projective - business architecture and operational excellence
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A Marriage Made in Heaven?
Banking & Finance Seminar
Business Architecture & Operational Excellence
Peter Knaepkens, Niki Serruys & Stephan Podevyn
Date: 31/05/2012
Introducing ourselves … … and Projective
Projective focuses on Project and Program Management for the financial sector: banks, insurance companies and market infrastructure players.
The majority of our consultants have extensive experience in Project Management and over ten years seniority in Banking and Finance.
Projective helps Financial Institutions define and design their Target Operating Model, linking Business Architecture (processes) to the underlying applications and infrastructure. By doing this FSIs create greater transparency and traceability between Business and IT which is a key success factor in achieving large change initiatives. We also assist our clients with installing a permanent governance around their Architecture.
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Peter KnaepkensProject Manager
Niki SerruysProject Manager
Stephan PodevynProject Manager
Sounds familiar?
3
Business processes are executed inconsistently between teams, persons and therefore often underperform. Process knowledge is limited to specific process parts
(silos).
Business processes are often task oriented and application dependent.Internal controls are not embedded in the process creating efficiency leaks.
Roles and responsibilities within the organization are not clearly defined and internal SLAs are not respected.
Projects are not delivering what was required by the business and clients. Business requirements are not clearly defined allowing ICT to be in the driving seat for projects.
Transformation of processes and systems require huge efforts and produce disproportional costs for individual business streams.
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Years of growth have had a strange effect on organizations …
• An architect designs and supervises the construction of buildings or other large structures.
• Architecture is about managing complexity and setting boundaries: budget, scope and time.
• Architecture deals with constraints and structures reality.
Architecture: the Basics
Architecture
5
Business Architecture offers a framework for transforming a company’s strategy into an adequate Operating Model
Mission
Goals & Objectives
Value Proposition
Target Operating Model
- Process model
- Organisation model
- Information model
External Factors
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The Target Operating Model defines how a company organizes itself to execute strategy & meet the current/future challenges
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Process model Organization model Information model
Value Proposition
Process: Describes how processes are run at the company at a conceptual and logical level and how responsibilities are assigned
Organization: Provides an overview of how the company’s functions and roles are hierarchically structured
Information: Gives a static map of the different information objects (and their definitions)
Value Proposition:The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment
It defines how the company will offer its products and services to the different client segments through the different channels
Target Operating Model
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Cu
sto
me
r C
on
tact
Ass
et
Mn
gt
Po
licy
Ad
min
istr
atio
nC
ust
om
er/
Inte
rme
dia
ry
Customer wants to switch funds
Enter Switch Fund data
Create fund switch record
Data complete & correct?
Request Closed
Process: Switch Funds
XOR Cancel RequestSubmit Request for further analysis
No
Information received?
Request extra information
Request approved?
Send rejection letter
Analyse requests
Extra information necessary ?
No
No
Yes
Confirm fund switch
Request closed
Funds updated
DRAFT FOR DISCUSSION
13.9.Investment
Yes
Yes Pending Trades?
Apply switch charges
Maximum free switches exceeded ?
