Enterprise Modeling: Aligning Business and IT

Enterprise Modeling: Aligning Business and IT Mamdouh Ibrahim, Ph.D., IBM Distinguished Engineer, ACM Distinguished Engineer, CTO Enterprise Architecture, IBM Global Business Services [email protected]

IBM Proprietary

© 2010 IBM Corporation

My mission today is to: Explain the difficulty in Aligning Business and IT Introduce EA as a vehicle to achieve such alignment Present approaches to capture and model: – Enterprise Capabilities - The Strategic Capability Network (SCN) – Enterprise Business Architecture - Component Business Modeling (CBM) – Service Oriented Architecture (SOA) – Service Oriented Modeling and Architecture – Event Driven Architecture (EDA) – A Conceptual Model

Highlight some Challenges that Research may help addressing

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The Reality of Business and IT Alignment IT executives have been losing sleep over "IT and business alignment." to varying degrees since the 1980’s Business/IT Alignment consistently ranks in the top ten key issues identified in annual surveys and trend analyses As business and technology become more intertwined, development and deployment of IT systems that effectively address the ever changing needs of the business today and in the future becomes increasingly critical

The question remains that after 30 years of some of our brightest minds working on this effort, why is it still an issue? 3


The ability to get aligned grows more and more difficult Problem: Business pressures are compounding while IT constraints are increasing Business Pressures

Launch new and innovative products

Shorter change cycles

Customized products for niche markets

Agents

Customer s

Suppliers

Resellers

3rd Party Providers

IT Constraints

4

4

Employees

Complex processes and systems

Complex applications and interfaces

IT budget spent on maintenance, not new investments


Enterprise Architecture (EA) Potential Solution???

5


The Analogy with “The City Plan” Enterprise Strategy Business Opportunity

Business Strategy

Technology Availability

IT Strategy

Strategy "the city’s purpose & goals"

Strategy

Enterprise wide focus

Enterprise Architecture Transition Planning

Outsourcing Initiatives NET WOR K

Compone nt

Enterprise Architecture "the city plan"

Electronic Service Delivery

Planning/Desig n Initiat ives a G rp h ciIlS

o e D u cn m a tM g a D t B .U

a e rh W o u s

u C tse o cS rim v d ie a M lw r

B .U In a tre ilu f/sM c n A a iu N ftrsW ce a S tsye n M m g

Initiatives focused on migrating to the new delivery environment Planning/Design Infrastructure Outsourci ng Initiatives focused on implemen ting t he vision Planning/design IT Competenc y c entre

Business Architecture

Planning

Competency Centre In itiatives

Infrastructure In itiatives

management Operations Recognise problem andfix report Call management Perf Log and Problem Capacity management Management Config. Analyse problem Bypass Escalate and/or problem Update customer Diagnose problem Resolve Operations problem Management Change Update customer Close problem

Data W arehouse

Customer Service Centre

Key Group Decisi on Points

Other Business Unit Systems Kiosks Telemetr y systems etc

EA guides investment, cost reduction and design decisions to support the goal of optimizing return on IT investments (ROI)

IT Architecture

In ventory

Schedul ing

Shi ppi ng Yarn Buy in g

Ass ort me nt Pla nnin g

AEI Corporate

Component Knit tin g

Ca sh Manageme nt

Saturn Group

Yankee Group

Order Ent ry Taggi ng & Pack in g

Knits Division

Ac countin g

Yarn Division

Component De sign Yarn Dy eing

Raleigh Plant

Seneca Plant

Business Structure

Business Locations

Program focus

Architecture Governance

6

Business Operating Environment and IT Infrastructure

Design and Delivery

Programme Architecture

Soln Outline

Macro Design

Soln Outline

As an integral part of the strategic planning process, the EA is the linkage between the business strategy, IT strategy and IT implementation

Micro Design Devt, etc. Programme Architecture

Macro Design

Micro Design

System Design "the buildings"

The Enterprise Architecture defines an environment in which infrastructure and solutions can be built for both known and unforeseen future requirements

Devt, etc.

