WIXLIB

Business-Driven, ITArchitecture TransformationWilliam Ulrich1President, TSG, Inc.Partner, Business Architecture AssociatesPresident, Business Architecture GuildFellow, Cutter ConsortiumCo-chair, OMG Architecture-Driven Modernization Task ForceCopyright TSG, Inc. 20183/19/2018

2Today’s topics Defining business vs. IT architecture, alignment and transformation Business risks, challenges and assessing technical debt Role of business architecture, from strategy definition through solutiondeployment Leveraging the business architecture / IT architecture transformationframework Framing IT architecture transformation through a business perspective Shifting to a business-driven, IT transformation approachCopyright TSG, Inc. 20183/19/2018

Terminology Level Setting: Business / IT ArchitectureAlignment & Transformation3 Business Architecture Definition Business architecture represents holistic, multidimensional business views of: capabilities, end-to-endvalue delivery, information, and organizational structure; and the relationships among these businessviews and strategies, products, policies, initiatives, and stakeholders.1 IT Architecture Definition Business / IT Architecture Alignment “Blueprints of the technologies, data structures and applications that collectively comprise the informationtechnology (IT) environment of an enterprise.”2State in which automated systems and data architectures fully enable business strategy, businesscapabilities and stakeholder valueBusiness / IT architecture transformation is the means of achieving “alignment”(1) Source: Federation of Enterprise Architecture Professional Organizations, adopted on January 14, 2017, after passing a vote by FEAPO Member Organizations.(2) Source: “Business Architecture: The Art & Practice of Business Transformation”, MK Press, 2010Copyright TSG, Inc. 20183/19/2018

4Business Architecture Domain Overview: Mappingthe Business EcosystemStakeholdersPolicies, Rules,RegulationsCapabilitiesOrganizationProducts &ServicesVision,Strategies &TacticsInformationValue StreamsInitiatives& ProjectsMetrics &MeasuresCopyright TSG, Inc. 2018Business ArchitectureSource: A Guide to the Business Architecture Body of Knowledge (BIZBOK Guide), v6.0, Part 1, Business Architecture Guild3/19/2018

5Business Architecture Differentiators Business architecture is foundational, transcending a given initiative or scenario Business architecture is reusable Business architecture scales horizontally and vertically Business architecture is not constrained to internal views Business architecture improves other disciplines Business architecture is politically agnostic*Source: Business Architecture Guild, BusinessArchitecture Quick Guide, 2017Consider one value stream example:“Take a Trip” value stream traces entirecustomer end-to-end journeyCopyright TSG, Inc. 20183/19/2018

6Breaking Down IT Architecture Blueprints of data structures, applications andtechnologies that represent current and / ortarget state of IT deployments Application architectureIT ArchitectureApplications,services &orchestrations Data architecturePhysical &logical datadeployments &representationsgsines ycleCocthlyPrnMo Technical architecture Shadow systems IT architecture should not be confused withthe IT organization The IT organization is just another business unitin a business ecosystemCopyright TSG, Inc. 2018Desktop &businesssystems out ofIT’s controlUnderlyingplatforms &technologies3/19/2018

TechnicalArchitectureData ViewData ArchitectureBusinessAutomation &Services ViewBusiness ArchitectureApplicationArchitectureBusiness ViewEnterpriseArchitecture7Quickly Sorting through the ArchitectureJargon: Why it MattersSolution ArchitectureSource: Business Architecture GuildBIZBOK Guide, v6.0, Part 1Platform & EnablingTechnology ViewInitiative or PortfolioArchitecture PerspectiveAbility to deliver real business value is realized and enhanced through formalintegration of business and IT at the architecture levelCopyright TSG, Inc. 2018*Source: “Business Architecture: Putting “Business” into EnterpriseArchitecture”, Ulrich, W. & Soley, R., May 2016, CIO Review3/19/2018

8How a Business Accrues Technical Debt Technical Debt Results from applying IT architecture changes that degrade data and application architectures over anincreasingly elongated timeframe Each set of changes increases time and cost of applying future changes, curtailing a business’s abilityto accommodate strategic objectives and business vision Technical debt is driven by: IT architectures that have grown increasingly misaligned to business model Continuous pressure to apply more changes to IT architectures never meant to support rapidly shiftingbusiness models Lack of executive understanding that technical debt is being incurred and that it presents a significantand growing risk to the businessCopyright TSG, Inc. 20183/19/2018

Technical Debt Results In:9 Inability to address customer discontinuity across business units and product lines Diminished capacity to manage risk, regulatory compliance, change management and crises* Business costs escalate as the business works around core IT systems IT solutions result in more business disruptions than they resolve Essential requirements are applied inconsistently or missed altogether Ongoing IT investments appear fully disconnected from priority business challenges and objectives,creating significant business risks*Business Architecture Now, Not Later? A Lesson from Crisis ManagementBrightTALK Recorded 13 April 5Copyright TSG, Inc. 20183/19/2018

