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The Open Group Baltimore 2015 Highlights

By Loren K. Baynes, Director, Global Marketing Communications, The Open Group

The Open Group Baltimore 2015, Enabling Boundaryless Information Flow™, July 20-23, was held at the beautiful Hyatt Regency Inner Harbor. Over 300 attendees from 16 countries, including China, Japan, Netherlands and Brazil, attended this agenda-packed event.

The event kicked off on July 20th with a warm Open Group welcome by Allen Brown, President and CEO of The Open Group. The first plenary speaker was Bruce McConnell, Senior VP, East West Institute, whose presentation “Global Cooperation in Cyberspace”, gave a behind-the-scenes look at global cybersecurity issues. Bruce focused on US – China cyber cooperation, major threats and what the US is doing about them.

Allen then welcomed Christopher Davis, Professor of Information Systems, University of South Florida, to The Open Group Governing Board as an Elected Customer Member Representative. Chris also serves as Chair of The Open Group IT4IT™ Forum.

The plenary continued with a joint presentation “Can Cyber Insurance Be Linked to Assurance” by Larry Clinton, President & CEO, Internet Security Alliance and Dan Reddy, Adjunct Faculty, Quinsigamond Community College MA. The speakers emphasized that cybersecurity is not a simply an IT issue. They stated there are currently 15 billion mobile devices and there will be 50 billion within 5 years. Organizations and governments need to prepare for new vulnerabilities and the explosion of the Internet of Things (IoT).

The plenary culminated with a panel “US Government Initiatives for Securing the Global Supply Chain”. Panelists were Donald Davidson, Chief, Lifecycle Risk Management, DoD CIO for Cybersecurity, Angela Smith, Senior Technical Advisor, General Services Administration (GSA) and Matthew Scholl, Deputy Division Chief, NIST. The panel was moderated by Dave Lounsbury, CTO and VP, Services, The Open Group. They discussed the importance and benefits of ensuring product integrity of hardware, software and services being incorporated into government enterprise capabilities and critical infrastructure. Government and industry must look at supply chain, processes, best practices, standards and people.

All sessions concluded with Q&A moderated by Allen Brown and Jim Hietala, VP, Business Development and Security, The Open Group.

Afternoon tracks (11 presentations) consisted of various topics including Information & Data Architecture and EA & Business Transformation. The Risk, Dependability and Trusted Technology theme also continued. Jack Daniel, Strategist, Tenable Network Security shared “The Evolution of Vulnerability Management”. Michele Goetz, Principal Analyst at Forrester Research, presented “Harness the Composable Data Layer to Survive the Digital Tsunami”. This session was aimed at helping data professionals understand how Composable Data Layers set digital and the Internet of Things up for success.

The evening featured a Partner Pavilion and Networking Reception. The Open Group Forums and Partners hosted short presentations and demonstrations while guests also enjoyed the reception. Areas focused on were Enterprise Architecture, Healthcare, Security, Future Airborne Capability Environment (FACE™), IT4IT™ and Open Platform™.

Exhibitors in attendance were Esteral Technologies, Wind River, RTI and SimVentions.

By Loren K. Baynes, Director, Global Marketing CommunicationsPartner Pavilion – The Open Group Open Platform 3.0™

On July 21, Allen Brown began the plenary with the great news that Huawei has become a Platinum Member of The Open Group. Huawei joins our other Platinum Members Capgemini, HP, IBM, Philips and Oracle.

By Loren K Baynes, Director, Global Marketing CommunicationsAllen Brown, Trevor Cheung, Chris Forde

Trevor Cheung, VP Strategy & Architecture Practice, Huawei Global Services, will be joining The Open Group Governing Board. Trevor posed the question, “what can we do to combine The Open Group and IT aspects to make a customer experience transformation?” His presentation entitled “The Value of Industry Standardization in Promoting ICT Innovation”, addressed the “ROADS Experience”. ROADS is an acronym for Real Time, On-Demand, All Online, DIY, Social, which need to be defined across all industries. Trevor also discussed bridging the gap; the importance of combining Customer Experience (customer needs, strategy, business needs) and Enterprise Architecture (business outcome, strategies, systems, processes innovation). EA plays a key role in the digital transformation.

Allen then presented The Open Group Forum updates. He shared roadmaps which include schedules of snapshots, reviews, standards, and publications/white papers.

Allen also provided a sneak peek of results from our recent survey on TOGAF®, an Open Group standard. TOGAF® 9 is currently available in 15 different languages.

Next speaker was Jason Uppal, Chief Architecture and CEO, iCareQuality, on “Enterprise Architecture Practice Beyond Models”. Jason emphasized the goal is “Zero Patient Harm” and stressed the importance of Open CA Certification. He also stated that there are many roles of Enterprise Architects and they are always changing.

Joanne MacGregor, IT Trainer and Psychologist, Real IRM Solutions, gave a very interesting presentation entitled “You can Lead a Horse to Water… Managing the Human Aspects of Change in EA Implementations”. Joanne discussed managing, implementing, maintaining change and shared an in-depth analysis of the psychology of change.

“Outcome Driven Government and the Movement Towards Agility in Architecture” was presented by David Chesebrough, President, Association for Enterprise Information (AFEI). “IT Transformation reshapes business models, lean startups, web business challenges and even traditional organizations”, stated David.

Questions from attendees were addressed after each session.

In parallel with the plenary was the Healthcare Interoperability Day. Speakers from a wide range of Healthcare industry organizations, such as ONC, AMIA and Healthway shared their views and vision on how IT can improve the quality and efficiency of the Healthcare enterprise.

Before the plenary ended, Allen made another announcement. Allen is stepping down in April 2016 as President and CEO after more than 20 years with The Open Group, including the last 17 as CEO. After conducting a process to choose his successor, The Open Group Governing Board has selected Steve Nunn as his replacement who will assume the role with effect from November of this year. Steve is the current COO of The Open Group and CEO of the Association of Enterprise Architects. Please see press release here.By Loren K. Baynes, Director, Global Marketing Communications

Steve Nunn, Allen Brown

Afternoon track topics were comprised of EA Practice & Professional Development and Open Platform 3.0™.

After a very informative and productive day of sessions, workshops and presentations, event guests were treated to a dinner aboard the USS Constellation just a few minutes walk from the hotel. The USS Constellation constructed in 1854, is a sloop-of-war, the second US Navy ship to carry the name and is designated a National Historic Landmark.

By Loren K. Baynes, Director, Global Marketing CommunicationsUSS Constellation

On Wednesday, July 22, tracks continued: TOGAF® 9 Case Studies and Standard, EA & Capability Training, Knowledge Architecture and IT4IT™ – Managing the Business of IT.

Thursday consisted of members-only meetings which are closed sessions.