Change Programs © 2010 IBM Corporation

Enterprise Capabilities and Business Architecture domains of EA are the Link to the Business EA Planning

Objectives

Enterprise Capabilities Transition

Emerging Opportunities Strategic Gap Analysis

Business Architecture

Current Environment

IS Architecture Technology Architecture

Governance 7


Modeling the Enterprise Capabilities Strategic Capabilities Network (SCN) V

V

C

V

C

C C

C

C C

C R R

R

R R

R R

R R

R

R R

R

R R

R

R

The Strategic Capability Network (SCN) 8


Strategic Capability Network Models the relationships between the Enterprise Value Propositions, Capabilities and Resources Value Proposition: What a company needs to be in order to offer a differentiated value to the market. Example: Offer low cost, customer convenience, modular design products

Strategic Capabilities Network (SCN) V

V

C

C

C C

C

R

R R

R

R

R R

R R

R

9

R

R R

R

Capability: What a company needs to do in order to achieve its strategic positions. Capabilities perform, improve, and create the activities of the firm. Example: Ability to design for customer assembly, Ability to merchandise in-store and online.

C

C

C

R

V

R

R

Capability Enabler(Resource): What a company needs to have in order to perform its capabilities. Resources represent the process, knowledge, organization and technology assets of the firm. Example: In-house engineers and designers, store locations, store layout expertise, web developer/programmer, server…


Airlines Example: Building the SCN Value

On-time arrival

FCFS seating

Passenger Management Cleaning

Maintain motivated, productive staff

10

Employee ownership

Consistent low prices

Un-congested airport if possible

Point to point routes

Direct purchasing Higher aircraft utilization

15-20 min gate turnaround

Capability

Enabler

Best baggage handling record

Frequent departures

Use of secondary airports

Baggage handling

Refueling

Restocking

Synchronization of processes

"Fun" workplace

Ticket less travel

Standardized aircraft maintenance

Airport kiosk management

Web-based purchasing

Short haul market analysis and selection

Design efficient processes

Standardized 737 fleet

Self service ticket outlets

Web resources


Modeling the Enterprise Business

Component Business Modeling (CBM) 11


What is Component Business Modeling (CBM) ? CBM is a technique for modeling a company into non-overlapping and unique components – Each component is a logical grouping of the people, technology and resources that deliver specific business value and can operate independently – CBM creates a map of the essential ‘building blocks’ of an organization into a format that can easily fit on a single page CBM is a powerful analytical tool that can be used in many ways – Alignment of organizational capabilities or investments with strategy – Assessment of issues and pain points in an integrated business and technology roadmap – Assessment of overlapping / duplicate capabilities on business and technology levels

12


A Business Component Map can be used as a tabular view of the business components in scope A Business Component is a part of an enterprise that has the potential to operate independently, in the extreme as a separate company, or as part of another company. Rows represent Accountability Levels characterizing the scope and intent of activity and decisionmaking. The three levels used are Directing, Controlling and Executing. Directing is about strategy, overall direction and policy. Controlling is about monitoring, managing exceptions and tactical decision making Executing is about doing the work 13

Columns are Business Competencies, defined as large business areas with characteristic skills and capabilities, for example, product development or supply chain. Business Administration

Financial Management

Product/ Process

Production

Supply Chain

Marketing & Sales

Service & Aftersales

Direct

Control

Execute


Business Component: The building block of a CBM A component is a business in microcosm. It has activities, resources, applications, infrastructure. It has a governance model. It provides goods and services (business services)

Business Component Elements Business Component

Resources

Each business component has differentiated capabilities

Each business component defines and decides on the use of all resources needed to perform the defined activities 14

Applications Infrastructure

Business Services

Activities

Component Governance

Business Purpose

Each business component has business services which form the interfaces to other business components

Each business component has a governance structure within which it manages its activities © 2010 IBM Corporation

Using several evaluation criteria ‘Heat Maps’ can be produced to prioritize and guide the selection of improvement projects

