rationalizing an enterprise it architecture

<Insert Picture Here>

Rationalizing an Enterprise IT Architecture

Ken Naylor

Insight Program Director – North American Technology Organization

PACE OF BUSINESSIncreasing expectations

from customers and

partners to provide

answers sooner

INNOVATIONCompanies are under

pressure to bring

products and services

to market faster

GLOBALIZATIONCustomers, supply chain,

and competition have all

become global

REDUCE COSTSRelentless pressures

to drive additional

efficiencies…do more

with less

Businesses 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 Challenges

OK, Who Made This Mess?

“The value of information increases exponentially as fragmentation is reduced.”

EllisonEllison’’s Laws Law

Reinvent IT EconomicsThe 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

• Eliminate Information Silo’s

• Intelligent Outsourcing

• Empowered change agent

Characteristics How Do They Do It?

8

Fusion Middleware

Governance, Risk and

Compliance

Enterprise Performance Management

ERP ERP

Standardization & Standardization &

IT ConsolidationIT Consolidation

World Class

Performance

World Class

Performance

Oracle Global TransformationPhase One (1998-2003): Operational Excellence

Goal: Save $1 Billion Per Year

Business Strategy:Business Strategy:

1. 1. Simplify information systemsSimplify information systems

2. Standardize data, systems, and 2. Standardize data, systems, and

business processesbusiness processes

3. Automate processes3. Automate processes

4. Move to shared service4. Move to shared service

Copyright ©2009 Oracle Corporation. All rights reserved. 9

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

Old State Current State

App./Services Architecture

Infrastructure Architecture


The Transformation Payoff for Oracle 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

• Practically speaking…

- You’re not likely to achieve meaningful levels of IT Rationalization without Enterprise Architecture

- You’re not likely to develop an effective Enterprise Architecture without employing IT Rationalization practices

The Role of the Enterprise Architect

ETL

Informatica Powermart

business events

JDBC / ODBC / Web Services

Web Site

Oracle Weblogic Application Server

web services

Business ProcessesSOA – BPEL Process Manager

Proactive EventsSOA – Business Activity Monitoring (BAM)

Events & MessagesSOA – Oracle Enterprise Service Bus (ESB)

Batch

Files

Real

Time

Data Grid & Caching Layer

Oracle Coherence Grid

Existing E2.0Confluence Wiki, Oracle Portal

SearchOracle Enterprise Search

Vehicle Domain Model , BI Analytics, Sessions, etc

VDM, BI Analytics , etc

BI

Analytics

Operational &Decision Support Databases

(Media and D/W )

Data Warehouse

Oracle Database EE (10g & 11g)

RAC, RAT, OLAP, Partitioning , Advanced

Compression

Web Site

Media

FinancialsStatistical Analysis

& Data Mining

SASSAS

ConsolidatedUser Interface

(Portal, Community,

Collaboration )

Oracle WebCenter

Dashboards & Enterprise BI

(Enterprise Business

Model, Caching, BI

Engine )

Oracle Business intelligence

EE

Reporting (pre-built & ad-hoc)

Microstrategy &

Ad-Hoc Tools (e.g., SQL

Navigator

BI ApplicationsOracle BI Applications

(Finance, HR, etc.)


Information Technology RationalizationGuiding Principles

• Driven by Business Strategy and value-based priorities

• Standardizes & Simplifies the technical architecture

• Broad perspective 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

11

33

22

55

44







11

33

22

55

44

Reduce Costs

Faster to Market

Innovate

Globalize

Business Goals


• 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




11

33

22

55

44




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




11

33

22

55

44




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


Business ArchitectureDecomposed

Business ArchitectureBusiness Architecture

Order to CashOrder to Cash

Procure to PayProcure to Pay

Hire to ExitHire to Exit

Service & SupportService & Support

Industry Specific & CustomIndustry Specific & Custom

…

QuickTime™ and a decompressor

are needed to see this picture.





Applications Architecture: Retail Example

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




11

33

22

55

44



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 business 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




11

33

22

55

44



Copyright ©2008 Oracle Corporation. All rights reserved.

Deploy Grid PlatformDeploy Grid Platform

Standardize Standardize

BusinessBusiness

ProcessesProcesses

ConsolidateConsolidate

ApplicationsApplications

& Data& Data

StandardizeStandardize

ServiceService

PlatformPlatform

OptimizeOptimize


SourceSource

ApplicationApplication

ManagementManagement

Outsource Application & Infrastructure ManagementOutsource Application & Infrastructure Management

ModernizeApplications

Preserve applications

investment while

transitioning to a

lower cost platform

ModernizeApplications

Preserve applications

investment while

transitioning to a

lower cost platform

Standardize Service Delivery Platform

IntegrationIntegrationBusiness

Intelligence

Business

IntelligenceProcess

Management

Process

ManagementUser

Interaction

User

Interaction

StandardizeCorporate ServicesImprove efficiencies and

reduce costs:

�Financial Mgmt

�Human Capital Mgmt

�Procurement

�Budgeting & Planning

�Facilities & Projects

StandardizeCorporate ServicesImprove efficiencies and

reduce costs:

�Financial Mgmt

�Human Capital Mgmt

�Procurement

�Budgeting & Planning

�Facilities & Projects

StandardizeFront Office

Grow revenue, improve

customer retention and

reduce cost:

�Marketing

�Sales & Service

�Relationship Mgmt

�Collaboration

StandardizeFront Office

Grow revenue, improve

customer retention and

reduce cost:

�Marketing

�Sales & Service

�Relationship Mgmt

�Collaboration

The Road to Operational ExcellenceOpportunities to standardize, consolidate and automate

Governance, Risk & Compliance

Governance, Risk & Compliance

ConsolidateInformation

Improve visibility and

reduce cost:

�Customers

�Financials

�Organizations

�Data Warehouses

�Documents

ConsolidateInformation

Improve visibility and

reduce cost:

�Customers

�Financials

�Organizations

�Data Warehouses

�Documents

1 2 3 4

5

6

7

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.

28



Case Study: Large Manufacturing Company

• 217 Disparate systems

• Plant autonomy – no process integration

• 9 process chains including Order-to-Make

• Integrate processes across 3 plants

• 100,000 attributes • 15,252 attributes (down 85%)

• Data element standardization

• 62,300 programs • 12,309 programs (down 80%)

Business Architecture

Information Architecture

Current State Future State

• Legacy systems on Mainframes

• Mainframes plus HP Superdome HP/UX for Grid computing

• 5,500 interfaces • 1,561 interfaces (down 72%)

• SOA and EDI Integration

App./Services Architecture

SOA & Integration

Architecture

Infrastructure Architecture

Data Mgmt Architecture

• Plant autonomy – separate databases, duplicate data

• Replicated financial data & integrated into single global data warehouse

App. Dev. Architecture

• JDeveloper tool for creating J2EE apps

• COBOL

Results:

�$3 Billion ROI

�Reduced production lead time from 30 to 14 days

�Increased the delivery hit ratio from 82.7% to 95%

�Customer inventory days reduced from 30 days to less than 24 hours

Case Study: Large Manufacturing Company

Recommendations

• Integrate IT rationalization with enterprise architecture efforts (or use as catalyst to initiate EA efforts)

• Start at the business level and drive your down to technology

• Align with the broader business strategy – not simply a IT cost-cutting initiative

• Involve the right mix of Business/IT/EA people/Strategic vendors

• Treat IT Rationalization as an ongoing process – not a discrete project




11

33

22

55

44



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