Transforming your business systematically from Fragile to...

AGILITY BY DESIGN “The best way to predict your future is to invent it” - Frank Herbert

Transforming your business systematically from Fragile to

Agile – ME Case Study Glenn Smyth

Founder and CE Fragile to Agile Pty Ltd

14th December 2015

“The best way to predict your future is to invent it” Frank Herbert, Dune

www.fragiletoagile.com.au AGILITY BY DESIGN 2 16/12/2015

Overview

• Brief Fragile to Agile Introduction • The case for change • Where are we now? - Fragile Inc. • Where do we need to be? - Agile Inc. • What do we need to get there? - BCM • How do we make it happen? • Brief case Studies • Summary

Agility by Design


Fragile to Agile Introduction

• Adelaide based dedicated architecture company launched in 2009

• We specialise in: • Enterprise Architecture • Solution Architecture • Business Capability Modelling • Targeted Strategic Roadmaps • Digital Transformation • Domain Reference Architectures • Enterprise Architecture Practice Establishment • Architecture Governance • Project Conceptual Design • Micro Services Architecture • Data Modelling • BPM/SOA Readiness

Delivering independent planning and design

expertise for business agility.

Agility by Design


Fragile to Agile Introduction

Our Brand Promise:

We identify the right change and make it predictable.

Our Value Proposition:

We help you deliver your strategy with confidence whilst minimising cost and risk and maximising agility.

Agility by Design


Fragile to Agile Clients Agility by Design


The case for change Agility by Design

• Disaggregation of the Business Model • Industry deconstruction • Enterprise reconstruction • Move to market services • Increasing levels of outsourcing • Disrupters “eating away” at business model from the edges, e.g. “Fin Tech” • Must ascertain where the organisational boundary lies

• Responsiveness

• Half-life of competitive advantage from product innovation continually falling • Industrialisation has hampered speed to market • Rate of change increasing • New channels coming on stream regularly

• Increasing Market Segmentation

• Generational change • Demographic change • Mergers and acquisitions

Agility/Adaptability is the new Black


• $80 -145 billion p.a. spent on failed and cancelled projects (The Standish Group International, Inc.)

• 25% - 40% of all spending on projects is wasted as a result of re-work (Carnegie Mellon)

• 50% of changes are rolled back out of production (Gartner)

• 40% of problems are found by end users (Gartner)

• Poorly defined applications result in a persistent miscommunication between business and IT; contributes to 66% project failure rate for these applications, costing U.S. businesses at least $30 billion p.a. (Forrester Research)

• 60% - 80% of project failures attributed directly to poor requirements gathering, analysis, and management (Meta Group)

• Nearly two thirds of all IT projects fail or run into trouble.

Where are we now?

The case for change


Spaghetti Architecture – the ‘Fur Ball’ Where are we now?

• Business processes are embedded in code, fragmented, difficult to change

• Increasing time and cost to market

• Solutions that do not match intent or fail

• Multiple solutions exist for business capabilities

• Data integrity issues and no single source of the truth

• Intertwined systems with inflexible interfaces and the need for the manual rekeying of data

Inability to react to market forces resulted in this company going from market leader to

bust in 10 years


Fragile Inc. - Processes Where are we now?

Organisational DNA


Agile Inc. Architecture Where do we need to be?

• Cheaper and quicker to market • Changes to business processes can be

made in materially less time • Management has real time visibility of

the performance of the business • Can easily switch between internal and

external capability delivery • Can independently optimise specific

business capabilities • Communication channels are added

without requiring major system changes • Single view of the customer and other

key stakeholders • IT solutions that support true business

agility • Materially lower risk in change execution • Agile Inc. transcends strategy - it’s an

overarching business and technology design paradigm which is not dependent on strategy or industry segment

“It is not the strongest of the species that survives but the most adaptable”

Charles Darwin


Seamless End to End Approach to change Where do we need to be?


Agility Pyramid What do we need to get there?


Integrated Change Framework What do we need to get there?


Business Capability Model Explained

• A logical model of what the business does, not how it does it (business process model) or who does it (organisational structure)

• Models the business as a set of services (service providers), including internally sourced and externally sourced services

• Has nothing to do with IT (at this stage), all services are modelled irrespective of whether they are manual or automated

• Is static, only changes if an organisation is entering/exiting a business or adding a new technical channel but not when implementing new products

• Insourcing/outsourcing of a capability/service does not affect the model

• Although it is fundamental to achieving agility (and often done to facilitate this), bigger benefits often flow from the deeper understanding of the business it yields


Business Capability Model Views

Executive View • Decomposes capabilities to two levels of abstraction only • Less rigour applied due to its high level nature • Consulting artefact • Used to manage up e.g. heat maps, investment and prioritisation Architecture View • Decomposes capabilities to four or five levels, where necessary • Design artefact – must be developed with rigour to achieve the detail required • Used for deep technical design e.g. overlays, Current State, Target State BPM/SOA View • Adds service containers - defines process and data boundaries and answers key

BPM/SOA design questions Recommended to use the same model for both consulting and design purposes


Business Capability Model Executive Level Example

– A Council

What do we need to get there?