Direct

Business Administration

New Business Development

Relationship Management

Servicing & Sales

Product Fulfillment

Financial Control and Accounting

Business Planning

Sector Planning

Account Planning

Sales Planning

Fulfillment Planning

Portfolio Planning

M

L

M

L

M

L

M

L

L

M Target Competency B = Base

Business Unit Tracking Control

M

Sector Management M

L

Relationship Management M

L

L

Staff Appraisals

Product Management

Credit Assessment M

L

C = Competitive

Compliance

D = Differentiated

Sales Management

Fulfillment Planning

L

M Revenue / Cost

Reconciliation H

M

M

L

M

Revenue Cost

L

(H, M, or L) “Hot” Component

Product Directory Staff Administration Execute

M

15

L

Sales

L

M

Credit Administration

L

Production Administration L

L

Marketing Campaigns M

L

L

L

M

L

Customer Accounts Revenue/Profit M

M

Customer Dialogue M

M

Product Fulfillment

L

Document Management

Contact Routing M

L

L

H

General Ledger L

M

improvement opportunity Cost control opportunity


CBM can be used to support many types of analysis

A Component Business Model comprises many viewpoints that can support many types of analysis

Types of Assessment Increased Operating Efficiency & Effectiveness CBM enables firms to eliminate duplications and optimize processes across traditional silos

Better Business/Technology Linkage

Planning Analysis & Execute Refinement Business Planning

M

Human Resource

Management Manual

Advisor/ Intermediary Administration Advisor/ Intermediary Set-up

Customer Behavior Decisioning M M

L

L

L

H

Service/Sales Administration M L

Sales and Cross-Sell

M M Administer Alliance L SLAs L Manufacturing Planning Marketing Audit/ QA/ Legal M L L M

Target Lists (Prospecting) Distribution M

Planning

L

gaps M

DevelopAlliance and Management Operate Systems M M

M

L

Campaign Management

Servicing Service Management

M

Channel Management

overextension End - customer marketing

H

M

L

M

Financial MCaptureL

L

Billing L M Payments Accounting L

&Finance

Planning M

Financial Control L

L

Increased Business Flexibility

Treasury M L Financial Consolidation L L

Product Processing Financial

M

H

Rewards L L Management Control SmartOperational Routing M L

Inventory L L Management Claims processing

End Consumer Sales

CustomerControl Account

M

M

Trading

Contact Servicing

In-force Processing

Campaign Execution Customer Profile

e.g. Sys A

Fees & Commissions

Contact Repository Correspondence

duplication

Funds Management

Contract Administration General Ledger

Intelligent Routing

Sales Support

Check Processing

Collections and Recovery

Asset & Liability Management

Merchant Operation M H

Contract & Policy Set-up

Product Development

Product Profile

M

L

H

Correspondence

Product Management Product Directory Accounting and G/L L L M L

M

Reconciliations

H

Operations Planning

Wholesales

16

L

(Dialogue Handler)

Campaign Execution

Conservation

Systems & Facilities Helpdesk

L

L %L RevenueL / Cost Revenue Cost Securitization “Hot” Component L L

L

Contact/Event L HistoryL

Market Research

H

Customer Profile

Training

Council Services

L

L

Operations Administration

Authorizations

Regulatory Reporting

Execution and (S)TP

L

M

Case Handling

L

Facilities L M

Monitor, Manage and Control

M

Financial Management

Finance

Product Development and Deployment

HR Management

Credit and Risk Management M L Application Processing L M

Customer Accounting

Contract Administration

Control

Acquisition Planning and Oversight

Asset Mgmt & Product Development

Business Administration

BU Administration L M Manage Alliance Rel M L Policy & Procedure LManualsL

Customer Portfolio and Analysis H L

Managing Products H L

Product Operations

Target Competency CB== Base Customer Servicing Product Operations Customer Competitive Risk Management and Sales Planning Management D = Differentiated Accounting Policies

New Business

M

Sales & Channel Management

M

Business Architecture L M

Marketing

Business Planning

Direct

Sector Marketing H Plans L

Customer Customer Portfolio Service and Management Sales

Customer Service

Product Business Acquisitions Administration Management

CBM provides the framework to make more informed investment decisions, allowing for the evaluation of alternatives and by increasing transparency around costs. Using CBM the business can focus in on those components where value is either constrained or may be enabled

Treasury

M

L

CBM Lens

CBM components define the natural boundaries/cleave lines within the business supporting rapid organizational change whether it be in the context of: • • • •