Queue fund switch request
No
XORNo
Open pending Switch Fund
Request
XOR
5.1. Inquiries
Send Confirmation Letter
XOR
Funds updated
XOR
Yes
No
Yes
XOR
Yes
1. Product Development
2. Marketing 3. Sales 4. Channel Management 5. Underwriting 6. Commercial
Administration8. Claims Management
7. Policy Administration
9. Customer Contact Management
Facility Management & Support
Business Improvement Services
Procurement & Vendor Management
Legal
Finance
Risk Management
Reinsurance
Asset Management
Compliance
HR
IT
General Management
Target Operating Model ICE – Value Chain View
Value chain (level 1)
Conceptual processes
Logical processes IT Architecture
Target Operating Model
Strategic Objectives
Service Service Service Service
Business Services
ESB
Integration Services (messaging, orchestration, transformation, etc)
ServiceService
Business ProcessesBusiness Process Manager
Life Policy Administration
Policy Administration
Services
Business Rules Engine
Business Rules
Pension Policy Administration
Policy Administration
Services
CIF
Client Information Services
Document Composition
Document Composition Rules
Distribution Mgmt
Distribution Services
Actuarial Services
Business Rules
Finance
Financial Services
Policy dataCIF
Client Directory
Agent Directory
Document management
Document Management
Services
Document storage
Agency & commission data
DataStores
Info Hub
Au
the
ntic
atio
n &
Au
tho
riza
tion
Se
rvic
es
Access Manager
User Meta Directory
User Provisioning
Local user directories
Local user directories
Identity Manager
Paper channel
Scanning / ICR
Electronic channel
E-mail / fax /SMS
Phone channel
IVR / Phone
Web channel - Portal
Clientportlet
Agentportlet
Brokerportlet
Bankportlet
Otherportlets
Exrtact services
Transform services
Load services
Agent Client Broker Bankassurance
Employee
Product Development & Management Pensions
Idea Generation
Product Feasibility
Product Design & Pricing
Product Implementation
Product Monitoring
Product Portfolio
Management
Monitoring & Needs
Identification
Monitoring of Product Content Quality
Review of Product
Related OPS Processes
Marketing
Leads Generation &
Channel Marketing
Leads Generation
Local & Agent Marketing
Step by Step Sales Cycle Support
Marketing Support for Brokers, Banks, Direct
Marketing Intelligence
Strategic Recommendations
Market & Consumer
Research and Analysis
CRM Capabilities & Data Management
Customer Insights
Customer
Intelligence
Customer Advocacy
Marketing Communication & Services &
PR
Media Strategies
Local Sponsorship
Corporate Social Responsibility
Brand Marketing
Public Relations
Internet Marketing
Sales
Lead Management
Sales Force Network Management
Channel Management
Contact Data
Maintenance
Relationship Development
Maintenance
Claims Management
Claim Notification
Claim Investigation Reinsurance Collection
Pay- outs
Underwriting Pensions
Data Entry
Investigation
Reinsurance
Acceptance
Contract Issuance
Billing & Collection
Distribution Support
Remuneration
Calculate Remuneration & Bonuses
Process Cost
Declarations
Pay- out
Contracting
Due Diligence
System Activation
End Relationship
Contract
Contract Maintenance
Reinsurance
Reinsurance Negotiation & Contracting
Reinsurance Billing
Reinsurance Reporting
HR
Manpower Planning
Training & Development
Compensation & Benefits
Performance Management
Communication
Culture
Administration
IT
Architecture
Enterprise Architecture
Solution Architecture
Data Architecture
Business Architecture
Infrastructure
Hosting & Housing
Operations & Maintenance
Configuration & Change Management
Incident & Problem Management
Infrastructure ArchitectureSupport & Helpdesk
Inventory Management
Strategic Planning
Application Development
& Maintenance
Software Development
Testing & QA
Maintenance
Requirement Management
Service Management
Organisation
Delivery Management
Service Management
Reporting
Coordination with BU
Finance Management
Security
Access Management
Security Management
Risk Management
Underwriting & RE Risk
Management
Market Risk Management
Balance Sheet
Management
Operational Risk
Management
Risk Modelling &
Concepts
Customer Contact
Management
Customer Inquiries
Customer Complaints
Facility Management & Support
Rent - HO & Agencies
Occupancy Services
HO & Agencies
Incoming Documents
Outgoing Documents
ArchivingMotor Fleet
Asset Management
Develop Investment
Strategy
Perform Investment
Analysis
Maintain Investment
Network
Monitor Portfolio
Performance
Approve Reserving
Methods
Perform Contract
Valuations
Develop Portfolio
Structure
Maintain Customer Fund
Accounts
Legal
Contract Negotiations
Intellectual Property
Protection
Legal Advice
