Why Enterprises Should Invest Money in EA Transformation Frameworks

Welcome Wolf Rivkin

Chief ArchitectB-Wave Software

Session Title:Why Should Enterprises Invest in

Business Architecture Transformation?

April 21-23, 2008

Renaissance Washington, DC

Preconditions.

Computer Science is an exact discipline; its rules and laws are objective rather than matter of taste;

IT as an industry should be (and mostly has been) developed based on Computer Science;

IT developed some problems around year 2000 that have not been solved till now;

The causes of these problems are: Application-based development; Increased complexity; Overuse of Point-To-Point API-based integration within complex application

architecture.

The negative consequences of the problems are: High TCO of IT; Low Business Agility; High Total Cost of exit from legacy applications.

Computer Science as the scientific basis of IT existence and development must have (and actually has!) exact solutions for these problems;

The level of complexity of these problems make them architectural by nature and, thus, a subject of Enterprise Architecture as one of the scientific disciplines under Computer Science;

2

B-Wave Software ®. All Rights Reserved ©

W. Rivkin “Why Enterprises Should Invest in Architecture Transformation”

April 21-23, 2008

Renaissance Washington, DC3

Why Should Enterprises Invest in Business Architecture Transformation?



Historical Excurse.

April 21-23, 2008


Reason #1: Wisdom Of the Great Ones.

4

“CEOs declare that the biggest challenge facing the modern enterprise is ‘change’. A quick review of the history of all known disciplines that deal with complex objects (things) reveals that change starts with the engineering descriptions of the things. … There is no way to change automobiles, computers, integrated circuits, oil refineries, battleships, telephone networks, programs, enterprises or any other complex thing quickly (or safely) without starting with the descriptive representations of the things you want to change.…these issues of quality, timeliness and change are the conditions that are forcing us to face up to the issues of Enterprise Architecture.… in the 21st century it (architecture) will be the determining factor, the factor that separates the winners from the losers, the successful and the failures, the acquiring from the acquired, the survivors from the others.”John A. Zackman’s “Enterprise Architectures: The Issue of The Century”



April 21-23, 2008



Reason #2: Size Does Matter.

J. Zackman’s Analysis Parameters

Where? What? How? Why? Who? When?

Object SubjectDiffe-rence

# of Apps By ThruReason to

beCreates

Imple-ments

Time frame

ROI

EnterpriseMeta-

Artifacts Same for every IT

~1000 ArchitectureMetho-dology

EfficiencyEnterprise Architect /

BMBA/SA, PA

1-5 years

.5-1 year

CompanyMeta-Entities – Artifacts

Same inside a vertical

TensAnalysis /

DesignTechno-

logyEffectiveness BA,SA, ITM

App Arc, Tech Arch,

PM

3-12 month

Same

OfficeData / Code /

Host – Entities

Different for any

twoones

Single digits

Develop-ment /

Implementation

Tools Utility PM Developer1-3

monthSame

Businesses’ IT Classification By Size & Complexity.


April 21-23, 2008



The Cause: 20+ years of ‘out of context’ Application Development;

Applications as isolated silos of functionality and data processing; Resulted in functional and data redundancy

Overuse of APIs for point-to-point Application Integration; With application number growth, the initial positive effect –

functionality reuse – quickly disappears as it leads to practically unchangeable ‘spaghetti’ architectures;

The Result: Enterprise Architecture has become a set of isolated silos of chaotically

integrated Applications (‘spaghetti’, ‘hairball’, ‘rat’s nest’);

The Business Effect: High Total Cost of Ownership of IT; Low Business Agility; High Exit Cost from Legacy Applications.

Reason #3: IT’s The Evolution, Stupid!


April 21-23, 2008


Analyze This: What is Enterprise?

