open group presentation on msbi method of creating enterprise architecture core diagrams

A. Nicklas Malik Senior Enterprise Architect

Microsoft Enterprise Architecture

Developing a Core Diagram of an

Agile Enterprise using MSBI (Minimum Sufficient Business Integration)

Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.

This is a How-To presentation.

You can use this tomorrow --

Aligning around a Core Diagram

Step by Step development process

Useful primarily for Collaboration and

Replication Model companies, but may be

applicable for others as well.

Please hold questions until the end of the talk, so that I can cover

the method. I will leave time for questions. I’m happy to follow-up

in person as well.


Business Agility – the ability

of a business to respond

more quickly and effectively

than its competition to the

changing demands of the

marketplace.


Coordination -Shared customers, products or suppliers

-Impact on other business unit transaction

-Operationally unique Business Units (BU)

-Autonomous Business Management

-BU control over business process design

-Shared customer / product / supplier data

-Consensus processes for designing IT

infrastructure services; IT application decisions

made in the business units

Unification -Globally integrated business processes often

with support of enterprise systems

-Centralized Management applying functional

/ process / business unit matrices

-Central IT decision making

-BUs with similar or overlapping operations

-High level process owners design

standardized processes

-Centrally mandated Databases

Diversification -Few shared customers or suppliers

-Few data standards across business units

-Operationally unique Business Units (BU)

-Most IT decisions made within business units

-Autonomous Business Management

-Independent transactions

-BU control over business process design

Replication -Centralized (or federal) control over business

process design

-Few, if any, shared customers

-Operationally similar business units

-Autonomous BU leaders with limited

discretion over business processes

-Centrally mandated IT services

-Standardized data definitions with data

locally owned (some aggregation at corp).

-Independent transactions (aggregated)

Business Process Standardization

Bu

sin

ess

Pro

cess

In

teg

rati

on

Low High

Lo

w

Hig

h

Source: Enterprise Architecture As Strategy, Ross, Weill, Robertson, HBS Press


MSBI method

applies

primarily to

these two

operating

models

MSBI method

applies

primarily to

these two

operating

models


Minimum Sufficient

Business Integration means

Integrate ONLY the minimum capabilities

needed to meet shared goals.

Distribute the rest.

Problem:

Each time you reuse a business service,

process, or system, that element becomes

more brittle, and slower to change.

How do we create an Enterprise Architecture

that avoids reusing too much?

Solution:

Build a Core Diagram that Illustrates

Agility at the Edge,

Consistency at the Core


ING Direct Core Diagram (adapted from Enterprise Architecture As Strategy)

Disney Company Core Diagram (circa 1957)

A core diagram is a simple one-page

view of the processes, data, and

technologies constituting the desired

foundation for execution. [It]

provides the rallying point for

managers responsible for building out

and exploiting the enterprise

architecture.

For most companies, I think some kind of

picture is essential for understanding the

expectations for a business transformation.

-- Jeanne Ross, Director, MIT CISR (e-mail to Nick Malik, 5-26-2011)