Mergers & Acquisitions New Product Introduction Insourcing/Outsourcing Decisions Alliance Partnerships and Utility Service Relationships


Example CBM Map

17

IBM Developed CBM Maps covering most industries


Modeling Service Oriented Architecture

IBM Service Oriented Modeling and Architecture 18

TM

(SOMA) © 2010 IBM Corporation

Service-orientation is becoming mainstream in software engineering in the industry. Increasing Levels of Abstraction *

Objects

Components

Services

SOA has become pervasive in developing solutions – Project percentage using SOA grows as organization matures and recognizes industry trends and internal pain points.

Software engineering has evolved over the years. – Concepts of service-orientation can be used whenever you apply software engineering.

SOA principles are increasingly used on non-SOA-specific projects. – Traditional projects express need for the same decoupling of functionality and alternative, hybrid implementation options as provided on SOA projects.

SOA has spawned variations of elements of service-oriented computing: Cloud Computing, Service Portfolio, Web 2.0 (GUI level composition), Context-aware Mobile Applications 19


A service-oriented modeling method should focus on services as the basic modeling construct To be effective, a Service Oriented Modeling Method must be able to support modeling solutions based on the five main constructs of SOA- services, components, compositions and flows, information, rules, and policies. (Flows) business processes – represent the flows of activities required to complete a business process. They are compositions of services targeted to achieve business goals.

Services – the main structuring element required by a service consumer, provided by the service provider. It offers functionality and quality of service, both of which are externalized within service descriptions / policy. Services could be atomic or composite.

Components – that realize not only the functionality of the services they expose but also ensure their quality of service (QoS) advertised by the service provider implementing (“realizing”) the services.

Information – that flows between the layers and within a layer.

Rules and policies – that constraints the services, components, and flows 20


SOMATM is IBM’s end-to-end method for building enterprise scale applications and solutions based on service-oriented principles Regardless of whether the implementation will use Web services …

21

Service Oriented Modeling and ArchitectureTM (SOMA)


At the heart of the SOA is the Service Model that defines services and components that realize them

Process Modeling & Decomposition

Business Goals

Functional Area Analysis

Service Hierarchy Service Portfolio Functional Area (From Functional Area Analysis) Actuaciones en Campo Gestión del cliente Actuaciones en Campo

(Values: GSM, EAA, FAA, PMD, IAM, RPA)

Open work order

Trace to ID in Trace to Worksheet Worksheet GSM Goal Service Modeling 1.1.1.1.1 Goal Service Model

2 Consulta Cliente

GSM Goal Service Modeling 1.1.1.1.2 Goal Service Model

(Candidate) Service

Obtener informacion de Orden de Trabajo


Actuaciones en Campo

Asignar instalador a la orden de Trabajo



Obtener informacion del instalador / contratista / agente Generate work order





Update work order status



Cierre de Orden de Trabajo



Schedule the work orders in the proper sequence



Optimize technician work order scheduling and routes



Validar Orden de Trabajo

GSM Goal Service Modeling 1.1.1.3 Goal Service Model

Actuaciones en Campo Actuaciones en Campo Actuaciones en Campo Decisiones Estratégicas Gestión del cliente Operaciones de Red Operaciones de Red Actuaciones en Campo

13 Reporte de numero de ordenes abiertas


Reporte de numero de ordenes de trabajo cerradas en GSM Goal Service Modeling 1.1.1.4.2 Goal Service Model un periodo 13.1 Reporte de Ordenes de Trabajo abiertas mas de XX GSM Goal Service Modeling 1.1.1.4.3 Goal Service Model dias Reportes GSM Goal Service Modeling 1.1.1.4.4 Goal Service Model Status of client order

GSM Goal Service Modeling 1.2 Goal Service Model

Activation of DTH card

PMD Process 6 Instalacion Modeling Integrada & Decomposition Work Order Process

Activation of Deco


Cierre de instalacion



Generate work order

PMD Process Instalacion Modeling Integrada & Decomposition Work Order Process


Schedule the work orders in the proper sequence - if there are work order dependencies, make sure the work orders are in the proper sequence. Optimize technician work order scheduling and routes (NP hard problem)