Litigation ResolutionBusiness Improvement Services
Project Management
Portfolio Management
Resource Management
Tracking & Reporting
Project Management
Business ConsultancyBusiness Process
Improvement
Finance
Finance & Accounting
General Accounting
Finance Reporting
Regulatory Reporting
Capital Allocation
Treasury
Financial Policies &
Procedures Management
Cost Management
Cost Accounting
Decision Support
Planning
Budgetting
Forecasting
Performance Measurement
Processing
Expense Reimbursements
Accounts Payable Processing
Tax
Tax Reporting
Tax Advisory
Procurement & Vendor
Management
Procurement
Underwriting Savings/Investments & Protection
Data Entry
Investigation
Reinsurance
Acceptance
Contract Issuance
Billing & Collection
Policy Administration Pensions
Administrative
Changes
Surrenders/MaturitiesCancellations
Endorsements
Billing & Collection Statement Generation
Policy Administration Savings/Investments &
Protection
Administrative
Changes
Surrenders/MaturitiesCancellations
Endorsements
Billing & Collection Statement Generation
Business Service
Sub Services
Cluster of Activities
Lege
nd
General Management
General Management
Sales Force Recruitment
& Training
General Administration
Payroll
Client Data Maintenance
Relationship Management
Remuneration
Relationship Termination
Global Brand &
Sponsorship
Administrative Support
Commercial Support
Technical Implementation
Commercial Implementation
Product Development & Management
Savings/Investments & Protection
Idea Generation
Product Feasibility
Product Design & Pricing
Product Implementation
Product Monitoring
Product Portfolio
Management
Monitoring & Needs
Identification
Monitoring of Product
Content Quality
Review of Product
Related OPS Processes
Technical Implementation
Commercial Implementation
Compliance
Ensure Compliance
Credit Risk
Business Risk
Demand management
Procurement Execution
Vendor Management
Product Development & Management Pensions
Idea Generation
Product Feasibility
Product Design & Pricing
Product Implementation
Product Monitoring
Product Portfolio
Management
Monitoring & Needs
Identification
Monitoring of Product Content Quality
Review of Product
Related OPS Processes
Marketing
Leads Generation &
Channel Marketing
Leads Generation
Local & Agent Marketing
Step by Step Sales Cycle Support
Marketing Support for Brokers, Banks, Direct
Marketing Intelligence
Strategic Recommendations
Market & Consumer
Research and Analysis
CRM Capabilities & Data Management
Customer Insights
Customer
Intelligence
Customer Advocacy
Marketing Communication & Services &
PR
Media Strategies
Local Sponsorship
Corporate Social Responsibility
Brand Marketing
Public Relations
Internet Marketing
Sales
Lead Management
Sales Force Network Management
Channel Management
Contact Data
Maintenance
Relationship Development
Maintenance
Claims Management
Claim Notification
Claim Investigation Reinsurance Collection
Pay- outs
Claims Management
Claim Notification
Claim Investigation Reinsurance Collection
Pay- outs
Underwriting Pensions
Data Entry
Investigation
Reinsurance
Acceptance
Contract Issuance
Billing & Collection
Underwriting Pensions
Data Entry
Investigation
Reinsurance
Acceptance
Contract Issuance
Billing & Collection
Distribution Support
Remuneration
Calculate Remuneration & Bonuses
Process Cost
Declarations
Pay- out
Contracting
Due Diligence
System Activation
End Relationship
Contract
Contract Maintenance
Reinsurance
Reinsurance Negotiation & Contracting
Reinsurance Billing
Reinsurance Reporting
Reinsurance
Reinsurance Negotiation & Contracting
Reinsurance Billing
Reinsurance Reporting
HR
Manpower Planning
Training & Development
Compensation & Benefits
Performance Management
Communication
Culture
Administration
IT
Architecture
Enterprise Architecture
Solution Architecture
Data Architecture
Business Architecture
Infrastructure
Hosting & Housing
Operations & Maintenance
Configuration & Change Management
Incident & Problem Management
Infrastructure ArchitectureSupport & Helpdesk
Inventory Management
Strategic Planning
Application Development
& Maintenance
Software Development
Testing & QA
Maintenance
Requirement Management
Application Development
& Maintenance
Software Development
Testing & QA
Maintenance
Requirement Management
Service Management
Organisation
Delivery Management
Service Management
Reporting
Coordination with BU
Finance Management
Security
Access Management
Security Management
Risk Management
Underwriting & RE Risk
Management
Market Risk Management
Balance Sheet
Management
Operational Risk
Management
Risk Modelling &
Concepts
Customer Contact
Management
Customer Inquiries
Customer Complaints
Facility Management & Support
