william m. ulrich – tactical strategy group, inc. m. ulrich – tactical strategy group, inc....

ArchitectureArchitecture--Driven Modernization 101: Driven Modernization 101: Concepts, Strategies & JustificationConcepts, Strategies & Justification

William M. Ulrich William M. Ulrich ––Tactical Strategy Group, Inc.Tactical Strategy Group, Inc.

www.systemtransformation.comwww.systemtransformation.com

Seminar ObjectivesSeminar Objectives! Define existing data & application architecture challenges

! Introduce modernization concepts

! Discuss business-driven modernization

! Outline techniques for performing application assessments, integration and transformation

! Describe practical application of these concepts through project-based scenarios

! Introduce enabling tools and technologies

! Help attendees get started

Seminar OutlineSeminar OutlineI. What is Architecture Driven Modernization?I. What is Architecture Driven Modernization?II. Existing Data & Application Architecture ChallengesII. Existing Data & Application Architecture ChallengesIII. Attempts to meet BPM ChallengeIII. Attempts to meet BPM ChallengeIV. Modernization OverviewIV. Modernization OverviewV. Modernization Processes, Techniques & ApproachesV. Modernization Processes, Techniques & ApproachesVI. Modernization ToolsVI. Modernization ToolsVII. Modernization ScenariosVII. Modernization ScenariosVIII. Getting StartedVIII. Getting StartedIX. Selling Management & RDIIX. Selling Management & RDIX. CloseX. Close

Process of understanding and evolving existing software assets Process of understanding and evolving existing software assets for the purpose offor the purpose of!! Software improvementSoftware improvement!! ModificationsModifications!! Interoperability Interoperability !! RefactoringRefactoring!! RestructuringRestructuring!! ReuseReuse!! Porting Porting !! MigrationMigration!! Translation into another languageTranslation into another language!! Enterprise application integrationEnterprise application integration!! ServiceService--oriented architectureoriented architecture

Modernization starts where existing practices fail to deliver Modernization starts where existing practices fail to deliver against business objectivesagainst business objectives

I. What is ArchitectureI. What is Architecture--Driven Driven Modernization (ADM)?Modernization (ADM)?

*Source: ADM.OMG.ORG

II. Existing Data & Application II. Existing Data & Application Architecture ChallengesArchitecture Challenges

!! Existing data & application Existing data & application architectures run in sharp contrast to architectures run in sharp contrast to modern IT disciplines.modern IT disciplines.

!! The challenge is how to leverage The challenge is how to leverage emerging architectures while adjusting emerging architectures while adjusting to critical business requirements & to critical business requirements & changing processes.changing processes.

CIO Legacy Survey*CIO Legacy Survey*

What are the major reasons for keeping the legacy systems your company is currently planning to retain?

!! Still able to support business processesStill able to support business processes 54.4%54.4%!! Still reliableStill reliable 49.749.7!! Staff available to support themStaff available to support them 44.344.3!! Still more cost effective than alternativesStill more cost effective than alternatives 41.641.6!! We do not have the budget to make any changes 36.9We do not have the budget to make any changes 36.9!! Still able to support strategic goalsStill able to support strategic goals 36.936.9

Still relevant and reliable* CIO Insight – December 2002

CIO Legacy SurveyCIO Legacy SurveyIf you are currently migrating or planning to migrate off any of your current legacy systems in the next year, what are the main reasons?

!! Meet new strategic goalsMeet new strategic goals 65.2%65.2%!! Legacy systems can’t support business processesLegacy systems can’t support business processes 59.959.9!! Legacy systems can’t support current strategic goals 56.1Legacy systems can’t support current strategic goals 56.1!! New systems would be more cost effective 48.5New systems would be more cost effective 48.5!! Legacy systems provide poor interoperability 41.7Legacy systems provide poor interoperability 41.7

Migration / transformation plans

* CIO Insight – December 2002

Existing Data & Application Existing Data & Application ArchitecturesArchitectures

!! Numerous languages and platformsNumerous languages and platforms!! 200 billion lines of Cobol (60% of total)200 billion lines of Cobol (60% of total)!! Haphazard design and stovepipe Haphazard design and stovepipe

architecturesarchitectures!! Segregated functionality and data structuresSegregated functionality and data structures!! Layers of middleware and data warehousesLayers of middleware and data warehouses!! WebWeb--based interfacesbased interfaces

Poorly Integrated Information ArchitecturesPoorly Integrated Information Architectures

Business processes, applications and data mirror stovepipe information governance structures.

Existing Business Processes

Existing Data & System Architectures

Existing Organizational Governance Structures

! Major telecommunications company cancels package implementation effort - 360 person years / no deliverable

! Insurance company cancels 12 year project having spent $199 million - no results / no deliverables

! $10 million banking application development project is canceled - no deliverables

! 3 year old, C-based client/server system must undergo major re-engineering effort - no cohesive design

! Countless other stories

Real World SymptomsReal World Symptomsof the Legacy Challengeof the Legacy Challenge

Bottom Line: Aging Architectures Bottom Line: Aging Architectures Impede Ability to Deliver Business ValueImpede Ability to Deliver Business Value

!! 85% of IT projects: late or never delivered*85% of IT projects: late or never delivered*!! Only 9% of IS projects come in on time or within budget*Only 9% of IS projects come in on time or within budget*!! ERP projects: years to implement, canceled 35% of the time ERP projects: years to implement, canceled 35% of the time

& rarely fully deployed*& rarely fully deployed*!! $16.5 billion is spent annually on systems that users never $16.5 billion is spent annually on systems that users never

see (Information Week)see (Information Week)!! Management believes “quick & easy” solutions can solve Management believes “quick & easy” solutions can solve

complex IT challengescomplex IT challenges

* Standish Group International

IT & Business Challenges Drive IT & Business Challenges Drive Modernization RequirementsModernization Requirements

EmergingInformation

Technologies

New ITArchitectures

ChangingBusinessModels

ChangingIndustryModels

•The Internet•Collaborative tools•Java, XML, HTML•New platforms•Integration tools•Open systems

•Time-to-market•Mergers•New products & services•CRM•Business intelligence•Process redesign •Model Driven

Architecture•J2EE and .Net•Component reuse•Web Services•Integration architecture•Agile methods

•E-Business•Deregulation •Globalization•Loss of intermediaries•Supply chain integration•Economic weakness

In a Nutshell…In a Nutshell…Current Business RequirementsCurrent Business Requirements

!! Reducing timeReducing time--toto--market for new products and market for new products and services services

!! Shifting to a customerShifting to a customer--driven philosophydriven philosophy!! Streamlining transaction flow across supply and Streamlining transaction flow across supply and

distribution chainsdistribution chains!! Creating flexible information systems to achieve Creating flexible information systems to achieve

business agilitybusiness agility!! Adapting systems to changing business processesAdapting systems to changing business processes

III. Attempts to MeetIII. Attempts to MeetBPM ChallengeBPM Challenge

!! New tools & technologies New tools & technologies !! New development techniquesNew development techniques!! But, have these advancements helped?But, have these advancements helped?

IT Attempting to Meet Challenges Using IT Attempting to Meet Challenges Using Traditional ApproachesTraditional Approaches

ExistingExistingDataData

&&ApplicationsApplications

WholesaleWholesaleApplicationApplicationReplacementReplacement

NonNon--InvasiveInvasiveDataData && ApplicationApplication

IntegrationIntegration

Application PackagesApplication Packages

A conceptual framework for non-invasive integration allows project teams to incorporate integration with modernization options.

•Database synchronization•Web access to legacy data•Data warehouse access

DataIntegration

•EDI & XML data interchange•Trading partner collaboration•External portals•Web Services

B2B Integration

Business Process

Integration

•Internal business process integration•External process integration•Workflow automation

•Web access to legacy transactions•Front-end / back-end application integration•ERP integration

EnterpriseApplication Integration

We have a Host of NonWe have a Host of Non--Invasive Invasive Integration OptionsIntegration Options

But Integration Technology is One But Integration Technology is One More Layer of Legacy ArchitectureMore Layer of Legacy Architecture

!! MessageMessage––Oriented Middleware:Oriented Middleware: Basic middleware that Basic middleware that allows an application to send / receive messages to / allows an application to send / receive messages to / from other applications.from other applications.

!! Data Management Middleware:Data Management Middleware: Facilitates access to Facilitates access to data not natively defined to an application.data not natively defined to an application.

!! Application ServerApplication Server: Multipurpose, Web: Multipurpose, Web--enabled enabled software that facilitates applicationsoftware that facilitates application--toto--application application communication across platforms.communication across platforms.

!! Adapters:Adapters: Custom pieces of code that enable Custom pieces of code that enable middlewaremiddleware--based communication.based communication.

Vendor-driven integration solutions create layers of legacy chaos across information architectures.

Source: Gartner Forecast Newsletter Issue 3, 2001

EAI Architectures can get MessyEAI Architectures can get Messy

But, These ApproachesBut, These ApproachesHave Fallen ShortHave Fallen Short

!! Wholesale application replacement:Wholesale application replacement:!! Too costly, too time consuming and too riskyToo costly, too time consuming and too risky

!! NonNon--invasive integration:invasive integration:!! Cannot address underlying architecture limitationsCannot address underlying architecture limitations

!! Package applications* Package applications* –– no panacea:no panacea:!! 35% of projects canceled outright35% of projects canceled outright!! Typically deploy only 40% of promised functionalityTypically deploy only 40% of promised functionality!! Only 10% of projects are on time and on budgetOnly 10% of projects are on time and on budget

!! Outsourcing: Only moves problem aroundOutsourcing: Only moves problem around*Who Is to Blame for ERP Failure?, Barry Calogero, serverworldmagazine.com, June 2001

Yet Integration is an IssueYet Integration is an Issue

Because Today’s Business ProcessesBecause Today’s Business ProcessesCut Across Stovepipe ArchitecturesCut Across Stovepipe Architectures

IT must deal with this!

`

Order Entry& Sales

InventoryControl

AccountsReceivableBilling

Shipping &Tracking

Customer Order Functions

Bottom Line is That…Bottom Line is That…

!! Replacement or packages often failReplacement or packages often fail!! No one understands the old systemsNo one understands the old systems!! IT is afraid to shut them offIT is afraid to shut them off!! Time to look at modernizationTime to look at modernization

IV. Modernization OverviewIV. Modernization Overview

!! Bridging the gapBridging the gap!! Standards basedStandards based!! Modernization infrastructureModernization infrastructure

IT Architecture EvolutionIT Architecture Evolution

These four stages of Architecture Evolution.