A special “thank you” goes to our sponsors and exhibitors: Avolution, SNA Technologies, BiZZdesign, Van Haren Publishing, AFEI and AEA.

Check out all the Twitter conversation about the event – @theopengroup #ogBWI

Event proceedings for all members and event attendees can be found here.

Hope to see you at The Open Group Edinburgh 2015 October 19-22! Please register here.

By Loren K. Baynes, Director, Global Marketing CommunicationsLoren K. Baynes, Director, Global Marketing Communications, joined The Open Group in 2013 and spearheads corporate marketing initiatives, primarily the website, blog, media relations and social media. Loren has over 20 years experience in brand marketing and public relations and, prior to The Open Group, was with The Walt Disney Company for over 10 years. Loren holds a Bachelor of Business Administration from Texas A&M University. She is based in the US.

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Filed under Accreditations, Boundaryless Information Flow™, Cybersecurity, Enterprise Architecture, Enterprise Transformation, Healthcare, Internet of Things, Interoperability, Open CA, Open Platform 3.0, Security, Security Architecture, The Open Group Baltimore 2015, TOGAF®

In Praise Of Heuristics – or Saving TOGAF® From Its Friends

By Stuart Boardman, Senior Business Consultant, Business & IT Advisory, KPN Consulting and Ed Harrington, Senior Consulting Associate, Conexiam

As the world’s best known and most used Enterprise Architecture (EA) framework, it’s quite reasonable that TOGAF®, an Open Group standard, attracts criticism from both outside and within The Open Group membership. We would like to discuss a particular class of criticism and even more about the thinking behind that.

This criticism states that TOGAF is neither rigorous nor scientific and that any good EA framework should be both of those things. Now we don’t know anyone who wouldn’t agree that TOGAF could be more rigorous about some things and that’s one of the areas highlighted for attention in the next version of TOGAF.

But, “scientific”? There’s the rub. What do we mean by scientific?

Machines, Nature and Enterprises

What these critics promote is a method, which for any given enterprise, under identical conditions will always deliver the same, “correct” result – regardless who executes the method, as long as they follow the rules. This approach depends on a very 19th/20th Century mechanistic view of an enterprise.

We agree that an enterprise is a system. Mechanical systems behavior is generally predictable. If you get the equation right, you can predict the behavior under any given set of conditions with an accuracy of (to all intents and purposes) 100%. So, if an enterprise were a machine, you could come up with a method that meets this requirement.

Natural and environmental systems do not, in general, behave predictably (leaving trivia like Pavlov and his dogs out of it). There is room for discussion for any one system under consideration as to why this is. It could just be because there are so many variables that we can’t capture all of them at one instant in time (i.e. they are highly complex) or because the system is chaotic (i.e. extremely sensitive to initial conditions) or even stochastic (i.e. we can only establish a probability for a particular outcome) – or possibly a mixture of those things.

A major aspect of enterprises is that, to a considerable extent, they are made up of people, individually and in groups. Each with their shifting perceptions of what “good” is. In fact even a single organization behaves more like an organism than like a machine (note: we are not claiming that organizations are organisms).

Especially important is that enterprises function within wider ecosystems in which external factors like resource availability, innovation, competition, customer loyalty, legislation and regulation (to name but a few) constantly affect the behavior of the enterprise. To reliably predict the behavior of the enterprise we would need to know each and every factor that affects that behavior. Complexity is a major factor. Do we recognize any existing enterprises that do not conform to this (complex) model?

Science and Uncertainty

Enterprises are complex and, we would argue, even chaotic systems. Change the initial conditions and the behavior may be radically different (a totally different equation). A real scientific method for EA would then necessarily reflect that. It would deliver results, which could continue to adapt along with the enterprise. That requires more than just following a set of rules. There is no “equation”. There may be a number of “equations” to choose from. Some degree of experience, domain knowledge and empathy is required to select the most adaptable of those equations. If the world of software architecture hasn’t yet determined a formula for the perfect agile system, how can we imagine the even more complex EA domain could?[1] Any such method would be a meta-method. The actual method followed would be an adaptation (concretization/instantiation) of the meta-method for the system (i.e. enterprise) under examination in its then specific context.

So even if there is an EA method that delivers identical results independent of the user, the chances they’d be correct are…well, just that – chance. (You probably have a better chance of winning the lottery!). The danger of these “scientific” approaches is that we kid ourselves that the result must be right, because the method said so. If the objective were only to produce a moment in time “as-is” view of an enterprise and if you could produce that before everything changed again, then a mechanistic approach might work. But what would be the point?

What Really Bothers Us

Now if the problem here were restricted to the proponents of this “scientific” view, it wouldn’t matter too much, as they’re not especially influential, especially on a global scale. Our concern is that it appears TOGAF is treated by a considerably larger number of people as being exactly that kind of system. Some of the things we read by TOGAF-certified folk on, for example, LinkedIn or come across in practice are deeply disturbing. It seems that people think that the ADM is a recipe for making sausages and that mechanistically stepping through the crop circles will deliver a nicely formed sausage.

Why is this? No TOGAF expert we know thinks TOGAF is a linear, deterministic process. The thousands of TOGAF certified people have a tool that, as TOGAF, itself in chapter 2.10 states: “In all cases, it is expected that the architect will adapt and build on the TOGAF framework in order to define a tailored method that is integrated into the processes and organization structures of the enterprise”.

Is it perhaps an example of the need so many people have to think the whole world is predictable and controllable – an unholy fear of uncertainty? Such people seek comfort and the illusion of certainty in a set of rules. That would certainly fit with an outdated view of science. Or perhaps the problem is located less with the architects themselves than with management by spreadsheet and with project management methodologies that are more concerned with deadlines than with quality? Less experienced architects may feel obliged to go along with this and thus draw the wrong conclusions about TOGAF.

The Task of Enterprise Architecture

Understanding, accepting and taking advantage of the presence of uncertainty is essential for any organization today. This would be true even if it were only because of the accelerating rate of change. But more than that, we need to recognize that the way we do business is changing, that agile organizations encourage emergence[2] and that success means letting go of hard and fast rules. Enterprise architects, to be useful, have to work with this new model, not to be risk averse and to learn from (shared) experience. It’s our responsibility to help our enterprises achieve their strategic goals. If we turn our backs on reality, we may be able to tick off a task on a project plan but we’re not helping anyone.

A good EA framework helps us understand what we need to do and why we are doing it. It doesn’t do the thinking for us. All good EA frameworks are essentially heuristics. They assemble good practice from the experience of real practitioners and provide guidance to assist the intelligent architect in finding the best available solution – in the knowledge that it’s not perfect, that things can and will change and that the most valuable strategy is being able to cope with that change. TOGAF helps us do this.

[1] For more on complexity and uncertainty see Tom Graves’s SCAN method.

