rationalizing an enterprise it architecture

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Rationalizing an Enterprise IT Architecture

Shaun McLaurin

Insight Program Director – North American Technology Organization

Business & IT Challenges

• Evolved through corporate,

organizational and technology

changes• Mergers & Acquisitions

• Adapted to new business processes

• Adhere to layers of regulatory

requirements

• Integrate ‘best of breed’ applications• Account for LOB IT ‘initiatives’

• Organizational and Information

silos

• Complex IT environment, multiple

skill sets, costly to operate

• Inflexible IT infrastructure difficult

(and risky) to modify

• Redundant application systems

and business processes

• Multiple versions of business data

IT Environment History Resulting in

It’s Expensive to Have Bad Information

“The value of information increases exponentially as

fragmentation is reduced.”

EllisonEllison’’s Laws Law

Reinvent IT EconomicsAn architect’s dilemma

InfrastructureInfrastructure

StrategicStrategicInvestmentInvestment


StrategicStrategicInvestmentInvestment

SavingsSavings

AnnualIT Spend

IT Spending and Demand Survey

�80% Maintenance�20% New Projects

IT Spend for World-Class Performers is

Comparable to Their Peers…

…But, they spend it differently

World-Class Performers Reduce Complexity

• They spend 18% less on IT

• They require 36% fewer IT workers

• They need 29% fewer apps

• They finish 91% of all projects to

spec, on time and on budget

• 100% have their top IT exec on the

senior management committee

• Better IT Vendor Management

• 5% fewer hardware vendors

• 29% less contractor services

• 65% fewer software suppliers

• Standardized best practices and

good architecture

• Simplification and standardization

• Higher levels of process discipline

• Improved overall alignment with

business objectives.

• Intelligent Outsourcing

• Empowered change agent

Characteristics How Do They Do It?

Copyright ©2009 Oracle Corporation. All rights reserved. 7

Technical Architecture

Technical Architecture

Oracle Rationalized IT Portfolio

63 Financial databases 1 Financial single global instance

1 IT Support single global instance

60 IT Support databases

97 Email servers on 120 databases

1 cluster of 2 Email servers and 4 databases

501 Education servers 296 Education servers

32 IT Support servers, 600 test servers

2 IT Support servers, 30 test servers

40 Education registration systems

1 Education registration system

27 IT Support applications 1 IT Support application

>1000 applications<100 applications – standardized on E-Business Suite

40 Data Centers

2300+ Staff

1 Global IT & Governance Model

2 Data Centers + 1600 Staff

Few standard business processes

Standardized core business processes

Business Architecture

Information Architecture

Current State

App./Services Architecture

Infrastructure Architecture


The Transformation Payoff The Ability to Scale Without Increasing Costs

$0$0$0$0

$2$2$2$2

$4$4$4$4

$6$6$6$6

$8$8$8$8

$10$10$10$10

$12$12$12$12

$14$14$14$14

$16$16$16$16

$18$18$18$18

$20$20$20$20

199319931993199319941994199419941995199519951995199619961996199619971997199719971998199819981998199919991999199920002000200020002001200120012001200220022002200220032003200320032004200420042004200520052005200520062006200620062007200720072007

Billions

0%0%0%0%

1%1%1%1%

2%2%2%2%

3%3%3%3%

4%4%4%4%

5%5%5%5%

6%6%6%6%

7%7%7%7%

8%8%8%8%

9%9%9%9%

Percentage

Revenue G&A

G&A as % of revenue

Revenue in Billions

+4 acquisitions

+17 acquisitions

+14 acquisitions


Information Technology RationalizationGuiding Principles

• Driven by Business Strategy

• Standardizes & Simplifies the technical architecture

• Just enough for enterprise solutioning efforts

• Reuses best practice Business Models, Process Models and Reference Architectures from industry and commercial vendors

• Initially focused on speed-of-delivery for high level guidance

• Matures iteratively & evolutionary for breadth & depth

• Can be enforced


IT Rationalization process

Establishes the vision for business and information technology.

Involves the right mix of people for success.

Establishes objectives, “future state” and roadmap.

Provides prescriptive guidance, process and standards for Business and Information Technology.

Documents current state and path to future state.