BuildWebSites

IntegrateWeb withBack-endSystems

ModernizeExisting

Architectures

Webify Legacy

Front-Ends

Modernization: Bridges Gap Between Modernization: Bridges Gap Between Existing & Emerging ArchitecturesExisting & Emerging Architectures

ExistingExistingArchitecturesArchitectures

StrategicStrategicArchitecturesArchitectures

Architecture ModernizationArchitecture Modernization

BusinessBusiness--Driven RequirementsDriven Requirements

Modernization AlternativeModernization Alternative –– Takes Over Takes Over Where Existing IT Strategies Fall ShortWhere Existing IT Strategies Fall Short

!! Augments or displaces existing IT optionsAugments or displaces existing IT options

!! Enables upgrade, conversion, consolidation, migration and Enables upgrade, conversion, consolidation, migration and related projectsrelated projects

!! Applies a measured, phased approach to meeting IT Applies a measured, phased approach to meeting IT challengeschallenges

!! Utilizes scenarios to ensure a businessUtilizes scenarios to ensure a business--driven approachdriven approach

!! Builds upon solid foundation of production systemsBuilds upon solid foundation of production systems

Modernization Comprised of Three Sets Modernization Comprised of Three Sets of Toolof Tool--Enabled DisciplinesEnabled Disciplines

!! AssessmentAssessment!! Analyzes / exposes application artifacts, data and Analyzes / exposes application artifacts, data and

process flows, architecture and behaviorprocess flows, architecture and behavior!! Stabilization & RefactoringStabilization & Refactoring

!! Structure, rationalize, realign, modularize and Structure, rationalize, realign, modularize and otherwise refactor existing systems otherwise refactor existing systems

!! TransformationTransformation!! Extracts logical data definitions and business rulesExtracts logical data definitions and business rules!! Facilitates reuse of existing extracted artifacts in Facilitates reuse of existing extracted artifacts in

redesign of target architecturesredesign of target architectures

Modernization is Based on a Set of Modernization is Based on a Set of Emerging OMG StandardsEmerging OMG Standards

!! Object Management Group Task Force* on ArchitectureObject Management Group Task Force* on Architecture--Driven Modernization formed in 2003Driven Modernization formed in 2003

!! Efforts focused on creating a standard Knowledge Efforts focused on creating a standard Knowledge Discovery MetaDiscovery Meta--model (KDM) to facilitate metamodel (KDM) to facilitate meta--data data exchange among vendorsexchange among vendors

!! Secondary goal is to bring vendors into compliance Secondary goal is to bring vendors into compliance through common processes & definitionsthrough common processes & definitions

!! Roadmap outlines seven stages of standards development*Roadmap outlines seven stages of standards development*!! Major industry players are participatingMajor industry players are participating

*ADM.OMG.ORG

Business ProcessRetooling Requirements

KnowledgeDiscovery

Meta-Model

Governance StructureConsolidation

Integration Projects

Strategic InformationArchitecture

RequirementsIntegration

Requirements

Multi-dimensional integration requires managing business unit, IT and external integration within the transformation repository.

Aligning Interim & Strategic OptionsAligning Interim & Strategic Options

TransformationProjects

Modernization Infrastructure Modernization Infrastructure RequirementsRequirements

!! Recognition of legacy valueRecognition of legacy value!! Process for assessing existing architectures Process for assessing existing architectures

and capturing, reusing and migrating and capturing, reusing and migrating existing software artifactsexisting software artifacts

!! Process for analyzing, designing, building Process for analyzing, designing, building and deploying target architecturesand deploying target architectures

!! Software that facilitates and integrates Software that facilitates and integrates modernization and development processesmodernization and development processes

First, Recognize that Old Systems First, Recognize that Old Systems Contain Business ValueContain Business Value

!! Old systems do many of the right things Old systems do many of the right things (i.e. rules), but not how users want them (i.e. rules), but not how users want them done or in the timedone or in the time--frames required (i.e. frames required (i.e. architecture)architecture)

!! Newly deployed systems and packages omit Newly deployed systems and packages omit valuable business rulesvaluable business rules

!! ERP and EAI have not fully addressed these ERP and EAI have not fully addressed these issuesissues

What Organizations Require to What Organizations Require to Enable Modernization Enable Modernization

!! Philosophical shift that recognizes:Philosophical shift that recognizes:!! Value of existing systems to a businessValue of existing systems to a business

!! How phased transformation is more prudent than an allHow phased transformation is more prudent than an all--oror--nothing replacement approachnothing replacement approach

!! ROIROI--driven commitment to incorporate driven commitment to incorporate transformation into all system projectstransformation into all system projects

!! Modernization support infrastructure that can be Modernization support infrastructure that can be deployed across an enterprisedeployed across an enterprise

Shift from “From Scratch” Development Shift from “From Scratch” Development Philosophy to Phased ReusePhilosophy to Phased Reuse

!! Replace “throwaway” philosophy with Replace “throwaway” philosophy with “reuse” philosophy“reuse” philosophy

!! Shift from an “all or nothing / go for broke” Shift from an “all or nothing / go for broke” approach to a phased deployment approachapproach to a phased deployment approach

!! Seek lower risks, higher returns and faster Seek lower risks, higher returns and faster delivery through phased delivery strategydelivery through phased delivery strategy

Existing Systems Reuse Should be BuiltExisting Systems Reuse Should be Builtinto Application Reinto Application Re--Design ProcessDesign Process

InformationArchitecture

Business ProcessModel

Business models represent as-is &reengineered business processes

Design models depict businessprocesses to be automated

Existing systems: input to redesignprocess & source of reusable data& business rules

Design Models

Mapping existing architecture to requirements and reusingexisting software artifacts and behaviors in new development projects.

Change Control &Configuration Mgmt

Repository Technology

System

Sub-system

JobstepJob

On-lineTable

Load Source

Library

RecordElement

DataFile

DBMS

Location

FormDefinition

UpgradeUnit

Field

Copy /Include

Analysis & Upgrade Tools

Perform Upgrade UnitDate Change

Build Enterprise CenturyDate Analysis Plan

Perform EnterpriseCentury Date Analysis

Establish Century DateChange Upgrade Units

Assess Upgrade UnitDate Change

Finalize Upgrade UnitAssessment Plan

Perform System LevelUpgrade Assessment

Develop CenturyDate Change Plan

Perform EnterpriseWide Analysis

Execute Upgrade UnitComponent Expansion

Upgrade ApplicationData Files / Data Bases

Validate CenturyDate Upgrade

Validation Tools

Order Entry& Sales

InventoryControl

AccountsReceivableBilling

Shipping &Tracking

System

Sub-system

JobstepJob

On-lineTable

Load Source

Library

RecordElement

DataFile

DBMS

Location

FormDefinition

UpgradeUnit

Field

Copy /Include

ProcessModel / Blueprint

Transformation

Software Re-engineering Technology

PositioningAnalysisInventory /Redevelopment

Enterprise

Planning

Business Driven Scenarios

Modernization ProcessModernization Process& Tool Infrastructure& Tool Infrastructure

ProcessManagement

Business Driven Scenarios

Systems Transformation Tools

Sample Modernization Sample Modernization MethodologyMethodology

Inventory/Analysis Positioning Transformation

EnterpriseRedevelopment

Planning

Source: COMSYS / USRM

" Based on results oriented case studies and success stories" Each stage contains multiple tasks and each task contains

multiple steps" Supports phased implementation strategy

• Architecture migration

• Design &component reuse

Transformation

• Enterprise wideassessment

• Architecturetransition planning

EnterpriseRedevelopment

Planning

• Assessment• Discovery• Business area

planning

Inventory/Analysis

•Stabilization•Refactoring•Transformation Preparation

Positioning

The Value of a Modernization The Value of a Modernization FrameworkFramework

Source: COMSYS / USRM

Measurement & MetricsMeasurement & Metrics

!! Metrics support analysis and planning of modernization Metrics support analysis and planning of modernization projectsprojects

!! Range from simple counts to more complex scoresRange from simple counts to more complex scores

!! EXAMPLES: EXAMPLES:

!! Total # batch jobs in systemTotal # batch jobs in system

!! # Data Elements in current system in common with # Data Elements in current system in common with data elements in ERP systemdata elements in ERP system

!! Function points, McCabe, Halstead, etc.Function points, McCabe, Halstead, etc.

!! Total integration pointsTotal integration points

ADM Assessment Approach: Decomposition ADM Assessment Approach: Decomposition Scheme Can be Represented in RepositoryScheme Can be Represented in Repository

InterfaceInterfaceInterface

BusinessRule

BusinessBusinessRuleRule

Module containsModule containsProgramProgram

Program uses InterfaceProgram uses InterfaceInterface is used by ProgramInterface is used by Program

ApplicationApplicationContains ModuleContains Module

Application

FunctionFunctionFunction

ModuleModuleModuleSystem

Business Unit

Business Business UnitUnit Business

ProcessBusiness Business ProcessProcess

ProgramProgramProgram

System containsSystem containsApplicationApplication

Interface is used by Interface is used by Business ProcessBusiness Process

Business ProcessBusiness Processuses Interfaceuses Interface

Program containsProgram containsBusiness RuleBusiness Rule

Business Unit performs FunctionBusiness Unit performs FunctionFunction is performed by Business UnitFunction is performed by Business Unit

Business Rule is defined Business Rule is defined in Programin Program

Bus. RuleQuery

Bus. RuleBus. RuleQueryQuery

ProjectProject--Level MappingLevel Mapping

ProjectProject--level repository facilitates tracking of business data andlevel repository facilitates tracking of business data andrules back to physical system artifacts and target requirements.rules back to physical system artifacts and target requirements.

System

Sub -system

Jobstep

On - linetransition

Load Source

RecordElement

Attribute

File

Database

FunctionBusinessrule

Procedure

Field

Event

Entity

Menu /Screen

Third Party

BusinessUnit

Business processBatch

job

Object /component

System

Sub -system

Jobstep

On - linetransition

Load Source

RecordElement

Attribute

File

Database


Procedure

Field

Event

Entity

Menu /Screen

Third Party

BusinessUnit


job

Object /component

Example of Repository’s Role in Example of Repository’s Role in Modernization ScenarioModernization Scenario

AnalystInterface

Modernization tools

Existing Systems

12

43

1

21 3

Pension

22 13

Insurance

Payroll

Distributedinterface

Integrateddatabase

Integrated application

Target Systems

Used for analysis, planning, redundancy identification, consolidation mapping & post-project documentation

Integration solutions must assess fragmentation impacts between business units and IT while considering the impact of interim integration layers.

