keynote rogerapac
TRANSCRIPT
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8/6/2019 Keynote RogerAPAC
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AligningAligningBusiness and ITBusiness and IT
ArchitecturesArchitectures
Roger Roberts McKinsey & CompanyRoger Roberts McKinsey & Company
[email protected][email protected]
February 23, 2005February 23, 2005
Microsoft Asia Pacific Regional Architect ForumMicrosoft Asia Pacific Regional Architect Forum
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2
Unit of measure
* Footnote
Source: Source
Aligning Business and IT ArchitecturesAligning Business and IT Architectures
Forces at Work Reshaping BusinessArchitectures
The Challenge and Opportunity for IT
The Central Role of Business Domains
Aligning IT Architecture Management with the
Changing Business Context
Moving from Planning to Execution
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3
Unit of measure
* Footnote
Source: Source
Structure
What are the scope, scale and boundaries of
the enterprise?
Strategic Capabilities
How does it deploys resources people,
intellectual property and tangible/intangible
assets to fulfill its aspirations
Source: McKinsey & Co.
Pressure for more rapid change in business architecture
is rising fast in almost every industry
What do we mean by business architecture?What do we mean by business architecture?
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Unit of measure
* Footnote
Source: SourceSource: McKinsey & Company
McKinsey colleagues
around the world haveidentified a wide range of
trends that ultimately are
reshaping business
architectures
2
1
3
4
Changing nature of work
production to interaction
Creative Destruction
Emergence of Global Process
Architectures
Unbundling the Corporation
Forces at work reshaping businessForces at work reshaping business
architecturesarchitectures
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Unit of measure
* Footnote
Source: Source
73
59
38
24
10
11
13
14
6
7
10
14
6
6
7
13
2
10
11 15
2 3
8 9
1
3 12 7
1 1
4
Interaction-
intensive
workers
Percent of total US labor costsPercent of total US labor costs
1900 1930 1960 2000
Data manipulators
Analytic knowledgeworkers
Coordinators
Data harvesters andcommunicators
Caregivers
Doers
Strategists
Interpersonalknowledgeworkers
Source: US Bureau of Labor Standards data; McKinsey Global Institute analysis
Over 60%
of the
economy
and stillgrowing
1.Interaction work takes over1.Interaction work takes over
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Unit of measure
* Footnote
Source: Source
Interactions
Searchcoordination,
monitoring
Direct,physicallabor/
Individual
analyticwork
Percent of time
Source: McKinsey Global Institute analysis
Inter-personal
know-ledgeworkers
StrategistsAnalyticknow-
ledgeworkers
Datamanipul-
ators
Care-givers
Dataharveste
rs andcommun-icators
Coordina-tors
Doers
Interaction costsas share ofoverall economyare increasing ascomposition oflabor force
changes
These interactioncosts are fallingas technologyand access to itbecome morepervasive
15 19
37 42
6877 78 78
85 81
63 58
3223 22 22
Labor costs are increasinglyLabor costs are increasingly
dominated by interaction costsdominated by interaction costs
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Unit of measure
* Footnote
Source: Source
% of total labor costs
GermanyU.S.
5146 32
12
8
India
19
42
60
30
Directphysical
labor
Analytic work
Interactions -SearchCoordinationMonitoring
Interaction
costs are
falling globally
Building
software is
more like
making a
movie than
running a
factory
Source: McKinsey Global Institute analysis
Interactions are a pervasive feature ofInteractions are a pervasive feature of
all modern economiesall modern economies
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Unit of measure
* Footnote
Source: Source
Key Messages
Falling interaction costs createnew degrees of freedom for
structuring business
architectures as organizations
become more networked
Three broad kinds of businesseswill emerge
Customer relationship Product innovation Infrastructure
Leaders must look hard at whatbusiness theyre really in?
