What is the Value of Architecture Andrew L Macaulay Global Head of Architects Community March 2006 In collaboration with Microsoft Architect Insight Conference.

What is the Value of Architecture

Andrew L MacaulayGlobal Head of Architects Community

March 2006

In collaboration with

Microsoft Architect Insight ConferenceDrive the Debate

March 2006

Copyright © 2006 Capgemini - All rights reserved

2

In collaboration with| Microsoft Architect Insight Conference

Agenda

Introduction

Issues Facing Business

How Can Architecture Help?

What Does Service-Oriented Architecture Add?

Critical Success Factors

Summary

March 2006


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Introduction

What is the true value of architecture? • Cost Reduction? • Risk Reduction?• Improved Business/IT Alignment?• Improved Business (and IT) Agility?

And how does the culture and behaviour of an organisation affect the outcome?

To answer these questions, we need to understand …• What we mean by Architecture• What we mean by Value• And how we might start measuring Value

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Architecture means different things to different people

Enterprise ArchitectureEnterprise Architecture

BusinessArchitectureBusinessArchitecture

Enterprise ITArchitectureEnterprise ITArchitecture

Enterprise IT Information Systems Architecture

Enterprise IT Information Systems Architecture

Enterprise ITTechnology Infrastructure Architecture

Enterprise ITTechnology Infrastructure Architecture

InformationArchitectureInformationArchitecture

Enterprise

Security A

rchitectureE

nterpriseS

ecurity Architecture

Enterprise

Governance A

rchitectureE

nterpriseG

overnance Architecture

Software Architecture, Network Architecture, Storage Architecture…Software Architecture, Network Architecture, Storage Architecture…

SolutionArchitecture

SolutionArchitecture

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Aligning Business Strategy and Project Delivery

Project Delivery Lifecycle

Project Initiation & Start-up

Business Case

Project Mandate

Project & Stage Plans

Project Execution Project Closure

Transition to RunSolution Outline

Solution Design

Build/Test Cycle

Deploy

Enterprise Architecture Governance

Business Strategy

IT Strategy

Business & IT Project

Prioritisation & Planning

Influence choice & timing of projects to ensure progress along the roadmap towards the EA vision

Enterprise Architecture Transition Roadmap

(As-Is to To-Be) Roadmap represents the “route” to realising strategic business & IT goals and the EA vision

Enterprise Business & Information Architecture

Enterprise IS & IT Architecture

Enterprise architecture represents the desiredfuture state of the business & IT landscape

Enterprise architecture establishes and sets the standards by which solutions should be architected, and provides guidance across the project delivery lifecycle

Is the EA roadmap still taking us where we want to go?

Are the target architecture & defined standards still “fit for purpose”?

Ensures “project level” architecture work is properly planned & costed

Is the architecture being complied with in the way we want?

Are projects getting expected value from the architecture?

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Value is also measured from an individual viewpoint

Increasing Business

Advantage

Increasing Business/IT Alignment

Improving IT/Project

Effectiveness

Reduced IT Complexity

Reducing Cost of IT

CEO

CIO

CFO IT/System Manager Business Manager

Issues Facing Business Today

www.capgemini.com

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Many Business Drivers – Often Conflicting

Cost reduction

More value from IT

More flexible IT

Cheaper solutions and faster

Reduce project failures

Integrated and interoperable information services

Better service from SOE/SOA solutions

Guarantee of Quality

Compliance

…

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Business Unit CBusiness Unit C Business Unit DBusiness Unit DBusiness Unit BBusiness Unit BBusiness Unit ABusiness Unit A

Typical Current State – Project-focused Silos

There is rarely an alignment of functional requirements across business units and even less often alignment with service level and other non-functional requirements across the business