7



Main Characteristics: A globally or nationally distributed complex business model; Hundreds to thousand of ‘out-of-context’ created and integrated applications; A Level of complexity requiring the Architecture level of description to ensure the

effective and efficient functioning of the whole Enterprise; Entities necessary to define:

Architecture - Meta-Artifacts , which are the same for all Enterprises; Analysis & Design - Artifacts (meta-data/code /host), which are the same

for each industry vertical; Development/Implementation – Low-level Entities : data, code and host,

which are different for different organizations. Definition:

– An enterprise is a conglomerate of organizations united by a common business model, with IT architecture characterized by a large amount (hundreds to thousand) of nationally or globally distributed applications.

Conclusion: It is possible to create a Reference Enterprise Architecture Framework,

formulated in meta-artifact terms only, that is valid for any Enterprise;

April 21-23, 2008


Analyze This: What is Architecture Framework?

8



Construction AnalogyConstructional Meta-Artifacts

Constructional Meta-Artifacts

The highest-

level entities defined.

The highest-

level entities defined.

The design

entities are hidden

April 21-23, 2008


Analyze That: What is an Enterprise Architecture Framework?

Constructional Analogue: The discipline describing business and technological artifacts are to

be implemented to create the desired construction. Enterprise Architecture:

The discipline describing business and technological artifacts, which are being and will be implemented by the Enterprise to achieve its business goals.

Main meta-artifacts, common for every Enterprise:•Enterprise Business Processes;•Enterprise Business Services;•Enterprise Data Dictionary (SVT, MDM, CDI, etc.);•Enterprise Service Bus.•Enterprise Technology Standards.

Enterprise Architecture Framework (EAF): A set of documents defining the roadmap of EA Transformation from

the Initial Architectural State through Intermediate ones to the Desired State.



April 21-23, 2008


ESOA Static Layers Model

External Customers

Firewall

Internal Customers

Business Partners B2B

Ope

n O

rche

stra

tion

Sta

ndar

ds

OS Layer

Data Layer

Service Producers Layer

Enterprise Services Bus

Service Consumers Layer

Presentation Layer

Ent

erpr

ise

Art

ifact

Rep

osito

ry

Agenda:

The Presentation Layer responsible for all requests and replies to and from the enterprise;

The Service Requestors (BP) Layer responsible for request/reply exchanges with ESB

he Enterprise Service Bus Layer representing a common informational environment supporting uncoupled, guaranteed, standard-based information exchange between service requestors and producers;

The Service Producers Layer – the former System Domain, comprised of business-related service clusters, exchanging messages with other ESOA participants through ESB.

The Data Service Layer – the part of the Data Layer usually responsible for providing a Single View of Truth – the unified view of the Enterprise’s dispersed data;

The Data Storage Layer represents the dispersed Enterprise Data Storages, including public and internal RDBMS, Data Warehouses, tapes, files, etc.

Computer Science Response – Enterprise Service Orchestration Architecture



April 21-23, 2008


Why ESOA is the Solution for IT Problems?

Low Business Agility: ESOA makes it possible to close the gap between Business and IT by creating a

common language like basic Business Process Flows (BPF) a.k.a. UML Activity Diagrams;

It makes it possible to run executable BPFs (a.k.a.. Use-case scenarios) directly, making SDLC shorter and more visible, changeable and maintainable;

It limits the impact of a change in service to the service itself; It makes all architecture components easily connectable, changeable, reusable and

replaceable; All of the above-mentioned qualities dramatically decrease projects’ time-to-market,

thus supporting higher business agility. High Total Cost of Ownership (TCO) of IT:

The much shorter SDLC, the absence of the ‘ripple effect’, and the wide availability of easily implementable reusable artifacts significantly decrease the cost of projects;

The architecture allows for the ultimate consolidation of functionality, data processing and storage, thus decreasing the size of IT and making it less expensive;

The adoption of any new technology in the future becomes much easier and less expensive, for it comes as the introduction of another replaceable service, easily connectable to the ESB through a corresponding adapter;

High Cost of Exit from Legacy Technologies: All of the above considerations show how simple and inexpensive the process-by-

process, service-by-service migration from a future legacy technology to a new , currently unknown one becomes.



