business architecture- why and how

8/3/2019 Business Architecture- Why and How

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Proposal for an Enterprise

Business Architecture

Denise Bedford

Information Quality

Revised February 19, 2007


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Purpose & Overview Purpose of the presentation is to:

propose a framework and strategy for aligning IT to businessthrough the development of a business architecture

Hear the Architecture Committees advice on the value andfeasibility of moving in the direction of a business architecture

Presentation Overview

Value of Business Architecture

Designing a Business Architecture

Business Process Management


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Business Challenges Business is facing:

Global business competition

Rapid innovation and fast-changing business requirements

Regulatory compliance challenges

Increasing cost pressures

Technologys typical response

Slow delivery times

High maintenance costs

Brittle solutions Stove piped functional applications

Redundant development efforts and operations

Redundant and costly investment in multiple technical solutions

Can technology be realigned to support the needs of business?


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Aligning IT with Business There is little disagreement within or outside the organization that we need to align

information technology to support the business

We need to decide:

What we expect to achieve from the alignment and how will we measure it

What alignment means from a business and from an IT perspective

What strategy we will use to achieve the realignment

The decisions will be made at the enterprise level so there needs to be anenterprise context for the realignment

The realignment needs to support decentralized development and businessevolution in the future to achieve this we need a business architecture


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Expected Results of Aligning IT with Business

How do we know this is not just the latest management fad?

Because it has practical applications which we can use to achieve ourbusiness goals and objectives

What are we trying to accomplish by shifting the role of information technology toan enabler rather than a driver?

Define direct and derivative results of shifting our focus to a business view

What is required to implement a business architecture?

Alignment takes the form of a fully elaborated Business

Architecture

What does it mean for how we work?

A four step plan is proposed for moving towards a business architectureinvolving business stewards, business analysts, technical stewards and datamanagement team


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Value of Business Architecture

Business

Optimization

Change ManagementRecords Capture &

Management Improvement

Process Optimization Financial Management & Control

Systems Interoperability

Business Intelligence & Benchmarking

Data QualityControl &

Assurance Improvements

Business Impact Analysis

Application Reuse

Focusing on supporting the business, and casting technology in an enabler mode, will generatedirect and derivative results.

Business Semantics & Sharing

Role Management

Derivative ResultsDirect Results

WorkflowDesign & Support


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Business & IT Alignment - Direct Results

Direct Business Results include

End-to-end business process analysis and adjustment (process optimization,

improvement and simplification)

Alignment of resource management and analysis by business areas and withbusiness goals (financial management and controls)

Pre-impact and pre-incident detection of business events and business targets,and the ability to assess the impacts and lead times in order to mitigate thebusiness impact (business impact analysis and business continuity)


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Business & IT Alignment - Derivative Results Derivative Business Results include..

Cross-organizational role discovery, provisioning and management based oncommon groups of privileges and permissions (increased effectiveness in rolemanagement and identity provisioning)

More effective and targeted benchmarking with peers and enable more efficientmeasurement, reporting and evaluation (business metrics and intelligence)

More efficient business processes based on automated workflows and businessprocess management (workflow design and management)


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Business & IT Alignment - Derivative Results Technical Derivative Results include

Smarter and rapid deployment/redeployment of new platforms and services,providing sufficient information to plan and manage the change cost effectively

(change management)

Interchangeable functional component design through increased access to andreuse of technical resources (applications reuse)

Optimization of use of the organizations technical resources by all contributors or

consumers, regardless of location (systems interoperability)


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Designing a Business Architecture


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Designing a Business Architecture In order to align technology with business, we need to design a business

architecture

Business architecture includes: Business framework to which all business definitions and models

can be mapped

Business process management best practices for representing

business processes which are manageable by business analysts,understandable to business managers and executable by developers


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Current State Business Framework We dont have a comprehensive view of the Banks business at this time, although

we have a wealth of business knowledge and documentation

Current business definitions may be constrained to what single organizational

units do and how they do it May be variations on a process across the organization