Business Capability Model Executive Level Example

– A Council



Business Capability Model Architecture Level Example

– An Environment Department



Planning & Consulting

Our Approach

Current State & Detailed Overlays Target State Roadmap

BCM Executive View

BCM Architecture View

Outcomes High Level Heat Maps Operating Model

& Sharing

High Level Design

How do we make it happen?


Fragile to Agile - Brief Case Studies

• ATO:

• Fragile to Agile approach used for the ATO change program – “… the most successful IT program in Australian history” (Auditor General)

• ME Bank complete transformation:

• Engaged by CEO after successful experience of Fragile to Agile approach at Adelaide Bank

• Program designed in 2010 and executed between 2010 and 2015

• Fragile to Agile designed the program and then performed the conceptual design for each project and provided governance to the program execution

• Highly successful - program completed within 2 weeks of original estimate and


Agility by Design

ME Bank - The Results – Winners !!


The tools and technologies implemented by the Program were numerous across the 13 projects and comprised 25 new solutions and 7 upgrades to existing solutions, the primary of which were: 1. A new Core Banking Solution – Temenos T24. This solution replaced three aging core systems with a single modern solution. 2. Business Process Management Solution – PegaSystems BPM - This solution enabled the automation of a large number of previously manual processes, many now being straight-through-processed. Significant cost savings were reaped by the Bank through this automation and it also enabled the standardisation and streamlining of its processes and the application of more rigour to process improvement efforts. 3. Data Warehouse Solution – delivered a major uplift in all regular reporting as well as an executive dashboard and support for ad-hoc reporting. 4. Paper Management Solution – introduced scanning at point of entry and, together with a new Document Management Solution, enabled the transition from paper-based to electronic document based processes. 5. Document and Records Management Solution – introduced a single electronic store for all documents and, together with the Paper Management Solution, enabled the transition from paper-based to electronic document based processes. 6. Integration Services Solution – WebMethods ESB 7. Security Services Solution – single sign-on was achieved by the implementation of a single authentication and authorisation solution across all solutions introduced by the Transformation Program.

The Primary Solutions


ME Bank - The Results

ROE has grown from 5% to 7.4% with the goal of increasing this to double digits in the medium term as the new platforms delivered by the Program are further leveraged. Growth in net profit after tax by about 25% in the 12 months after the Program completed while holding costs relatively flat.


Improvement in end to end Home Loan Mortgage process: • Improved conditional approval rates; from 4 - 10 days to 50% having an instant decision. • Letter of Offer generation from 3 hours to seconds, • 75% reduction in data rekeying • 50% of the Bank’s home loans are now conditionally approved by the system (from zero per

cent before the Program) and the time it takes to get this approval has been cut from 3 days to 30 minutes.

98.7% of all deposit account opening processes are now straight through processed while before the Program it took 4 person hours manual effort, on average. Customers can open a transaction account completely online with zero human intervention and within five minutes An uplift in time to market for new products, what was taking 12 months now takes 3 months Break down of the communication barriers between business and ICT; Provides executive with the required information to make better informed investment and prioritisation decisions; Improved customer and staff satisfaction

ME Bank - The Results


“Thanks to the transformation, we can detect when customers have had a change in circumstances. This provides data trigger points for cross-selling super if they’re not with an industry super fund and for building loyalty if they’re with an industry fund. Because it’s easier to plug new functionality into our systems, we’ll also be able to display super accounts through our internet and mobile banking platforms in the future” Jamie Mc Phee, CEO “As CIO of ME Bank I was engaged to execute on their Technology Transformation road map and it was a dream come true to walk into the quality of work completed by Fragile to Agile to prepare the program for execution. The Fragile to Agile methodology is second to none, their systematic approach and ability to maintain integrity of scope is the foundation of success. The success of the Transformation of ME Bank into the Digital Era was predicated on the brilliant work completed by Fragile to Agile in the assessment current stage, design of future state, and the creation of an executable road map; a road map that stood firm through 4 years of execution. Fragile to Agile worked closely with us through the entire execution to assist with maintaining scope and ensuring our delivery. I hope I have the opportunity to work with Fragile to Agile again in the future.” Kathryn Hawkins, Transformation CIO “The best PMs have learned through their experiences that to exceed rather than just succeed they have to think beyond the basics of project management. It is not enough just to know about scheduling, budgeting, subject matter, and so on. To be really successful, one has to look beyond the mundane and rise above the ordinary. ME Bank’s Transformation Programme did rise above the ordinary and Fragile to Agile where fundamental to that success. Backed by their brilliant methodology, the team from Fragile to Agile never lost sight of the big picture and worked tirelessly alongside us to make sure we delivered exceptional value to all of ME Bank’s stakeholders.” Trevor Mason, Transformation Program Manager

ME Bank - The Results - Testimonials


Business Capability Model – BPM/SOA View (note Illustrative, not ME Bank)


Example Business Input – Operating Model


Key Shifts from Fragile to Agile Summary


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Transforming your business systematically from Fragile to...

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