April 21-23, 2008


Introducing ESOA- based Enterprise Service Orchestration Architecture Framework(ESOAF™)



The ESOAF is a Reference framework that is built completely on the meta-artifact level in order to be applicable to any IT-based Enterprise;

Main characteristics of ESOAF: A gradual, incremental approach to the Enterprise Architecture

Transformation from an application-centric Initial State – Legacy Enterprise to a completely ESOA based Desired State – Elegant One;

Completely uncoupled through ESB service requestors and service providers;

Maximizes component reuse, and minimizes the problems associated with component enhancement & replacement;

Facilitates exit from current & future legacy systems; Closes the Business-IT gap by implementing Business Process Flows; Analysis, Design, and Technology Agnostic; Encourages and facilitates creation and reuse of the Enterprise Reusable

Artifacts; The expectation of ROI is ~30% in one year;

How to Implement it?

April 21-23, 2008


ESOAF™ Initial State Example – Legacy Enterprise



GURU

TRECS(To be

used for Posthouse

also)

GLOBAL 2000"Progress"

(DWH)

HP 9000

Email

CitibankWorldlink

TreasuryWorkstatio

n

PeopleSoftProjectCosting

PeopleSoftAsset

Managment Corporate/

Regional Hyperions

ARC

SunTrust

IRS 1099

Risk Mgmt

Bank of Am.

Fed Express

ARM Lockbox

I.T. Billing

PeopleSoftHuman

Resources

SunTrust daily & 2 weekly

New Hire

WOTC/CIC/MIIGates

McDonald

M&R401k actual deduction

Amounts

PeopleSoftBenefits

Elections

Global Hyperion

Misc. Billing

FMDSAgent/IHC

State Tax/IRS

AetnaFlex

Spending

Cobra

EBENX

VisaUS Bank

Wells Fargo

SYSCOEDI

Banks

FTP to EMEABanks

Wells Fargo

Bank of America

RTA

OLD HOLIDEX OFFLINE

dco

booking

Booking

FMDSPriority Club

CAT

Holidex

tapes

NEW HOLIDEX OFFLINE

HIRORevenue Mgmnt

MQSeries

DPL Report

(see notes)

OFFLINE REPORTIN

G

CC

DPL Report

(see notes)

MKTG

RES

CORP

Internet Consumer

Sites

CHAD

FTP

FT

P

FMDS IVR

SAS

Terminal Maint

Competitive DB

STARSmith Travel

DPL Report

(see notes)

MKTG

FTP

HOLIDEX

STATS

CID File Totals

Mixed Brand Files

Nat. Corp. ActngFile

Multi Year

Inventory

BIS

Holidex

Stats

HFBHotel Fact

Book

IAHI

dpGSTS

dpGSTS

Herman

QESQuality

Eval System

Holidex

Perot

Perot

VOMonth

FIS

CASPER

Service CenterStay adjustments

NeuMICS

ABT

Global Investment Tracking

GITS

Contract Labor

Service

GSDBGuest Stay

DB

Geo

Co

des

HotelsVicini

tyMapquest

Air2Web

OpenWorld

E-meetings/Search

MSG MEDI

A

IBM

IN2

SAS

Web

log

s

Consumer Site

Hotel Credit Auth

GNR Guest Name Rcd

Credit Card

Authorization

HIRO

Denials/Regrets

MSG MEDI

A

CoPartners

MARITZUS

MSG MEDI

A

WebGURU

Pyramid

Lawpack

KARS

IVR

QES

Credit Card Authorization

Tuxedo

Rev/Opstats

CPII

PromoVendors

MQSeries

Dis

tres

sed

Inve

nto

ry

BIS

Denials/

regrets

Smith Travel

PS

Smith Travel

Total Solution

s/TS

HFB

QES

dpGSTS

Direct Mktng

Online Directory/

Hotel Solicitation DB/Hotel

Profile

Hotel Direct

ory Print

TAF

VOMonth

VODailyVOMonth

Hyperion

RTA

Hotel Invoices

Inns Performance Rpt

Smith Travel

Agent Productivity

Offline Booking ODS

Fax

Fax

Fax

Non-3270 Hotels

Business

Objects

HFB

First Tenn

Processing

Chase Processi

ng

Amex Processi

ng

Outgoing

MasterCard

Diners Club

CES 1st

Data North

MasterCard

Diners Club

CES 1st

Data South

MasterCard

Diners Club

First Tennessee

incoming

Confirmation Rpts

Confirmation Rpts

Confirmation Rpts

Confirmation RptsConfirm

ation Rpts

Confirmation Rpts

Import Process

Export Process for DWHIMP

(ARC Marketing - located

in London)CRO Centers(Worldwide)