Formal policies and procedures may not fully describe how work is done

May be gaps in coverage of some business processes

May be redundant descriptions of the same process which are notconsistently maintained

May represent a technology view rather than a human workflow view May not describe all of the resources that are required to support a business

process


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Current State Business Framework For example, there are currently several high level schemes in use

throughout the Bank

Accounting framework (Controllers budget and expenditures) Records management framework (BRCS, Archives Fonds organizational

history) IT-Business framework (application-focused) Business continuity framework (core processes and critical incident) Business definitions in administrative, policy and procedures manuals (business

operations)

Each scheme represents a resource viewpoint, though none serves as abaseline for comprehensively aligning resources to end-to-end busienssprocesses

We propose a new framework which will allow us to harmonize theseviews this framework takes the form of an organizational businesstaxonomy


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Business Framework

StrategicAlign

mentandAggregation

End to End Primary Business Activities

Business Subprocess and Tasks

Business Processes

Lines of Business

Business Areas


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Banks Business Framework Level 1: Business Areas

High level aggregation which distinguishes primary and support activities, and which isaligned with organizations strategy and performance goals [Example: Operations]

Level 2: Lines of Business

Set of one or more linked business processes which collectively define a line of productsand services [Example: Lending]

Provides a level of aggregation which is valuable for evaluation and monitoring but notsufficiently granular to enable business process management

Level 3: Business Process

End-to-end description of a process which is comprised of a series of steps or tasks thathave defined conditions triggering its initiation and defined outcomes/outputs at itscompletion [Example: Project Appraisal]

Level 4: Business Subprocesses and Tasks

Individual tasks which make up a process, or a group of tasks which is enacted or calledfrom another (initiating) process (or subprocess), and which forms part of the overall

process [Example: Draft Aide Memoire]


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How to Determine if it is a ..

Criteria Line of Business Business Process

Definition There must be an accepted and published

definition of the line of business, including

all products and services

There must be defined conditions marking the initiation

and completion, and a sequence of steps in between.

Policies & Governance Processes There must be defined, institutionally

authorized and published policies at theLoB level.

There are institutionally authorized and defined

business procedures, events, rules, tiggers andconditions that derive from and implement the LoB

policies.

Products & Services

vs. Inputs & Outputs

The LoB must have defined products,

services, outputs and outcomes which are

required to sustain the organization.

The Business Process has defined inputs which are

converted directly to outputs at the end of the process.

Budget vs. Expenditures The LoB has a defined budget line. Business process incurs individual expenses which

can be tied to tasks or subprocesses, for all types ofresources.

Risks There is a known business risk to theorganization when it is not available. Inherits at least the risk rating of the LOB, but mayhave an elevated risk if the business process must

continue regardless of other BPs in the LOB.

Service Standards & Metrics LoB must have defined and published

service standards and quality metrics

across products and services.

BPs have service standards and quality metrics for

individual products and services.

Clients & Stakeholders LoB has defined consumergroups/segments and stakeholders,

whether internal or external to theorganization.

BPs tracks to specific customers, who receive theproducts and services at the completion of the

process.


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How to Determine if it is

Criteria Line of Business Business Process

Human Assets LoB has associated core competencies, job

family and job profiles.

Business processes have people/roles and/or agents

assigned to specific steps or subprocesses. Can trace

human resources used to perform the business process.

Facilities, Technology &

Information Assets

Supported by facilities, consume energy, use

communications, data, and information to

generate outputs and outcomes.

Tracks to specific applications at specific points in the

business flow. Uses and produces known information

assets. Tracks to specific offices and technologyexpenses to support the people and systems used in the

process.

Comparable Industrial

Sector

Has comparable economic sector and external

competitors, regardless of whether it is a primary

or supporting LoB. LoB may or may not be a

primary activity for the institution.

Does not have a comparable industrial sector because it

is not at a sector level of categorization. Inherits this

value from the Line of Business.

Known Business

Processes

Must have one or more associated business

processes. Line of Business can not exist

without supporting business processes.

Is comprised of steps that make up a business process.

