Business Value of Architecture- driven IT Infrastructure.
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Transcript of Business Value of Architecture- driven IT Infrastructure.
IT Pressures Felt by Most Businesses Today
How do we respond more quickly to business requirements? Flexibility Interoperability
How do we get more for our IT dollar? Reduce IT operating costs Minimize capital investment Deliver more “new” capabilities for less
How do we manage complexity in IT? Maintain skills for multiple technologies Enforce standards and compliance
Source: Accenture I.T. Spending Survey
Today’s ITDesired IT
The Agile Business
30%New Capability
70%Sustaining &
RunningExisting
Capability
45%New Capability
55%Existing
Capability
IncreasesValue Creation
DecreasesMaintenance &
Delivery
Do More With Less: but HOW?
With Infrastructure that is driven by Technology Architecture
Enterprise Architecture Framework
Strategy
BusinessProcess Applications Information Infrastructure
BusinessArchitecture
ApplicationPortfolio
InformationArchitecture
TechnologyArchitecture
Source: META Group
Buildings:• Models & Concepts• Blueprints• Bills of Material• Building Codes• Workmanship Standards
IT Systems:• Frameworks & Models• Patterns• Standards & interfaces• Buy Lists• Qualities (metrics)
PC
Laptop
Server
Mainframe
Router
DataDataData
Backbone Network Architecture
LAN
Server
Source: Forrester
What is architecture? “a system’s fundamental organization, embodied in its components, their relationships to each other and the environment, and the principles guiding its design. IEEE Standard 1471-2000
• Would you build a house without architecture? Then why Infrastructure?
Does your Infrastructure look like this?
…if so, you need architecture
How does Technology Architecture help? Tool for Risk Management• Architecture is based on requirements• Architecture helps you to make decisions• Translates IT decisions into business consequences
Tool for Project Management• Classic” project management focuses on time and
money -Functionality pays the price• Architecture guards the functionality
• “Design authority”• Architecture gives insight into the consequences of
decisions as they impact on the requirements
Planning Tool• Provides early insight into all relevant items• Helps to analyze the consequences of decisions• Develops standards and guidelines
Architecture Matters
“If the Federal Government continues to do what we have done (i.e. build non-architected solutions), we will continue to get what we have (i.e. a non-interoperable, expensive, and ever challenging tangle of data, applications, and technology)”
- Federal CIO Council
Source: Federal EnterpriseArchitecture Framework V1.1
JetBlue“Some people say airlines are powered by jet fuel,but this airline is powered by its IT infrastructure”
- President Dave Barger
WalMart“Accelerated growth could not have been achieved without our state-of-the-art computer systems”
- WalMart ISD
State Street“the architectural review process adds value by identifying issues before they impact a project.” - Amy Gutschen, SVP IT
NASDAQ“Highly scaleable infrastructure handles 1.8 billion real-time messages per day and 50K trades per second”
- TIBCO
IT Architecture as Competitive Advantage
IT Infrastructure
Best Practices of Leaders“Drive simplicity and flexibility throughout the technology environment by setting architectural standards and closely scrutinizing the true costs and benefits of exceptions.”
“Tackle complexity by reducing the number of technologies and platforms they deploy and by designing architectures to increase the flexibility and ease of implementation.”
“Take into account commercial aspects such as industry standardization and the likely future support of technologies because of the enormous costs of obsolescence.”
Source: McKinsey
The MIT Study: Leaders have ‘High Capability’ IT Infrastructure Analyzed 180 electronically based business
initiatives in 89 top performing enterprises
Common thread among leaders: “IT Architecture & Standards”
Spending focused on achieving competitive advantage
Highly robust and flexible infrastructure
Organization skilled at employing technology to support business value
Frozen in the past
In the Abyss
Leading
Competitive
Mainframe based application portfolio
Little flexibility
Ops and maintenance dominate budget
Ineffective new development
Too many technologies & inconsistent policies
Distributed computing environment - robust & simple
Effective new development
Source: McKinsey
Where Are You?