Promotes adherence to EA guidance and plans while architecting business-driven, enterprise solutions.

Identify the Business Strategy

Establish Enterprise Architecture Program

Define “Future State”Architecture

Define Rationalization Roadmap

Establish EA Governance

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Reduce Costs

Faster to Market

Innovate

Globalize

Business Goals


Globalized Operational Excellence Oracle Transformation Drivers

Lower Costs Better Information, Governance

• Global information visibility

• Global consistency of process, policy & data

• Strong internal controls

• Easier compliance

• Fewer data centers

• Self service processes

• Labor & transaction cost efficiencies

• Shared service centers

• Offshoring

Increase Speed

• Streamline applications change management

• Fast integration of new acquisitions

Improve Customer Service

• Improved quality and service

• One customer experience

The Global Transformation Payoff for OracleAbility to drive profitable, sustainable growth

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Percentage

Operating Margin %

Operating Margin %

(14.4% in 1993)

(40.8% in 2007)

Achieved through global processes, consolidation, simplification and shared services

Note:Figures based on non-GAAP results. GAAP to non-GAAP reconciliations are available on the Oracle Investor Relations website at www.oracle.com/investor.

We grow our operating cash flow 3 times faster than five years ago.Safra Catz, CFO

Oracle Q3 Earnings Report, March 2008


• Executive Sponsors

• Business Stakeholders

• Chief Enterprise Architect

• Program Manager

• Business Architects & Industry Experts

• Information Analysts

• Solution Architects

• Strategic Vendors

TASKS

PEOPLE

• Establish goals, leadership and resources

• Define scope and the next iteration of work product

• Gain Executive sponsorship and support

• Conduct Stakeholder analysis

• Establish plan for an EA Governance Board

• Develop a communication plan




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How do you…

• Stay current with technology and applications,

• Implementing best practice business models,

• Yet be able to integrate these business processes

• To improve business visibility, agility and efficiency




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Defining “Future State” Architecture

Business Business StrategyStrategy

Business Business Requirements Requirements & Objectives& Objectives

Architectural Architectural PrinciplesPrinciples

Business ArchitectureBusiness Architecture

Application ArchitectureApplication Architecture

Technical ArchitectureTechnical Architecture

EA Views

EA Views

EA Artifa

cts

EA Artifa

cts

Business Process & GRC Models

Data/Info Objects & Models

Technology Standards & Reference Models

Industry Industry Best PracticesBest Practices

& Models& Models

EA Inputs

EA Inputs

EA/Solutioning Process & Guidance

Information ArchitectureInformation Architecture

Capability & Service Descriptions

Leverage ‘Common Use Applications’ Architecture


Integrated Logistics

Integrated Financial Controls

Multi Channel Order Management

RetailRetail

Trade Promotion Execution

Trade Promotion Management

Demand Management

Consumer Consumer GoodsGoods

Account Origination with Core Banking

Multi-Channel Customer Service

Banking IRM

BankingBanking

Order to Bill

Revenue Management

Customer Care

CommunicationsCommunications

Order to Cash

High Tech Distribution

Product Lifecycle Management

High High TechnologyTechnology

Best Practice Industry ProcessesExample Industries…

Conceptual Business Model : Retail

CustomerDemand &Enterprise

AnalyticsAnalytics CRM & MarketingCRM & Marketing Loyalty Call Center Sales Field Service