Fragmentedbusiness

governancestructures

Fragmentedbusiness processes& workflow

Fragmented data& applicationarchitecture

Interimintegration

middlewarelayers

Modernization must Address Complex Modernization must Address Complex Dimensions of Architecture ChallengeDimensions of Architecture Challenge

Transformation Task

Business– Driven Project

Enterprise Inventory

Application Documenta-

tion

Application Cleanup

Data Mining / Cleanup

Data Redesign / Migration

Language Upgrade /

Conversion

EAI & User Interface Upgrade

Application Modulari-

zation

Architecture Migration

Strategic IT Planning

X

Outsourcing Initiative

X X X

Maintenance Upgrades

X X

BPI / BPA

X X X X

Rehosting

X X X

Package Assessment

X X

Package Implementation

X X X X

HIPAA (data upgrade)

X X X X

Web-to-Host

X X

CRM Initiative

X X X X

Data Warehouse

X X X X

Application Consolidation

X X X X X X

Component Development

X X X X X

Web Services Migration

X X X X X

Business Scenario / Modernization Task MappingBusiness Scenario / Modernization Task Mapping

ModernizationModernizationGeneral Planning Guidelines General Planning Guidelines

!! Define business strategy and IT requirementsDefine business strategy and IT requirements!! Create and / or identify target architectureCreate and / or identify target architecture!! Define project(s) parameters and ROIDefine project(s) parameters and ROI!! Map existing environment against target Map existing environment against target

requirements and related architecturerequirements and related architecture!! Build plan to assess, capture or migrate, upgrade, Build plan to assess, capture or migrate, upgrade,

reuse and / or deactivate legacy componentsreuse and / or deactivate legacy components

V. Modernization Processes, V. Modernization Processes, Techniques & ApproachesTechniques & Approaches

V. I Application AssessmentsV. I Application AssessmentsV. I I Application Stabilization & Refactoring V. I I Application Stabilization & Refactoring V. I I I Application TransformationV. I I I Application Transformation

V.I Application AssessmentsV.I Application Assessments

!! Enterprise AssessmentsEnterprise Assessments!! ProjectProject--Level AssessmentsLevel Assessments

Enterprise AssessmentEnterprise Assessment

Objectives! Identify strategic information architecture

requirements! Inventory existing application portfolio! Establish architecture transition strategy! Link priority application projects with

suggested modernization scenarios

Enterprise Assessment BreakdownEnterprise Assessment Breakdown

Data Architecture

BusinessArchitecture

TransformationStrategy

TechnicalArchitecture

"Provides baseline for developing modernization options"Establish scope and boundaries for cross-application projects"Key to establishing clear requirements and strategy

• Current systems summary

• Current physicalsystems to currentfunctions matrix*

• Current physicalsystems to targetfunctions matrix

• Current systems inter-relationship DFD*

• Functional mappingsummary

• Current data storesdescription*

• Current data storesto current systemsmatrix*

• Current data stores to target entity typesmatrix

• Data mapping summary

• Current to target enterprise architecture summary• Architecture transitioning & impact summary

• Suggested modernization project options

• Current physical systems inventory

• Current physical systems attributes / metrics

• Current to target technical architecture variances

Technical ArchitectureAssessment

Business ArchitectureAssessment

Data ArchitectureAssessment

Modernization Planning Deliverable SummaryModernization Planning Deliverable Summary

ModernizationPlanning

Repository View of Systems Repository View of Systems Decomposition SchemeDecomposition Scheme

InterfaceInterfaceInterface

BusinessRule

BusinessBusinessRuleRule

Module containsModule containsProgramProgram

Program uses InterfaceProgram uses InterfaceInterface is used by ProgramInterface is used by Program

ApplicationApplicationContains ModuleContains Module

Application

FunctionFunctionFunction

JobJobJobSystem

Business Unit

Business Business UnitUnit Business

ProcessBusiness Business ProcessProcess

ProgramProgramProgram

System containsSystem containsApplicationApplication

Interface is used by Interface is used by Business ProcessBusiness Process

Business ProcessBusiness Processuses Interfaceuses Interface

Program containsProgram containsBusiness RuleBusiness Rule

Business Unit performs FunctionBusiness Unit performs FunctionFunction is performed by Business UnitFunction is performed by Business Unit

Business Rule is defined Business Rule is defined in Programin Program

Bus. RuleQuery

Bus. RuleBus. RuleQueryQuery

Tool captures RedRed information / / Analysts add Blue informationAnalysts add Blue information

This information can be stored in open tool vendor repository

• What mix of existing, new and package components will define an organization'sapplication systems under the target architecture?

• How will organizations partition and transition existing systems to achievestrategic targets?

ExistingSystems

PackageSoftware

Strategic ApplicationArchitecture

New Data /Functions

Application Modernization PlanningApplication Modernization Planning

Integration Technology

Architecture Definition &Architecture Definition &Transition PlanningTransition Planning

Existing Systems

Strategic Information Plan

Modernization Plan

• Strategic Information Plan defines strategic architectures• Modernization Plan defines how to achieve it

Strategic InformationSystems Architecture

ArchitectureTransition Strategy

Modernization Plan identifies path forward

Information Systems Architecture• Business Architecture• Data Architecture• Technical Architecture• Define model driven, implementationindependent design

Architecture Modernization Strategy• Assess existing systems• Map existing to target architecture• Establish enterprise transition strategy• Establish maintenance strategy• Manage shifting target specifications

Key Tasks Regarding Modernization & Key Tasks Regarding Modernization & Integration PlanningIntegration Planning

MajorEnhancement

ERP / TotalReplacement

InfrastructureStabilization

Language /Platform Conversion

GUIFront-end

DBMSMigration

Multi-systemConsolidation

DEGREEOF CHANGE TECHNICAL

Evaluating Project OpportunitiesEvaluating Project OpportunitiesFU

NC

TIO

NA

L

EAI

Data WarehouseComponentization

Sample Modernization StrategySample Modernization StrategyPayroll

Pension

Insurance

Accounts Payable

Accounts Receivable

Cash Disbursements

Invoicing

Customer Tracking

Order Processing

Existing Applications

Integrated Human Resources System• Finalize top-down designs• Collapse redundant functions / data • Transition functions/data to client/server• Phase deactivation of legacy systems

Review / Acquire Accounting Package• Assess underlying package functionality• Migrate / collapse redundant legacy data• Effect shut-down of legacy systems

Phased Transition to New Billing System• Stabilize existing applications• Develop integrated client/server design• Assess current systems• Employ phased migration to target

architecture

Modernization Options

Tasks include consolidation, migration, redesign and redeployment activities.

The ProjectThe Project--Level AssessmentLevel Assessment

" Assess long-term business and information plans" Identify the best modernization strategy to meet short

and long-term information requirements" Eliminate "guess work" typically involved in IT

planning efforts" Establish phased, cost effective modernization plan

based on current position and future needs

ObjectivesObjectives

Note: Assessments leverage Enterprise Assessment

ProjectProject--Level Assessment OptionsLevel Assessment Options

Existing ArchitectureAssessment

Disciplines & Tools

Three sets of tasks are basis for integration and modernization projects. Relies on enterprise assessment.

ArchitecturalAssessment

FunctionalAssessment

TechnicalAssessment

Meta-Data, Metrics, Documentation & Plan

Technical assessment inventories and documents existing systems environments, data usage and program flow.

Technical Assessment

EnvironmentalAnalysis

ProcessAnalysis Data Definition

Analysis

Documentation

DatabaseDefinitions Source Code

Reviews

Subject Matter Expert Discussions

Technical AssessmentTechnical Assessment

Metrics Documentation

" Current system flows, user views and data utilization summary" Architecture summary metrics" How systems are constructed and interrelate

General SystemArchitectureAssessment

Data AccessLayer

Assessment

PresentationLayer

Assessment

ApplicationArchitecture

Summarization

Architectural AssessmentArchitectural Assessment

Functional AnalysisFunctional Analysis

• Current system, bottom up planning level models• Multiple current system, integrated models• Integrated top down / bottom up models• Functional conformance metrics

User BacklogRequirements

Analysis

Data ArchitectureAnalysis

FunctionHierarchy Analysis

BusinessFunction / Entity

Analysis

Functional Assessment: Gap Analysis

• Assess the potential for data & behavioral reuse• Determine % of target existing in current systems• Determine % of target to be developed from scratch

CurrentSystem

TargetSystem

GAP Analysis GAP Analysis

CURRENT SYSTEM TARGET SYSTEM

Interviews

Mapping

Interviews

Current-to-target data mapping extracts bottom-up data usage to create or validate target data models.

EntitiesRetained by

Target

EntitiesNot Mapped

Top-DownAnalysis

Entitiesby System

Existing Documentation

IdentifyUnique

& RedundantEntities

Legacy Data

Records &Elements

Current System Models

CurrentCurrent--toto--Target Data MappingTarget Data Mapping

Program-to-function mapping helps determine level of legacy application conformance to target architecture.

CurrentPrograms

CurrentFunctions

TargetFunctions

PROGRAM 1

PROGRAM 2

PROGRAM 3

FUNCTION 1

FUNCTION 2

FUNCTION 3

FUNCTION 4

FUNCTION 5

FUNCTION A

FUNCTION B

FUNCTION C

FUNCTION D

FUNCTION EMANUAL

NoNoMapMap

Program / Function GAP AnalysisProgram / Function GAP Analysis

Determining Functionality: Determining Functionality: Reverse Requirements TracingReverse Requirements Tracing

Determines where certain functions are performed across a system

SystemComponent

TracingUser I/O Review

& Analysis& AnalysisSystem Function

Breakdown

Input /OutputReview

Documentation Reports

PROGRAM SOURCE CURRENT PROCESS CURRENT FUNCTION TARGET FUNCTION

FORM 004 - Create current function / process hierarchy - establish current functions

Purchasing

Sending/Receiving

Financial Services

Inventory

Manufacturing

Etc...