[2] See, for example Ruth Malan and Dana Bredemeyer’s The Art of Change: Fractal and Emergent

By Stuart Boardman, KPN, and Ed Harrington, ConexiumStuart Boardman is a Senior Business Consultant with KPN Consulting where he leads the Enterprise Architecture practice and consults to clients on Cloud Computing, Enterprise Mobility and The Internet of Everything. He is Co-Chair of The Open Group Open Platform 3.0™ Forum and was Co-Chair of the Cloud Computing Work Group’s Security for the Cloud and SOA project and a founding member of both The Open Group Cloud Computing Work Group and The Open Group SOA Work Group. Stuart is the author of publications by KPN, the Information Security Platform (PvIB) in The Netherlands and of his previous employer, CGI as well as several Open Group white papers, guides and standards. He is a frequent speaker at conferences on the topics of Open Platform 3.0 and Identity.

Ed Harrington is a Senior Consulting Associate with Conexiam, a Calgary, Canada headquartered consultancy. He also heads his own consultancy, EPH Associates. Prior positions include Principle Consultant with Architecting the Enterprise where he provided TOGAF and other Enterprise Architecture (EA) discipline training and consultancy; EVP and COO for Model Driven Solutions, an EA, SOA and Model Driven Architecture Consulting and Software Development company; various positions for two UK based companies, Nexor and ICL and 18 years at General Electric in various marketing and financial management positions. Ed has been an active member of The Open Group since 2000 when the EMA became part of The Open Group and is past chair of various Open Group Forums (including past Vice Chair of the Architecture Forum). Ed is TOGAF® 9 certified.

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The Open Group Madrid 2015 – Day One Highlights

By The Open Group

On Monday, April 20, Allen Brown, President & CEO of The Open Group, welcomed 150 attendees to the Enabling Boundaryless Information Flow™ summit held at the Madrid Eurobuilding Hotel.  Following are highlights from the plenary:

The Digital Transformation of the Public Administration of Spain – Domingo Javier Molina Moscoso

Domingo Molina, the first Spanish national CIO, said that governments must transform digitally to meet public expectations, stay nationally competitive, and control costs – the common theme in transformation of doing more with less. Their CORA commission studied what commercial businesses did, and saw the need for an ICT platform as part of the reform, along with coordination and centralization of ICT decision making across agencies.

Three Projects:

  • Telecom consolidation – €125M savings, reduction in infrastructure and vendors
  • Reduction in number of data centers
  • Standardizing and strengething security platform for central administration – only possible because of consolidation of telecom.

The Future: Increasing use of mobile, social networks, online commercial services such as banking – these are the expectations of young people. The administration must therefore be in the forefront of providing digital services to citizens. They have set a transformation target of having citizens being able to interact digitally with all government services by 2020.

Q&A:

  • Any use of formal methods for transformation such as EA? Looked at other countries – seen models such as outsourcing. They are taking a combined approach of reusing their experts and externalizing.
  • How difficult has it been to achieve savings in Europe given labor laws? Model is to re-assign people to higher-value tasks.
  • How do you measure progress: Each unit has own ERP for IT governance – no unified reporting. CIO requests and consolidates data. Working on common IT tool to do this.

An Enterprise Transformation Approach for Today’s Digital Business – Fernando García Velasco

Computing has moved from tabulating systems to the internet and moving into an era of “third platform” of Cloud, Analytics, Mobile and Social (CAMS) and cognitive computing. The creates a “perfect storm” for disruption of enterprise IT delivery.

  • 58% say SMAC will reduce barriers to entry
  • 69% say it will increase competition
  • 41% expect this competition to come from outside traditional market players

These trends are being collected and consolidated in The Open Group Open Platform 3.0™ standard.

He sees the transformation happening in three ways:

  1. Top-down – a transformation view
  2. Meet in the middle: Achieving innovation through EA
  3. Bottom-up: the normal drive for incremental improvement

Gartner: EA is the discipline for leading enterprise response to disruptive forces. IDC: EA is mandatory for managing transformation to third platform.

EA Challenges & Evolution – a Younger Perspective

Steve Nunn, COO of The Open Group and CEO of the Association of Enterprise Architects (AEA), noted the AEA is leading the development of EA as a profession, and is holding the session to recognize the younger voices joining the EA profession. He introduced the panelists: Juan Abal, Itziar Leguinazabal, Mario Gómez Velasco, Daniel Aguado Pérez, Ignacio Macias Jareño.

The panelists talked about their journey as EAs, noting that their training focused on development with little exposure to EA or Computer Science concepts. Schools aren’t currently very interested in teaching EA, so it is hard to get a start. Steve Nunn noted the question of how to enter EA as a profession is a worldwide concern. The panelists said they started looking at EA as a way of gaining a wider perspective of the development or administrative projects they were working on. Mentoring is important, and there is a challenge in learning about the business side when coming from a technical world. Juan Abal said such guidance and mentoring by senior architects is one of the benefits the AEA chapter offers.

Q: What advice would you give to someone entering into the EA career? A: If you are starting from a CS or engineering perspective, you need to start learning about the business. Gain a deep knowledge of your industry. Expect a lot of hard work, but it will have the reward of having more impact on decisions. Q: EA is really about business and strategy. Does the AEA have a strategy for making the market aware of this? A: The Spanish AEA chapter focuses on communicating that EA is a mix, and that EAs need to develop business skills. It is a concern that young architects are focused on IT aspects of EA, and how they can be shown the path to understand the business side.

Q: Should EA be part of the IT program or the CS program in schools? A: We have seen around the world a history of architects coming from IT and that only a few universities have specific IT programs. Some offer it at the postgraduate level. The EA is trying globally to raise awareness of the need for EA education. continuing education as part of a career development path is a good way to manage the breadth of skills a good EA needs; organizations should also be aware of the levels of The Open Group Open CA certifications.

Q: If EA is connected to business, should EAs be specialized to the vertical sector, or should EA be business agnostic? A: Core EA skills are industry-agnostic, and these need to be supplemented by industry-specific reference models. Methodology, Industry knowledge and interpersonal skills are all critical, and these are developed over time.

Q: Do you use EA tools in your job? A: Not really – the experience to use complex tools comes over time.

Q: Are telecom companies adopting EA? A: Telecom companies are adopting standard reference architectures. This sector has not made much progress in EA, though it is critical for transformation in the current market. Time pressure in a changing market is also a barrier.

Q: Is EA being grown in-house or outsourced? A: We are seeing increased uptake among end-user companies in using EA to achieve transformation – this is happening across sectors and is a big opportunity in Spain right now.

Join the conversation! @theopengroup #ogMAD

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The Open Group San Diego 2015 – Day Two Highlights

By Loren K. Baynes, Director, Global Marketing Communications, The Open Group

Day two, February 3, kicked off with a presentation by Allen Brown, President and CEO of The Open Group, “What I Don’t Need from Business Architecture… and What I Do”.