SCC Member Changes

Import pre-processing

Weekly Monthly

FlatFiles for

DWH

Internt (Open World):SCC enroll/updates

BulletinBoard/

IMP Server

Weekly

IC CASAReporting

CRP

(granular IC data)

FidelioSales Force

Automation

FIS

Global II

Perot GDS Processin

g

Consolidate Hotel Stay and Rev info for SCC members (done at Mail Marketing)

John Berry at

ADC

airlines

SCCdata

weekl

y

weekly

check-out info for

G2000

Consolidate GMR Stay Info

in SLCincludes

fax, phone

and manual

data entry

GMRdata

Alpharetta Data Center (John Berry)sends files to Airline Partners and PCW

This is the SCC Business Service Center. They provide fulfillment services and customer service to SCC members. They have live access to SCC membership information contained in IMP databaseMail

Marketing(located in

Bristol)

World Assist(Traveler's

Ins.)

PMS

weekly Fidelio

& His

PMS ONLY

Invoice Return File

reconciliationstay

data

stay

data

stay

data

weekly

DPL Report (see notes)

(3)

Agt/CoPartnr Inv

HI Mkting send Msg Media Distressed inventory weekly.

Ideas

Hotels

Efolio

HIRO

GUI

RFP Assist

Transportation

Tracker

Calyva Sales Reporting

Notes Recievable

Pegasus

· Corporate Account Master

· Rate Rules

· Inventory Master

FIS Aging

Manually Populate a Hotel Master in Herman

Vantive

Net Master



VCROEcomm Hotel DB

Triggers

Maritz RFP Processing

EMEAJDEdwards

EMEA ACom

AP SunAP, GL, HR

PostHouse SAP

CMH Financial Apps

Spreadsheet Uploads

Regional Competitv

e Info

Trusted Link

Enterprise (EDI)

Vendors

Posthouse using for booking until Opera is in place.

GURU

HCRHQTSNTGDLSDL

COVIA (Galileo

) GOVT/MILITA

RY

FTP Posix FileGDS (Property #)

(Not currently used)IAHI

HERMAN

Holidex

TPFAR

Email

Email

email addreses

Lanyan 3270 Emulation

TCP

MVS

Galileo

Sabre

Worldspan

Amadeus

Pegasus

Expedia

Third Party

International Sites

Open World

Ultra Res

Travel Web

Dai

ly R

ate

Up

dat

e

CAT, HFM

DWH MVSTAC/HFM

HFM

HCA

Enrollments/member changes

No Holidex Connection Hotels

2 w

ay

PC Presumed Stay

Aggregate individual Hotel files into a DCO, a CC, and a REV file for processing

DC

O/R

ev

NGNG

Rweb

DWH DCO

EDT

AirlinesReporting

Email

TPFAR

IMPEmai

l

Internet link

from Marit

z

FTPPB/PS

MQ SeriesFEPI

Email

VISA Preferr

ed

Carlson Marketi

ng

Hurdle Point> Rate change<

Franchise Billing

Mngmnt and

Contracts

or Fax

Email

or Fax

PClubstay data

Email or Fax

IHC Hotel PMS

Commissions

Barbara

Keene

Dir in Londo

nWorld Assist 24 Hr Service

Consolidate monthly

reconcilation file

Consolidate hotel

submissions

Email Networ

k

Lane System

Email

Fax

Sales leads messages for HI/CP/ST(to fcx only)

cc: mail

Email or Fax

Goes to hotels

via Jeff Gerler

Global Sales Office

Dennis MorganDonna Ring

Hotels

PSGL

PSProje

ct Costi

ng

ABT

ABT

Canadian

Bank Rec

Maria Bazley

QFI Calculat

ion

Chad

Casper

USPS

HOLIDEX direct

RWeb

airlinesFTP

IMP

EC

C E

nro

llmen

t vi

a F

TP

Manual Reject

Lending

Perot (ECS)