Marketing Order Mgmt Pricing CTOWeb Store

Supply ChainPlanning

Supply ChainExecution

Business OperationsBusiness Operations

Merchandise Planning& Optimization

Merchandise Operations

Store Operations


Integration and Collaboration

Enterprise Infrastructure

Corporate AdministrationCorporate Administration

Indirect Procurement Projects

EPM Financials

Compensation

Human Resources Real Estate

ITITHRHRHelpdesk

Store Inventory Mgmt

Point-of-Sale

Workforce Scheduling

Learning Mgmt

Store Helpdesk

Workforce Comms

TransportationManagement

ReplenishmentOptimization

Sourcing

Warehouse Management

Home Delivery

Advance InventoryPlanning

Supply NetworkOptimization

Value Chain Allocation

Value ChainCollaboration

PIMMerchandiseFinancial Planning

Assortment Planning

Item Planning

Category Mgmt

Price Optimization

Promotion Planning& Optimization

Trade Management

Invoice Match

Merchandise Management

Price Management

Sales AuditDemand Forecasting

Returns Management


Information / Data ArchitectureDecomposed

Information ArchitectureInformation Architecture

ERP Data ModelsERP Data Models

Process Data ModelsProcess Data Models

Data HubsData Hubs

Industry Data ModelsIndustry Data Models

…

Customer

ProductHealthcare


Technical ArchitectureDecomposed

Technical ArchitectureTechnical Architecture

SOA & Integration ArchitectureSOA & Integration Architecture

Data & Information Mgmt ArchitectureData & Information Mgmt Architecture

Security ArchitectureSecurity Architecture

Infrastructure ArchitectureInfrastructure Architecture

Application Development ArchitectureApplication Development Architecture

Business Intelligence ArchitectureBusiness Intelligence Architecture


EA Future State:

Applications, Technology

EA Transformation Focus:

Operational Excellence(Business, IT)

Enterprise Solutioning:

Business-Driven Initiatives

IT Rationalization is an iterative journey

EA Transformation Focus:

Management Excellence




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Rationalization Deliverables

Current State Gap &Opportunity Analyses

High Level Roadmap

Targeted Benefits

Target architecture and process model that defines the

applications, services, information and infrastructure required to

satisfy key business goals and requirements

High level, multi track program of phased actions, initiatives and

implementations that provides a framework for planning and

managing the future state migration

Identification of potential cost savings and other benefits to be

derived from the future state

Future State Vision

Key findings and conclusions including targeted analyses of the

current state environment and its key performance gaps and

opportunities


• Chief Information Officer

• Chief Enterprise Architect

• At least one Executive Sponsor

• At least one major Business Executive

• At least one Business Architect

• Lead Solution Architects pulled in on an as-needed basis

RESPONSIBILITIES

BOARD MEMBERS

• Establish an EA Governance model and an Architecture Review Board

• Promote the EA agenda and adherence to “Future State” EA Prescriptive Guidance:

• Review IT project designs

• Review proposed enterprise solution architectures and major initiatives

• Provide direction




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8 Strategies for Transformation

Composite Business ProcessesComposite Business Processes

8

IT Standardization StrategyDriven by business model

Common Processes

Common Data

Accelerate Transformation BenefitsLeverage Integration and BI platforms

Common Enterprise Information Model

Composite business processes

and business analytics accelerate

business resultsComposite Business ProcessComposite Business Process

�No single source of truth

�Redundant applications

�Incomplete and conflicting data

�Labor intensive compliance

Long-term goal: Standardize processes, consolidate redundant applications and eliminate data silos

Application & Data Silos

�Common view of information

�Key Performance Indicators

�Business reporting and analytics

�Compliance reporting

�End-to-end visibility

�Unified workplace

�Compliance

• Deploy standardized business processes over legacy application silos using standards-based services.

• Improve process management and controls enforcement.

• Improve visibility through common enterprise information model.

• Improve business analytics using out-of-the-box analytics capabilities.

• Publish key performance indicators

• Shelter users from changes to underlying systems as they are consolidated over time.

Enterprise Software Architecture

Analytics

Applications

Customers Employees Partners

Business Integration

Data & Content

Application Development

Scale & Continuity

Enterprise Management

Security & Compliance

Intelligence & Analytics

3rd Party Applications

Legacy Applications

Existing Technology

CRMERP IndustriesHCM

Composite Industry Processes

Documents

Collaboration

User Interaction

Applications

Technology

Architect a More Competitive Enterprise

• Mergers & Acquisitions : Guide strategic fit assessment and post-merger consolidation

• Business Processes : Provide insights into gaps or redundancies ; Enhance customer service

• Compliance & Audit : Facilitate transparency across applications ; Manage users & applications life-cycle management

• Enterprise Architecture : Consolidated technical infrastructure ; Reduced costs & Increase agility

• Vendor Management : Negotiate terms ; Risk Reduction

rationalizing an enterprise it architecture

Technology

support servers

business strategy

business objectives

education servers architecture

business processes account

support databases1

governance model business

best practice business