Allen began with a brief history of The Open Group vision of Boundaryless Information Flow™, which enables the break down of barriers to cross-functional organization when information is held in siloed parts. Allen and team used the word “boundaryless” that was started by Jack Welch in 2002 with the phrase “Boundaryless Organization”. This approach focused on thinking and acting, not technical. “Boundaryless” does not mean there are no boundaries, it means that boundaries are permeable to enable business.

Allen also discussed brand actualization, and that organizations wishing to achieve brand recognition such as Nike and Apple must be aware of the customer journey. The journey entails awareness, evaluation, joining, participation, renewal and advocacy. The organization needs to learn more about the people so as not to segment, since people are not “one size fits all”. Business Architecture helps with understanding the customer journey.

By Loren K. Baynes

Business Architecture is part of Enterprise Architecture, he continued. A greater focus on the “what”, including strategic themes, capabilities and interdependencies, can add a lot of value. It is applicable to the business of government as well as to the business of “businesses” and non-profit organizations.

John Zachman, Founder & Chairman, Zachman International and Executive Director of FEAC Institute, presented “The Zachman Framework and How It Complements TOGAF® and Other Frameworks”. John stated the biggest problem is change. The two reasons to do architecture are complexity and change. A person or organization needs to understand and describe the problem before solving it.

“All I did was, I saw the pattern of the structure of the descriptive representations for airplanes, buildings, locomotives and computers, and I put enterprise names on the same patterns,” he said. “Now you have the Zachman Framework, which basically is Architecture for Enterprises. It is Architecture for every other object known to human kind.” Thus the Zachman Framework was born.

According to John, what his Framework is ultimately intended for is describing a complex object, an Enterprise. In that sense, the Zachman Framework is the ontology for Enterprise Architecture, he stated. What it doesn’t do is tell you how to do Enterprise Architecture.

“My framework is just the definition and structure of the descriptive representation for enterprises,” he said. That’s where methodologies, such as TOGAF®, an Open Group standard, or other methodological frameworks come in. It’s not Zachman OR TOGAF®, it’s TOGAF® AND Zachman.

By Loren K. BaynesJohn Zachman

Allen and John then participated in a Q&A session. Both are very passionate about professionalizing the architecture profession. Allen and John agreed there should be a sense of urgency for architecture to keep up with the rapid evolution of technology.

The plenary continued with Chris Forde, GM APAC Region and VP, Enterprise Architecture, The Open Group on “The Value of TOGAF® Architecture Development Method (ADM) and Open Systems Architecture”. Chris was presenting on behalf of Terry Blevins, Fellow of The Open Group, who could not attend.

Chris said, “Enterprise Architecture is a constant journey.” The degree of complexity of organizations or objects (such as airplanes) is enormous. Architecture is a means to an end. ADM is the core of TOGAF.

Enterprise Architecture (EA) is nothing but a paperweight if there are no plans in place to use it to make decisions. Supporting decision-making is the key reason to produce an Enterprise Architecture. Chris noted sound decisions sometimes need to be made without all of the information required. EA is a management tool, not a technology tool.

Allen Brown chaired a panel, “Synergy of EA Frameworks”, with panelists Chris Forde, John Zachman, Dr. Beryl Bellman, Academic Director, FEAC Institute, and Iver Band, Enterprise Architect, Cambia Health Solutions.

Iver began the panel session by discussing ArchiMate®, an Open Group standard, which is a language for building understanding and communicating and managing change.

One of the questions the panel addressed was how does EA take advantage of emerging technologies such as mobile, big data and cloud? The “as designed” logic can be implemented in any technology. Consideration should also be given to synergy among the different architectures. EA as a management discipline helps people to ask the right questions about activities and technologies to mitigate risk, take advantage of the situation and/or decide whether or not to deploy the strategies and tactics. The idea is not to understand everything and every framework, but to get the right set of tools for interaction and navigation.

In the afternoon, tracks consisted of Risk, Dependability and Trusted Technology, Open Platform 3.0™, Architecture Frameworks and EA and Business Transformation. Presenters were from a wide range of organizations including HP, Tata Consulting Services (India), Wipro, IBM, Symantic and Arca Success Group.

A networking reception was held at the Birch Aquarium, Scripps Institution of Oceanography. Attendees enjoyed a scrumptious dinner and experienced the wonders of ocean and marine life.

A very special thank you goes to our San Diego 2015 sponsors and exhibitors: BiZZdesign, Corso, FEAC Institute, AEA, Good E-learning, SimpliLearn and Van Haren Publishing.

Most of our plenary proceedings are available at Livestream.com/opengroup

Please join the conversation – @theopengroup #ogSAN

By Loren K. BaynesLoren K. Baynes, Director, Global Marketing Communications, joined The Open Group in 2013 and spearheads corporate marketing initiatives, primarily the website, blog and media relations. Loren has over 20 years experience in brand marketing and public relations and, prior to The Open Group, was with The Walt Disney Company for over 10 years. Loren holds a Bachelor of Business Administration from Texas A&M University. She is based in the US.

 

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Filed under Business Architecture, Conference, Enterprise Architecture, Enterprise Transformation, Internet of Things, Interoperability, Open Platform 3.0, Professional Development, Standards, TOGAF®, Value Chain

Professional Training Trends (Part Two): A Q&A with Chris Armstrong, Armstrong Process Group

By The Open Group

This is part two in a two part series.

Professional development and training is a perpetually hot topic within the technology industry. After all, who doesn’t want to succeed at their job and perform better?

Ongoing education and training is particularly important for technology professionals who are already in the field. With new tech trends, programming languages and methodologies continuously popping up, most professionals can’t afford not to keep their skill sets up to date these days.

The Open Group member Chris Armstrong is well-versed in the obstacles that technology professionals face to do their jobs. President of Armstrong Process Group, Inc. (APG), Armstrong and his firm provide continuing education and certification programs for technology professionals and Enterprise Architects covering all aspects of the enterprise development lifecycle. We recently spoke with Armstrong about the needs of Architecture professionals and the skills and tools he thinks are necessary to do the job effectively today.

What are some of the tools that EAs can be using to do architecture right now?

There’s quite a bit out there. I’m kind of developing a perspective on how to lay them out across the landscape a bit better. I think there are two general classes of EA tools based on requirements, which is not necessarily the same as what is offered by commercial or open source solutions.

When you take a look at the EA Capability model and the value chain, the first two parts of it have to do with understanding and analyzing what’s going on in an enterprise. Those can be effectively implemented by what I call Enterprise Architecture content management tools, or EACM. Most of the modeling tools would fall within that categorization. Tools that we use? There’s Sparx Enterprise Architect. It’s a very effective modeling tool that covers all aspects of the architecture landscape top-to-bottom, left-to-right and it’s very affordable. Consequently, it’s one of the most popular tools in the world—I think there are upwards of 300,000 licenses active right now. There are lots of other modeling tools as well.