Purchasing DepartmentVendor / Product Report Date

Vendors/Products Added xxxxxxxx 999999 xxxxxxxx 99/99/99

Vendors/Products Changed xxxxxxxx 999999 xxxxxxxx 99/99/99

Vendors/Products Discontinued xxxxxxxx 999999

Reverse requirements tracing determines application functionality by tracking user views back into the source code.

Source: USRM / Comsys

Reverse Requirements Tracing of FunctionsReverse Requirements Tracing of Functions


FORM 004 - Creating current function / process hierarchy - establishing current processes

Purchasing

Purchasing

Purchasing

Purchasing

Purchasing

Sending/Receiving

Sending/Receiving

Inventory

Inventory

Manufacturing

Manufacturing

Manufacturing

Sending/Receiving

Select vendor / product

Change vendor / product

Roll off vendor / product

Order supplies

Pay vendors

Track vendor shipments

Disperse supplies

Maintain supply stock

Request supplies

Ship corporate products

Manage materials

Request supplies

Create products

Purchasing DepartmentVendor / Product Report Date

Vendors/Products Added xxxxxxxx 999999 xxxxxxxx 99/99/99

Vendors/Products Changed xxxxxxxx 999999 xxxxxxxx 99/99/99

Vendors/Products Discontinued xxxxxxxx 999999

Reverse requirements tracing abstracts application functionalityReverse requirements tracing abstracts application functionality by by tracking user views back into the source code. tracking user views back into the source code.

Source: USRM / Comsys

Reverse Requirements Tracing of Logical ProcessesReverse Requirements Tracing of Logical Processes

Current-to-target functional analysis maps legacy programs, processes and functions to target architecture functional definitions.


Mapping functions to program source modules

Purchasing

Purchasing

Purchasing

Purchasing

Purchasing

Sending/Receiving

Sending/Receiving

Inventory

Inventory

Inventory

Manufacturing

Manufacturing

Manufacturing

Sending/Receiving

Sending/Receiving

Manufacturing

Manufacturing

Select vendor / product

Change vendor / product

Roll off vendor / product

Order supplies

Pay vendors

Track vendor shipments

Disperse supplies



Request supplies



Manage materials

Manage materials

Request supplies

Create products

Create products

PU300200

PU300200

PU300200

PU300520

PU500000

SR774200

SR600350

INV08040

Manual

INV00100

SR400100

SR400200

MA906600

Manual

MA665000

MA240030

MA240050

Program / Process / Function MapProgram / Process / Function Map

ThreeThree--way vs. Twoway vs. Two--way Mappingway Mapping

CurrentCurrent––toto––targettarget––toto––proposed mapping supports proposed mapping supports package assessments.package assessments.

Legacy

Requirements

Package

Implementation Project PlanningImplementation Project Planning

!! ProjectProject--level analysis establishes detailed level analysis establishes detailed documentation and implementation plandocumentation and implementation plan

!! Essentially becomes first step in a Essentially becomes first step in a modernization projectmodernization project

FUNCTIONALCONDITION

TECHNICAL QUALITY

ORGANIZATIONAL IMPACT

GOOD

POOR

POOR GOOD

LOW HIGH

MAINTAIN /MIGRATE /

INTEGRATE

UPGRADE /CONSOLIDATE

MAINTAIN MAINTAIN

PHASE OUT REPLACEINTEGRATE

ORENHANCE

ENHANCE /CONSOLIDATE

LOWHIGH

High impact systems should be enhanced, consolidated, maintainedor otherwise modernized or otherwise modernized based on business requirements.

Software Option Strategy MatrixSoftware Option Strategy Matrix

Maintenance Replacement EnhancementTechnologyMigrations

Document & assessexisting baseline

Implement stds,methods, procs

Position - formaintainability

Re-document

Personnelreallocation

Port to workstation

Refine testingprocedures

Evaluate options- High level architecture- Package vs. Rewrite

Rewrite / Redevelop- Assess existing base- Build strategy- Position current system- Refine new architecture- Transformation support

Package- Assess/select- Integrate with reverse

engineering support

Positioning as "survival"strategy


- Apply analyzers- Build plan


Position systemsas appropriate

Refine test procedures

Add enhancements

Validate & implement


Determine needs / buildmigration plan


Positioning techniques- Translate- Restructure- Rationalize data defs- Re-aggregation

Transformation support

Validate & implement

Software Change Strategy SummarySoftware Change Strategy Summary

V.IIV.II Application Stabilization & Application Stabilization & RefactoringRefactoring

! Improve source code quality so that it is easier to analyze, modify, debug and test

! Prepare systems for design level and physical component level reuse within targetarchitectures

LegacyApplications

&Data

Documentation, improvement and data integrity scenarios streamline management and upgrade tasks.

Data Integrity•Mining•Cleanup•Consolidation

Application Improvement•Structuring •Rationalization•Modularization

Application Documentation

Application Management & Application Management & Maintenance Facilitation ScenariosMaintenance Facilitation Scenarios

Application StagingApplication Staging

! Establish working versions of production source code

! Establish Positioning configuration management procedures

! Facilitate change control procedures to manage and assimilate production upgrades

! Verifies logical equivalence of retooled source code

! Involves executing comparisons to verify that no functional changes were inadvertently introduced

! It is NOT testing - testing looks for differing results, validation looks for equivalency

! Requires 60 - 70% execution coverage and good test suites

ValidationValidation

Validation testing attempts to automate as much of the process as possible.

OriginalUpgrade

Unit

CapturedReports

ConvertedUpgrade

UnitOriginal Input Data Original or ExpandedInput Data

CapturedScreens

CapturedReports

CapturedScreens

CapturedOutput Data

CapturedOutput Data

AutomatedComparison

Utility

Audit TrailReports

Validation ProcessValidation Process

Conversions & Language Level Conversions & Language Level UpgradesUpgrades

! Focus is on 2nd to 3rd, 3rd to 3rd or 4th to 3rd generation language conversion

! Does not address paradigm shift to objects

Assess Effort & FinalizeWork plan

Prepare Source Code for

Conversion

ConvertSource

Modules

MigrateEnvironmentalComponents

RedocumentApplication

Migrate Data &Data Definition

Language

Validate &Gain UserSign-off

Code StabilizationCode Stabilization

! Delivers stable code with defective constructs removed

! Provides standardized, structured source program logic

! Resolves program level design aberrations

Program DesignReview &

Improvement

CodeRestructuring

Code FlawAnalysis &Removal

Code RestructuringCode RestructuringUNSTRUCTURED STRUCTURED

Restructuring of COBOL is highly automated.

Data Definition RationalizationData Definition Rationalization

• Simplifies system-wide data tracing and analysis• Externalizes data usage and representations• Eliminates definitional redundancy and inconsistency• Facilitates many strategic migration efforts

LiteralExternalization

Field & RecordSize Expansion

Physical DataUpgrade

Data NameRationalization

Data DefinitionMigration

Field & Record Size ExpansionField & Record Size Expansion

!! Expands business data and related definitionsExpands business data and related definitions!! Includes physical data and all definitions of Includes physical data and all definitions of

that datathat data!! Examples: area codes, bar codes, dollar Examples: area codes, bar codes, dollar

amounts, datesamounts, dates!! This is a businessThis is a business––driven initiativedriven initiative

Field ExpansionOption

Combined Rationalization / Field Combined Rationalization / Field Expansion ViewExpansion View

ExistingSource

CompositeRecord

NewSource

FieldExpansion

Trace

ApplyDescriptive

Names

DataDefinitionAnalysis

PropagateComposite

CompositeField

Expansion

SecondaryTrace &

Propagation

ExpandFields

ReviewAnalysis

BuildComposite

Literal ExternalizationLiteral Externalization

!! Finds embedded business dataFinds embedded business data!! Places it into user Places it into user –– modifiable tables or modifiable tables or

databasesdatabases!! Examples: dates, plantExamples: dates, plant--codes, areacodes, area--codes, codes,

interest rates, etc.interest rates, etc.

Code Slicing & ModularizationCode Slicing & Modularization

!! Slicing allows analysts to eliminate or Slicing allows analysts to eliminate or segregate portions of a programsegregate portions of a program

!! Modularization realigns application source Modularization realigns application source code / functionality physicallycode / functionality physically

!! First step towards Services Oriented First step towards Services Oriented Architecture (SOA)Architecture (SOA)

!! Techniques maintenance, redesign, migration Techniques maintenance, redesign, migration and package deploymentand package deployment

Code Slicing TechniquesCode Slicing Techniques

• Isolates logic into new modules• Supports functional modularity• Simplifies maintainability for large programs• Supports redundancy reconciliation and re-aggregation

Obtain / AccessSlicing

Analysis

SelectSlicingCriteria

PerformSlice

Review Results& Repeat

as Required

Perform QualityReview &Validate

Slice byProcedure

Range

Slice byReportCriteria

Slice byComputation

Variable

Slice byTransaction

Criteria

Slice byStatementSelection

Current System Re-aggregated System

FunctionA

FunctionA

FunctionC

FunctionD

FunctionB

Function A

Function C

Function B

Function D

FunctionB

Functions can be split out and recombined to modularize application functionality.

Systems ModularizationSystems Modularization

V.III Architecture TransformationV.III Architecture Transformation

! Leverage existing applications to facilitate multiple redevelopment scenarios

! Reuse, where applicable, system and program level artifacts

! Improve the integrity and completeness of new systems

! Shorten / streamline application development process

! Facilitate application integration efforts

Architecture Modernization Architecture Modernization OptionsOptions

Modernization options include data and business rule capture, Modernization options include data and business rule capture, consolidation, redesign, validation and redeployment.consolidation, redesign, validation and redeployment.

Legacy Architecture

Data Consolidation

&Abstraction

DeployNew &

DeactivateLegacy

Architecture

BusinessRule Capture &Consolidation

Target Architecture

Design

StrategicRequirements

TargetArchitecture

Validate TargetRequirements

Rule / DataSynchronization

Redesign & ReRedesign & Re--Specification Specification

Adopted from Al Travis / CSC Index

Current Systems Target System

Planning

Construction

Analysis

Design

Planning

Construction

Analysis

Design

BusinessStrategies

Top-down, target data model

Bottom-up, legacydata model

Deliverables• Integrated top-down, bottom-up

data model• Gap analysis determining missing

data entities & attributes• Reconciliation of inconsistent data

usage• An understanding of legacy to target

data migration requirements

Consolidating topConsolidating top--down and bottomdown and bottom--up data models produces a higher up data models produces a higher quality data architecture and increases likelihood of project suquality data architecture and increases likelihood of project success.ccess.

