Level

December 4, 2010 53

Measuring Maturity and Importance

Level of Importance

5.04.03.02.01.01.0

2.0

3.0

4.0

5.0

Level

Of

Maturity

Architecture Value




Strategic Planning


Management

Organisation Structure and Skills


December 4, 2010 54

Benefits of Increasing Enterprise Architecture Management Maturity

• Measuring the true impact of increasing Enterprise Architecture Management maturity is hard to achieve

• IT architecture simplification can be one of the largest contributors tor IT cost reduction (in the range of 5%-18%) but it has a long lead time - up to 2 years

December 4, 2010 55

Outcomes of Effective Enterprise Architecture Management

Standardising Hardware and Core Software

Platforms

Standardising Information Elements

Shared Between Systems

Building Reusable Application Components

Specifying Application Architecture

Requirements

Deploying Integration Infrastructure

Defining Architecture Methodology

Reduced Costs

Modeling Information Relationships and

Lifecycles

Service Improvements

&

December 4, 2010 56

Impact of Effective Enterprise Architecture Management Can Be Difficult to Quantify

Increase flexibility within the business and IT

Lower capital spendLeverage new capabilities for competitive advantage

Sustained cost reductionsHigher application development

productivity

Eliminated or reduced spend on redundant application purchase

and development

Improved operational efficiency and effectiveness

Faster access to informationSimplified analysis and testing

Reduced operational riskBetter information qualitySimplified development

Higher IT productivityRenegotiation/consolidation of supplier

contracts

Increased hardware utilisation and deferred or eliminated

hardware spend

Better IT and business decisionsIntegrated infrastructure and

application managementShorter integration time (and corresponding project time

Improved responsiveness to business needs

Rationalised application portfolioLower integration costs (and corresponding project costs)

Tertiary/ Long-Term Benefits

Secondary/ Medium-Term Benefits

Primary/ Immediate Benefits

December 4, 2010 57

Impact of Effective Enterprise Architecture Management Can Be Difficult to Quantify

Scope and Benefits of Enterprise Architecture Over Time

Ease of Measuring Benefits of Enterprise Architecture

Primary/

Immediate

Benefits

Secondary/

Medium-Term

Benefits

Tertiary/

Long-Term

Benefits

Directly

Quantifiable

Difficult to

Define Intangible

December 4, 2010 58

Measuring Quantitive and Qualitative Value from Enterprise Architecture

Measures of Value from Enterprise

Architecture

Quantitive Measures of Value

Qualitative Measures of Value

Reduced Project Risk and Complexity

Improved Business Requirements Delivery

Reduction in project time and cost over-runs both without scope or

quality reduction

Improved Project Success

Solution quality, delivery on-time and within budget and to user

satisfaction

Cost Control and Improved Return on

Investment

Measuring return on projects over lifetime

Reduced Costs for Business As Usual

Operations

Complete operational costs of IT to reflect the total cost of ownership

Enable Delivery of IT Strategy

Sustained delivery of the IT Strategy which should also be

concerned with delivering value

Reductions in faults and overspend due to incorrect requirements

Better Alignment with Business

Quality-related feedback from the business through regular surveys

Increased Agility and Competitiveness

Measure through feedback where IT is viewed as an partner and

enabler with the business and not just a cost and constraint

Improved Business Knowledge

Measure through effect with the business becoming better

connected and greater reach of processes

December 4, 2010 59

Focussing on Areas of Low Maturity and High Importance

Importance

Maturity

First Areas To Focus On To Generate

Improvements

Third Areas To Focus On To Generate

Improvements

Second Areas To Focus On To Generate Improvements

Fourth Areas To Focus On To Generate Improvements

Low View of Importance High View of Importance

Low Maturity

High Maturity

December 4, 2010 60

Focussing on Areas of Low Maturity and High Importance

• Use Enterprise Architecture measurement framework to identify areas of greatest return on investment

December 4, 2010 61

Enterprise Architecture Value Measurement Programme

• Does the Enterprise Architecture programme have a measurable impact on the IT investment portfolio?

• Does the Enterprise Architecture programme lead to measurable improvements of performance?

• Is there a clear relationship between Enterprise Architecture programme and business services?

• Does the Enterprise Architecture programme result in measurable cost savings/avoidance?

Define Enterprise

Architecture Measurement

Framework

Measure Enterprise

Architecture Value

AnalyseEnterprise

Architecture Value Measures

Plan Enterprise Architecture

Implementation/Enhancement Programme of

Work

Execute Programme

Measure Delivery and Results

Feedback on Measurement Framework

December 4, 2010 62

Summary

• Appropriate Enterprise Architecture can deliver significant business benefits

• Comprehensive Enterprise Architecture value measurement framework is needed to link Enterprise Architecture to business benefits

December 4, 2010 63

More Information

Alan McSweeney

[email protected]