A lot of people find the price point for Sparx Enterprise Architect so appealing that when people go into an investment and it’s only $5K, $10K, or $15K, instead of $100K or $250K, find it’s a great way to get into coming to grips with what it means to really build models. It really helps you build those fundamental modeling skills, which are best learned via on-the-job experience in your real business domain, without having to mortgage the farm.

Then there’s the other part of it, and this is where I think there needs to be a shift in emphasis to some extent. A lot of times the architect community gets caught up in modeling. We’ve been modeling for decades—modeling is not a new thing. Despite that—and this is just an anecdotal observation—the level of formal, rigorous modeling, at least in our client base in the U.S. market, is still very low. There are lots of Fortune 1000 organizations that have not made investments in some of these solutions yet, or are fractured or not well-unified. As a profession, we have a big history of modeling and I’m a big fan of that, but it sometimes seems a bit self-serving to some extent, in that a lot of times the people we model for are ourselves. It’s all good from an engineering perspective—helps us frame stuff up, produce views of our content that are meaningful to other stakeholders. But there’s a real missed opportunity in making those assets available and useful to the rest of the organization. Because if you build a model, irrespective of how good and relevant and pertinent it is, if nobody knows about it and nobody can use it to make good decisions or can’t use it to accelerate their project, there’s some legitimacy to the question of “So how much value is this really adding?” I see a chasm between the production of Enterprise Architecture content and the ease of accessing and using that content throughout the enterprise. The consumer market for Enterprise Architecture is much larger than the provider community.

But that’s a big part of the problem, which is why I mentioned cross-training earlier–most enterprises don’t have the self-awareness that they’ve made some investment in Enterprise Architecture and then often ironically end up making redundant, duplicative investments in repositories to keep track of inventories of things that EA is already doing or could already be doing. Making EA content as easily accessible to the enterprise as going to Google and searching for it would be a monumental improvement. One of the big barriers to re-use is finding if something useful has already been created, and there’s a lot of opportunity to deliver better capability through tooling to all of the consumers throughout an enterprise.

If we move a bit further along the EA value chain to what we call “Decide and Respond,” that’s a really good place for a different class of tools. Even though there are modeling tool vendors that try to do it, we need a second class of tools for EA Lifecycle Management (EALM), which is really getting into the understanding of “architecture-in-motion”. Once architecture content has been described as the current and future state, the real $64,000 question is how do we get there? How do we build a roadmap? How do we distribute the requirements of that roadmap across multiple projects and tie that to the strategic business decisions and critical assets over time? Then there’s how do I operate all of this stuff once I build it? That’s another part of lifecycle management—not just how do I get to this future state target architecture, but how do I continue to operate and evolve it incrementally and iteratively over time?

There are some tools that are emerging in the lifecycle management space and one of them is another product we partner with—that’s a solution from HP called Enterprise Maps. From our perspective it meets all the key requirements of what we consider enterprise architecture lifecycle management.

What tools do you recommend EAs use to enhance their skillsets?

Getting back to modeling—that’s a really good place to start as it relates to elevating the rigor of architecture. People are used to drawing pictures with something like Visio to graphically represent ”here’s how the business is arranged” or “here’s how the applications landscape looks,” but there’s a big difference in transitioning how to think about building a model. Because drawing a picture and building a model are not the same thing. The irony, though, is that to many consumers it looks the same, because you often look into a model through a picture. But the skill and the experience that the practitioner needs is very different. It’s a completely different way of looking at the world when you start building models as opposed to solely drawing pictures.

I see still, coming into 2015, a huge opportunity to uplift that skill set because I find a lot of people say they know how to model but they haven’t really had that experience. You just can’t simply explain it to somebody, you have to do it. It’s not the be-all and end-all—it’s part of the architect’s toolkit, but being able to think architecturally and from a model-driven approach is a key skill set that people are going to need to keep pace with all the rapid changes going on in the marketplace right now.

I also see that there’s still an opportunity to get people better educated on some formal modeling notations. We’re big fans of the Unified Modeling Language, UML. I still think uptake of some of those specifications is not as prevalent as it could be. I do see that there are architects that have some familiarity with some of these modeling standards. For example, in our TOGAF® training we talk about standards in one particular slide, many architects have only heard of one or two of them. That just points to there being a lack of awareness about the rich family of languages that are out there and how they can be used. If a community of architects can only identify one or two modeling languages on a list of 10 or 15 that is an indirect representation of their background in doing modeling, in my opinion. That’s anecdotal, but there’s a huge opportunity to uplift architect’s modeling skills.

How do you define the difference between models and pictures?

Modeling requires a theory—namely you have to postulate a theory first and then you build a model to test that theory. Picture drawing doesn’t require a theory—it just requires you to dump on a piece of paper a bunch of stuff that’s in your head. Modeling encourages more methodical approaches to framing the problem.

One of the anti-patterns that I’ve seen in many organizations is they often get overly enthusiastic, particularly when they get a modeling tool. They feel like they can suddenly do all these things they’ve never done before, all that modeling stuff, and they end up “over modeling” and not modeling effectively because one of the key things for modeling is modeling just enough because there’s never enough time to build the perfect thing. In my opinion, it’s about building the minimally sufficient model that’s useful. And in order to do that, you need to take a step back. TOGAF does acknowledge this in the ADM—you need to understand who your stakeholders are, what their concerns are and then use those concerns to frame how you look at this content. This is where you start coming up with the theory for “Why are we building a model?” Just because we have tools to build models doesn’t mean we should build models with those tools. We need to understand why we’re building models, because we can build infinite numbers of models forever, where none of them might be useful, and what’s the point of that?

The example I give is, there’s a CFO of an organization that needs to report earnings to Wall Street for quarterly projections and needs details from the last quarter. And the accounting people say, “We’ve got you covered, we know exactly what you need.” Then the next day the CFO comes in and on his/her desk is eight feet of green bar paper. She/he goes out to the accountants and says, “What the heck is this?” And they say “This is a dump of the general ledger for the first quarter. Every financial transaction you need.” And he/she says, “Well it’s been a while since I’ve been a CPA, and I believe it’s all in there, but there’s just no way I’ve got time to weed through all that stuff.”

There are generally accepted accounting principles where if I want to understand the relationship between revenue and expense that’s called a P&L and if I’m interested in understanding the difference between assets and liabilities that’s a balance sheet. We can think of the general ledger as the model of the finances of an organization. We need to be able to use intelligence to give people views of that model that are pertinent and help them understand things. So, the CFO says “Can you take those debits and credits in that double entry accounting system and summarize them into a one-pager called a P&L?”

