Septiembre 27 a Octubre 01 de 2005 Bogotá, Colombia A Practical Framework for an Adaptive Enterprise Jitendra Puri E-mail: [email protected]@hp.com.

Septiembre 27 a Octubre 01 de 2005Bogotá, Colombia

A Practical Framework for an Adaptive Enterprise

Jitendra Puri

E-mail: [email protected]

XXV Salón de Informática “Arquitecturas Empresariales de Software” Septiembre 28-Octubre 01 de 20052

Darwin …

“It is not the strongest who survive but those

that can quickly adapt to the changing

environment conditions”


This session is not for anyone who believes:

+ That in the business everything will go back to normal if

we just wait and see

+ That success of IT projects is responsibility of technical

staff

+ The customers will stay with you if give them bad service

+ The shareholders think that red ink is real cool colour


Agenda

+ Business context

+ A new adaptive mindset

+ Risks and mitigation strategies

+ Conclusions


A snapshot of North American Fixed line business….

N. American Fixed Line Capex as % of Revenue 1990 - 2006E ($bn)

0%

5%

10%

15%

20%

25%

30%

35%

40%

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

N. American Fixed Line Capex 1990 - 2006E ($bn)

0

20

40

60

80

100

120

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

Source: RHK Telecom Economics Program


Both external and internal pressures are continuously pressing price dowwards

Over capacity

Over capacity

NewTechnologies

NewTechnologies

CompetitionCompetition

Government &

Regulation

Government &

Regulation

PricePrice


Operating cost as % of revenue

• But relatively the operating costs are still very high

• Average communication industry operating costs range between 60 – 70%.

• The rate of reduction in price in much steeper than the rate of reduction in the operating cost.

Average cost/Unit

Average revenue/unit

Un

it C

ost /

Rev

enue

1999 2000 2001 2002 2003 2004 2005

Average cost/Unit

Average revenue/unit

Un

it C

ost /

Rev

enue

1999 2000 2001 2002 2003 2004 2005

Source: RHK Telecom Economics Program

In simple economic terms…


We need a attack several dimensions at the same time….

Grow RevenueGrow

Revenue

Improve Business Flexibility

Improve Business Flexibility

Improve Customer

Service

Improve Customer

Service

ReduceCost

ReduceCost


This implies…

+ Highly flexible infrastructure

+ Rapid introduction o new services and features

+ Fast time-2-revenue

+ Easy and flexible response to business changes

+ Fast reactions to competitive moves


and….

+ Ultra low cost operations:

+ High level of process automation+ Very low manpower levels+ High level of system integration+ High quality and excellent customer service+ Right first time data integrity+ Customer self management+ Low cost of change+ Use standardized commercially available, off the shelf,

software


An enterprise delivers services to customers

People Process Technology

Delivery process

Business objectives and strategy

Darwin Architecture for the Adaptive Enterprise:Service delivery supply chain view

Suppliers

Consumed business services

Customers

Offered business services


The business process model is key to aligning delivery with strategy

People Process Technology

Management process

Delivery process


Suppliers

Consumed business services

Customers

Offered business services

Business process model

Darwin Architecture for the Adaptive Enterprise:Service delivery supply chain view


Minimize risk:• Ensure security and

continuity of internal business operations, while minimizing exposure to external risk factors

Maximize return:• Improve business results;

grow revenue and earnings, cash flow, and reduced cost of operations

Improve performance:• Improve business

operations performance end-to-end across the enterprise

• Increase customer and employee satisfaction

Increase agility:• Enable the business

organization and operations to adapt to changing business needs

So…what would you do in a CIO’s role?


But what about business & IT alignment challenges?

+ Not sufficient business influence to guide technical projects

+ Not integrating technical projects with business change programmes

+ Not realising the value of information and process-centric elements

+ Legacy applications and platforms, outsourced services and supplier

management issues

+ Management interconnection between Business & IT.


A new adaptive mindset is needed

+ Assess, design and maintain a

dynamic link between business

and IT.+ Architect and integrate

heterogeneous IT

environments. + Extend and link business

processes across suppliers and

customers. + Manage and control the whole

IT environment to deliver

business services.