Source: McKinsey & Company
2. Unbundling the Corporation2. Unbundling the Corporation
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Unit of measure
* Footnote
Source: Source
Coases law
A company tends to
expand until the cost of
organizing an extra
transaction within the
organization equals thecost of carrying out the
same transaction on the
open market
Organization costs
are a growth barrier
Execute
transactions
internally only if
value captured is
greater than value
network would
have created for
customers and the
enterprise
Metcalfes law
The value of a network
goes up as the square
of the number of new
nodes (participants) in
the network
Network value is
exponential
Source: McKinsey & Company
Networked organizations shift the boundaryNetworked organizations shift the boundary
between internal & externalbetween internal & external
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Unit of measure
* Footnote
Source: Source
Often webs
build around
more formal
networks
(e.g., tier 2 or3 suppliers to
a HK-based
apparel
manufacturer
for European
brands)
A network is a set of relationships that builds onexplicitagreement to a set of standards
The set of relationships creates a gated community
Network growth can be controlled by selecting andevaluating relationships
Network value creation can be managed
The necessity of explicit agreements slows growthdown to manageable levels
Formal
networks
Gated, controlled
A web is a set of informal relationships that builds onimplicitagreement to a set of standards
The set ofinformal relationships develops organically Webs require publication of the relevant standards
Web growth cannot be controlled and therefore valuecreation can not be managed traditionally
Web growth is faster than network growth
Informal
webs
Organic, unbounded
Source: McKinsey & Co.
Explicit agreement around standards makeExplicit agreement around standards make
formal networks manageableformal networks manageable
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Unit of measure
* Footnote
Source: Source
Tendency to collaborate
Insurance
Chemicals,
steel, paper
Television
News/ information
Electronic banking
Actual value of
a standard
Health care
Credit cards
PCs
Online services/
Internet technology
Desirability of
the standard
Positivefeedback loops
for network
growth
Ability to un-bundle the value chain Potential value to be extracted Value-sharing architecture
Automobiles
ASSESSMENT
Retail banking Brokerage
Alreadyexperiencing
network effects
Source: McKinsey & Co.
Petroleum
So far few industries have fully leveraged theSo far few industries have fully leveraged the
benefits of external network configurationsbenefits of external network configurations
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Unit of measure
* Footnote
Source: Source
Implied lifetime in S&P 500 based on company exits
90
45
30
22
15
1935 1955 1975 1995 2005E
Its getting tougher to
survive
Half of all companies in
S&P 500 today are likely to
be gone by 2020
Pace of change is
accelerating
Over long time periods,
even the survivors tend to
under-perform broadermarkets
Source: McKinsey & Co.
3. Creative Destruction is shortening the3. Creative Destruction is shortening the
lifespan of corporate entitieslifespan of corporate entities
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Unit of measure
* Footnote
Source: Source
Create OperateTrade/
Destroy
Markets
Primary focus is to create,
exchange, and destroy assets
Companies
Primary focus is to operate assets
Source: McKinsey & Co.
Just surviving is difficult - and
getting more so
Survivors generally underperformattackers in their industry theylose the attackers advantage They do not create enough
They do not trade/destroy enough
Markets are better at creating,trading, and destroying thansurvivors
Implication is that willingness tounbundle and reshape businessarchitectures is critical to survival
Why do survivors under performWhy do survivors under perform
markets?markets?
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14
Unit of measure
* Footnote
Source: Source
Continuous cycle of creating and
destroying
Prerequisite: State-of-the-art
development & operations capabilities
Create OperateTrade/
destroy
TomorrowFocus on development &
operations
Today
Create OperateTrade/
destroy
Source: McKinsey & Co.
Sustained leadership demands anSustained leadership demands an
integrated create-operate-trade mindsetintegrated create-operate-trade mindset
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15
Unit of measure
* Footnote
Source: Source
Traditional process model
Offshore
(e.g.,
Asia)
Near-shore
(e.g.,
Eastern
Europe)
Onshore
R&D
Logistics
S&MHR
REM/FM
Corporate
center
Finance
Manufacturing
Shoring
Sourcing
Make Partner Buy
Size indicates number of FTEs
Focus on onshore optimization
Manufacturing
Sourcing
Make Partner Buy
Logistics
REM/FM
HR
S&M
LogisticsR&D
Corporatecenter
IT
Finance
R&D
Target process model
IT
Shoring
IT
IT
Source: McKinsey & Co. (disguised client engagement example)
Cost reduction EUR 500 million p.a. Implementation time 3 years
AutomationOptimizationRedesignRightshoringRightsourcing
Performance leaders fundamentally optimize theirPerformance leaders fundamentally optimize their
operations across all processesoperations across all processes
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16
Unit of measure
* Footnote
Source: Source
More flexibility in IT architecture required
to meet disruptive threats
Decreasing business margins require
reshaping of process sourcing strategy
It is not the strongest
of the species that
survive, nor the most
intelligent, but the onemost responsive to
change
Charles Darwin
It is not the strongest
of the species that
survive, nor the most
intelligent, but the onemost responsive to
change
Charles Darwin
IT must ride the price/performance
curve just to maintain pace
New IT architecture models with a new
level of flexibility and efficiency offer hope
Sustaining global growth requirestechnology leadership
Source: McKinsey & Co.