PS A/R

FMDS(& E-

Room)

Guest Relations

GDS Bill

FIS Customer

FISFranchise Info Sys

Data Warehouse

PS A/P

Business Intelligenc

e Sys

Email

CASCorporate Accounts System

Email

PeopleSoft Daily

Revenue System

DRS

PeopleSoftGeneralLedger

PeopleSoftAccounts Payable

PeopleSoftAccounts

Receivable

PeopleSoftPayroll

TRMPeopleSoft

Billing

DB2 table load for online billing

Yearly 1099 feed

Perot processed transactions

Pegasus inquiriesPMS DCO data

Transaction Repository

Hotel Database

table

Complete picture sent to Perot once a month before

month end processing

ECS End User

Database/Query

transaction capability

Query transaction detail sent

Query transaction detail sent

AR info

rmat

ion

P/S all AR receivablesand Perot receivables total

Cost information

Travel Agent

DatabaseMaintain travel agentinformation

Maintain property information

Query processedtransactions

Accounting Audit Reports

SCH Help Desk

Perot Transaction Processing

Pegasus

PeopleSoft AR/

BILLING

PeopleSoft GL

InterContinental Hotel

PMS

P/S AP

Travel Agents

Perot Web/User Interface

Data feed

Data feed

Pegasus member transactions

Inquiries, edits,

research

Travel agent payments

Travel agent remittance detail and inquiry process

GLR

HLD

Holidex transaction data

Invoice detail,adjustments, inquiries

Hotel invoices,

direct debits

Scc ODS Members

info

ARC

IATA

CLIA

Pegasus Central(Has link into 6C Online and Web

Guru)

GWYHMI

Two WayFIDELIO V 6.x 2 wayMSI 2 way

ENCORE 2 way

LANMARK V 2.1xOPERA 2 way & IHC

One WayMSI some 1 way

DC

O/R

ev

OPERA 1 wayFIDELIO V 6.x 1 way w/DCO (US)

DCO / REV / CC

DC

O/R

ev

dco

DCO and

GNR Info

HotelFact Book

SARReports

BISQFI

VendorPrints

Surveys

Completed

Surveys

Analytical

Reporting

GSTS Processing Mail

SASCIG

Portal

Mail

Gar

nis

hm

ents

&

Sal

ary

Rec

eip

ts

Service Area Codes/Distressed inventory

Email

Travelweb, Expedia,

etc.

MasterCard

Diners Club

NAB CES

TAPE

General Dataset

General Dataset

ERROR

FTP

ERROR

FTP

ERROR

FTP

Customer info

Hotel Info

Financial/HR Info

Hotel/Customer

Revenue mgt

Agent/Stay

Sales Info

Hotel Performance

Corporate

Stay

Booking

Presumed Stay

Monthly Financial

Hotel Information

Legend

Notes

· All DPL reports link directly to Holidex for storage.

Jennifer Brookshire

Collections

Management

W2

PS GL

Print Vendor

Unclaimed Property

Compliance System

Authoria

HR DB

Fin DB

Fin DB

Fin DB

Fin DB

SCH Hotels

Holidex

DPL Report (see notes)

(3)

IHC Repor

ts

InterContinental Hotels

only

ECS End User

MARITZUK

FT

P

ICLPAsiaP

acFTP

PC Statement

s

Email

HQT

April 21-23, 2008


ESOAF™ Desired State – ‘Elegant Enterprise®’.

14

End user

Agent

Manager / Admin

B2B Partner

Channels

IVR

Web

XML Gateway

B2B gateway

VXML/ HTTPS

ESBClient / Server

XML/ HTTPS

Actors

Business Services Domains Data Services Domains

Main DBData Warehouse Public DB

ETLBI, ETL

ERP CRM Batch

Business ProcessesBusiness Rules

Elegant Enterprise IT Architecture Framework

Intellectual Property DomainsReusableArtifacts

Repository

Business Process Subflows

Business Rules

Business Services

Enterprise Data Signatures



April 21-23, 2008


Business Process Development Life Cycle (BPDLC) for Elegant Enterprise®.

