System Architectures Ronan Bradley [email protected].

System Architectures

Ronan Bradley

[email protected]

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The aims of this module

“The aim of this module is to provide students with knowledge of the purpose, design and context of enterprise architectures within an organisation and to provide them with the technical skills to develop prototype enterprise systems, which serve as a practical foundation for future modules.”

This is a new module Overlap of approximately 50% with previous module

“Enterprise Systems and Architectures”

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Learning Outcomes I A. Explain the various processes within the

organisation and the IT systems which support these processes.

B. Analyse the alignment required between IT and business functions

C. Explain and apply the concepts of enterprise wide IT systems.

D. Compare and contrast the different service models used within the enterprise and compare the benefits and drawbacks of these models within the enterprise context.

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Learning Outcomes II E. Classify the set of systems and architectures

used within a large organisation. F. Justify the need for distributed and component

based systems to facilitate software reuse and system integration in the enterprise.

G. Demonstrate a clear understanding of Service Oriented Architecture and its application within the enterprise.

H. Explain the purpose of and common approaches to enterprise data modelling

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Learning Outcomes III I. Employ Business Process Modelling within the

enterprise using hands-on case studies. J. Select, evaluate, compare and contrast a

variety of approaches to developing distributed applications and systems.

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General Enterprise IT reading list…

Note: The reading list in the course document is out of date.

The best information for this module is on the web: Management perspectives: www.cio.com Industry trends: www.news.com Architects: www.intelligententerprise.com, www.ebizq.net Architects & Developers: www.serverside.com,

Find web-sites which suit your background and style of learning.

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Examination

Written Examination 60% Continuous Assessment 40%

What this module is about?

Why this happens What were they trying to do

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Systems and Architectures

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Definitions

System A group of interrelated elements forming a collective

entity Architecture

A style and method of design and construction

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What is System Architecture?

A set of agreed-to methods, standards, and techniques that promote both efficient division of responsibility and increased functional reliability while building complex functions from simple components.

A holistic set of models that represent an enterprise’s information systems in order to manage change.

Exercise: Give an example of a system architecture. Analyse how it supports the two definitions

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Everyday Example

System architectures are everywhere and can be recognized by standards bodies, government regulation, or commodity products

Eg: food health and safety regulations, building codes, consumer electronics

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Bringing Home a New TV

A television relies upon two systems Electrical distribution Broadcast distribution

The consumer has an application and relies upon these systems implicitly

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Reliability

Standards: voltage, plug configuration, fusing, codes

Methods: metropolitan distribution, long-line transmission, generation

So, the customer doesn’t check the wiring before plugging in the TV

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Modularity

Standard interfaces allow architectures to upgrade components as needs or technologies change

Broadcast has changed several times over the lifetime of TV

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TV Architecture Changes

Film

Program

Broadcast

Display

Black & White

Film

Program

Broadcast

Display

Colour

Film

Program

Broadcast

Display

Satellite

Film

Program

Broadcast

Display

Pay Per View

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Architectures Enable Change

Designers can add new standards within an existing framework and create new services

Migration to new services is gradual and modular – not sudden and universal

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Enterprise Architecture Examples Architectures can exist at an individual layer of the technology

stack or span multiple layers. Any organisation will utilise multiple architectures.

The following are examples of architectures that are used in organisations. Client/server - widely used and relies and clients that request services

and servers that respond to these requests. The workload is shared and distributed.

Wireless (mobile) – allow communication from remote locations

Cloud computing

ERP (e.g. SAP)

Relational database

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Goal of systems architecture for enterprise systems

Goals of a systems architecture for enterprise systems include: Smooth flow of transactional information across multiple systems Accountability and security through elimination of custom

interfaces or manual processes Access to current information aggregated across organizational

domains Improve systems incrementally

Goal to be like Lego™ bricks Fit together easily Easy to recombine in different ways Flexible to solve many different problems

The world of enterprise IT

Dealing with complexity and legacy within a business

environment

What is Enterprise IT?

Enterprise IT is an engineering discipline. Not a science.

Engineering is the discipline of acquiring and applying knowledge of design, analysis, and/or construction of works for practical purposes.