The P&L would be an example of a view into a model, like a picture or diagram. The diagram comes from a model, the general ledger. So if you want to change the P&L in an accounting system you don’t change the financial statement, you change the general ledger. When you make an adjustment in your general ledger, you re-run your P&L with different content because you changed the model underneath it.

You can kind of think of it as the difference between doing accounting on register paper like we did up until the early 21st Century and then saying “Why don’t we keep track of all the debits and credits based on a chart of accounts and then we can use reporting capabilities to synthesize any way of looking at the finances that we care to?” It’s allows a different way for thinking about the interconnectedness of things.

What are some of the most sought after classes at APG?

Of course TOGAF certification is one of the big ones. I’d say in addition to that we do quite a bit in systems engineering, application architecture, and requirements management. Sometimes those are done in the context of solution delivery but sometimes they’re done in the context of Enterprise Architecture. There’s still a lot of opportunity in supporting Enterprise Architecture in some of the fundamentals like requirements management and effective architectural modeling.

What kinds of things should EAs look for in training courses?

I guess the big thing is to try to look for are offerings that get you as close to practical application as possible. A lot of people start with TOGAF and that’s a great way to frame the problem space. I would set the expectation—and we always do when we deliver our TOGAF training—that this will not tell you “how” to do Enterprise Architecture, there’s just not enough time for that in four days. We talk about “what” Enterprise Architecture is and related emerging best practices. That needs to be followed up with “how do I actually do Enterprise Architecture modeling,” “how do I actually collect EA requirements,” “how do I actually do architecture trade-off analysis?” Then “How do I synthesize an architecture roadmap,” “how do I put together a migration plan,” and “how do I manage the lifecycle of applications in my portfolio over the long haul?” Looking for training that gets you closer to those experiences will be the most valuable ones.

But a lot of this depends on the level of maturity within the organization, because in some places, just getting everybody on the same page of what Enterprise Architecture means is a big victory. But I also think Enterprise Architects need to be very thoughtful about this cross-training. I know it’s something I’m trying to make an investment in myself, is becoming more attuned to what’s going on in other parts of the enterprise in which Enterprise Architecture has some context but perhaps is not a known player. Getting training experiences in other places and engaging those parts of your organizations to really find out what are the problems they’re trying to solve and how might Enterprise Architecture help them is essential.

One of the best ways to demonstrate that is part of the organizational learning related to EA adoption. That may even be the bigger question. As individual architects, there are always opportunities for greater skill development, but really, organizational learning is where the real investment needs to be made so you can answer the question, “Why do I care?” One of the best ways to respond to that is to have an internal success. After a pilot project say, “We did EA on a limited scale for a specific purpose and look what we got out of it and how could you not want to do more of it?”

But ultimate the question usually should be “How can we make Enterprise Architecture indispensible? How can we create an environment where people can perform their duties more rapidly, more efficiently, more effectively and more sustainably based on Enterprise Architecture?” This is part of the problem, especially in larger organizations. In 2015, it’s not really the first time people have been making investments in Enterprise Architecture, it’s the second or third or fourth time, so it’s a reboot. You want to make sure that EA can become indispensible but you want to be able to support those critical activities with EA support and then when the stakeholders become dependent on it, you can say “If you like that stuff, we need you to show up with some support for EA and get some funding and resources, so we can continue to operate and sustain this capability.”

What we’ve found is that it’s a double-edged sword, ironically. If an organization has success in propping up their Architecture capability and sustaining and demonstrating some value there, it can be a snowball effect where you can become victims of your own success and suddenly people are starting to get wind of “Oh, I don’t have to do that if the EA’s already done it,” or “I can align myself with a part of the business where the EA has already been done.” The architecture community can get very busy—more busy than they’re prepared for—because of the momentum that might exist to really exploit those EA investments. But at the end of the day, it’s all good stuff because the more you can show the enterprise that it’s worth the investment, that it delivers value, the more likely you’ll get increased funding to sustain the capability.

By The Open GroupChris Armstrong is president of Armstrong Process Group, Inc. and an internationally recognized thought leader and expert in iterative software development, enterprise architecture, object-oriented analysis and design, the Unified Modeling Language (UML), use case driven requirements and process improvement.

Over the past twenty years, Chris has worked to bring modern software engineering best practices to practical application at many private companies and government organizations worldwide. Chris has spoken at over 30 conferences, including The Open Group Enterprise Architecture Practitioners Conference, Software Development Expo, Rational User Conference, OMG workshops and UML World. He has been published in such outlets as Cutter IT Journal, Enterprise Development and Rational Developer Network.

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A Historical Look at Enterprise Architecture with John Zachman

By The Open Group

John Zachman’s Zachman Framework is widely recognized as the foundation and historical basis for Enterprise Architecture. On Tuesday, Feb. 3, during The Open Group’s San Diego 2015 event, Zachman will be giving the morning’s keynote address entitled “Zachman on the Zachman Framework and How it Complements TOGAF® and Other Frameworks.”

We recently spoke to Zachman in advance of the event about the origins of his framework, the state of Enterprise Architecture and the skills he believes EAs need today.

As a discipline, Enterprise Architecture is still fairly young. It began getting traction in the mid to late 1980s after John Zachman published an article describing a framework for information systems architectures in the IBM Systems Journal. Zachman said he lived to regret initially calling his framework “A Framework for Information Systems Architecture,” instead of “Enterprise Architecture” because the framework actually has nothing to do with information systems.

Rather, he said, it was “A Framework for Enterprise Architecture.” But at the time of publication, the idea of Enterprise Architecture was such a foreign concept, Zachman said, that people didn’t understand what it was. Even so, the origins of his ontological framework were already almost 20 years old by the time he first published them.

In the late 1960s, Zachman was working as an account executive in the Marketing Division of IBM. His account responsibility was working with the Atlantic Richfield Company (better known as ARCO). In 1969, ARCO had just been newly formed out of the merger of three separate companies, Atlantic Refining out of Philadelphia and Richfield in California, which merged and then bought Sinclair Oil in New York in 1969.

“It was the biggest corporate merger in history at the time where they tried to integrate three separate companies into one company. They were trying to deal with an enterprise integration issue, although they wouldn’t have called it that at the time,” Zachman said.

With three large companies to merge, ARCO needed help in figuring out how to do the integration. When the client asked Zachman how they should handle such a daunting task, he said he’d try to get some help. So he turned to a group within IBM called the Information Systems Control and Planning Group and the group’s Director of Architecture, Dewey Walker, for guidance.

Historically, when computers were first used in commercial applications, there already were significant “Methods and Procedures” systems communities in most large organizations whose job was to formalize many manual systems in order to manage the organization, Zachman said. When computers came on the scene, they were used to improve organizational productivity by replacing the people performing the organizations’ processes. However, because manual systems defined and codified organizational responsibilities, when management made changes within an organization, as they often did, it would render the computer systems obsolete, which required major redevelopment.

