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© Michael Rosen
Applying Business Architecture to the Cloud
Mike Rosen, Chief Scientist Mike.Rosen@ WiltonConsultingGroup.com
© 2013 Michael Rosen
Agenda n What do we mean by the cloud?
n Sample architecture and cloud support
n What are the questions?
n Motivation, Capabilities, Stakeholders, Value Streams, Organization
n Portfolio Management, Risk Management
n Conclusion
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© 2013 Michael Rosen
Taking an Architectural Approach n Architecture is intended to influence decisions
• Strategic, portfolio, initiative, design, implementation, platform…
n Architects do this by • Collecting information, analyzing scenarios, questioning assumptions • Aggregating information, putting it in context, abstracting • Conceptualizing, Visualizing, Formalizing, Communicating
n Architectural models structure concepts and relationships to ask / answer specific questions, targeted at specific stakeholders
n What questions do we need to ask about the cloud? What architectural models will help answer them?
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© 2013 Michael Rosen
What is the Architecture of the Cloud? n Everyone has their own opinion
• …which coincidentally corresponds to their product set
n One differentiation is Public, Private, Hybrid
n Another is IaaS, PaaS, SaaS
n One perspective is that the cloud is a new ‘sourcing’ strategy
n Let’s look at an independent view
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© 2013 Michael Rosen
NIST Cloud Computing Reference Architecture
5 Source: NIST
Information Technology Laboratory Cloud Computing Program
The NIST Cloud ComputingReference Architecture
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Cloud Carrier
Cloud Auditor
SecurityAudit
Privacy Impact Audit
Performance Audit
Cloud Service
Consumer
Cloud Broker
Service Intermediation
Service Aggregation
Service Arbitrage
Cloud Service Provider
Secu
rity
Priv
acy
Physical Resource Layer
Hardware
Facility
Resource Abstraction and Control Layer
Service Layer
IaaS
SaaS
PaaS
Cloud Service Management
Business Support
Provisioning/Configuration
Portability/Interoperability
© 2013 Michael Rosen
NIST Cloud Consumers
6 Source: NIST
Information Technology Laboratory Cloud Computing Program
Example Services Available to a Cloud Consumer12
PaaSConsumer
IaaSConsumer
CRM
Social Networks
Content Management
ERP
FinancialsSales
Email & OfficeProductivity
Document Management
Human Resources
Collaboration
Billing
SaaSConsumer
BusinessIntelligence
Integration
Development& Testing
Database
PlatformHosting
Storage
Compute
ServicesManagement
Backup & Recovery
CDN
Cloud Provider
ApplicationDeployment
© 2013 Michael Rosen
What Does the Cloud Mean to You?
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Virtualization Hybrid IaaS SaaS ….
Finally! I don’t need IT anymore. I can get everything myself in the cloud
to IT… to Business…
© 2013 Michael Rosen
View of IT Architecture
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Enterprise Systems
Data representations
Platforms and technologies
Applications, services, processes
Desktop and business systems not controlled by IT
Source: ‘Business Architecture: The Art and Practice of Business Transformation’
© 2013 Michael Rosen
IT System Spectrum
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Shadow Systems Enterprise Systems
Low cost to procure Unaccounted for
High cost to procure Managed
Management Operations Help Desk Availability Reliability Scalability Integration Backup DR / BCP Security Entitlements Compliance Audit Tech. Refresh
High Risk Higher Initial Cost
Where will Cloud Systems Fit?
Redundancy Inconsistency Complexity
© 2013 Michael Rosen
Business Architecture Questions n What business are you in? n What external environment do you need to accommodate?
(competition, regulation) n What market position do you want to have in the future? n What is your business operational model? n What products and services do you need to achieve that position? n What information and business capabilities do you need to provide
and support those products and services? n What value streams and processes enable those capabilities? n What organizational structure will yield those capabilities? n How will the organization be governed to achieve them? n Which ones can we deploy or source from the cloud?
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© 2013 Michael Rosen
Sample Enterprise Application
Billing
CRM
Shipping
Business Rules
Product Catalogue
Inventory
Marketing webgo
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© 2013 Michael Rosen
Enterprise Infrastructure Enterprise End-to-End Solution
Social Media / Networks
BPM
Dash boards
Reports
Users SOA Infrastructure Collaboration
RIA
Security Architecture
and devices
Enterprise Resources (ERP, data, etc.)
