In collaboration with Microsoft Architect Insight Conference Drive the Debate What is the Value of Architecture Andrew L Macaulay Global Head of Architects Community March 2006 Agenda  Introduction  Issues Facing Business  How Can Architecture Help?  What Does Service-Oriented Architecture Add?  Critical Success Factors  Summary | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 1 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 | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 2 Architecture means different things to different people Enterprise Architecture Enterprise IT Information Systems Architecture Enterprise IT Technology Infrastructure Architecture Enterprise Security Architecture Enterprise IT Architecture Information Architecture Enterprise Governance Architecture Business Architecture Solution Architecture Software Architecture, Network Architecture, Storage Architecture… | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 3 Aligning Business Strategy and Project Delivery Enterprise Architecture Transition Roadmap (As-Is to To-Be) Influence choice & timing of projects to ensure progress along the roadmap towards the EA vision Enterprise architecture represents the desired future state of the business & IT landscape Business Strategy Roadmap represents the “route” to realising strategic business & IT goals and the EA vision Is the EA roadmap still taking us where we want to go? Business & IT Project Prioritisation & Planning IT Strategy Enterprise Business & Information Architecture Are the target architecture & defined standards still “fit for purpose”? Enterprise IS & IT Architecture Enterprise Architecture Governance Are projects getting expected value from the architecture? Ensures “project level” architecture work is properly planned & costed Enterprise architecture establishes and sets the standards by which solutions should be architected, and provides guidance across the project delivery lifecycle Is the architecture being complied with in the way we want? Project Delivery Lifecycle Project Initiation & Start-up Project Execution Project Closure Business Case Transition to Run Solution Outline Project Mandate Solution Design Build/Test Cycle Deploy Project & Stage Plans | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 4 Value is also measured from an individual viewpoint Increasing Business Advantage CEO  Increasing Improving Reduced IT Business/IT IT/Project Complexity Alignment Effectiveness   CIO    CFO IT/System Manager   Business Manager Reducing Cost of IT    | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 5 Issues Facing Business Today www.capgemini.com 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 … | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 7 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 Business or Organisation Business Unit A Business Unit B Business Unit C Business Unit D Business processe s Business processe s Business processe s Business processe s Processes optimised for specific BU requirements result in considerable overlap and redundancy Functional Requirements Version 4 70% of IT projects fail to deliver their expected results because of this ‘silo’ mentality Functional Requirements Version 1 Infrastructure and Governance Functional Requirements Version 2 Infrastructure and Governance Functional Requirements Version 3 Infrastructure and Governance With increased complexity and integration of function, cost of change and maintenance is increasing Increasing complexity = increasing £££ for each change | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 8 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 25% Phase 1 Cost Operational "Operational Support" Euphemism Phase 2..n 75% Cycle of: Lower phase 1 cost Higher phase 2..n cost Higher operational cost Inflexible, slow to change CxOs often cannot understand why relatively straightforward business changes are costly, risky and slow to implement | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 9 How Can Architecture Help? www.capgemini.com The Four Quadrants of Enterprise Architecture Value Increase Value Expand IT Reach Increase Business Agility You can collaborate more effectively than your competition with your customers, suppliers and partners through your IT You can continuously adapt your business more quickly and with lower risk than your competition by changing your IT Increase Project Success You can significantly improve your success with your investment in ITenabled business projects Reduce IT Cost You can deliver new IT solutions and manage your existing IT services at lower cost than your competition Reduce Cost | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 11 Where Does the Value Come From? Business Strategy and Goals Enterprise Architecture Capability and Governance Enterprise Architecture Project Portfolio Management Solution Architectures Increased Understanding of the Business Reducing complexity of IS & IT systems Holistic View of Business & IT Systems Technology and Systems Roadmaps Consistent (or Managed) View of Nonfunctional Req Design with Knowledge of Context and Enterprise Enabling consolidation of servers Reducing project risk can drive Reducing Costs Improving Project Integrating Success existing systems easier Value to the Business More Reactive to Business Availability Change Enabling and reuse of Competitive shared Advantage services Innovating & leveraging new technologies | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 12 Understanding the Different ‘Types’ of Value Architecture can enable Small % decrease in costs frees significant % increase in ability to invest Competitiveness Improved responsiveness to Business Change Increase flexibility within the Business and IT Innovation/leveraging of new technology Business Benefit Cost What you have to do to run your business Compliance What you have to do to be in business Spend Reduced costs of environment Increased project success Reduced project risk Leverage new capabilities for competitive advantage Reduced costs Based on Maslow's Hierarchy of Needs | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 13 Taking a Holistic View of the Architecture WHY? Contextual Governance Security Information Systems WITH WHAT? Physical Information Business HOW? Logical Technology Infrastructure WHAT? Conceptual Integrated Architecture Framework, version 3.9, Copyright © 2000-2006 Capgemini | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 14 Architecture Maturity/Culture Affects Delivery of Value Reduced Biz-IT Cost/Risk Alignment Level 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 ££££ ££££ ££££ | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 15 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 TO Services organisation TO Tightly coupled processes/systems Stovepipes - Integration “spaghetti” TO Loose coupling of processes/systems Service Webs - Standard Interfaces | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 16 SOA Delivering Business and IT Value Externally created Value through more efficient market interaction Internal Value created through process redesign License cost savings Internal Cost Reduction by shared resources Mobility Process based Service-Oriented Infrastructure Service-Oriented Applications Service-Oriented bEnterprise  Platform Rationalisation  Storage Area Networks  Server Virtualisation  Grid Computing       Security Web Services Business Intelligence Management tools Development Tools Service Orientated Architecture     Mobility Event Driven Real Innovation ………… etc | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 17 Measuring Value (Quantitive and Qualitative) Examples £ £ £ £ £     Reduced Project Risk and Complexity Improved Project Success Cost Control and Improved ROI Reduced Costs for Business As Usual Facilitate Delivery of IT Strategy Improved Business Requirements Better Alignment with Business Increased Agility & Competitiveness Improved Business Knowledge Reduction in project over-runs both in terms of cost and time without reduction of required scope Measure around quality of solution; the delivery on-time and within budget Measuring ROI of projects over time – there is, however, an investment cost to start this (building reusable services) Operational costs of the IT estate to reflect the total cost of ownership and does not just shift (hide) costs elsewhere Progress in the delivery and sustaining of the IT Strategy, which itself will be delivering Value through IT This should become visible through better development metrics around faults due to incorrect requirements Quality-related feedback from the business, for example through annual surveys IT seen as an enabler and partner with the business and not just a cost and constraint on the business Measure through effect, with the business becoming better connected, business units able to see themselves in context | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 18 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 | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 19 Capgemini Research: Added Value of Architecture Boxplot of Quality of the project architec by What was the architecture metho 2,5 Quality of the project architec Quality of the project architec Test for Equal Variances for Cost over/underrun F-Test Test Statistic P-Value 1 Levene's Test Test Statistic P-Value 2 0 10 -40 -20 20 30 40 50 60 95% Bonferroni Confidence Intervals for StDevs 1,0 IAF None What was the architecture metho 2,08 0,166 70 1 2 0 20 40 Cost over/underrun 60 80 100 F-Test Test Statistic P-Value 1 0,08 0,001 Levene's Test Test Statistic P-Value 2 0 10 -40 -20 2,0 1,5 0,05 0,000 Test for Equal Variances for Time over/underrun Quality of the project architec Quality of the project architec 3,0 Role of Project Architecture Quality of the project architec  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 20 30 40 50 60 95% Bonferroni Confidence Intervals for StDevs 1,52 0,234 70 1 2 0 20 40 Time over/underrun 60 80 100 Role of IAF | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 20 Summary www.capgemini.com Critical Success Factors for Enterprise Architecture Connect Deliver  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  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 | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 22 Critical Success Factors for Solutions Architecture Governance Approach  Work collaboratively with both business and IT as partners  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  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’) | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 23 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 | Microsoft Architect Insight Conference In collaboration with Copyright © 2006 Capgemini - All rights reserved March 2006 24 Andrew L Macaulay [email protected] www.capgemini.com