Enterprise IT is as much about business and people as about technology

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What is an enterprise?

A larger business or organisation. Sometimes used in contrast to a SME (Small to Medium

Enterprise) In the UK, SME means <250 employees In the USA, SME means <500 employees

An Enterprise’s IT requirements are more complex and they will typically have internal IT staff capable of developing and deploying systems. This course will focus primarily on open/standards based

software. Microsoft solves the problems within its own technology world.

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Understanding the enterprise IT environment

Decision making in enterprise IT is driven by the need to balance a number of different factors apart from technical feasibility.

The way that these are balanced is sometimes called IT governance Processes designed to ensure the right decisions are made

and that all stakeholders, including senior management, internal customers, and departments such as finance, have the necessary input into the decision making process.

There are 5 main factors which impact the decision.

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5 drivers of Enterprise IT

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Understanding the enterprise IT environment

There are five primary drivers for IT decisions1. Skills: Costs and availability

2. Technology life-cycle: How enterprise IT evolves and how the IT industry evolves

3. Business requirements: how IT supports business strategy

4. How investment and benefit can be measured

5. IT organisation: how IT is itself organised, the roles in an IT department (covered in next section)

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Understanding the enterprise IT environment

There are five primary drivers for IT decisions1. Skills: Costs and availability

2. Technology life-cycle: How enterprise IT evolves and how the IT industry evolves

3. Business requirements: how IT supports business strategy

4. How investment and benefit can be measured

5. IT organisation: how IT is itself organised, the roles in an IT department

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The technical skills pyramid

Highly skilled systems software developers are rare.

Therefore, they must be used to solve exclusively technical issues.

The solutions of the higher groups in the pyramid are used to developers lower down the pyramid.

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Rare: Systems software developers

Common: Assemblers and configurers

Medium availability: Application developers

Specialisation of skills

Most staff will either have be predominantly technically skilled or business skilled – even in IT departments.

Attempting to use technically focused staff on business focused problems will result in poor solutions and vice versa.

Therefore, the way we develop software should attempt to allow separation of roles between the two.

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Technical skills

Business skills

Combination

Dealing with the skills challenge

Goal 1: Reduce the technical skills requirement and allow more staff to participate in any software development process

Solution: Rely on products instead of custom coded solutions; Reduce the difficulty in the code itself by moving as much

of the difficult code into the products you buy Use tools to make both development easier and the

process of development easier (e.g. Visual C++ or eclipse or Business Process Modelling tools)

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Dealing with the skills challenge

Goal 2: Reduce the amount of code that needs to be written. Allow developers to focus on writing business logic

that is specific to the problem at hand, not infrastructure code which is generic

Maximise the amount of reuse of existing systems, codes, designs etc

Reducing the amount of code written also reduces the cost of maintenance

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Understanding the enterprise IT environment

There are five primary drivers for IT decisions1. Skills: Costs and availability

2. Technology life-cycle: How enterprise IT evolves and how the IT industry evolves

3. Business requirements: how IT supports business strategy

4. How investment and benefit can be measured

5. IT organisation: how IT is itself organised, the roles in an IT department

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The IT life-cycle is driven by many factors The IT industry itself

Technology innovation

The business environment New customer demand Investment from VCs Economic cycle Competition among end-users

Inhibited by the lifespan of IT systems What is the average lifespan of an enterprise IT system?

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Where does cloud computing fit into this?

A naïve view of enterprise IT life-cycle

Evolution is the survival of the fittest. Each stage dies out as the next on is better.

IT evolution consists of technological progress which replace previous waves of technology

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© Korn

IT systems don’t evolve – new systems get deployed

Systems are only decommissioned when there is a compelling business need. Enterprise systems are typically used for 7+ years. Only sometimes is that it is too old to maintain

The reality of enterprise IT life-cycles

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© Korn

CICSCICS IMSIMS

Client/serverClient/serverCORBACORBA

J2EEJ2EE

Web Services

Web ServicesSOASOA

Understanding the enterprise IT environment

There are five primary drivers for IT decisions1. Skills: Costs and availability

2. Technology life-cycle: How enterprise IT evolves and how the IT industry evolves

3. Business requirements: how IT supports business strategy

4. How investment and benefit can be measured

5. IT organisation: how IT is itself organised, the roles in an IT department

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IT and Business Strategy

Any investment within an enterprise will be evaluated in the context of whether it fits into the overall business strategy.