Zachman recalled Walker’s observation that “organizational responsibilities” and “processes” were two different things. As such, he believed systems should be designed to automate the process, not to encode the organizational responsibilities, because the process and the organization changed independently from one another. By separating these two independent variables, management could change organizational responsibilities without affecting or changing existing systems or the organization. Many years later, Jim Champy and Mike Hammer popularized this notion in their widely read 1991 book, “Reengineering the Corporation,” Zachman said.

According to Zachman, Walker created a methodology for defining processes as separate entities from the organizational structure. Walker came out to Los Angeles, where Zachman and ARCO were based to help provide guidance on the merger. Zachman recalls Walker telling him that the key to defining the systems for Enterprise purposes was in the data, not necessarily the process itself. In other words, the data across the company needed to be normalized so that they could maintain visibility into the assets and structure of the enterprise.

“The secret to this whole thing lies in the coding and the classification of the data,” Zachman recalled Walker saying. Walker’s methodology, he said, began by classifying data by its existence not by its use.

Since all of this was happening well before anyone came up with the concept of data modeling, there were no data models from which to design their system. “Data-oriented words were not yet in anyone’s vocabulary,” Zachman said. Walker had difficulty articulating his concepts because the words he had at his disposal were inadequate, Zachman said.

Walker understood that to have structural control over the enterprise, they needed to look at both processes and data as independent variables, Zachman said. That would provide the flexibility and knowledge base to accommodate escalating change. This was critical, he said, because the system is the enterprise. Therefore, creating an integrated structure of independent variables and maintaining visibility into that structure are crucial if you want to be able to manage and change it. Otherwise, he says, the enterprise “disintegrates.”

Although Zachman says Walker was “onto this stuff early on,” Walker eventually left IBM, leaving Zachman with the methodology Walker had named “Business Systems Planning.” (Zachman said Walker knew that it wasn’t just about the information systems, but about the business systems.) According to Zachman, he inherited Walker’s methodology because he’d been working closely with Walker. “I was the only person that had any idea what Dewey was doing,” he said.

What he was left with, Zachman says, was what today he would call a “Row 1 methodology”—or the “Executive Perspective” and the “Scope Contexts” in what would eventually become his ontology.

According to Zachman, Walker had figured out how to transcribe enterprise strategy in such a fashion that engineering work could be derived from it. “What we didn’t know how to do,” Zachman said, “was to transform the strategy (Zachman Framework Row 1), which tends to be described at a somewhat abstract level of definition into the operating Enterprise (Row 6), which was comprised of very precise instructions (explicit or implicit) for behavior of people and/or machines.”

Zachman said that they knew that “Architecture” had something to do with the Strategy to Instantiation transformation logic but they didn’t know what architecture for enterprises was in those days. His radical idea was to ask someone who did architecture for things like buildings, airplanes, locomotives, computers or battleships. What the architecture was for those Industrial Age products. Zachman believed if he could find out what they thought architecture was for those products, he might be able to figure out what architecture was for enterprises and thereby figure out how to transform the strategy into the operating enterprise to align the enterprise implementation with the strategy.

With this in mind, Zachman began reaching out to people in other disciplines to see how they put together things like buildings or airplanes. He spoke to an architect friend and also to some of the aircraft manufacturers that were based in Southern California at the time. He began gathering different engineering specs and studying them.

One day while he was sitting at his desk, Zachman said, he began sorting the design artifacts he’d collected for buildings and airplanes into piles. Suddenly he noticed there was something similar in how the design patterns were described.

“Guess what?” he said. “The way you describe buildings is identical to the way you describe airplanes, which turns out to be identical to the way you describe locomotives, which is identical to the way you describe computers. Which is identical to the way you describe anything else that humanity has ever described.”

Zachman says he really just “stumbled across” the way to describe the enterprise and attributes his discovery to providence, a miracle! Despite having kick-started the discipline of Enterprise Architecture with this recognition, Zachman claims he’s “actually not very innovative,” he said.

“I just saw the pattern and put enterprise names on it,” he said

Once he understood that Architectural design descriptions all used the same categories and patterns, he knew that he could also define Architecture for Enterprises. All it would take would be to apply the enterprise vocabulary to the same pattern and structure of the descriptive representations of everything else.

“All I did was, I saw the pattern of the structure of the descriptive representations for airplanes, buildings, locomotives and computers, and I put enterprise names on the same patterns,” he says. “Now you have the Zachman Framework, which basically is Architecture for Enterprises. It is Architecture for every other object known to human kind.”

Thus the Zachman Framework was born.

Ontology vs. Methodology

According to Zachman, what his Framework is ultimately intended for is describing a complex object, an Enterprise. In that sense, the Zachman Framework is the ontology for Enterprise Architecture, he says. What it doesn’t do, is tell you how to do Enterprise Architecture.

“Architecture is architecture is architecture. My framework is just the definition and structure of the descriptive representation for enterprises,” he said.

That’s where methodologies, such as TOGAF®, an Open Group standard, DoDAF or other methodological frameworks come in. To create and execute an Architecture, practitioners need both the ontology—to help them define, translate and place structure around the enterprise descriptive representations—and they need a methodology to populate and implement it. Both are needed—it’s an AND situation, not an OR, he said. The methodology simply needs to use (or reuse) the ontological constructs in creating the implementation instantiations in order for the enterprise to be “architected.”

The Need for Architecture

Unfortunately, Zachman says, there are still a lot of companies today that don’t understand the need to architect their enterprise. Enterprise Architecture is simply not on the radar of general management in most places.

“It’s not readily acknowledged on the general management agenda,” Zachman said.

Instead, he says, most companies focus their efforts on building and running systems, not engineering the enterprise as a holistic unit.

“We haven’t awakened to the concept of Enterprise Architecture,” he says. “The fundamental reason why is people think it takes too long and it costs too much. That is a shibboleth – it doesn’t take too long or cost too much if you know what you’re doing and have an ontological construct.”

Zachman believes many companies are particularly guilty of this type of thinking, which he attributes to a tendency to think that there isn’t any work being done unless the code is up and running. Never mind all the work it took to get that code up and running in the first place.

“Getting the code to run, I’m not arguing against that, but it ought to be in the context of the enterprise design. If you’re just providing code, you’re going to get exactly what you have right now—code. What does that have to do with management’s intentions or the Enterprise in its entirety?”

As such, Zachman compares today’s enterprises to log cabins rather than skyscrapers. Many organizations have not gotten beyond that “primitive” stage, he says, because they haven’t been engineered to be integrated or changed.

According to Zachman, the perception that Enterprise Architecture is too costly and time consuming must change. And, people also need to stop thinking that Enterprise Architecture belongs solely under the domain of IT.