Rent - HO & Agencies
Occupancy Services
HO & Agencies
Incoming Documents
Outgoing Documents
ArchivingMotor Fleet
Asset Management
Develop Investment
Strategy
Perform Investment
Analysis
Maintain Investment
Network
Monitor Portfolio
Performance
Approve Reserving
Methods
Perform Contract
Valuations
Develop Portfolio
Structure
Maintain Customer Fund
Accounts
Legal
Contract Negotiations
Intellectual Property
Protection
Legal Advice
Litigation ResolutionBusiness Improvement Services
Project Management
Portfolio Management
Resource Management
Tracking & Reporting
Project Management
Business ConsultancyBusiness Process
Improvement
Finance
Finance & Accounting
General Accounting
Finance Reporting
Regulatory Reporting
Capital Allocation
Treasury
Financial Policies &
Procedures Management
Cost Management
Cost Accounting
Decision Support
Planning
Budgetting
Forecasting
Performance Measurement
Processing
Expense Reimbursements
Accounts Payable Processing
Tax
Tax Reporting
Tax Advisory
Procurement & Vendor
Management
Procurement
Underwriting Savings/Investments & Protection
Data Entry
Investigation
Reinsurance
Acceptance
Contract Issuance
Billing & Collection
Underwriting Savings/Investments & Protection
Data Entry
Investigation
Reinsurance
Acceptance
Contract Issuance
Billing & Collection
Policy Administration Pensions
Administrative
Changes
Surrenders/MaturitiesCancellations
Endorsements
Billing & Collection Statement Generation
Policy Administration Pensions
Administrative
Changes
Surrenders/MaturitiesCancellations
Endorsements
Billing & Collection Statement Generation
Policy Administration Savings/Investments &
Protection
Administrative
Changes
Surrenders/MaturitiesCancellations
Endorsements
Billing & Collection Statement Generation
Business Service
Sub Services
Cluster of Activities
Lege
nd
General Management
General Management
Sales Force Recruitment
& Training
General Administration
Payroll
Client Data Maintenance
Relationship Management
Remuneration
Relationship Termination
Global Brand &
Sponsorship
Administrative Support
Commercial Support
Technical Implementation
Commercial Implementation
Product Development & Management
Savings/Investments & Protection
Idea Generation
Product Feasibility
Product Design & Pricing
Product Implementation
Product Monitoring
Product Portfolio
Management
Monitoring & Needs
Identification
Monitoring of Product
Content Quality
Review of Product
Related OPS Processes
Technical Implementation
Commercial Implementation
Compliance
Ensure Compliance
Credit Risk
Business Risk
Demand management
Procurement Execution
Vendor Management
Achieving Operational Excellence starts with detailing the TOM…
1. Making sure OPEX is derived from a company’s strategy
2. Defining how the parts of the VC should be sourced
3. Removing waste from processes & standardizing
4. Aligning Business & IT
5. Consolidating service components
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Business Architecture Maturity Model: most FSI are at level 1 or 2
Dimension Level 1 Level 2 Level 3
Defining architecture Architecture as a project Architecture as a process Architecture as a facilitating process
Use of architecture Architecture is used informatively Architecture is used for steering design
Architecture embedded in the organization
Involvement of business Architecture related to business goals
Architecture driven by business goals
Architecture process integrated in business
Involvement within development process
Ad hoc Structural Interactive
Relation to current situation Attention to current situation Attention to migration Attention to migration
Roles and responsibilities Responsibility for architectural content assigned
Management responsible for architecture process
Top management responsible for architecture effectiveness
Coordination of activities Steering per project Coordination between projects Coordination between projects
Maintenance architecture process & products
Maintenance is fragmented Maintenance procedures available
Continuous process improvement & Maintenance Policy available
Architecture roles and training Role recognized Role described Role supported & appreciated
Use of architecture method Project specific Organization generic Method optimization
Consultation Internal architecture meetings Meeting commissioners and users
Organization wide discussion of the quality of the architecture process
Architecture tools Ad hoc and product centred Structural and process oriented Integrated tools
Workshop: What are the most important roadblocks preventing Financial Institutions – YOU - to achieve a mature Business Architecture?