IT business management

Service delivery

management

Servicedelivery


Adaptive Enterprise

Business services

Application services

Infrastructure services


An Adaptive Enterprise is enabled through…

• An IT strategy that is in synchronization with the enterprise’s business strategy.

• An enterprise architecture to execute the IT strategy that can rapidly adapt the IT environment to meet the demands created by changes in the business environment.

Business strategyBusiness strategy

IT strategyIT strategy

Enterprise architectureEnterprise

architecture

IT g

overn

ance

IT g

overn

ance

Corp.

Gov.

Corp.

Gov.

IT environmentIT environment

• IT governance that will drive the development and implementation of the strategy and the architecture.

• An IT environment which realizes the strategy and architecture to deliver business services to meet today’s needs and ready to meet tomorrow’s.


Enterprise Architecture challenges

+ How to manage a highly connected environment – with multiple,

overlapping dependencies?+ How to balance the benefits of centralised versus decentralised

control?+ How to increase local autonomy and innovation without increasing

inefficiency, lowering quality and increasing risk?+ How to insure compliance with standards and policies across a

complex organization?+ How to manage the new relationship between business and IT as IT

becomes a key element in the success or failure of many major

projects?


Enterprise architecture facilitates alignment between business and IT

Business Strategy

Process Models

Information & Knowledge Models

Application Architecture

Information Management Architecture

Technical Architecture

Access infrastructureProcess infrastructureService infrastructure

Hot zone of complexity

Common language for business & IT

Aligned service delivery

The world of IT organization

The world of the business


Integration

Simplification

Standardization

Modularity

+

+

+

Applied consistently across these services:• Business

• Applications

• Infrastructure

Architecture Design Principles• Reduce number of elements• Eliminate customization• Automate change

• Use standard technologies and interfaces

• Adopt common architectures• Implement standard processes

• Break down monolithic structures

• Create reusable components • Implement logical

architectures

• Link business and IT • Connect applications and business

processes within & outside the enterprise


Benefits of Architecture design rules

+ Service-oriented architecture (SOA) and virtualization deliver IT

flexibility and choice

– Protects legacy investments

– Allows heterogeneity, doesn’t force homogeneity and monolithic rules

– Leverages industry investment

– Enables parallel innovation, fast response to change

– Provides multi-sourcing, flexibility of outsourcing/in-sourcing

+ Model driven automation simplifies execution of IT practices

– Cost of change is low & predictable

– Automates service lifecycle delivery and management


Architecture Design rules

+ Service-oriented architecture (SOA) and virtualization– Service is the unit of modularity– Layer services types: infrastructure, application

and business– Separate service perspectives: functional from management

+ Model-driven automation (MDA)– Service defined by model– Models encapsulated within layers– Models express dependencies between layers– Models provide continuity throughout the service lifecycle

+ SOA, virtualization, and MDA combine to realize the Adaptive

Enterprise


Service delivery

Functional

Service delivery management

Management


Business services


Business services control

Application services control

Infrastructure services control

Modularization: services and virtualization

Management modularity and layering parallels delivery

Virtualization of both delivery and management capabilities

Separate service perspectives: functional from management

Virtualization

Virtualization

Management comprises multiple perspectives

Service is the unit of modularity

Layer services by type: infrastructure, applicationand business

Fin

ancia

l

Quality

Secu

rity

Config

.

Fin

ancia

l

Quality

Secu

rity

Config

.

Fin

ancia

l

Quality

Secu

rity

Config

.


Service delivery

Functional


Management


Simplification: model-driven automation

Models encapsulated within layers

Models express dependencies between layers

Models capture best practices for all perspectives

Service defined by model



Finan

cial

Quality

Secu

rity

Con

fig.

Financia

l

Quality

Secu

rity

Con

fig.

Financia

l

Quality

Secu

rity

Con

fig.

Business services



Application model

Infrastructure model

Business model


Serv

ice-o

riente

d a

rchite

cture

Service delivery

Functional


Management

Business services




Integration: service-oriented architecture (SOA)

Services perspectives can be managed across layers

SOA service management integration



Application model


Financia

l

Quality

Secu

rity

Config.

Financia

l

Quality

Secu

rity

Config.

Financia

l

Quality

Secu

rity

Config.