“Enterprise Architecture is not about building IT models. It’s about solving general management problems,” he said. “If we change that perception, and we start with the problem and we figure out how to solve that problem, and then, oh by the way we’re doing Architecture, then we’re going to get a lot of Architecture work done.”

Zachman believes one way to do this is to build out the Enterprise Architecture iteratively and incrementally. By tackling one problem at a time, he says, general management may not even need to know whether you’re doing Enterprise Architecture or not, as long as their problem is being solved. The governance system controls the architectural coherence and integration of the increments. He expects that EA will trend in that direction over the next few years.

“We’re learning much better how to derive immediate value without having the whole enterprise engineered. If we can derive immediate value, that dispels the shibboleth—the misperception that architecture takes too long and costs too much. That’s the way to eliminate the obstacles for Enterprise Architecture.”

As far as the skills needed to do EA into the future, Zachman believes that enterprises will eventually need to have multiple types of architects with different skill sets to make sure everything is aligned. He speculates that someday, there may need to be specialists for every cell in the framework, saying that there is potentially room for a lot of specialization and people with different skill sets and a lot of creativity. Just as aircraft manufacturers need a variety of engineers—from aeronautic to hydraulic and everywhere in between—to get a plane built. One engineer does not engineer the entire airplane or a hundred-story building or an ocean liner, or, for that matter, a personal computer. Similarly, increasingly complex enterprises will likely need multiple types of engineering specialties. No one person knows everything.

“Enterprises are far more complex than 747s. In fact, an enterprise doesn’t have to be very big before it gets really complex,” he said. “As enterprise systems increase in size, there is increased potential for failure if they aren’t architected to respond to that growth. And if they fail, the lives and livelihoods of hundreds of thousand of people can be affected, particularly if it’s a public sector Enterprise.”

Zachman believes it may ultimately take a generation or two for companies to understand the need to better architect the way they run. As things are today, he says, the paradigm of the “system process first” Industrial Age is still too ingrained in how systems are created. He believes it will be a while before that paradigm shifts to a more Information Age-centric way of thinking where the enterprise is the object rather than the system.

“Although this afternoon is not too early to start working on it, it is likely that it will be the next generation that will make Enterprise Architecture an essential way of life like it is for buildings and airplanes and automobiles and every other complex object,” he said.

By The Open GroupJohn A. Zachman, Founder & Chairman, Zachman International, Executive Director of FEAC Institute, and Chairman of the Zachman Institute

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CIOs to Leverage EA to Bolster their Presence in the C-Suite

by Naveed Rajput, Lead Enterprise Architect, Capco (Capital Markets)

Changing CIO landscape:    

The gulf between the Business and IT has been recognised in the enterprises for many years. However this chronic organisational impairment has started causing landslides in the CIO landscapes. There exists maturity mismatch between business and other central functions as well but IT capability has been brought under intense scrutiny due to increasingly frequent high profile failures.

Global macro forces such as economic fragility, financial crisis, heightened regulations, investment shortfall, fierce competition, globalisation, to name a few, are constantly transforming the business landscape.  Technology is one of the key considerations to untangle the complexity and volatility yielded by above mentioned macro commotion. The issue gets further flared up due to scarily high correlation between these factors which translates into a direct impact on the bottom line of firms.

Cost reduction has become a strategic driver for businesses and as a result, tech savvy finance chiefs are getting popular to lead Technology investment decisions. This paradigm shift in the CIO landscape is an important corporate event which presents an enterprise with burgeoning complexities and ultimately does more harm than good. Enterprise IT which is run as a cost centre struggles to provide sustainable competitiveness and In fact stifles innovation and future growth.

Investment Governance & CIO and CFO Alignment:              

The remedial actions mandate CIOs to assume ascendance to fill the void between IT and Business. The Enterprise Architecture function and governance can play a key strategic role for CIOs if structured and operated properly.

The biggest flashpoint to address includes capital planning and IT investment governance. CIOs can leverage and adapt the investment decision making framework and models used by their business counterparts. Using common factor models allow CIOs to analyse and calibrate the IT investment proposals similar to the way investment decisions are made by business lines – Think risk adjusted returns by deploying capital in a diversified portfolio.

Instead of using fairly lightweight valuation method, CIOs should strengthen their capabilities in deploying sophisticated valuation techniques to demonstrate understanding of the cost and benefits profile of the proposals. Apart from using the standard NPV, IRR, Profitability Index, and Payback Period, they should also consider quantifying embedded options and flexibility in project proposals.

Proposal Calibration and Comparative Investment Analysis:

IT can liaise with Finance to establish quantitative attributes to ensure alignment of parametric model. One of the key measures is the discount rate for which the weighted average cost of capital (WACC) could be a reasonable starting proxy to estimate the opportunity cost.

Once all the relevant input factors are established, the proposals with different time horizon and risk profile should be scaled and standardised for comparative analysis. Equivalent Annual Annuity (EAA) or Least Common Multiple of Lives (LCML) method is often used to bring the proposals to comparative scale. Subsequently, discount rates are adjusted to reflect the riskiness of the projects – think project specific beta.

Depending on the level of sophistication and maturity CIOs can use scenario analysis or Monte Carlo to simulate sensitivity of various factors on the outcome of the corporate portfolio. The extent to which the projects are aligned or misaligned with the strategy should also be part of the quantification.

Investment Fabric – Tying it all Together with EA 

Investment governance is more art than science for executives who ultimately use qualitative judgement for their decisions. Quantitative rigour applied to the process and mature analytics driven due-diligence process develops their gut feel and assists with alignment of views in the C-suite.

CIOs should creatively craft investment fabric to realise enterprise strategy roadmap. They should use EA to decipher correlation between proposed projects and establish P&L attribution to formulate portfolio balance sheet. Beyond the investment decisions, an effective EA can provide adequate architectural insights to the programmes and initiatives spanning across multiple product lines and business functions.

There is a lot that CIOs can leverage from the rest of the C-suite. CIOs should reclaim more power on IT strategy and decision making and by doing so enable the rest of the C-suite to drive the enterprise forward in the most efficient way possible.

Naveed RajputNaveed Rajput is an experienced strategy consultant and a business savvy technologist. He specialises in driving CXO engagements and enterprise strategy initiatives. He is a TOGAF® practitioner with well over 15 years of experience in delivering variety of complex and major global programmes including cross-functional Target Operating Models (TOM), Architecture Maturity, IT Capital Planning, and Investment Governance Initiatives. He has orchestrated technology and regulatory driven change agendas for top Fortune and FTSE financial and professional services firms including Logica, Deutsche Bank, Credit Suisse, Capco, Commerzbank, Mizuho Securities, Shell, and Wolters Kluwer-CCH.

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