Evaluating Technical Debt From a Business PerspectiveMatrix represents ITarchitectures as a wholeor portions thereofApplication systems areplotted on this matrixInitiatives may use thisplotting approach basedon the applicationsimpactedContinuous business / ITarchitecture alignment,with minimal disruptionand capital investmentLevel of IT & business architecture misalignment10Copyright TSG, Inc. 2018Complete IT architecturereplacement required, whichtriggers major, highlydisruptive capital investmentMajor IT portfolio investmentneeded to align business & ITarchitectures & address ITarchitecture degradationDegradation of data, application and technical architecturesSource: Business Architecture Associates, Inc.3/19/2018

IT Investments Must Look Beyond Technical Architecture toAddress Technical Debt, Business Challenges11 Business Architecture“Rainbow Model” represents transformationaljourney that concurrently transformsbusiness architecture and data, application,application and technical architecturesData ArchitectureApplication ArchitectureTechnical ArchitectureSOA, Cloud,VirtualizationSolution value grows when youmove up architectural stackCurrent State / Target State Transformation PathsWhen journey only travels acrosstechnical architecture, business valueis highly constrainedCurrent-to-target state transformation comprises many individual initiatives moving towards common business objectives,in cohesive fashion, over extended period of timeCopyright TSG, Inc. 2018Source: “Architecture-Driven Modernization: Transforming the Enterprise”, Dr. Vitaly Khusidman,William Ulrich, 2008, http://www.omgwiki.org/admtf/doku.php3/19/2018

Implications of Rainbow Model on IT BudgetAllocation & Business Funding12 At many organizations, IT will spend 10’s or 100’s of millions of dollars annually, whether thoseinvestments are business-driven or not It is incumbent upon the business to ensure that these investments are business-driven anddeliver business value by: Framing investments in business terms that clearly articulate and reconcile business objectives andinvestment focal points within the business, before the discussion shifts to IT Ensuring that all IT investments have traceability back to business objectives and impacted business focalpointsIT spending is a constant; but can the business directly trace dollars spent back to theimprovement in customer and related stakeholder value and overall improvement in businesscapabilities?Copyright TSG, Inc. 20183/19/2018

Business / IT ArchitectureAlignment Sample Metrics- Capability InstancesAcross IT Assets- Capability AutomationPercentages- Capability AutomationPercentages AcrossValue Stream StagesMetrics require businessto-IT architecture crossmappingsLevel of IT & business architecture misalignment13Transformation Planning Leverages BusinessArchitecture Based Technical Debt MetricsQuadrant IIQuadrant I416Application253Quadrant IIIQuadrant IV8IT Architecture Metrics- Reliability- Security- Maintainability- PerformanceEfficiencyMetrics supported by workfrom Consortium for ITSoftware Quality (CISQ)10911712Degradation data, application and technical architecturesCopyright TSG, Inc. 2018Source: Business Architecture Associates, Inc.3/19/2018

Decision matrix provides rapidanalysis for executives to:-Invest wisely in business-aligned ITsolutions (Q II / Q III)Determine when technical architectureupgrade satisfies business needs (Q IV)-Avoid reinvesting in fully bankrupt ITassets (Q I)-Evaluate among business/IT alignmentscenarios, such as cross-business unitsystem consolidation, transform in place,migrate to new IT architectureApplicationQuadrant IQuadrant IILevel of IT & business architecture misalignment14Using Technical Debt Matrix as input to BusinessDriven, IT Transformation & InvestmentsViability technology,misaligned to business modelrequires new functionality124Business/IT architecturemisalignment, IT foundationrequires major architecturalinvestment53Quadrant IVQuadrant III8IT architecture aligned tobusiness, viable foundationfor moving forward109Business/IT architecturealigned, requires investmentin IT architecture foundation712Degradation data, application and technical architecturesCopyright TSG, Inc. 20186Source: Business Architecture Associates, Inc.3/19/201811

15What Technical Debt Analysis from a Business andan IT Perspective Tells Us Capability mapping to IT architectures exposes major IT architecturechallenges by exposing: Massive capability-related redundancies, where what the business does isimplemented in hundreds or thousands of systems and technologies Fragmentation and inconsistencies in what the business does Redundancies, fragmentation and inconsistencies: Lead to poorly aligned and often conflicting information and related business challenges Destabilize IT architectures, making them particularly difficult to change in substantiveways Stymie investments to align IT architectures to business strategy and business architecture The good news: capabilities, and business architecture in general, provide insightsinto phased transformation options and related business-driven strategiesCopyright TSG, Inc. 20183/19/2018