Integrated financial perspective

Financia

lFin

ancia

lFin

ancia

l

Business model


Utility

com

putin

g m

od

els – O

GSA

an

d D

MTF Service delivery

Functional


Management




Standardization: drive adoption of industry standards

Business services



RosettaNet, UCCnet, OAG, ebXML

Virtual servers, storage, networks WSDM, Grid (WS-RF)

ITIL, ITSM

WS

DM

,W

BEM

, C

IMW

SD

MW

SD

M

SCOR, AQPC, VMISOA, virtualization and MDA standards enable customers to leverage industry innovation and provides investment security Grid (WS-

RF)Web services

(WS-*)




Infrastructure servicescontrol

New service trigger


Service delivery

Operate

Deploy

Design

Source

Service lifecycle:

Use of models across the service lifecycle

Change

Application model

Business model

Chang

e

Change


Business services




Automating and managingdelivery of business services

Multi-channel access



Infrastructure servicescontrol

Application model

Business model


Business services


IT business manageme

nt

Financial manageme

nt

Relationship

management

Lifecycle/project

management

Managem

ent

inte

gra

tion

Service delivery management Service delivery


Customers Employees Suppliers Management Auditors

Darwin Architecture for the Adaptive Enterprise: Service delivery detail view


Organizational change management to realize the Adaptive Enterprise

• Align IT team and organization

• Define policies, processes and environment

• Map IT functions to business priorities

• Enable a step-wise journey

Program management

office

Services andIT processes

ArchitectureAligning people, process and technology for superior execution


The three stages of the Adaptive Enterprise journey

Adaptive

Flexible

Transformational

Strategic partner

Dynamic & synchronized

Time to value

Efficient

Optimized

Respected peer

Managed and integrated

Quality of service

Operational

Stable

Trusted supporter

Available and secure

Predictable

Architecture

Economics

Keep it runningObjective

IT relationship with the business


EA risks and mitigation strategies

The Architecture will not meet business needsThe Architecture will not meet business needs

Define and maintain architecture with needs clearly defined, including near term business plans, infrastructure and development skill sets, budget issues and commercial off the shelf support

Define and maintain architecture with needs clearly defined, including near term business plans, infrastructure and development skill sets, budget issues and commercial off the shelf support

Risks

Mitigation Approach



Standard architecture elements will not interoperate as expectedStandard architecture elements will not interoperate as expected

Avoid selecting best-of-breed technology for each element without considering interoperability, research case studies with specific configurations.If doubt persists…pilot!!

Avoid selecting best-of-breed technology for each element without considering interoperability, research case studies with specific configurations.If doubt persists…pilot!!

Risks

Mitigation Approach



An architecture element, or its vendor will become significantly less viable

An architecture element, or its vendor will become significantly less viable

Keep abreast of the market via research functions, maintain part-list of applications, architecture design for separation of functionality when feasible

Keep abreast of the market via research functions, maintain part-list of applications, architecture design for separation of functionality when feasible

Risks

Mitigation Approach



Architecture governance will be ineffectiveArchitecture governance will be ineffective

Obtain management support, create explicit governance processes and link critical related processes.

Obtain management support, create explicit governance processes and link critical related processes.

Risks

Mitigation Approach


Conclusion

+ Migration to Adaptive Enterprise is a journey – not a “big bang”

+ Journey involves people and process – not just technology

+ Focus on existing pain points and areas for long-term transformation

+ We have to learn to embraces heterogeneity and leverage

investments, not “rip and replace”

+ Business must lead IT and not the other way round…


Main references

+ Driving business value from IT – Eric Woods, Laurent Lachal, Chris

Harris Jones, Gary Barnet+ Adaptive Enterprise vision of Hewlett Packard+ Lean Operator, an economic and business view point – Keith J.

Willetts+ Enterprise Architecture evaluation scorecard, - Gene Lenganza+ Best Practices, Standards of Enterprise Architecture+ Structures and Processes for effective Enterprise architecture+ Managing the people side of enterprise architecture- Gene Lenganza+ Risk and mitigation of Enterprise Architecture efforts

Septiembre 27 a Octubre 01 de 2005 Bogotá, Colombia A Practical Framework for an Adaptive Enterprise Jitendra Puri E-mail: [email protected]@hp.com.

Documents

software slide

software septiembre

business flexibility

business changes

business results

business context

business organization

business services customers