“A strategy is a long term plan of action designed to achieve a particular goal.”

“A company's strategy is its overall plan of development. Corporate strategy can be more formally defined as a comprehensive plan or action orientation that identifies the critical direction and guides the allocation of resources of an entire organization.“

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Role of IT is pivotal in supporting business strategy

Contribute to the achievement of business goals. Launch of new product M&A Entry to new market

Deliver objectives in a manner which is: Cost effective Timely Flexible

Over 50% of US corporate capital investment is IT related

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IT Strategy

The plan an organisation uses in providing information services.

IT allows business to implement its business strategy. IT helps determine the company’s capabilities.

IT Strategy must make sense in the context of the organisational structure and approach

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CoreCompetency

The resources and capabilities that have been determined to be a source of competitive advantage for a firm over its rivals.

Building a business strategy

StrategyAn integrated and coordinated set of actions taken to exploit core competencies and gain a competitive advantage.

Business Level Strategy

Actions taken to provide value to customers and gain a competitive advantage by exploiting core competencies in specific, individual product markets.

Leads to

Leads to

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CoreCompetency

The resources and capabilities that have been determined to be a source of competitive advantage for a firm over its rivals.

Building a business strategy

StrategyAn integrated and coordinated set of actions taken to exploit core competencies and gain a competitive advantage.

Business Level Strategy

Actions taken to provide value to customers and gain a competitive advantage by exploiting core competencies in specific, individual product markets.

Leads to

Leads to

Exercise:

For a chosen business or organisation analyse:

What is its core competencies?

How does that fit with its business strategy?

How does it fit with its business level strategy?

How does it fit with its technology strategy?

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Generic Business Level Strategies

CostCost UniquenessUniqueness

Source of Competitive AdvantageSource of Competitive Advantage

Differentiation

•Relatively standardised products•Features acceptable to many • customers •Lowest competitive price

•Value provided by unique features and value characteristics and command premium price•High customer service•Quality, prestige or exclusivity•Rapid innovation

Which companies fit

into each category? How does

this influence their

approach to IT?

Understanding the enterprise IT environment

There are five primary drivers for IT decisions1. Skills: Costs and availability

2. Technology life-cycle: How enterprise IT evolves and how the IT industry evolves

3. Business requirements: how IT supports business strategy

4. How investment and benefit can be measured

5. IT organisation: how IT is itself organised, the roles in an IT department

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Funding the IT department

In order to determine how much funding is given to the IT department, there needs to be understanding of how that budget will be spent

How are costs associated with designing, developing, delivering and maintaining IT systems recovered? Particularly if the system is used by multiple departments.

There are three main methods for measuring where funding is spent: Chargeback Allocation Corporate budget

Think about the impact of each approach on the IT investment. Will

they encourage/discourage investment? Encourage/discourage

cooperation?

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Chargeback

IT costs are recovered by charging individuals, departments, or business units

Rates for usage are calculated based on the actual cost to the IT group to run the system and billed out on a regular basis

They are popular because they are viewed as the most equitable way to recover IT costs

However, creating and managing a chargeback system is a costly endeavor

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Allocation

Recovers costs based on something other than usage, such as revenues, log-in accounts, or number of employees

Its primary advantage is that it is simpler to implement and apply

True-up process is needed where total IT expenses are compared to total IT funds recovered from the business units.

There are two major problems: The 'free rider' problem Deciding the basis for charging out the costs

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Corporate Budget

Here the costs fall to the corporate P&L, rather than levying charges on specific users or business units

In this case there is no requirement to calculate prices of the IT systems and hence no financial concern raised monthly by the business managers.

However, this creates a disconnect between the cost and the benefits of IT investment.

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Funding Method

Description Why do it? Why not do it?