Has a defined initiation point and a defined completion

point. May have business subprocesses but does not

include another business process.

Business Area Is aligned with a Business Area as defined by the

organizations strategic and performance

contracts.

Not applicable.


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Line of Business vs. Business Process These terms are often used interchangeably in the business

literature but it is important to distinguish them because

Line of business is generally one level above where we can dobusiness process management effectively

Line of business is comprised of multiple business processes each of which represents an end-to-end process

Lets consider what would happen if we tried to do business processmanagement at the Line of Business level


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Business Processes

The framework provides us with a structure for harmonizing the Banks businessknowledge, but we need to look at individual business processes for the detailedbusiness knowledge that will help us achieve our goals

The top two levels of the framework (business areas and lines of business)provide us with a strategic view of the Banks business

The bottom levels of the framework (processes and subprocesses) providethe business knowledge needed to begin to design a business architecture

and to support business process management

Lets focus on Business Processes and Subprocesses in order to identify thekinds of business knowledge we need to support the business


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ProjectApproval

ProjectIdentification

ProjectPreparation

ProjectAppraisal

ProjectNegotiation

ProjectEvaluation

ProjectSigning

ProjectEffectiveness

ProjectSupervision

ProjectCompletion

Lending Line of Business Comprised of Linked BusinessProcesses

Business Processes

Steps & Subprocesses

ResourcesAllocated and

Managed at these levels

Decision mtg package

Minutes, PID, ISDS SMO

Notice to Borrower

Draft Aide-memoire

Post-appraisal letter to

Borrower.

Prepare AIS in SAP

Prepare SMO Prepare PCN, PID, ISDS PCN Review Meeting

ROC and/or OC review

(for projects high risks)

Draft PAD

PID

PAD-stage ISDS Draft EA, RAP, IPDP

Minutes of PCN meeting

Minutes of QER

Process Variations are found and

Improvements are made at these Levels

Line of Business level is too coarse to support process management goals and objectives

Application calls are

Executed at this level

LendingLineofB

usiness

Lending

LineofBusiness


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Business Process Management Best

Practices


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Business Process Management Best Practices Business process management recommends that we:

Define internal best practices and guidelines to ensure that business processmodels are consistently developed (ARIS Framework)

Develop business models for processes, and inventory, register and publishexisting business models (Business Analysts & Stewards working with IQand IS teams)

Recommend standards-based modeling and execution languages to be usedby developers for implementing business process models (OASIS BPEL,

WSDL, XSD) Build a business architecture layer as part of enterprise architecture (SOA +

BA)

Establish an enterprise governance process for business processmanagement


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Business Process Models A business process should be represented as models of end-to-end

sequence of tasks or subprocesses, which describe all of the inputs,

outputs and steps/activities required to execute the process

ARIS framework provides us with a comprehensive view of a business

process description

Working within the business framework, and leveraging the ARISbusiness processing modeling strategy, we can both harmonize across

the organization and standardize our current business knowledge


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Environmental

Data

Information

Services

Other

Services

Material Input

Financial

Resources

Initial Event Message

Business

Process

Steps & Subprocesses Result/Event

Information

Services

Other

Services

Material Input

Financial

Resources

Goal

SoftwareComputer

Hardware

Machine

Resources

Human

Input/Output

Org

Unit

Business Process Description

Robust description of a business process includes all elements of the ARIS framework.


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Business Framework and Business Process

Management Looking back to the value proposition, we need a level of business process

description which will allow us to:

connect any system associated with the process

identify the people who support it

link financial resources

acknowledge but also cross organizational boundaries

identify compliance (financial, records) points

identify data and information quality control points

Identify common steps and subprocesses to simplify and reuseapplications

provide managers with the capability to monitor the process forimprovement and planning purposes