Building a High Integrity Data ArchitectureBuilding a High Integrity Data Architecture

Functional Mapping Process• Expand I/A functional decomposition• Expand I/A current to target mapping• Complete current to target gap analysis• Develop integrated functional

decomposition & CRUD matrix

Top Down Inputs• I/A Functional Decomposition• Logical Data Model• I/A Functional Mapping

Bottom Up Inputs• Source code, screen layouts & JCL • Screen & report layouts• I/A assessment results

Deliverables• Detailed mapping of reusable

source code components• Identification of reusable I/O• Integrated functional structures

& data / functional matrix

Logical Functional Mapping ProcessLogical Functional Mapping Process

Functional DerivationFunctional Derivation

!! Functional analysis now extends to the Functional analysis now extends to the business logic / business rule levelbusiness logic / business rule level

!! Requires extraction, filtering, packaging and Requires extraction, filtering, packaging and analysis of business logicanalysis of business logic

!! Services as basis for validation of target Services as basis for validation of target functional models and other scenariosfunctional models and other scenarios

Business Rule Derivation: Extending Business Rule Derivation: Extending Functional DecompositionFunctional Decomposition

!! Business Logic: Bounded set of conditional and Business Logic: Bounded set of conditional and imperative statements that relies on and directly imperative statements that relies on and directly or indirectly impacts business dataor indirectly impacts business data

!! Business Rule (Systems View): Description of Business Rule (Systems View): Description of how a business workshow a business works

!! The Challenge: Capturing and filtering business The Challenge: Capturing and filtering business logic to achieve business rule candidates logic to achieve business rule candidates

Business Rule Derivation: Logic Capture, Business Rule Derivation: Logic Capture, Filtering, Packaging and AnalysisFiltering, Packaging and Analysis

!! Capture: Process of capturing logic blocks that Capture: Process of capturing logic blocks that serves as business rule candidatesserves as business rule candidates

!! Filtering: Eliminating nonFiltering: Eliminating non--business logicbusiness logic!! Packaging: Putting logic into a context that Packaging: Putting logic into a context that

makes sense to business and design analystsmakes sense to business and design analysts!! Analysis: Categorizing, leveraging and reusing Analysis: Categorizing, leveraging and reusing

captured business rulescaptured business rules

Cobol Business Rule CandidateCobol Business Rule CandidateB9000B9000--POSTPOST--8000.8000.

* CALCULATE CURR AND OUTPUT ACCOUNT BALANCE TO POSTING SUSPENSE * CALCULATE CURR AND OUTPUT ACCOUNT BALANCE TO POSTING SUSPENSE VSAMVSAMPERFORM B9050PERFORM B9050--CALCCALC--MONTHLYMONTHLY--CHARGES THRU B9050CHARGES THRU B9050--EXIT.EXIT.

IF DDACCTIF DDACCT--ACCTACCT--SRVCSRVC--CHGCHG--FL NOT = “W” AND “G” AND “X”FL NOT = “W” AND “G” AND “X”

IF HEA1010AIF HEA1010A--ACCTACCT--BAL = ZEROBAL = ZERO

COMPUTE HEA1010ACOMPUTE HEA1010A--ACCTACCT--BAL = DDACCTBAL = DDACCT--ACCTACCT--BAL BAL –– (WS(WS--TOTTOT--MONTHLYMONTHLY--CHARGES * 2)CHARGES * 2)

IF HEA1010AIF HEA1010A--ACCTACCT--BAL < ZEROBAL < ZERO

PERFORM U8010PERFORM U8010--CALCCALC--PENALTYPENALTY THRU U8010THRU U8010--EXITEXIT

MOVE “Y” TO HEA1010AMOVE “Y” TO HEA1010A--PENALTYPENALTY--FLFL

COMPUTE HEA1010ACOMPUTE HEA1010A--ACCTACCT--BAL = HEA1010ABAL = HEA1010A--ACCTACCT--BAL BAL –– WSWS--TOTTOT--PENLTYPENLTY--CHGCHG

ELSE NEXT SENTENCEELSE NEXT SENTENCE

ELSEELSE

COMPUTE HEA1010ACOMPUTE HEA1010A--ACCTACCT--BAL = DDACCTBAL = DDACCT--ACCTACCT--BAL BAL –– WSWS--TOTTOT--MONTHLYMONTHLY--CHARGESCHARGES

IF HEA1010AIF HEA1010A--ACCTACCT--BAL < ZEROBAL < ZERO

PERFORM U8010PERFORM U8010--CALCCALC--PENALTYPENALTY THRU U8010THRU U8010--EXITEXIT

MOVE “Y” TO HEA1010AMOVE “Y” TO HEA1010A--PENALTYPENALTY--FLFL

COMPUTE HEA1010ACOMPUTE HEA1010A--ACCTACCT--BAL = HEA1010ABAL = HEA1010A--ACCTACCT--BAL BAL –– WSWS--TOTTOT--PENLTYPENLTY--CHGCHG

ELSE NEXT SENTENCEELSE NEXT SENTENCE

ELSE IF DDACCTELSE IF DDACCT--ACCTACCT--SRVCSRVC--CHGCHG--FL = “W”FL = “W”

MOVE WSMOVE WS--TOTTOT--MONTHLYMONTHLY--CHARGES TO HEA1010ACHARGES TO HEA1010A--SRVCSRVC--CHCH--DFRDFR--HLD.HLD.

**** DISABLED 05/03/89 BY BGG **** DISABLED 05/03/89 BY BGG –– HANDLED DIFFERNTLY NOWHANDLED DIFFERNTLY NOW

****** ELSE IF DDACCTELSE IF DDACCT--ACCTACCT--SRVCSRVC--CHGCHG--FL = “G”FL = “G”

****** MOVE WSMOVE WS--TOTTOT--MONTHLYMONTHLY--CHARGES TO HEA1010ACHARGES TO HEA1010A--SRVCSRVC--CHCH--GICGIC--HLD.HLD.

PERFORM B9100PERFORM B9100--FILLFILL--SGMENTSGMENT THRU B9100THRU B9100--EXIT.EXIT.

PERFORM B9200PERFORM B9200--OUTPTOUTPT--POSTPOST THRU B9200THRU B9200--EXIT.EXIT.

B9000B9000--EXIT. EXIT.EXIT. EXIT.

Sco

pe o

f bus

ines

s ru

le c

andi

date

Rules can be reused as-is or as basis for legacy redesign.Source: Netron, Inc. 2002

Non-Business Logic Non-Business Logic IdentificationSyntactically dead code Logic never executed regardless of data values.

Semantically dead code Logic not executed based on setting of data values.

Program initialization Logic that initializes element or record area values.

Input / output logic Code accessing physical data. Includes call, read, write and other I/Ostatements.

Output area build Logic that moves data to screen and report work areas.Status checking Tests directly after I/O commands checking communication or other

status codes.Error handling Imperative logic that invokes exception reporting or module

termination based on status code results.Data manipulation Database or file manipulation logic.

Environmental logic Manages security, homegrown technology, date handling or similarroutines.

Extraneous logic Redundant conditionals, mutually exclusive tests or similar routines.

Business Logic Must be Filtered From NonBusiness Logic Must be Filtered From Non--Business LogicBusiness Logic

Filtering guidelines help analysts separate business from non-business logic – a key step in rule derivation.

Extracted & Packaged Business LogicExtracted & Packaged Business Logic

System / Application Name: Accounting / Accounts Receivable

Program Name: PGREG117

Paragraph Name: REGION-VALIDATION

Data Element Search Argument: Element = REGION-CODE

Logic:IF REGION-CODE NOT = ZEROAND ACCOUNTING-CLEARANCE NOT = ZERO

ADD WS-VALIDATION-AMT (WRK-SUB) TO RGN-TOTAL (IE-REGION).

Logic Analysis Leads to Reusable Logic Analysis Leads to Reusable Business Rule CandidatesBusiness Rule Candidates

System / Application Name: Accounting / Accounts Receivable

Program Name: PGREG117

Paragraph Name: REGION-VALIDATION

Business Rule: REGION VALIDATIONPrecondition: REGION CODE is not a Zero (i.e,. a valid REGION)Trigger: ACCOUNTING CLEARANCE is not a Zero

(i.e, a valid CLEARANCE)Postcondition: REGIONAL ACCOUNTING TOTAL

is increased by VALIDATION AMOUNT

IF DDACCT-ACCT-SRVC-CHG-FL NOT = “W” AND “G” AND “X”

IF HEA1010A-ACCT-BAL = ZERO

COMPUTE HEA1010A-ACCT-BAL = DDACCT-ACCT-BAL – (WS-TOT-MONTHLY-CHARGES * 2)

IF HEA1010A-ACCT-BAL < ZERO

PERFORM U8010-CALC-PENALTY THRU U8010-EXIT

MOVE “Y” TO HEA1010A-PENALTY-FL

COMPUTE HEA1010A-ACCT-BAL = HEA1010A-ACCT-BAL – WS-TOT-PENLTY-CHG

ELSE NEXT SENTENCE

ELSE

COMPUTE HEA1010A-ACCT-BAL = DDACCT-ACCT-BAL – WS-TOT-MONTHLY-CHARGES

IF HEA1010A-ACCT-BAL < ZERO

PERFORM U8010-CALC-PENALTY THRU U8010-EXIT

MOVE “Y” TO HEA1010A-PENALTY-FL

COMPUTE HEA1010A-ACCT-BAL = HEA1010A-ACCT-BAL – WS-TOT-PENLTY-CHG

ELSE NEXT SENTENCE

ELSE IF DDACCT-ACCT-SRVC-CHG-FL = “W”

MOVE WS-TOT-MONTHLY-CHARGES TO HEA1010A-SRVC-CH-DFR-HLD.

Business Rule Mapping to Target Business Rule Mapping to Target ArchitectureArchitecture

In this example, Account Balance is the query item with rules as follows:- Find all ACCT-BALANCE & related variables- Capture rule back to first “IF” & down to end of test.

Business rules will be based on queries from top-down architecture team.