Socialize &

Extend

Socialize &

Extend

• Onboard

individual

segments to the

core diagram

• Demonstrate

value

• Report progress

to build

pressure to

adopt

• Onboard

individual

segments to the

core diagram

• Demonstrate

value

• Report progress

to build

pressure to

adopt

Test Test

• Tangible over

abstract

• Clear over

Comprehensive

• Pilot - Test -

Revise

• Tangible over

abstract

• Clear over

Comprehensive

• Pilot - Test -

Revise

Prepare Prepare Develop Develop

• Segregate

capabilities by

differentiation

• Address Data

Mastering and

Privacy

• Develop Core

Diagram

adoption plan

• Segregate

capabilities by

differentiation

• Address Data

Mastering and

Privacy

• Develop Core

Diagram

adoption plan

• Socialize value

and get buy-in

• Create list of

business models

and key

capabilities

• Focus on the

key challenge /

strategy

• Decide what

decisions you

want to support

• Socialize value

and get buy-in

• Create list of

business models

and key

capabilities

• Focus on the

key challenge /

strategy

• Decide what

decisions you

want to support


Turn by Turn

directions


Bu

sin

ess

Mo

del C

an

vas

Key Partners Key Activities Value

Proposition

Customer

Relationship

Customer

Segments

Key

Resources

Channels

Cost Structure Revenue Streams

Business Model

An organized approach

to describe one way in

which an enterprise

delivers value and meets

its goals

Required

Competency

Partner Type

Value Proposition Customer Demands

and Relationships

Products and

Serv ices

Distribution

Channels

Geographies and

Locales

Finance and

Rev enue Models

Customer Type

Resource / Asset

input to

delivered

through

affect and

demand

targets drives

demands

supports

affect

affect

drives

may

include

has

targeted

to

targets

Required

Competency

Partner Type

Value Proposition Customer Demands

and Relationships

Products and

Serv ices

Distribution

Channels

Geographies and

Locales

Finance and

Rev enue Models

Customer Type

Resource / Asset

input to

delivered

through

affect and

demand

targets drives

demands

supports

affect

affect

drives

may

include

has

targeted

to

targets

Source: Enterprise Business Motivation Model 3.5

http://motivationmodel.com


OEM Installed Software Sales Business Model

XBox

Game

Licensing

Our initial effort at a core diagram started with the collection of 23 business

models (only 8 are named here). Example: OEM Installed Software Sales

OEM

Installed

Software

Sales

Online

Advertising

Platform

as a

Service

Negotiated

Volume

Licensing

Strategic

Consulting

Services

Online

Business

App

Services

Bricks and

Mortar

Retail

COA systems,

Digital

Distribution

Systems

Individual License

Tracking &

Invoicing

Improve Sales of

OEM hardware by

including licensed

operating

software

License Fee on a

Per-item basis

Collaborative

development of

software to

amplify the value

of innovative

hardware

OEM and

Hardware

Component

Manufacturer

Software

+

Software Keys

Secure Electronic

Distribution

Authorized Replicator +

Secure Print Vendor

EMEA, LATAM, APAC,

NorthAm

Value

proposition

Required

Competencies

Required

Assets

Revenue

Model

Customer

Expectations

Customer

Type

Partner

Type Products / Svcs

Channels Locales


Po

rter’

s V

alu

e C

hain

Ideati

on

To

Avail

ab

ilit

y

Aw

are

ness t

o

Lead

Lead

To

Ord

er

Ord

er

To

Fu

lfil

lmen

t

Fu

lfil

lmen

t To

Cu

sto

mer

Valu

e

Plan to Earnings Release

Hire to Retire

Info Strategy to Service Response

Counsel to Resolve

Su

pp

ort

ing

Pro

cess

es

Core Processes M

icro

soft

En

terp

rise

Valu

e C

hain


Accounts Receivable

Product Data Management

Business Intelligence

Lic to Customer Activation WF

Some capabilities create

DIFFERENTIATION in the marketplace. These capabilities will

change frequently.

Rapid change is essential for

BUSINESS AGILITY

Business Model Key Differentiators Key Non-Differentiators

OEM

Installed

Software

Sales

Track + Invoice each license

Secure OEM Collaboration

Agreement-Specific Pricing *

Secure Online Licensing


biz biz biz

Digital

R&D

Core

Agile “Edge” R&D

Business Capabilities

Consistent “Core”

Capabilities

Ideati

on

to

Avail

ab

ilit

y

biz biz biz biz biz biz

Content

R&D

Physical

R&D


biz

biz

biz

biz

biz

biz

biz

biz

biz

biz

biz

biz

Customer

Type #1

Customer

Type #3

Customer

Type #2

Agile “Edge”

Lines of Business


Capabilities

Ord

er

To

Fu

lfil

lmen

t

Core


Core


Capabilities

HR IT Legal Finance

Agile “Edge”

Support Functions


Sys #1 Sys #2 Sys #3

Customers

Transactions

Service Req

Contacts

Accounts

Budgets

Earnings

Royalties

Products

Digital Origin

Collateral

Catalogs

R+D#1 R+D#2

Division. A Division. B Division. C Division. D

Ideation To Availability

Awareness to Lead

Lead To Order

Order To

Fulfillment

Fulfillment To

Customer Value Supporting

Functions

Common

123

ABC

DEF

GHI

AB2

DE2

GH2

Dep

t A

lph

a

Dep

t B

eta

D

ep

t G

am

ma

D

ep

t D

elt

a

Se

gm

en

t Z

Se

gm

en

t X

Re

gio

n E

R

eg

ion

N

Web Chat Call Ctr

Mktg

#1

Mktg

#2

Sales

#1

Sales

#2 CRM

IVR

HR/Ben CMDB Fin Rpt


Name of

Business

Process

Name of

Business

Process

Names of

Business

Units

Names of

Business

Units

Centralized

Data Facets

Centralized

Data Facets

Specific

System

Names

Specific

System

Names

Groups of

Systems

Groups of

Systems


Test the diagram with stakeholders

Simplify if necessary

Does it work during rationalization?

Pilot with one area of the business / segment

Onboard business areas / segments

Indicate which systems are “approved” and

which are “de-facto”

Explain it to business stakeholders


For collaboration-model companies –

Focus on information to be integrated

Integrate to the minimum sufficient level

for agility

Use your company’s process model if

possible

Be simple, clear, and specific

Gain buy-in through adoption

Test and Iterate


Your Presenter

A. Nicklas Malik

Senior Enterprise Architect

Microsoft IT Enterprise Architecture

[email protected]

Inside Architecture blog: http://blogs.msdn.com/nickmalik

LinkedIn: http://linkedin.com/in/nickmalik

open group presentation on msbi method of creating enterprise architecture core diagrams

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