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ProjectApproval

ProjectIdentification

ProjectPreparation

ProjectAppraisal

ProjectNegotiation

TL prep. PCN package

and Sends to SM

TL prepares if applicable

ROC and SM clears

TL prepares OC andSM, CD, RVP clear

Information

Business

Process

AIS, SMO, BTOR

PCN, PID, ISDS

Cover Memo, Note

Agenda

Minutes of PCN review

SAP, IRIS, Passkey, ProjectPortal, Lotus Notes, Travel

Web

W2K, Domino, Edge Server,

HIS, Oracle, WebSphere,

Lotus Notes, Siteminder,

iPlanet, SAP, AIX, HACMP,

EMC SRDF, EMC Timefinder

TSM TDF, Tivoli Monitor,

Telalert, Precise Luminate

Role&Resp

Metr

ic

Technology

TT prepares QER

package SM Clears

TL circulates

TL prepares minutes of

QER and SM clears andIssues minutes

Decision mtg package

Minutes, PID, ISDS

SMO Notice to Borrower Draft Aide-memoire

Post-appraisal letter to

Borrower.

Negotiations Package Formal Invitation to

Borrower to Negotiate

Minutes of Negotiation Summary of Negotiation

Status of Negotiation

notice

Final Board Package SCR & email to SECBO Regional Pre-board mtg

Memo to MD

Pre-board meeting

Board Approval

TT prepares and CD, SM,

LOAG2, CC clear TL prepares minutes and

Lawyer, LOAG2, Leader

of Borrower deleg. clear

TL & Leader of Borrowerdelegation sign

TT prepares package,

SM and CD clear TL prepares notice to

Borrower and CD issues

TT prep. aide-memoire,

TL signs & delivers TL prep. post-appraisal

letter SM-CL-CD clear

PAD, PID, ISDS

Safeguards Documents

Minutes of QER

Agenda Email

TL prepares Board pkg,

SM-FO-LY-CD clear Lawyer prepares SCR &

signed by RVP, LEGVP,

expert appointed by CG

TL prepares NB-BoardApproval & lawyer clears

IRIS, Passkey, Project

Portal, Lotus Notes, LAS

Transmittal Memo

PAD,,PID, ISDS

Safeguards Documents

Legal Documents Minutes, Agenda

SMO, Aide-memoire

Notice to Borrower BTOR, Letter

Memo, PAD, MOP Notice of Invitation

Letter of Invitation

Letter of Sector Policy Letter ofDevelopment

Program

Minutes

Transmittal memo

form 2337 , form 1767

Board Doc Sub. Form

PAD, MOP, speech Notice to Borrower

SCR Report

Form 14, Form152 Speech

SAP, IRIS, Passkey, ProjectPortal, Lotus Notes, LAS,

Travel Web









HIS, WebSphere, Oracle,

SAP, Lotus Notes,

Siteminder, iPlanet, Solaris,

Sybase, Replication Server,

WebServer,

Print Archietcture.



SAP, Lotus Notes,



WebServer,

Print Archietcture.

Prepare AIS in SAP Prepare SMO Prepare PCN, PID, ISDS

PCN Review Meeting

ROC and/or OC review

(for projects high risks)Activities Draft PAD PID

PAD-stage ISDS

Draft EA, RAP, IPDP

Minutes of PCN meeting

Minutes of QER









Portal, LAS, Lotus Notes


Portal, LAS, Lotus Notes

Metrics for Lending (Reg: 58% of Bank Budget): Cost (40%), Quality (19%), Volume (16%), Capacity (13%), Satisfaction (6%), Timeliness (6%).

Time, Cost, Capacity, Vol Time, Cost, Cap, Vol, Quality Time, Cost, Cap, Vol, Quality Time, Cost, Cap, Vol, Quality Time, Cost, Quality

App


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ProjectEvaluation

ProjectSigning

ProjectEffectiveness

ProjectSupervision

ProjectCompletion

TL sends an invitation

On signing TL prepares a notice to

Borrower signing

and Lawyer clears

TL sends signed Legal Documents to ACTCF

Information

Business

Process

Notice of Signing Legal Documents

Notice to Borrower

Email

FAX

W2K, Domino.

Role&Resp

App

Technology

TL prepares a memo &

letter and lawyer clears CD signs and sends

Letter to Borrower

Procurement process

Disbursement Financial Management

Completion report

identifying accomplishm-

ents, problems, lesson

learned.

