Applying Business Architecture to the Cloud - …c.ymcdn.com/sites/ Business Architecture to the Cloud ... Architecture is intended to influence decisions • Strategic, ... Strategic

© 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

2


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?

3


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

4


NIST Cloud Computing Reference Architecture

5 Source: NIST

Information Technology Laboratory Cloud Computing Program

The NIST Cloud ComputingReference Architecture

8

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


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


Public, Private, Hybrid

7 Source: Wikipedia


What Does the Cloud Mean to You?

8

Virtualization Hybrid IaaS SaaS ….

Finally! I don’t need IT anymore. I can get everything myself in the cloud

to IT… to Business…


View of IT Architecture

9

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’


IT System Spectrum

10

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


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?

11


Sample Enterprise Application

Billing

CRM

Shipping

Business Rules

Product Catalogue

Inventory

Marketing webgo

12


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


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?

14


Business Motivation Model

Slide 15


BMM Subset

16


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

17

<<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


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?

18


Business Architecture Foundations

Capabilities

BA Foundational Domains

19

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


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)


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)


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?

22


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?

23


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….


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.

25


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


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?

27


Process Model – Internal Activities

28


Process Model – External Activities

29


Process Model – External Activities

30

Thanks to Razvan Radulian for the corrected model


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

31


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

32


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?

33


Business Capabilities to Organizational Unit

34

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








Source: Business Architecture Guild Body of Knowledge Handbook


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?

35

© 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


Issues with the Cloud n  Availability / Reliability

n  Security

n  Incident Management

n  Accountability

n  Semantics

n  Integration

n  Regulatory Compliance

n  Visibility

37


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!

38


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.

39


Business Decision Matrix n  This table summarizes the business architecture issues associated

with cloud services.

40

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?


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

41

© Michael Rosen

Questions?

Applying Business Architecture to the Cloud - …c.ymcdn.com/sites/ Business Architecture to the Cloud ... Architecture is intended to influence decisions • Strategic, ... Strategic

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