ADM Analysis Tool•Business Rule description is mapped

to Business Rule Query•Rule can then map to Process

ANALYSISREPOSITORY

Redundancy Tracking & Redundancy Tracking & ConsolidationConsolidation

!! Should address unnecessary data and Should address unnecessary data and functional redundanciesfunctional redundancies

!! Streamlining / consolidating redundancy Streamlining / consolidating redundancy requires ROI analysisrequires ROI analysis

!! Process is tool supported but must be businessProcess is tool supported but must be business--drivendriven

VI. VI. Modernization Tool Mapping to TasksModernization Tool Mapping to TasksAssetMgmt

ReTool/Redeploy

Develop-ment

Mainte-nance

ProcessRedesign

ToolFeature

Method

System Wide AnalysisMaintenance environmentRedevelopment environmentSystem wide summary analysisGeneral purpose repositoryProgram Level AnalysisProcess flow metricsProgram flow diagramsIn-line cross referenceInteractive analysis toolsCode ImprovementCode restructuringData definition rationalizationRemodularization toolsPhysical data migrationModel Based ToolsBusiness planning toolsAnalysis toolsDevelopment toolsDesign toolsReverse engineering toolsIntegration Tools

X

XX

X

X

XX

X

XX

X

XX

X

XX

XX

X

X

X

X

X X X

X XX

X

X

X

X

X

XX

XX

X

VII. Modernization ScenariosVII. Modernization Scenarios

!! Scenarios depict practical application of Scenarios depict practical application of transformation discipline, tools and strategiestransformation discipline, tools and strategies

!! Scenarios have a businessScenarios have a business--driven project focus driven project focus and are typically delivered in phasesand are typically delivered in phases

!! Case studies reflect actual project resultsCase studies reflect actual project results

12 Modernization Scenarios*12 Modernization Scenarios*I.I. Application Portfolio ManagementApplication Portfolio ManagementII.II. Application ImprovementApplication ImprovementIII.III. LanguageLanguage--toto--Language Conversion Language Conversion IV.IV. Platform Migration Platform Migration V.V. NonNon--Invasive Application Integration Invasive Application Integration VI.VI. Services Oriented Architecture Transformation Services Oriented Architecture Transformation VII.VII. Data Architecture MigrationData Architecture MigrationVIII.VIII. Application & Data Architecture ConsolidationApplication & Data Architecture ConsolidationIX.IX. Data Warehouse DeploymentData Warehouse DeploymentX.X. Application Package Selection & Deployment Application Package Selection & Deployment XI.XI. Reusable Software Assets / Component Reuse Reusable Software Assets / Component Reuse XII.XII. ModelModel--Driven Architecture Transformation Driven Architecture Transformation

* Modernization Scenario White Paper -- http://adm.omg.org/adm_info.htm#white%20papers

System

Sub -system

Jobstep

On - linetransition

Load Source

RecordElement

Attribute

File

Database


Procedure

Field

Event

Entity

Menu /Screen

Third Party

BusinessUnit


job

Object /component

System

Sub -system

Jobstep

On - linetransition

Load Source

RecordElement

Attribute

File

Database


Procedure

Field

Event

Entity

Menu /Screen

Third Party

BusinessUnit


job

Object /component

Scenario I. ApplicationScenario I. ApplicationPortfolio ManagementPortfolio Management

Application & businessenvironment

Existing SystemsMeta-Model

Queries, metrics& reports

Analysis, refactoring &transformation Tools

Objective: Establish multi-dimensional knowledge base for managing & transforming applications.

Repository

Application PortfolioApplication PortfolioManagement ScenarioManagement Scenario

!! Large IT portfolio, difficult to navigateLarge IT portfolio, difficult to navigate!! Legacy systems poorly documentedLegacy systems poorly documented!! CrossCross--functional / crossfunctional / cross--application project application project

being proposedbeing proposed!! Outsourcing plan proposedOutsourcing plan proposed

Issues:Issues:

Strategy:Strategy:!! Document crossDocument cross--functional applications and functional applications and

relation to business functions in relevant relation to business functions in relevant business units using repositorybusiness units using repository

Application Portfolio ManagementApplication Portfolio Management

Enterprise wide analysis scenario inventories systems portfolio, defines functional /physical boundaries and supports enterprise level transition planning.

HumanResources

Accounting& Revenues

InventoryControls

Back OfficeProcessing

Sales &Marketing

Application Application Portfolio Management: Portfolio Management: Information Capture & ManagementInformation Capture & Management

Parse & LoadFacility

LegacyApplications Access to on-line

Documentation

Repository

Physical / LogicalMapping &

Impact analysis

A/R

CLAIMS

H/R

ModernizationTools

Structure, rationalize,streamline, stabilize

& otherwise refactor

Scenario II. Scenario II. Application ImprovementApplication Improvement

Objective: Create a stabile foundation for managing, enhancing or modernizing systems. Reduce application fragility, increase quality.

Redundant / poorly defineddata & process definitions

Rationalized, structuredstreamlined source code

Application Improvement ScenarioApplication Improvement Scenario

!! Systems and programs hard to change and Systems and programs hard to change and understandunderstand

!! Poorly structured, designed source programsPoorly structured, designed source programs!! Data definitions redundant, and hard to Data definitions redundant, and hard to

understandunderstand

Issues:Issues:

Strategy:Strategy:!! Analyze and cleanup volatile programs and Analyze and cleanup volatile programs and

systemssystems

Application Improvement ScenarioApplication Improvement ScenarioConvert, stabilize, structure, and/or slice selected modules in highly modified systems

Rationalize data definitions across systems of interest – determined during assessment

Data Definition Rationalization

Process

Interim GUI data design effort

Strategic data modeling effort

Rationalized source code

Converts source code to new language or language level with run time environment

Scenario III. LanguageScenario III. Language--toto--Language Language Conversion Conversion

Scenario IV. Platform Migration Scenario IV. Platform Migration Objective: Convert applications to new language and / or run time platform. Scenarios can be performed separately or together.

Scenario III:

Migrates application to new hardware and / or operating system

Scenario IV:

Rehosting ScenarioRehosting Scenario

! Current platform obsolete or inaccessible! Shared / relational databases require redesign! Preference is to not rebuild - but to stay in code

based environment

Issues:

Strategy:! Develop and implement phased migration plan

Rehosting Scenario ProcessRehosting Scenario Process

Finalize Code BasedClient/Server System

Develop AssessmentProposal

Assess MigrationRequirements

Finalize Code BasedMigration Plan

Prepare Systems forCode Based Migration

Stabilize ApplicationCode

Standardize SystemWide Data Definitions

Remodularize SelectedSource Code

Finalize Client/ServerDesign

Redesign & ImplementSource Programs

Build Client/ServerMigration Plan

SOURCE: TSRM / JAMES MARTIN & CO.

Host based system is redesigned to the extent required to move it to Web-basedenvironment - includes relational redesign of data structures.

Host BasedEnvironment

Client / ServerEnvironment

Character BasedFront-end

RedesignedDBMS

Legacy FileStructures

GUI Front-end

File Redesign& Migration

Character Interface to Web

SourceMigration

SourceStabilization

EnvironmentalFinalization

Rehosting Scenario Rehosting Scenario -- Target Target ArchitectureArchitecture

Re-aggregation slices input/edit/validation logic and creates standaloneroutines to be ported to workstation environment

Remodularization

• Isolates I/O functions• Isolates edit / validation logic• Eliminates host related logic

Host to N-Tier remodularization

Monolithic Legacy System

Isolated / Consolidated I/O& Routines

Rehosting Modularization ApproachRehosting Modularization Approach

Scenario V. NonScenario V. Non--Invasive Application Invasive Application Integration Integration

Objective: Create the option of accessing host applications & data via Web-based interfaces*.

Host BasedApplication

InputEdits

OutputBuild

Web Front-end Host / Server Web Front-end

LegacyDBMS

Legacy FileStructures

Network Network

Mid

dlew

are

Mid

dlew

are

*Non-invasive approach only impacts front-ends. Underlying architecture remains intact.

EAI ScenarioEAI Scenario

!! Users cannot access backUsers cannot access back--end application end application functionalityfunctionality

!! Existing systems are not conducive to WebExisting systems are not conducive to Web--based access and ebased access and e--business requirementsbusiness requirements

Issues:Issues:

Strategy:Strategy:!! Build frontBuild front--end with backend with back--end connectivity to end connectivity to

address user requirementsaddress user requirements

Integration via XML Case StudyIntegration via XML Case Study

!! Situation: Manual reporting from frontSituation: Manual reporting from front--end to legacy backend to legacy back--endend!! 2525--year old MVS/CICS/390 systemyear old MVS/CICS/390 system!! WebWeb--based Java Applet interface through Oracle Databasebased Java Applet interface through Oracle Database!! Reports generated by frontReports generated by front--end Webend Web--based systembased system!! Data manually reData manually re--keyed into MVS Backkeyed into MVS Back--end end

!! Relativity Solution:Relativity Solution:!! Knowledge Mining of business logic establishing connectivity betKnowledge Mining of business logic establishing connectivity between ween

mainframe and Websphere frontmainframe and Websphere front--end end !! Developed “Mediator” to determine 3270 or Web callsDeveloped “Mediator” to determine 3270 or Web calls!! “Mediator” enabled XML data stream flow from Web, translated int“Mediator” enabled XML data stream flow from Web, translated into o

BMSBMS!! Transaction message sent back in XMLTransaction message sent back in XML

Source: Relativity

Batch to Online ClaimsBatch to Online ClaimsProcessing Case StudyProcessing Case Study

!! Situation: Largest health insurance contract in nation Situation: Largest health insurance contract in nation serving 50% of government employeesserving 50% of government employees!! 2020--year old IBM S/390 mainframes, VSAM, DB2, year old IBM S/390 mainframes, VSAM, DB2,

3 million lines of code3 million lines of code!! Claim processing nightly Claim processing nightly –– batch systembatch system

!! RelativityRelativity Solution:Solution:!! Links mainframe to thinLinks mainframe to thin--client w/ web front endclient w/ web front end!! IBM MQ messaging, WebSphere, Java Server PagesIBM MQ messaging, WebSphere, Java Server Pages!! Online, realOnline, real--time accesstime access!! Restructured COBOL, new JavaRestructured COBOL, new Java--based programsbased programs

Source: Relativity

Re-aggregation slices input/edit/validation logic and creates standaloneroutines to be ported to workstation environment

Modularization

• Isolates I/O functions• Isolates edit / validation logic• Creates portable I/O validation

routines

Host Application Processing

Monolithic Legacy System

Web Front-end Input & Validation

Distributed FrontDistributed Front--End ModularizationEnd Modularization

Host environment remains basically intact while new front-end routineshandle all client interfaces.