• “We have no time!”
• “We have no money!”
• “We don’t see the (immediate) benefits!”
• “We can’t decide where to start & who should sponsor this initiative!”
• “There is no common opinion about definitions & scope of BA!”
• “We have tried this before, doesn’t work!”
• “We are happy with what we got!”
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APPENDIX: Business Architecture Maturity Level
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Dimension Description
Defining architecture Architecture development approaches vary between isolating, autonomous projects and a continuous facilitating process. In the first case architecture is seen as a product, in the second case as a process
Use of architecture Developing an architecture is not a goal in itself. Architecture has to be used in an organization to achieve something. Architecture can be used in various ways: purely informative, to guide individual projects, or as a management instrument for the complete organization.
Involvement of business Architecture finds its justification in enabling the realization of business goals. It isimportant to synchronize the architecture content with business goals and capabilities.Cooperation between architects and business lines is a necessity
Involvement within development process Architecture needs to steer changes to optimize the realization of business goals.Cooperation with the development process, the relationship between the architectureprocess and the development process, is very important. This holds for process-,organization- and IT-development
Relation to current situation Architecture is often associated with a new, desired situation. But organizations also have the current situation. It is important for architecture to consider this current situation with its challenges and opportunities. This will enhance the applicability of the architecture. If the current situation is neglected, chances are that the organization can only dream the architects dream
Roles and responsibilities Clear assignment of architecture roles and responsibilities will prevent architecturediscussions and differences of opinion from not being addressed, and ending up in anorganizational vacuum. Furthermore parties can be hold accountable for theircontribution to the architecture
Coordination of activities Within an organization there are often many different developments which areundertaken simultaneously. These developments share resources, and are oftendepending on each others results. Architecture can be used for coordination ofdependencies and can help project prioritization
Source: Sogeti
APPENDIX 1: Business Architecture Maturity Level
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Dimension Description
Maintenance architecture process & products It is not sufficient to deliver architecture products like principles, guidelines and models.They need to be maintained: new insights are included, and what has become out-datedis deleted.
Architecture roles and training Being an architect is a demanding profession. The architect not only needs to developarchitecture products, but also needs to have knowledge of process and systemdevelopment and infrastructures. And (s)he needs strong interpersonal and managerialskills. This makes training a necessity.
Use of architecture method Developing architecture is done by a methodology using activities, techniques, tools andproducts. When this method varies over time or user, or when parts of it need furtherdetailing before they can be applied, the usability of the method is limited.
Consultation The development of architecture asks for extensive consultation with variousstakeholders, like business managers, process owners, information managers, projectmanagers and IT staff. An orchestrated exchange of ideas is an important part of thearchitecture process. It ensures that the architecture is based on business requirements,and that the architecture products are accepted by the organization.
Architecture tools The architecture process can be supported by tools. When they are used in an integratedfashion, preferably supported by a repository, their effectiveness and efficiency is at thehighest. Provided, of course, that the tools are suited to the chosen architecture method
Source: Sogeti
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