SaaS Big Data
Presentation Tier
Application Tier
Enterprise Tier Resource Tier
Enterprise Business
Architecture
Enterprise Information Architecture
Enterprise Application Architecture
Enterprise Technology Architecture
Enterprise 3.0 Application Architecture
Performance Framework
Data Warehouse
Business Intelligence
IaaS
Slide 13
SaaS
SaaS
© 2013 Michael Rosen
What Should the Cloud Strategy Be?
n To answer this, we first need to answer several other questions. • How does it relate to the business strategy? • What capabilities are involved? • How will it affect stakeholder interactions? • What organizational units will be involved / affected? • What will the costs / benefits tradeoff be? • How will we prioritize a roadmap and plan?
n As an architect, how do we go about answering these questions?
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© 2013 Michael Rosen
support <<Strategy>>
Have the largest selection of books
<<Goal>> On-line source of
choice for all types of media
quantify
achieve <<Objective>>
Enlist 1000 partners
implement
<<Tactic>> Create an Exchange for independent use-
book sellers
<<Business Network>>
Partner Exchange <<realize>>
Business Motivation Model Example
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<<Strategy>> Have a broad
selection of products
<<Tactic>> Partner directly with
publishers
<<Business Service>> DirectShip
ThruPublisher
<<Objective>>
Offer 1,000,000 titles through 3rd parties
© 2013 Michael Rosen
Business Motivation Model n The BMM answers key business questions:
• Why are we doing this? • How will we know if it’s working?
n What is the impact on our decisions with the cloud?
n Which tactics can best be implemented where?
n How will they need to integrate together?
n Will the cloud make it more or less difficult to measure success?
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© 2013 Michael Rosen
Business Architecture Foundations
Capabilities
BA Foundational Domains
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Information Capabilities require business information using consistent
vocabulary
Strategy
Capabilities are required to implement business
strategies
Value Streams Capabilities are leveraged
within value streams
Organization
Business Units and Partners have capabilities
Capabilities map to these related concepts
© 2013 Michael Rosen
Strategic
Strategic Planning
Partner Relations Marketing
Predictive Analysis
Risk Management Innovation
Core
Inventory Management
Customer Management
Product Management
Logistics Exchange Network IT
Support HR Finance Legal
WebGo Capability Map (Level 1)
© 2013 Michael Rosen
Customer Management
Customer Acquisition Attraction
Data Collection
Validation
Customer Information Creation
Maintain
Remove
Customer Service Problem Resolution
History Tracking
Outreach
Customer Profiling Aggregation
Analysis
Demographics
WebGo Capability Model (Level 2 and 3)
© 2013 Michael Rosen
Capability Strata n Strategic or Direction Setting (Top)
• Provide differentiation or set direction • Reflect executive priorities • Could you run these in the cloud? • Would you if you could?
– What are the decision criteria?
n Supporting (Bottom) • Abilities that an organization must have to function as a business • Traditional targets for outsourcing • Cloud is a good alternative • Why would you not move these to the cloud?
– What are the decision criteria?
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© 2013 Michael Rosen
Core Capabilities n Value Add, Core (Middle)
• The heart of what an enterprise does to ensure viability and thrive in the market
• Can be thought of as a customer facing view of the business
n Which ones are critical to success?
n How comfortable are we with them in the cloud? Could we do them better ourselves?
n How do they have to work together? • End-to-end value streams • Information integration
n What are the implications?
n How do we make a decision?
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© 2013 Michael Rosen
Who are the Stakeholders?
n Customers interact with WebGo to find and purchase books, media, and other consumer products
Customer
Independent
Publisher
Shipper
n Independent sellers interact WebGo to offer their inventory for sale through the exchange
n Publishers interact with WebGo advertise their books and receive orders for direct delivery
n Shippers interact with WebGo to ship selected inventory from the warehouses to customers
Others….
© 2013 Michael Rosen
Stakeholder Analysis n The interaction with each stakeholder can be expressed in a value stream.
n There will often be more than one value stream for each stakeholder.
n Analysis of the stages of the value stream provide insight into the opportunities for new interactions via the cloud (e.g. mobile devices, social networks) and to evaluate the potential value (internal and external).
n Having identified beneficial areas for new interaction, we then identify the new capabilities that we need to support them.
n Each affected stage of the value stream may require one or more new capabilities. Of course, many of those capabilities would be common for multiple value streams and multiple stakeholders.
n For each new capability, we could identify different sourcing options. Some capabilities may be available from the cloud, some as COTS products, and others as new or enhanced implementations of existing capabilities.