Infrastructure and

Governance

Infrastructure and

Governance

Functional Requirements

Version 1


Version 1

Business processe

s

Business processe

s

Business processe

s

Business processe

s


Version 2


Version 2

Business processe

s

Business processe

s

Business processe

s

Business processe

s

Infrastructure and GovernanceInfrastructure and Governance

Business or OrganisationBusiness or Organisation

Processes optimised for specific BU requirements

result in considerable overlap and redundancy

70% of IT projects fail to deliver their expected

results because of this ‘silo’ mentality

With increased complexity and integration of function,

cost of change and maintenance is increasing

Increasing complexity = increasing £££ for each change

Infrastructure and Governance

Infrastructure and Governance


Version 3


Version 3


Version 4


Version 4

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IT Landscapes often locked in a ‘vicious circle’

Continual business improvement and new initiatives are inhibited by IT due to the slow and costly nature of implementing change

Things have been made worse by projects attempting to deliver in an isolated fashion to bypass inhibitors – but this has only resulted in further constraints for subsequent projects in the medium term

Cycle of:Lower phase 1 cost

Higher phase 2..n costHigher operational cost

Inflexible, slow to change

Phase 1

Phase 2..n

Cost

75%

25%

Operational

"Operational Support"Euphemism

CxOs often cannot understand why relatively straightforward business changes are costly, risky and slow to implement

CxOs often cannot understand why relatively straightforward business changes are costly, risky and slow to implement

How Can Architecture Help?

www.capgemini.com

March 2006


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The Four Quadrants of Enterprise Architecture Value

Increase Business Agility

Reduce IT Cost

Expand IT Reach

Increase Project Success

You can continuously adapt your business more quickly and with lower risk than your competition by changing your IT

You can significantly improve your success with your investment in IT-enabled business projects

You can deliver new IT solutions and manage your existing IT services at lower cost than your competition

Reduce Cost

IncreaseValue

You can collaborate more effectively than your competition with your customers, suppliers and partners through your IT

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Where Does the Value Come From?

ReducingCosts

ReducingCosts

ImprovingProject

Success

ImprovingProject

Success

MoreReactive

to BusinessChange

MoreReactive

to BusinessChange Enabling

CompetitiveAdvantage

EnablingCompetitiveAdvantage

EnterpriseArchitecture

Capability andGovernance

Valueto the

Business

Valueto the

Business

EnterpriseArchitectureEnterprise

Architecture

SolutionArchitectures

SolutionArchitectures

ProjectPortfolio

Management

ProjectPortfolio

Management

BusinessStrategy

and Goals

BusinessStrategy

and Goals

Consistent(or Managed)View of Non-

functional Req

Consistent(or Managed)View of Non-

functional Req

Holistic Viewof Business

& IT Systems

Holistic Viewof Business

& IT Systems

Design withKnowledge ofContext andEnterprise

Design withKnowledge ofContext andEnterprise

Integratingexistingsystemseasier

Integratingexistingsystemseasier

Reducingproject

risk

Reducingproject

risk

Enablingconsolidation

of servers

Enablingconsolidation

of servers

Reducingcomplexityof IS & ITsystems

Reducingcomplexityof IS & ITsystems

IncreasedUnderstandingof the Business

IncreasedUnderstandingof the Business

Technologyand SystemsRoadmaps

Technologyand SystemsRoadmaps

Innovating &leveraging newtechnologies

Innovating &leveraging newtechnologies

Availabilityand reuse of

sharedservices

Availabilityand reuse of

sharedservices

can drive

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Understanding the Different ‘Types’ of Value