Chargeback Charges are calculated based on actual usage

Fairest method for recovering costs since it is based on actual usage

Must collect details on usage; often expensive and difficult

Allocation Expenditures are divided by non-usage basis

Less bookkeeping for IT

IT department must defend allocation rates

Corporate Budget

Corporate allocates funds to IT in annual budget

No billing to the businesses. Good for encouraging use of new technologies.

Have to compete with all other budgeted items for funds

Comparing funding methods

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Calculating the cost of IT projects

The most basic method of determining costs is to add up all of the hardware, software, network, and people involved in IS.

Real cost is not as easy to determine.

Most companies continue to use the over-simplistic view of determining cost and never really know the real cost.

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IT Investment Monitoring

“If you can’t measure it, you can’t manage it”.

Management needs to make sure that money spent on IT results in organisational benefit.

Must agree upon a set of metrics for monitoring IT investments.

Three questions: How much will it cost? How much will we get back? Is it a better investment than the alternatives?

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Total Cost of Ownership

Answers the “How much will it cost?”

Total Cost of Ownership (TCO) - the industry standard

It looks beyond initial capital investments to include costs associated with technical support, administration, and training.

This technique estimates annual costs per user for each potential infrastructure choice; these costs are then totaled.

Careful estimates of TCO provide the best investment numbers to compare with financial return numbers when analyzing the net returns on various IT options

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TCO Component Breakdown

For shared components like servers and printers, TCO estimates should be computed per component and then divided among all users who access them

For more complex situations, such as when only certain groups of users possess certain components, it is wise to segment the hardware analysis by platform

Soft costs, such as technical support, administration, and training are easier to estimate than they may first appear

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Valuing IT Investments

Soft benefits, such as the ability to make future decisions, make it difficult to measure the payback of IT investment IT can be a significant part of the annual budget, thus under close

scrutiny. The systems themselves are complex, and calculating the costs

is an art, not a science. Because many IT investments are for infrastructure, the payback

period is much longer than other types of capital investments. Many times the payback cannot be calculated because the

investment is a necessity rather than a choice, and there is no tangible payback.

IT has been oversold in the past and too many high-profile failures are well known!

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Return on Investment calculation

Calculate the lifetime costs of the project (normally set to 3 or 5 years depending on the organisation) Initial equipment and software costs Staff costs including salary, benefits, recruitment and training costs

for development and roll-out phase. Staff costs (as above) for each year the system is maintained. Software, hardware and network maintenance costs.

Calculate the lifetime benefit of the project.

Return on investment = (Benefit – Cost)/Cost RoI < 0 means the investment is never covered RoI > 0 means the investment is covered. It must then be compared

to other potential investments to see which is the best.

Payback anaylsis identifies how long it will take before RoI>1

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Internal rate of return

Commercial organisations are judged by the owners on the basis of profit (and sometimes revenue).

In order to deliver any profit target, the organisation will set a rate of return it expects from any existing or new business. Building in evaluation of the riskiness of the business.

This internal benchmark is called the Internal Rate of Return.

IT Departments and IT architects

Driver 5. IT organisation: how IT is itself organised, the roles in an IT department

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Eight Core Activities of IT department

IT is responsible for the delivery of new solutions and maintenance of existing solutions.

Apart from project specific requirements, it has 8 core activities

Anticipating new technologies. IT must keep an eye on emerging technologies. Work closely with management to make appropriate decisions. Weigh risks and benefits of new technologies.

Strategic direction. IS can act as consultants to management. Educate managers about current technologies/trends.

Process innovation. Review business processes to innovate. Survey best practices.

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Eight Core Activities (continued)

Supplier management. Carefully manage outsourced IT.

Architecture and standards. Be aware of incompatibilities. Inconsistent data undermines integrity.

Security Important to all general managers. Much more than a technical problem.

Business continuity planning Disaster recovery. “What if” scenarios.

Human resource management. Hiring, firing, training, outsourcing, etc.

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What IT Does Not Do

Does not perform core business functions such as: Selling Manufacturing Accounting.

Does not set business strategy. General managers must not delegate critical technology decisions.

In most cases, IT is a service to the rest of the business.

In some cases, IT is seen as a cost of doing business.

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IT Organisational structures

Centralised – bring together all staff, hardware, software, data, and processing into a single location.