Workstation handles Web - based I/O,edits, validation & host interfaces

Host Application Processing

Web Front-end Input &Validation

Host system retains core processinglogic, original TP monitor logic & data access facilities

Note: Uses I/O macro to GUI conversion tool,on-line (CICS) monitor emulation & standardcommunication software (i.e. Micro Focus)

Note: Transaction I/O handling is emulatedby new client environment

Linking Web FrontLinking Web Front--End via HostEnd via Host

Scenario VI. Services Oriented Scenario VI. Services Oriented Architecture (SOA) TransformationArchitecture (SOA) Transformation

Objective: Create a framework for constructing and interlinking back-end systems with the goal of making applications more agile.

Identify, extract,document & publishservices within SOA

framework

Existing applicationsRepository identifying

reusable services

SOAFramework

SOA Transformation RoadmapSOA Transformation Roadmap!! Excavate data meaning & business functionality Excavate data meaning & business functionality

from systems of interestfrom systems of interest!! Stabilize, standardize & structure code as Stabilize, standardize & structure code as

requiredrequired!! Rationalize and (optionally) redesign Rationalize and (optionally) redesign

application dataapplication data!! ReRe--aggregate systems to isolate data access, aggregate systems to isolate data access,

users interface, business logicusers interface, business logic!! Incorporate results into SOA frameworkIncorporate results into SOA framework

Redesigned Data & Modularized Systems Redesigned Data & Modularized Systems Serve as SOA Building BlocksServe as SOA Building Blocks

Order Customer Data InventoryData Data

Data & application architecture designed around functional components

• Applications decompose into single function modules (i.e. services)• Business logic is isolated from I/O and user interface functionality

Common OrderModules Common Customer

Mgmt. Modules

Sub-modules

Sub-modules

Common InventoryMgmt. Modules

Sub-modules

Sub-modules

Sub-modules

Sub-modules

Common DistributionModules

Sub-modules

Sub-modules

Scenario VII. Scenario VII. Data Architecture MigrationData Architecture Migration

Objective: Consolidate, cleanse, redesign & migrate existing data structures to relational database. Refactor applications as required.

Existing data file/ database formats

Rationalizeddata structures

Refactoredapplications

Relationaldata model

Physicaldata design

Physicaldatabase

Data cleansingprocess

Data Architecture Data Architecture Migration ScenarioMigration Scenario

!! Data is scattered, redundantData is scattered, redundant!! Data does not conform to business needsData does not conform to business needs!! Data inaccessible to Web applicationsData inaccessible to Web applications

Issues:

!! Identify relevant data and approachIdentify relevant data and approach!! Design new data architectureDesign new data architecture!! Capture, refine, consolidate and migrate dataCapture, refine, consolidate and migrate data!! Perform phased migration and adjust applicationsPerform phased migration and adjust applications

Strategy:

• Rationalized views used to create integrated, relational database• New database may reside on host or in client/server environment

Target Data Model

Rationalized DataStructures

Relational ModelingRefinements

Data ArchitectureData Architecture Migration ConceptMigration Concept

Re-aggregation slices input/edit/validation logic and creates standaloneroutines

Remodularization

• Isolate I/O functions• Isolate data access / presentation logic•Modularize functions based on

functional assessment

Modularized System

Monolithic System

Isolated / Consolidated I/O& Functions

Data Architecture Migration:Data Architecture Migration:Functional ModularizationFunctional Modularization

Scenario VIII. Application Scenario VIII. Application & Data Architecture Consolidation& Data Architecture Consolidation

OEDist

ProInv

•Integrate, automate common processes •Consolidate & redesign cross-functional data•Migrate baseline systems to new architecture•Identify & consolidate redundant logic•Create & phase in reusable modules

Consolidated data &application architecture

OE Inv DistPro-cure

IntegratedRelationalDatabase

Consolidation tasks

OEDist

ProInv

OEDist

ProInv

OEDist

ProInv


Objective: Consolidate multiple redundant or related systems into a common data & application architecture.

Consolidation Scenario OverviewConsolidation Scenario Overview

!! Redundant or stovepipe applications cannot share Redundant or stovepipe applications cannot share datadata

!! Segregated functions hindering business agilitySegregated functions hindering business agility!! Redundant applications, data, functions inflating Redundant applications, data, functions inflating

operating costsoperating costs

Issues:

Strategy:

!! Design integrated target architectureDesign integrated target architecture!! Develop and perform phased migration of relevant Develop and perform phased migration of relevant

applicationsapplications

Consolidation ApproachConsolidation Approach

POSITIONING STEPSStep 1 Code stabilization / restructuring

Step 2 Data name rationalization

Step 3 Redundancy reconciliation & re-aggregation

Step 4 Client/server architecture finalization

TRANSFORMATION STEPSStep 5 Redevelop person management sub-system

Step 6 Transform base payroll functions

Step 7 Transform base pension functions

Step 8 Transform base insurance functions

Step 9 Finalize target functionality / deploy integrated system

TargetArchitecture

Architecture

"Personnel System Example"

Phased Consolidation: Phased Consolidation: One Application From ManyOne Application From Many


Business Unit 1

Business Unit 2

OEDist

ProInv

•Integrate & automate common processes across business units•Consolidate & redesign cross-functional data•Migrate baseline systems to new architecture•Migrate & consolidate subsequent business unit applications under new architecture•Web-enable selected user interfaces as required

TargetArchitecture

OE Inv DistPro-cure

IntegratedRelationalDatabase

Integration &Transformation Tasks

OEDist

ProInv

OEDist

ProInv

Business Unit 3

OEDist

ProInv

Baseline Applications

Extract, analyze, transform validate & load

End user access tocross-functional data

Scenario IX.Scenario IX.Data Warehouse DeploymentData Warehouse Deployment

Objective: Create non-operational, consolidated view of data & make this data available to business users in ad hoc formats.

Integrated, rationalized,relational view of

abstracted data

Data Integration / Data Warehouse Data Integration / Data Warehouse ScenarioScenario

!! Users find data inaccessible, hard to decipherUsers find data inaccessible, hard to decipher!! Save data stored across multiple systems, Save data stored across multiple systems,

databasesdatabases

Issues:Issues:

Strategy:Strategy:!! Extract and consolidate relevant data and make Extract and consolidate relevant data and make

it accessible to endit accessible to end--users, customersusers, customers

Data Integration / Data Warehouse ScenarioData Integration / Data Warehouse Scenario

Develop IntegratedGraphical Front-End

Develop AssessmentProposal

Assess Current SystemMeta-Data

Build User DataQuery Plan

Rationalize Cross SystemData Representations

Rationalize DataRepresentations

Finalize IntegratedData Architecture

Complete Front-end& Server Design

Deploy User DataQuery Capability

Build Graphical UserInterface Plan

SOURCE: TSRM / JAMES MARTIN & CO.

Selective migration / integrationof cross-functional data

End user access to cross-functional data

Data Warehouse ConceptData Warehouse Concept

• Data definitions are rationalized across systems of interest• Composite views are used as basis for integrated extract database design

Cross ApplicationData Name

RationalizationProcess

Cross system extract databasedata design effort

Sys C

Warehouse Scenario Composite Warehouse Scenario Composite Record Capture RationalizationRecord Capture Rationalization

• Rationalized data views used to create integrated, relational extract database• Extract database may reside on host or be downloaded to client environment• Extract programs are developed to load & refresh extract data

Integrated Data Modelto Support Host Resident

Queries

Rationalized LegacyComposite Records

Relational ModelingRefinements

Developing WarehouseDeveloping Warehouse

Data Warehouse: Data Warehouse: Data Extraction ProcessData Extraction Process

1995 TSG, Inc. All Rights Reserved

Extraction & consolidation routines (in-houseor commercial tools) must also purify extractdata as defined during target attribute model

Warehouse Environment

Operational Data:Extract, Transform & Load

GUI Front-end Routines

Scenario X. Application Package Scenario X. Application Package Replacement ScenarioReplacement Scenario

!! Current systems not meeting business needsCurrent systems not meeting business needs!! Packages under reviewPackages under review

Issues:

Strategy:!! Assess package candidate inabilityAssess package candidate inability!! Map selected package to legacy environmentMap selected package to legacy environment!! Perform phased package deployment and Perform phased package deployment and

legacy deactivationlegacy deactivation

Package selection and replacement options can leverage or ignore legacy architectures. Option 5 uses the legacy architecture as the baseline for the new application as an alternative to licensing and implementing a package.

Replacement Option Utilizes LegacyAnalysis Techniques

Reuses LegacyApplication in Target

Architecture1. Standard Package Selection No No

2. Package Selection with GapAnalysis

Yes No

3. Standard PackageImplementation

No No

4. Package Implementation withGap Analysis & Legacy Reuse

Yes Yes

5. Legacy Consolidation &Migration to Target Architecture

Yes Yes

Basic Package Replacement OptionsBasic Package Replacement Options

Application Package Selection & Application Package Selection & Deployment Deployment –– phase onephase one

Legacy Application Functionality

PackageAssessment

Functionality of Proposed Packages

StrategicRequirements

Package Selection Results & Plan

Func d

Func g..............

Func eFunc f

Func aFunc bFunc c

BusFunction

Source REQ

PK1

PK2

PK3

LEG

XXX

XXX

XX--XXX

XX

X

X

XXX

X

X

X

X

XXX

XXX

XX--

X

X

XXX

Objective: Provide objective analysis of how well various packages meet strategic information requirements.

Application Package Selection & Application Package Selection & Deployment Deployment –– phase twophase two

Retain / Integrate with package

Discard / Deactivate

CurrentSystemFunctionality

Verify integrity ofstrategic requirements

Strategic Requirements

Add new functionsto package

Implement/ Integrate

Package SolutionFunctionality

Do not implement

Objective: Provide a concrete package deployment roadmap.

Scenario XI.Scenario XI. Reusable Software Assets / Reusable Software Assets / Component ReuseComponent Reuse

ExistingApplications

ReuseRepository

DevelopmentProjects &

Web Services

Business Rule& Data

Extraction

ComponentRepository

LanguageMigration Option

Objective: Create a repository of reusable components.