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© 2013 Michael Rosen
Register for
Exchange
Advertise Items
Provide order info
Process Order Notify Invoice
Value Stream
Independent
Partner Registration
XC. Member Registration
Seller Verification
Item Addition
Item Availability
Product Catalog
Seller Rating
Shipping Calculation
Selection
Line Item Allocation
PO Submission
Order Acceptance
Customer Notification
Timeout
Notification Acceptance
Partner Processing
Payment
Accounts Receivable
© 2013 Michael Rosen
Value Stream n Value Streams tell us:
• ‘How’ things are done for a specific stakeholder and scenario • How different processes fit together to support a stakeholder • What information must be shared between processes
n ‘Stages’ of a value stream require specific capabilities
n Stages of a value stream may be implemented by processes
n Value Streams identify capabilities that are critical to the delivery of value (satisfaction) to our most important stakeholders.
n Value Streams tell us the integration requirements of capabilities, processes and information. How does this relate to our decisions about sourcing on the cloud?
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© 2013 Michael Rosen
Process Model – External Activities
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Thanks to Razvan Radulian for the corrected model
© 2013 Michael Rosen
Business Processes in the Cloud n Move entire process to the cloud
n Source some of the tasks from the cloud
n What does that mean? • Loss of control
– Collaboration versus Coordination
• Data integration and transformation • Visibility • Activity Monitoring (BAM) • Auditing and Reporting
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© 2013 Michael Rosen
Information Map (Linked)
Customer
Order Shipment Partner
Product Invoice
Proposal Profile Location
pays
contains
delivered by
sent to
contains
described by
informs
recommends
provides submits Is for
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© 2013 Michael Rosen
Enterprise Information Concerns n What is the critical enterprise information?
n How is that information characterized and classified?
n What information is critical to efficient end-to-end integration?
n What information are you comfortable keeping on the cloud?
n What information are you comfortable having under the control of another business?
n How much integration / transformation will be required for consistent and efficient end-to-end interactions?
n What information semantics do you need to own?
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© 2013 Michael Rosen
Business Capabilities to Organizational Unit
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ABC Insurance
Property & Casualty
Life & Disability
Health
EnterpriseDiagram Key
Supporting Capabilities
Customer Facing Capabilities
Strategic Capabilities
IT
Finance
Marketing
Legal Dept.
Purchasing
HR
Customer Management
Claims Management
Payments Management
Account Management
Product Management
Procurement Management
Legal Management
Financial Management
Employee Management
Investment Management
Reserves Management
Marketing Management
Information Technology
Management
Strategic Planning
Transformation Office
Decomposes into
Business unit has capability
Decomposes into
Decomposes into
Decomposes into
Business Unit
Decomposes into
Decomposes into
Decomposes into
Business unit has capability
Business unit has capability
Business unit has capability
Business unit has capability
Business unit has capability
Business unit has capability
Business unit has capability
Source: Business Architecture Guild Body of Knowledge Handbook
© 2013 Michael Rosen
Organization Maps n How will the cloud affect organization structure?
n What might a new organization structure look like?
n What will the political implications be?
n Do the organizations have the skills to source via the cloud and manage those apps?
n How do you avoid silos and redundancies?
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© 2013 Michael Rosen 36
IT Portfolio Scorecard
Factor 1 Alignment
to IT Strategic Intentions
Factor 2 Alignment to
Business Strategic Intentions
Factor 3 Risk
Factor 4 Service
Level and Quality
Factor 5 Annual Application Cost
Factor 6 The Extent
to which the Application
is Used
App
licat
ion
Nam
e
IT Im
pact
Inde
x (1
00)
Max
imum
IT Im
pact
Bus
ines
s Im
pact
In
dex
(100
)
Max
imum
Bus
ines
s Im
pact
Secu
rity
Ris
k M
ax
Tech
nica
l Ris
k M
ax
Serv
ice
Leve
l
Qua
lity
Ann
ual C
ost i
ndex
(1
00)
Ann
ual C
ost (
000)
Com
putin
g - D
ata
Cen
ter
Com
putin
g - L
ocal
Mai
nten
ance
Lice
nse
/ Con
trac
ts
Dep
ende
ncy
Bre
adth
Human Resource Planning 97 5 26 3 5 3 5 3 49 1,780 1,480 0 300 0 4 3