Information Analysis & Modeling

Source Technique #


Service Model

Existing Assets Analysis

Refactoring & Rationalization (Litmus Test) 22


SOMA Scope - Identification Goal Service Modeling

Domain Decomposition

Existing Asset Analysis

Service Refactoring & Rationalization

Technical Feasibility and Exploration Process Modeling & Decomposition

Goal Service Model

Process Model

Information Functional Area Analysis & Analysis Modeling BELA

Functional Area Model

Validate against existing results

Information Model

Rule & Policy Analysis

Variation Oriented Analysis

Rule & Policy Catalog

Variation Model

Existing Assets Catalog

Services Model & Portfolio

Recommended soma capability pattern

23


Content of the Service Model Service Model

Service Identification – Bottom-up

Existing System Analysis

Services Portfolio

e ts vic Ser ponen ng m o ppi gC Ma stin ate Exi f st To e o ce c i nan serv n s inte Ma etwee ation b oc inv

m Lit

Hierarchy

Exposure Decisions us

sts Te

Service Dependency Diagram

Composition & Flow, Message Specification

Specification

Maintenance of state between service invocations

Quality of Service

SL

Component Specification

, As

R NF

Realization Decisions uses the Arch Decisions r to ac f Re

, rm State Management fo s an Techniques Tr

Service Realization Decisions service allocation to components 24

component layering

State Management Requirements

Functional Area Analysis

ation Identific Service ce rvi tion Se riza o S teeg Ca rvice Id entif icati on

He lp Id Sco en pe tif ica Ser y I h de tio vic p a n n e To tify gr o p e S Do er or w v ic Ch An n & es al Bo mi ys tt ss i s o m ed -u by p l ca ni s ch ice Te erv & s le s Bu ab of en n io to at ts ic n tif ne en po I d om C

ce rvi e Relationship S between Services Static Flows Service Dynamic Flows

Domain Decomposition

Dy Me nam ss ic ag Fl e F ow low s Allo cat eS erv ice s to S pe c Man ify Sta t age Tec m e hniq ent ues

Co

mp one

nts

Process Decomposition Variation-Oriented Analysis Goal Service Modeling Identify Goals & Sub-goals Identify Services For Sub-goals Identify KPI’s & Metrics for sub-goals & services Sub System Analysis Identify Functional/ Technical Components Identify Enterprise Components


Event Driven Architecture Event Producers

Event Instantiator

Event Emitter

Event Processing Services (Simple) Event Adapters

Event

Repositories Event Information Management and Query Services

Channel

Event Channels

Registries

Subscription Services

Notification Services

Event Flow

Event Processing Services

Event Governance and Related Security Services

Event Security Services

Event Bus

Event Monitoring and Analytic Infrastructure

Publication Services

Event Adapters

Event Handler

Event Processing Services (Simple) Event Orchestration Services

Event Consumers

Complex Event Processing 25


What is Event Driven Architecture (EDA)? An approach for designing and building applications in which events trigger messages to be sent between independent software modules that are completely unaware of each other -- decoupled, as opposed to the loosely coupled services that are inherent in the SOA-based approach. An event source typically sends messages to middleware, and the middleware matches the messages to the subscription criteria of programs that want to be notified of the events. Gartner Inc., Stamford, Conn

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What is an Event ? An Event is a significant (it may affect some action), atomic (happens completely or not at all) occurrence (e.g. fact becoming true, a state transition) in the reality An event may be part of a business process, e.g. – A trade order has been issued, – An aircraft in a specific flight has landed, – A reading of sensor data, or – Monitoring information about IT infrastructure, middleware, applications and business processes An event may be raw or derived, simple or complex and may relate to other events through event causality, and to entities through event attributes Events are sorted according to Event types

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Business Event Processing Event Processing Network

Producers

Consumers

28

Generate and may publish events

perform operations on events

Consume and react to either raw or complex events © 2010 IBM Corporation

EDA Conceptual Model Event Producers

Event Adapters

Publication Services

Event Processing Services

Channel

Event Channels Event

Event Bus

Subscription Services

Event Handler

Event Information Management and Query Services

Repositories

Registries

Notification Services

Event Adapters Event Processing Services (Simple) Event Orchestration Services

Event Flow

Event Security Services

Event Monitoring and Analytic Infrastructure

Event Processing Services (Simple)