Business Process Development

Business Processes

Business Planx

Execu

tion

Feed

back

Business Strategy

Real-Time

Discover

Design

Deploy

Analyze

Optimize

Direct

Develop

Execute

Formulate

Business Management

Business Analysts

Business Modelers, Architects Developers

Business Analysts



April 21-23, 2008


ESOAF™ As a Transformation Roadmap.

Initial State

Pilot Project

1-st State

----------------

n-th State

5 years

4 years

1 year

Start

.5 year

Desired State

Zackman -like State

Matrix

Spewak -like Time Axis

RUP -like ESOA

Adoption Phases

Inception

Elaboration

Construction

Transition

ESOA Layers Axis

BPDLCPhases Axis

Redundancy Reduction

Business Process Enhancement

Technology Adoption

ESOA

as BAU

Team-based Activities / Artifacts



Who is doing What, When, Where and Why.

April 21-23, 2008


What if We Forget About All This and Just Live Happily Ever After?

17



Prognosis for ‘World Business Lines’ of Enterprises with Different Architectures

$TCO

SpaghettiArchitecture

Release #1 Release

#2

Release #3

Release #4

ESOA Transformation

Applications #

Tens Apps. (Company)

Hundreds Apps,(Enterprise)

The Point of Suffocating

Enterprise Threshold Release

#5

Release #2

TransformedEnterprise

$ROI

POC

Release #3

Release #4

1 year

Release #6

Release #7

Release #82

years

2 years

3 years

3 years

4 years

4 years

PP

5 years

5 years

Start of ESOA Transformatio

n

Elegant Enterprise

Legacy Enterprise

April 21-23, 2008


Question: Does IT Matter?Answer: IT Depends.

How IT is: often considered as pure cost. In these cases IT does not matter;

How IT should be: differentiated by Business and Intellectual Property (IP) value into: Commodities - not IP, might be outsourced, do not matter:

Almost all infrastructure (Managed Services); Trivial technical and business services (SOAS);

Revenue generating services: IP BPF – should not be outsourced – matter; Trivial BPF – might be outsourced (BPO) - do not matter. IP Business Services– should not be outsourced - matter. Trivial Business Services – might be outsourced (SOAS)- do not matter.

Vitally important internal services– should not be outsourced - matter: ESB; Security.

The super-task of ESOAF™ - making IT matter again.

18



April 21-23, 2008


Postcondition-Executive Summary.(Lessons Learned)

IT as an industry has over time developed immanent problems related to legacy, application-based development and point-to-point integration in general rather than particular technology or tools;

These Architecture-level problems are common for every IT-based Legacy Enterprise; The enterprise Architecture of a Legacy Enterprise has become so rigid that it makes both

IT maintenance and/or Business/IT change costly and time-consuming; Attempts to reduce these costs by simple cheap labor outsourcing of existing processes

without any qualitative change threaten the competitiveness and the very survival of the Enterprise

Computer Science as an underlying methodology base for IT has come up with a solution that requires architectural rather than technological innovation. Moreover, only this kind of innovation makes future technological improvements effective and efficient;

This solution is based on the concepts of BPM, ESB and SOA, however the fruitful implementation of those concepts is possible only under an Enterprise-wide complete and comprehensive Architecture Framework (EAF); isolated projects of implementation of any of them independently are drastically less effective and prone to failure;

The ESOAF™, introduced in this presentation is the only complete, cohesive, comprehensive and proven framework known to the author allowing Enterprises to safely and surely migrate from Legacy to Elegant Enterprise.

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April 21-23, 2008


Thank You!Wolf RivkinChief ArchitectB-Wave Software

Contact Information:Tel: 404-409-6872Email: [email protected]: http://www.b-wavesoft.com.


Why Enterprises Should Invest Money in EA Transformation Frameworks

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