Data / RuleConsolidation

Component Reuse ScenarioComponent Reuse Scenario

!! Desire to move legacy functions to Web servicesDesire to move legacy functions to Web services!! Need to consolidate and reuse legacy functionalityNeed to consolidate and reuse legacy functionality

Issues:

Strategy:!! Define target architectureDefine target architecture!! Perform phased legacy consolidationPerform phased legacy consolidation!! Migrates to componentMigrates to component--based environmentbased environment!! Deploy Web servicesDeploy Web services

Component Reuse TasksComponent Reuse Tasks

!! Address redundancy and reuse issuesAddress redundancy and reuse issues!! Perform consolidation as neededPerform consolidation as needed!! Select, extract and componentize rulesSelect, extract and componentize rules!! Deploy under servicesDeploy under services--based architecturebased architecture

Component Reuse Scenario Case StudyComponent Reuse Scenario Case Study

!! Situation: 30Situation: 30--year old inventory management system year old inventory management system supporting 91 bases worldwidesupporting 91 bases worldwide!! 6000 people accessing Unisys 2200 mainframe daily6000 people accessing Unisys 2200 mainframe daily!! 1.6 million lines of code, maintenance became unfeasible1.6 million lines of code, maintenance became unfeasible!! After 3 years’ efforts, offAfter 3 years’ efforts, off--thethe--shelf software delivered only shelf software delivered only

27% functionality27% functionality

!! RelativityRelativity Solution:Solution:!! Analysis and Knowledge Mining used to remove unused Analysis and Knowledge Mining used to remove unused

code and extract COBOL business rulescode and extract COBOL business rules!! Java components generated from extracted COBOL Java components generated from extracted COBOL

business rulesbusiness rules

Source: Relativity

Scenario XII.Scenario XII. ModelModel--Driven Architecture Driven Architecture TransformationTransformation

Objective: Migrate existing applications to an environment in which systems are maintained in models.

•Extract business rules & data definitions•Purge implementation dependent logic•Rationalize/consolidate data & logic as needed•Migrate/merge extracted logic & data definitions into applicable modelsExisting applications

& data definitionsSample models

RegisterClaim

ApproveClaim

Trigger

ObjectFrom objectdata model

PreconditionEmployee makes

a claim Register claim

TriggerDaily claimreview process

Source: Martin/Odell

InsuredEmployee

Producepacking list

DecrementFGI

Ship orderShip order

Shipping ClerkDrop ship

from remotewarehouse

VIII.VIII. GettingGetting StartedStarted: AssessmentsAssessments

!! Snapshot the enterprise / develop an architecture Snapshot the enterprise / develop an architecture transition strategytransition strategy

!! Objectively gather facts and requirementsObjectively gather facts and requirements

!! Identify hypotheses for various systemsIdentify hypotheses for various systems

!! Build an interim and strategic planBuild an interim and strategic plan

!! Develop a phased migration strategyDevelop a phased migration strategy

GettingGetting StartedStarted: PilotsPilots

! Test drive and refine a selected strategyIntegrate redevelopment task set

! Get the application team on boardVerify tool requirements

! Fine tune validation approach

! Adjust application proposal, contract, workplan and cost justification analysis

Develop and implement a pilot project to:Develop and implement a pilot project to:

IX. Selling Management / ROIIX. Selling Management / ROI

! Maintenance is drawing too many resources

" System reliability is an issue

" Integration requirements exist

" Migration to model driven approach is planned

" Any funded project where existing systems could play a minor or major role

A portfolio list identifying systems, platforms, size, & strategic requirements should be kept as a baseline from which to identify redevelopment candidates

Identifying BusinessIdentifying Business--Driven Driven OpportunitiesOpportunities

Business Requirements Drive Business Requirements Drive ValueValue--Based ROIBased ROI

!! Reducing timeReducing time--toto--market for new products market for new products and services and services

!! Shifting to a customerShifting to a customer--driven philosophydriven philosophy!! Streamlining transaction flow across supply Streamlining transaction flow across supply

and distribution chainsand distribution chains!! Creating flexible information systems to Creating flexible information systems to

achieve business agilityachieve business agility

Current State of ROI on IT Current State of ROI on IT ProjectsProjects

!! 83% of companies do not track or measure 83% of companies do not track or measure (ROI) on technology projects.*(ROI) on technology projects.*

!! Companies that measure ROI track time Companies that measure ROI track time lines and costs but not value.*lines and costs but not value.*

!! Value must be determined to assess ROIValue must be determined to assess ROI

* Building and Measuring ROI for Application Integration Projects, Julia King, Computerworld ROI, Brainstorm Business Integration Conference, October 29, 2001

ValueValue--Driven ROI PrinciplesDriven ROI Principles

!! Existing data structures and applications are Existing data structures and applications are highly valued information assetshighly valued information assets

!! Application management and maintenance must Application management and maintenance must consider business value consider business value -- not just IT cost reductionnot just IT cost reduction

!! Rewrite, package replacement and integration Rewrite, package replacement and integration projects must consider legacy information assets projects must consider legacy information assets as key ROI factorsas key ROI factors

!! Projects impacting legacy environments should be Projects impacting legacy environments should be cost justified in phasescost justified in phases

ValueValue--Driven ROI Versus TotalDriven ROI Versus Total--CostCost--ofof--Ownership (TCO)Ownership (TCO)

!! TCO breaks down IT spending by application areaTCO breaks down IT spending by application area!! One study showed TCO increasing $2,300 per One study showed TCO increasing $2,300 per

employee after an ERP implementation*employee after an ERP implementation*!! But if revenue increased $10 million as a result...But if revenue increased $10 million as a result...!! ...the resulting annual cost increase of $1.1 million ...the resulting annual cost increase of $1.1 million

(based on 500 IT personnel) would still return an (based on 500 IT personnel) would still return an ROI of $9 million**ROI of $9 million**

*IT Spending Budget Practices Beyond Service Level Agreements, Gartner Inc., www.gartner.com, 2001**Legacy Systems: Transformation Strategies, William M. Ulrich, Prentice Hall, 2002

The Wrong Project Approach The Wrong Project Approach Results in Negative Project ROIResults in Negative Project ROI

!! At Hershey, a $112 million ERP implementation At Hershey, a $112 million ERP implementation resulted in shipping delays and deliveries of resulted in shipping delays and deliveries of incomplete orders*incomplete orders*

!! This, in turn, caused Hershey’s profits to drop This, in turn, caused Hershey’s profits to drop 19% in one quarter*19% in one quarter*

!! Which increases criticality of selecting the right Which increases criticality of selecting the right approach and delivering it in phases approach and delivering it in phases

*Failed ERP Gamble Haunts Hershey, by Craig Stedman, Computerworld, November 1, 1999

BusinessBusiness--Driven Value Assessment Driven Value Assessment Shifts with Economic ConditionsShifts with Economic Conditions

!! In 2000, top spending priorities at financial service In 2000, top spending priorities at financial service firms: customer relations (37%), competition firms: customer relations (37%), competition (18%), cost savings (14%) and efficiency (10%)*(18%), cost savings (14%) and efficiency (10%)*

!! By 2001, priorities shifted to cost savings (32%), By 2001, priorities shifted to cost savings (32%), efficiency (29%), market share (23%) and efficiency (29%), market share (23%) and customer demands / requirements (15%)*customer demands / requirements (15%)*

!! Customers fell in priority while cost saving Customers fell in priority while cost saving priorities increasedpriorities increased*Budget Season is Here: Financial Services IT Spending is in for Big Changes, by John Hagerty, AMR Research, May 2001

Phased ROI: Reduces Project Risk & Phased ROI: Reduces Project Risk & Helps Manage Shifting PrioritiesHelps Manage Shifting Priorities

!! “Assessing the business value, related costs and “Assessing the business value, related costs and annual projected TCO for a project should be annual projected TCO for a project should be incorporated into a cost model that quantifies ROI by incorporated into a cost model that quantifies ROI by project phase.”*project phase.”*

!! “If a project is put on hold or cancelled due to a shift “If a project is put on hold or cancelled due to a shift in business priorities, that project will have delivered in business priorities, that project will have delivered some value prior to being cancelled.”*some value prior to being cancelled.”*

*Legacy Systems: Transformation Strategies, William M. Ulrich, Prentice Hall, 2002

ValueValue--Based ROI for IT Projects*Based ROI for IT Projects*

*Legacy Systems: Transformation Strategies, William M. Ulrich, Prentice Hall, 2002

! Identify various options to meet a given set of business requirements

! Estimate revenue growth and / or cost savings to be gained from each approach

! Calculate cost of delivering each approach as the implementation cost plus annual operating costs

! Determine “net value” for each option: Subtract project costs from projected annual revenue growth and / or cost savings

Information Asset Management Information Asset Management & Maintenance ROI& Maintenance ROI

!! Application assets must be documented Application assets must be documented whether maintained inwhether maintained in--house or offsitehouse or offsite

!! Proactive upgrade activities can streamline Proactive upgrade activities can streamline delivery of business value or prepare delivery of business value or prepare applications for strategic transformationapplications for strategic transformation

!! Outsourcing / insourcing agreements should Outsourcing / insourcing agreements should incorporate valueincorporate value--added activities added activities -- not just not just cost reductioncost reduction

Transformation Support for Transformation Support for Outsourcing ROIOutsourcing ROI

!! IT cost cutting is currently the driving force IT cost cutting is currently the driving force behind outsourcing initiativesbehind outsourcing initiatives

!! ValueValue--added outsourcing ROI goes beyond added outsourcing ROI goes beyond cost cutting and includes:cost cutting and includes:!! Documenting applications in an open repositoryDocumenting applications in an open repository!! Integrating applications using EAI technologyIntegrating applications using EAI technology!! Upgrading, migrating and / or consolidating Upgrading, migrating and / or consolidating

enterprise data and applicationsenterprise data and applications

Phased ERP Deployment Leverages Phased ERP Deployment Leverages Modernization DisciplinesModernization Disciplines

*ERP: Time for a Rethink, Richard Todd, a white paper from www.max-international.com, June 1998

Phased alternative to standard ERP deployment approach*Phased alternative to standard ERP deployment approach*

! Migrate existing applications to an industry-standard database

! Migrate application front-ends to a client/server environment

! Add core ERP functionality to this environment! Integrate additional ERP features with best-of-breed

solutions

X. Summary / Close / QuestionsX. Summary / Close / Questions

william m. ulrich – tactical strategy group, inc. m. ulrich – tactical strategy group, inc....

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