Application development without = Failure
Technology Architecture
Good Technology Architecture Focuses on Infrastructure as well as Applications
TraditionalArchitecture
s
Architecturesfor the Future
By default
IT-driven
Application focus
Cost-savings and control
Buy lists
By design
Business-driven
Infrastructure focus
Revenue-gen and efficiency
Alternatives
Source: Gartner
Define Enterprise
Architecture
High Capability IT Infrastructure
Technology Architecture
Building Blocks
Sources: Gartner, Meta, Giga, MIT
Start EA Planning
Formalize - Implement: Focus on:
1. Drives business alignment
2. Use a framework or your own process
1. System Concepts
2. Principles
3. Rules
4. Patterns
5. Interfaces & Standards
1. Scaleable
2. Reusable
3. Interoperable
4. Sustainable
5. Secure
6. Reliable
Good Architecture means:
Questions CEOs & Executives must ask:
Define Enterprise
Architecture
High Capability IT Infrastructure
Technology Architecture
Building Blocks
1. Do we have an EA planning process?
2. How do we know it’s working?
1. Do we have formalized & agreed upon Technology Architecture?
2. Is this in line with business objectives?
3. How do we know?
1. Are we reducing IT operating costs through IT Infrastructure investment? ROI?
2. What architectural standards, platforms & patterns maximize agility and interoperability?
3. Which will help us compete on productivity growth?Source: The Arnold Group
What Benefits Leaders Reap from Architecture-driven IT Infrastructure Investments1. Lower IT Operating Costs
1. Giga: implementing Architecture yields 20% savings in annual IT operating budget
2. Gartner: Architecture can provide savings of 10% to 20% of infrastructure costs
3. Giga: non-standard technology architecture increases costs by 10% & time by 25%
2. Increased Strategic Agility1. Gartner: Enterprise IT Architecture gives 30%
improvement in ability to deal with changing external drivers.
2. MIT: Correlated top performers with high capability IT infrastructure & standards
3. Increased Productivity 1. Forrester: 40% productivity gap between leaders and
laggards in IT investment
1. Lower IT Operating Costs with Enterprise IT Architecture
Reduce Capital Outlays Consolidation of hardware Consolidation of software licenses Volume purchase agreements
Reduce Support Costs Shared know-how Less training Fewer and easier upgrades Fewer diagnosticians Less vendor administration Less product evaluation Faster implementation
Enable Superior Operations Software distribution Backup and recovery System software management Software asset management Test and validation Help Desk
Improve System Management Capacity planning Performance management Fault management Security management Configuration management Performance measurement
Source: Gartner
2. Increased Strategic Agility & Growth
Interoperability GE: Well-architected IT infrastructure enables them to
integrate so many diverse businesses so well.Source: CIO Insight
Scalability Dell: Flexible architecture and IT Infrastructure allowed them
to grow dramatically … and plan for another doubling.Source: Forrester
Faster Time-to-Benefit/Faster Time-to-MarketFedEx Ground: ‘Poster child’ for the Agile Enterprise; enteredground delivery market to become #2 in 12 months.
Source: Fortune, Information Week Cross-boundary Security
H&R Block: Uses secure, integrated architecture to avoid overtaxing partners, staff, and the IRS.
Source: H&R Block
3. Increased Productivity
• Technology-driven productivity gap is widening 1. 1975 productivity gap between average firms and tech
leaders was 15% -- rising to 40% by 20002. Architecture and IT Infrastructure are key components *
• Tech-cautious firms are losing competitiveness1. Leaders get productivity and profit results by outspending
their competitors on new IT projects by more than 60%2. Productivity leaders are consolidating their industries3. Architecture and IT Infrastructure are key components *
Examples:1. CEMEX – FY 2001 profits of 16% compared with competitors'
3% as a result of technology and IT infrastructure investments
2. Dell - Compaq vs. Dell -- produces only 8% more revenues than Dell with 75% more assets and 85% more employees
Source: Forrester, The Arnold Group*
You Can’t Wait …
Benefit ExampleAction
CVS tracks in real time. Competition is stuck with too many track shoes.
Deploy Flexible, StandardizedInfrastructureServices
Interoperability with Value Chain
Create ‘High Capability’IT infrastructure
Strategic Agility
FedEx soars. Competition is grounded.
Develop Enterprise & Technology Architecture Competency
Return on Assets
WalMart writes the Book. Competition is in Chapter 11.