Based on Maslow's Hierarchy of Needs

Improved responsiveness to Business Change

Increase flexibility within the Business and IT

Innovation/leveraging of new technology

Reduced costs of environment

Increased project success

Reduced project risk

Leverage new capabilities for competitive advantage

Reduced costs

Architecture can enableArchitecture can enable

Busine

ss Benefit

Busine

ss Benefit

Compliance

What you have to doto be in business

Cost

What you have to doto run your business

Compet-itiveness

SpendSpend

Small %decrease in costsfrees significant %increase in ability

to invest

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Info

rmatio

nS

ystems

Tech

no

log

yIn

frastructu

re

Bu

sin

es

s

Info

rmatio

n

Security

Governance

WHY?Contextual

WHAT?Conceptual

HOW?Logical

WITH WHAT?Physical

Taking a Holistic View of the Architecture

Integrated Architecture Framework, version 3.9, Copyright © 2000-2006 Capgemini

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Architecture Maturity/Culture Affects Delivery of Value

Level Reduced Cost/Risk

Biz-IT Alignment

Added Value

-1 Not Needed

0 Not Understood

1 Appreciated £

2 Product Standardisation ££

3 Strategy Development ££ £

4 Architecting Projects £££ £

5 Enterprise Architecture Development ££££ ££ ££

6 Enterprise Architecture Service ££££ ££££ ££££

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Where Does Service-Oriented Architecture fit?

Moving to a Services view of the world …• Fosters reuse• Enables flexible Orchestration rather than fixed process• Allows you to leverage virtualisation and consolidation

Traditional organisation

Tightly coupled processes/systemsStovepipes - Integration “spaghetti”

Tightly coupled processes/systemsStovepipes - Integration “spaghetti”

Services organisation

Loose coupling of processes/systemsService Webs - Standard Interfaces

Loose coupling of processes/systemsService Webs - Standard InterfacesTO

TO

TO

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SOA Delivering Business and IT Value

Externally created Value through more efficient

market interaction

Mobility Event Driven Real Innovation ………… etc

Internal Value createdthrough process

redesignInternal Cost

Reduction by shared resources

License costsavings

Platform Rationalisation

Storage Area Networks Server Virtualisation Grid Computing Security

Web Services Business Intelligence Management tools Development Tools Service Orientated Architecture

b

Mobility

Processbased

Service-OrientedInfrastructure

Service-OrientedApplications

Service-OrientedEnterprise

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Measuring Value (Quantitive and Qualitative) Examples

£ Reduced Project Risk and Complexity

Reduction in project over-runs both in terms of cost and time without reduction of required scope

£ Improved Project Success

Measure around quality of solution; the delivery on-time and within budget

£ Cost Control and Improved ROI

Measuring ROI of projects over time – there is, however, an investment cost to start this (building reusable services)

£ Reduced Costs for Business As Usual

Operational costs of the IT estate to reflect the total cost of ownership and does not just shift (hide) costs elsewhere

£ Facilitate Delivery of IT Strategy

Progress in the delivery and sustaining of the IT Strategy, which itself will be delivering Value through IT

Improved Business Requirements

This should become visible through better development metrics around faults due to incorrect requirements

Better Alignment with Business

Quality-related feedback from the business, for example through annual surveys

Increased Agility & Competitiveness

IT seen as an enabler and partner with the business and not just a cost and constraint on the business

Improved Business Knowledge

Measure through effect, with the business becoming better connected, business units able to see themselves in context

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Case Study: National Assembly of Wales

£500k avoided cost in one year joining up projects and delivering common requirements as corporate services rather than siloed functionality

Currently predicting over £2m of avoided integration cost across 3 projects by taking an enterprise view early in the project lifecycle

The are indications (although not fully quantified yet) from projects that have worked independently to meet siloed needs, that the cost of ignoring the Architecture are orders of magnitude higher than aligning to the Architecture

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Capgemini Research: Added Value of Architecture Used Six Sigma methodology for analysis Work to date summarises the first results of

the research of benefits of architecture and other factors on project results. A sample is shown on this page

The results are based on a survey of 30 projects. Currently developing revised figures based on between 100 and 300