OED assess what works

and what does not and

learn from the

experience.

Borrower submits a

completion report to the

Bank Board of EDs

Borrower prepares specs

and evaluates bids. Ps ensures procurement

Disbursement Officer

authorize to withdraw fund

FM maintains oversightof the FM project

Memo

Notice to Borrower-letter

Email

OED staff assesses the

project and sends to

CD, SM, SD, TL, etc.

IRIS, Lotus Notes, Passkey

Bid documents, Contract

Bid evaluation report

Minutes of bid opening

Cost estimate sheet

Technical &/or financial

evaluation report FM Reports/Docs

Report that contains

accomplishments,

problems,

lessons learned

OED evaluation report.

IRIS, Passkey, Project PortalClient Connection, LAS,

Extranet, Lotus Notes

W2K, Domino.



SAP, Lotus Notes,

Siteminder, iPlanet

Edge Server, IHS,

WebSphere, Oracle, SAP,

Siteminder, iPlanet, Lotus

Notes

Notice of signing and

signing ceremony Notice to Borrower

signing

Signed Legal DocumentsActivities

Notice to Borrower

Declaration of

Effectiveness



SAP, Lotus Notes,



WebServer,

Print Archietcture.

IRIS, Project Portal,Lotus Notes, Passkey

Intranet, Lotus Notes,

Passkey

Metrics for Lending (Reg: 58% of Bank Budget): Cost (40%), Quality (19%), Volume (16%), Capacity (13%), Satisfaction (6%), Timeliness (6%).

IRIS, Lotus Notes, Passkey

Time Time Time, Cost, Cap, Vol, Quality Satisfaction QualityMetr

ic


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TravelMonitoring -

Unit/VPU

TravelPlanning

TravelTransacting

TravelControlling

TravelMonitoring

Specific Trip

Budget Analysts/Officers

forecast travel expenses

Traveler makes

Reservation and enters

Trip information into theWeb Travel

Information

Business

Process

Travel Authorizations

Travel Advisory services

and guidelines Trip Document created

In travel web system

Reservation itinerary

with American express

Online Reservation system,

Travel Web, Passkey, Notes

W2K, IIS, Oracle,

MS Load Balancer, SAP R3,

TSM, NetIQ, Telalert,

Edge Server, IHS,

WebSphere, Lotus Notes

Role&Resp.

App

Technology

Traveler contacts A. Exp

AM approves the trip A. Exp receives Notice

and issues the ticket

Traveler enters expenses

TCS is sent to Manager AM approves the trip

Pre-Trip Controls

Post-Trip Controls Monitoring Specific Trip

Monitoring Specific

Unit/VPU

Traveler can use the

Web Travel System to

monitor the status of trip

request as well as sub-

sequent expense reimb-ursement request

Ex Ante Controls: verify

cost assignment,

explanation of exceptions,

PCard Usage, etc.

Ex Post Controls: trip is

approved, traveler sendsreceipt to ACT.

Itinerary

VISA

Ticket

BTOR

Budget Analysts/Officers

use the SAP Cost Report

or Administrative

Expense Report to

monitor travel expenses

Travel Expense Postings

Trip Document

PCard Receipt

Display Trip

Print/Simulate Trip My Trip Summary Report

Outstanding Trip Claims

Report

Travel Expense

Exception Report

Budget Summary Repor

Operational Mission

Summary Report

SAP, Travel Web, Passkey

W2K, IIS, Oracle, MS

Load Balancer, SAP R3,


Edge Server, IHS,

WebSphere, Lotus Notes




Edge Server, IHS,

WebSphere




Edge Server, IHS,

WebSphere

Planning at Budget Level

Planning Specific Trip

Activities

Before the Trip

After the Trip




Edge Server, IHS,

WebSphere

SAP, Travel Web, Passkey SAP, Travel Web, Passkey

Metrics for Travel (Bank Wide: Over $ 200M in FY-05) : Cost Effectiveness Get Best Results with available Funds