Event Governance and Related Security Services

Event Instantiator

Event Emitter

Event Consumers 29


A Vision for Event Bus

Event Consumer

Event Producer

Event Producer

Local Event Bus

Local Event Bus Events

Events

Events

Event Producer Events

Event Bus extends ESB to include Event Processing capabilities Intra - Enterprise Event Bus Events

Events

Local Event Bus Event Producer

30

Event Consumer

Events

Events

Local Event Bus Event Consumer

Event Consumer


A simple scenario of event-driven business logic The story: On landing, the airline finds car renting passengers, and notify car rental companies

Car Allocation

Route

Car Location

Route

landing

Some observations: There are many “no shows” in car rentals, and event-driven logic eliminate the extra cost here.

Split

Customer DB

Enrich

This is neither a monitoring application, nor typical pub/sub, it is another type that we call “agile application integrations” This blue boxes are common event processing operations. The main business opportunity is to provide building blocks that :

Aggregate

provide easy implementation; Provide easy integration with the environment.

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Challenges

Research and Industry collaboration 32


Issues for consideration (just to list a few….)

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Taxonomy for Business Architecture Formal Meta-Models to support building tools Industry specific Business Frameworks (Insurance, Banking, Telco Service Provider…) Modeling the negative impact of some needed capabilities when modeling the Enterprise Capabilities Quantifying the contribution of capabilities to the value propositions they support Models for estimating the cost of resource alternatives that are required to support Enterprise Capabilities Modeling the representation of event, including payload, and events spatial and temporal properties modeling of interfaces and protocols of event exchange among event producers, event consumers and event processing agents Context modeling - context as a major abstraction (temporal, spatial, state-oriented, and segmentation-oriented) Event processing functions models: filtering, transformation and pattern matching. The semantics of the various patterns including semantic policies of fine tuning is of special interest Event-driven BPM -- the interleaving of events within BPM, and the various interaction points © 2010 IBM Corporation

So…..Today, my mission was to: Explain the difficulty in Aligning Business and IT Introduce EA as a vehicle to achieve such alignment Present approaches to capture and model: – Enterprise Capabilities - The Strategic Capability Network (SCN) – Enterprise Business Architecture - Component Business Modeling (CBM) – Service Oriented Architecture (SOA) – Service Oriented Modeling and Architecture – Event Driven Architecture (EDA) – A Conceptual Model

Highlight some Challenges that Research may help addressing

The question is……did I accomplish my mission? 34


Thank you Thai

Hindi Traditional Chinese

Gracias Spanish

Russian

Thank You English

Obrigado Brazilian Portuguese

Arabic

Danke German

Grazie Italian

Simplified Chinese

Merci French

Japanese Tamil

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Korean


References 1. Arsanjani, A.; Ghosh, S.; Allam, A., Abdollah, T.; Ganapathy, S.; and Holley, K.; ‘‘SOMA: A Method for Developing Service-Oriented Solutions’’ IBM Systems Journal 47, No. 3, 377– 396 (2008). 2. Arsanjani, A.; “Service-oriented modeling and architecture,” IBM developerWorks http://www.ibm.com/developerworks/library/ws-soa-design1/ 3. Etzion, O.; Niblett, P.; “Event Processing in Action,” Manning Publishing Company, 2010. 4. Glissmann, S.; Sanz, J.; "Business Architecture for the Design of Enterprise Service Systems",, in: Handbook of Service Science, Springer, 2010. 5. IBM, Component Business Models - Making Specialization Real, IBM Institute for Business Value, (2005). 6. Luckham, D.; “The Power of Events: An Introduction to Complex Event Processing in Distributed Enterprise Systems,” Addison-Wesley Professional, 2002. 7. McDavid, D.W.,. A standard for business architecture description. IBM Systems Journal, 38(1), 12-20 (1999).

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Copyright and Warranty Notes

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Enterprise Modeling: Aligning Business and IT

Enterprise Modeling: Aligning Business and IT

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