A 95% confidence level is used to test the significance of our hypothesis

Quality of the project architec

95% Bonferroni Confidence Intervals for StDevs

2

1

706050403020100


Cost over/ underrun

2

1

100806040200-20-40

F-Test

0,166

Test Statistic 0,05P-Value 0,000

Levene's Test

Test Statistic 2,08P-Value

Test for Equal Variances for Cost over/ underrun

Role of Project Architecture


95% Bonferroni Confidence Intervals for StDevs

2

1

706050403020100


Time over/ underrun

2

1

100806040200-20-40

F-Test

0,234

Test Statistic 0,08P-Value 0,001

Levene's Test

Test Statistic 1,52P-Value

Test for Equal Variances for Time over/ underrun

What was the architecture metho


NoneIAF

3,0

2,5

2,0

1,5

1,0

Boxplot of Quality of the project architec by What was the architecture metho

Role of IAF

Summary

www.capgemini.com

March 2006


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Critical Success Factors for Enterprise Architecture

ConnectConnect

Developing an EA Capability is a major change programme that will not happen in a few months (acknowledge/plan for this)

Strong executive sponsorship from within IT and Business

Work collaboratively with both business and IT as partners

Regular targeted communication with both the Business and IT, effectively driving a Marketing Plan

Understand key stakeholders and communicate specifically with them

Make your success and value visible

Developing an EA Capability is a major change programme that will not happen in a few months (acknowledge/plan for this)

Strong executive sponsorship from within IT and Business


Regular targeted communication with both the Business and IT, effectively driving a Marketing Plan

Understand key stakeholders and communicate specifically with them

Make your success and value visible

DeliverDeliver

A common language/framework and approach, with supporting tools if appropriate

A clear governance model over projects/Solution Architectures, including sufficient Authority

A pragmatic approach so that you can delivery some results early and you are not seen as just an ivory tower doing strategy stuff

Architecture is a living thing. Use feedback from projects to learn and track the changing priorities and goals in the business

A common language/framework and approach, with supporting tools if appropriate

A clear governance model over projects/Solution Architectures, including sufficient Authority

A pragmatic approach so that you can delivery some results early and you are not seen as just an ivory tower doing strategy stuff

Architecture is a living thing. Use feedback from projects to learn and track the changing priorities and goals in the business

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Critical Success Factors for Solutions Architecture

GovernanceGovernance


Leverage and conform to the Enterprise Architecture

Work under the right level of EA governance and provide the right level of solution governance to the design/engineering teams

Reuse services and infrastructure wherever possible and appropriate


Leverage and conform to the Enterprise Architecture

Work under the right level of EA governance and provide the right level of solution governance to the design/engineering teams

Reuse services and infrastructure wherever possible and appropriate

ApproachApproach

A common language/framework and approach with supporting tools, if appropriate

Solution Architects with the correct mix of Business and IT skills, and subject-matter-specialists available, maybe through a ‘T-model’

A pragmatic approach, knowing where to focus and when to stop (when it is ‘good enough’)

A common language/framework and approach with supporting tools, if appropriate

Solution Architects with the correct mix of Business and IT skills, and subject-matter-specialists available, maybe through a ‘T-model’

A pragmatic approach, knowing where to focus and when to stop (when it is ‘good enough’)

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Summary

Enterprise Architecture is a journey• The business change to implement the capability, the evolution of

the Architecture itself, the cycle of awareness to acceptance to adoption of the approach, the change it can foster in the business …

Governance, Authority and Sponsorship are critical• Getting a governance model that reflects the corporate culture but

can deliver the goods, together with the authority and support are critical for EA to be able to function – and then deliver value

Communication is key• As with Architecture as a whole, communication of the EA function,

the Architecture and the value is something that needs to become business as usual

Value is ‘in the eye of the beholder’• Value can come in many forms - never forget that you must

understand the business context, culture and stakeholders to be able to really demonstrate value

Andrew L [email protected]

www.capgemini.com

What is the Value of Architecture Andrew L Macaulay Global Head of Architects Community March 2006 In collaboration with Microsoft Architect Insight Conference.

Documents

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true value of architecture

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