Electronic Bill Tracking 100 4 37 3 5 1 2 2 37 1,329 1,029 0 163 136 5 3
Accounts Payable, AR Systems 75 4 63 4 5 2 2 4 33 1,199 215 0 568 416 5 5
Financial Planning / Forecasting 92 4 62 5 4 3 1 3 42 1,528 612 2 783 131 2 3
General Ledger Consolidations 81 4 45 3 5 3 1 3 48 1,743 0 493 795 454 3 3
Fina
nce
/ Adm
Order Processing Systems 39 2 100 5 5 2 2 2 16 580 369 0 199 12 3 3
Finished Goods .Inventory 47 2 53 4 5 3 1 3 65 2,351 43 0 257 2,051 3 3
Maintenance Management 72 3 34 3 5 1 2 2 11 399 193 0 104 102 3 2
Production Planning and Mngt 100 4 59 5 3 3 5 4 18 660 0 33 0 627 5 3
Quality Examination System 67 3 90 5 4 4 4 4 27 961 0 2 0 958 2 5
Retail Shipment Data Warehouse 83 4 49 3 5 2 2 3 96 3,467 0 2,184 328 955 5 5
Man
ufac
turin
g
Warehouse. Replenishment Syst 72 4 28 5 5 4 3 3 100 3,618 0 2,741 585 292 5 5
Customer Information 72 4 37 3 3 2 3 4 47 1,690 1,103 0 541 46 5 2
Marketing Customer Support 47 3 44 3 5 3 5 3 5 185 0 26 58 101 2 5
Merchandising Payment Syst 92 5 42 3 5 3 5 2 24 855 221 0 44 590 3 3
Prime-Customer Internet Portal 86 4 24 3 3 2 2 3 55 1,983 1,423 0 485 75 3 5
Sales Force Automation 64 3 75 5 3 4 3 3 50 1,810 673 0 742 395 5 5
Sale
s
Sales Marketing Database 81 3 79 5 5 3 2 2 69 2,489 2,089 0 400 0 2 3
Small Applications 0 0 0 0 0 0 0 0 0 2,147 1,000 500 500 147
30,773 10,449 5,981 6,853 7,490
© 2013 Michael Rosen
Issues with the Cloud n Availability / Reliability
n Security
n Incident Management
n Accountability
n Semantics
n Integration
n Regulatory Compliance
n Visibility
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© 2013 Michael Rosen
Lock-in and Interoperability n What happens if you want to move to a different Cloud provider?
• Mergers and Acquisitions • Out of business • Poor performance (cost, SLA, technical)
n Can you move to a new platform? • What level of features / functions have you used? • Is everything assessable through an API? • Are industry standards followed? Do they exist?
n What about your data? • Can I get my data out at all? • How much is it going to cost to get my data out? • How much of my time is it going to take to get my data out?
n Cloud relationships will come to an end. Have an exit strategy!
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© 2013 Michael Rosen
Cost Benefit Analysis n Let’s review what we’ve done.
• We identified the overall set of stakeholders that could be affected by a cloud strategy. • Then, we examined opportunities to add value with the cloud, across all stakeholders
and scenarios. • Finally, we identified the capabilities that would be required to provide the complete
scenario, and where those capabilities could be leveraged to maximize their value.
n Now, we are able to do a cost benefit analysis. • For each new interaction, there is potential benefit, and cost. We must understand both
to perform a realistic evaluation. • At the same time, the cost is shared across multiple different value streams, and if we
don’t understand this, we will be evaluating the tradeoff incorrectly. • Business architectural enables better decisions about what should and should not be
part of the cloud strategy, and how to measure the results to see if the strategy is delivering the expected value.
n We can also prioritize the new capabilities based on dependencies, how often they are used, and what scenarios they support.
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© 2013 Michael Rosen
Business Decision Matrix n This table summarizes the business architecture issues associated
with cloud services.
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Business Model Considerations
Capability Support – YES; Stategic – NO Core – Information Security? Information passing? Semantic Integration? End-to-end value stream integration? How critical?
Information Security, availability, reliability, BCP? Semantics?
Motivation What tactics can be implemented in the cloud?
Value Streams What information needs to be shard? What processes need to work together?
Processes Can the whole process be deployed in the cloud? Can individual tasks? What is the Impact on: Control, integration, visibility, BAM, auditing, reporting.
Organization Organizational structure, politics? Skills to manage?
© 2013 Michael Rosen
Summary n The cloud is not coming…it’s already here
n Business will use the cloud whether you like it or not
n Help to evaluate the cloud on business terms
n Get in front of the cloud! Be ready with guidelines, standards, and architectural services
n Position the cloud to provide value and agility and reduce costs. Not to provide complexity, risk and increased integration
n Integrate cloud services into your Business Architecture
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