Travel Web, SAP, Passkey,

Notes

Cost Effectiveness Cost EffectivenessCost Effectiveness Cost Effectiveness Cost EffectivenessMetric


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Query-Imaging& Career mgt

StaffBenefits

StaffPerformance

StaffPayment

Recruiting& Staffing

Information

Business

Process

Role&Resp

App

Technology

Activities

Staff prepares

HR Forms

LARS, TAX Kiosk

LMS, Parking System

HR Ben Pension, Passkey NextGen Healthcare IS

PeopleSoft, Solaris,

WebSphere, IHS, Oracle,

SAP, Edge Server, AIX,

Oracle, W2K, oracle report

Server, ASP, Web

Staff prepares OPE,

Manager approves

Manager prepares and

approves performance

awards, awards forexcellence

Payroll

Staff Receivable Time Recording Post Allowance

Staff prepares

HR Forms

OPE

Performance Awards

system Awards for Excellence

system

HR Forms

Payroll System Staff Receivable Syst

TRS Post Allowance Syst

W2K, Domino, PeopleSoft,

ASP, Oracle, Power Builder

Leave and Attendance

TAX Computation

Staff Learning/Training Parking, health services

Pension

Benefits Administration

OPE Performance Mgt

Performance Awards

Awards for Excellence

PeopleSoft, Solaris,

WebSphere, IHS, Oracle,

SAP, Edge Server, AIX,

Oracle

Job Information Agency Recruitment Consultant & Staff app.

YP/JPA Recruitment

HARP Retiree E-recruitment

HR officer prepares

HR Forms

W2K, Domino, W2K, IIS5,

ASP, Oracle, Edge Server

Job World

CATS

YP System, JPA FARP Retiree System

eRecruit

HR Query

HR Imaging HR Kiosk Internal Communications

Staff

HR Forms

W2K, Domino, W2K, IIS5,

ASP, Oracle, Edge Server

Yournet HR Query

HR Imaging HR Kiosk

Metrics for HR Management: OPE, Performance Award, Award for Excellence, Time, learning

OPE, Perf. Award, A for Exc Time Time learningTime

Metric


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Current State Business Process Models Current status of business process modeling..

Business process models exist for some business processes but they arerepresented at varying levels of detail, quality and focus

In other cases, business processes are described as documentation(business procedures, administrative manuals, operational procedures, etc.)

For some processes, there are neither models nor procedural documentation

Recommend that as business analysts work with clients, they conduct asystematic inventory of business process models to

Identify what exists and what is needed to harmonize it

Identify gaps in existing processes

Determine what is needed to fill the gaps


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Business Process Model Registry Design an enterprise level repository for business process models consistent with

enterprise architecture best practices

Establish a registration and review process for all business process models which

is consistent with the Business Architecture governance model

Empower business analysts to:

Discover and inventory existing business process models

Identify redundant models

Identify variations in practice

Identify and link models that describe steps or subprocesses in the samebusiness process

Identify business processes which are not described by BP models


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Standards-Based Modeling and Execution Languages Business architecture is implemented in degrees it is possible to achieve

a level of interoperability without having a fully deployed SOA if consistentbusiness semantics are used across applications

However a fully developed business architecture presumes a crossapplication, business-oriented service oriented architecture which isgrounded in standards

Although the standards are not yet widely adopted, some major applicationvendors are supporting OASIS:

BPEL for defining process flows

WSDL for defining the interfaces to services used by the process

XSD for defining the XML data structures used by the process


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Establish Business Architecture Governance Model Because the business architecture has such high value to the organization, it

needs to be managed at the enterprise level

Because the business architecture is cross-organizational and cross-applications,

roles and responsibilities associated with building and sustaining it need to beclearly defined and supported

We have proposed a governance and stewardship model which identifies anddescribes four roles and responsibilities, including:

Business stewards at all three levels of the framework (Business Area, BusinessLines, Business Processes)

Information Quality/Data Management Program

Business Analysts

Technical Custodians


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Governance & Stewardship