Decentralised – the components in the centralised structure are scattered in different locations to address local business needs.

Federalism – a combination of centralised and decentralised structures.

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Federalism

Most companies would like to achieve the advantages derived from both centralised and decentralised organisational paradigms.

Federalism and governance

A key role of central IT in a federal organisational structure is governance

Governance includes Defining IT Strategy and architecture for the organisation Define technology and product standards Police new projects to ensure that they conform to standards Provide guidance on how to achieve business and project goals

Some objectives of governance include Minimise duplication and maximise reuse Minimise incompatibilities between systems Provide a consistent framework to develop IT systems

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Chief Information

Officer

ChiefKnowledge

Officer

ChiefTechnology

Officer

ChiefNetworkOfficer

IS Managers

NameTitle

Systems Developers/Developers

Business Analysts

Database Administrators

Support Personnel/Operations

Other

How IT organises

Architects

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CIO

The CIO (Chief Information Officer) is the head of the IS organisation.

CIO’s primary goal is to manage IT resources to implement enterprise strategy.

Provide technology vision and leadership for developing and implementing IT initiatives to help the enterprise maintain a competitive advantage.

As the importance of technology has increased so has the position of the CIO. Sometimes reports directly to the CEO. Otherwise COO or CFO

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CTO and other senior roles

The CIO, particularly in larger organisations, cannot guide the enterprise toward the future alone.

Other strategic areas require more focused guidance.

Often supplemented by a Chief Technology Officer Track emerging technologies Advise on technology adoption Design and manage IT architecture to insure consistency and

compliance

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The role of the architect

The architect develops plans based on a vision of the requirements for the system which is a blueprint of the company’s systems.

This “blueprint” is used for translating business strategy into a plan for IT.

Architect Must understand what is expected from business. Must clearly communicate between technology and business

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Some relevant questions for architects

What IT architecture is already in place? Is the company developing the IT architecture from scratch?

Is the company replacing an existing architecture? Does the company need to work within the confines of an

existing architecture?

Is the company expanding an existing architecture?

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Understanding existing architecture

Understanding existing architecture allows managers to evaluate the IT requirements of an evolving business strategy vs. their current IT.

Plans for the future architecture can then be compared with the current infrastructure to help identify which components of the current system can be used in the system being developed.

Plan for existing architecture Analyse the existing architecture and infrastructure Analyse the strategy served by the existing architecture. Analyse the ability of the existing architecture and infrastructure to

further the current strategic goals.

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Understanding time scales Strategic Time Frame

What is the life span of the system?

Technological Advances Can the infrastructure and architecture support these advances?

E.g. SOA (Service Oriented Architecture) defines a service or an interface as a reusable piece of software.

Growth Requirements Will it meet future demand? Is it scalable?

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Evaluate on expected financial value. Can be difficult to quantify.

Steps Quantify costs Determine the anticipated life cycles of system components Quantify benefits Quantify risks Consider ongoing dollar costs and benefits

Assessing Financial Issues

Conclusions “the challenge”

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Conclusions: The ideal of the enterprise IT

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Decisions made for the ‘correct’ technical reasons

Modern technologies updated regularly.

Built by the best with the latest equipment and skills

A consistent architecture ensures everything fits well together

Sleek and efficient supported by a single agenda

Capable of supporting business change for years to comeSwiss RE Building

in London

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Conclusions:The reality of enterprise IT is closer to…

Combined pressures of new technology and business results in almost chaos.

38 years of construction – 147 builders 0 architects 160 rooms – 40 bedrooms, 6 kitchens, 2 basements, 950 doors 65 doors to blank walls, 13 staircases abandoned, 24 skylights in floors No architectural blueprint exists

The Winchester “Mystery” House

Exercise: Does IT matter at all?

IT doesn't make a difference to business Nicholas Carr (Harvard Business School)

http://hbswk.hbs.edu/archive/3520.html

IT does make a difference to business Faisal Hoque (BTM Institute)

http://www.cio.com/article/125950/Study_Provides_Evidence_That_Technology_Execution_Leads_to_Business_Performance/1

Review and contrast the arguments. Which do you believe?

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