Macroeconomic trends force companies toMacroeconomic trends force companies to
rethink their IT strategyrethink their IT strategy
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17
Unit of measure
* Footnote
Source: Source
UPS strategic IT-enabledcapabilities
New services and network optimizationbased on global track-and-trace
One face to the customersupported bycustomer automation system
Dynamic capacity optimization byoverarching order management
Cross-divisional business integrationbuilt on common data
Enhanced solutions business throughintegration with customer systems
Ware-
house
mgmt.
Ware-
house
mgmt.
Customer
automation
Customer
automation
Order
management
Order
management
Supplychain
manage-
ment
Supplychain
manage-
ment
Professional
services
Professional
services
FinancialservicesFinancialservices
Sys-
tem
inte-gra-
tion
Sys-
tem
inte-gra-
tion
Source: McKinsey & Co.
Technology enabled UPS to turn packageTechnology enabled UPS to turn package
delivery into a global information businessdelivery into a global information business
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18
Unit of measure
* Footnote
Source: Source
Romania
China
Japan
India
Fiji
New Zealand
AustraliaSpain
UnitedKingdom
Ireland
France
Portugal
USA
Mexico
Egypt
Hungary
SouthAfrica
Switzerland
Greece
Sweden
Albania
Germany
Malta
Netherlands
Italy
Belgium
Kenya
Poland
offer global solutions for corporate customersuse low cost call centers for customer serviceoffer advanced mobile products globally
Global brand
Global reach
Global customerbase - 135 million
Global skill pool
Technology leadership
enables Vodafone to
Source: McKinsey & Co.
Sustaining global growth requiresSustaining global growth requires
technology leadership: Example - Vodafonetechnology leadership: Example - Vodafone
http://www.vodafone.com/http://www.vodafone.com/ -
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19
Unit of measure
* Footnote
Source: Source
Forces at Work Reshaping BusinessArchitectures
The Challenge and Opportunity for IT
The Central Role of Business Domains
Aligning IT Architecture Management with the
Changing Business Context
Moving from Planning to Execution
Aligning Business and IT ArchitecturesAligning Business and IT Architectures
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20
Unit of measure
* FootnoteSource: Source
USD 1 bnMajor applications*
Central functions HR Finance/controlling Purchasing Other
Back-office Product development Underwriting Policy administration Claims/benefits Other
IT infrastructure
dominates
Data center Storage
Network Telecoms PCs/mobile
devices
ILLUSTRATIVE
Front-office Sales force automation CRM Call center Internet Other
* Disguised insurance industry exampleSource: McKinsey & Co.
75
225
50
650
Only a smallfraction of app
spend delivers
new
differentiating
capabilities
After recent cost cutting much IT spendingAfter recent cost cutting much IT spending
goes into infrastructuregoes into infrastructure
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21
Unit of measure
* FootnoteSource: Source
Current paradigm
Business flexibility
Infra-
structure-
centric
architecture
IT
efficie
ncy
Application-centric
architecture
Past IT architectures were bound bytrade-off between increasing
business flexibility and reducing IT
cost/increasing process commonality
Every new app brought its own
infrastructure along
2004
2000IT
efficie
ncy
New paradigm
Business flexibility
Application-centric architecture
New
architectureparadigm
Future IT architecture mustprovide both an increase in
business flexibility and a decrease
in IT cost
Decoupling of apps and
infrastructure
Source: McKinsey & Co.
What definesthe the new
architecture
paradigm?
Technology capabilities and a new architectureTechnology capabilities and a new architecture
model offer hope to shift this mixmodel offer hope to shift this mix
R f IT i h b i
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22
Unit of measure
* FootnoteSource: Source
IT project budget
Percent
Budget reallocation from "Run the
Company" to "Change the
Company" by
refocusing on projects that drive
metrics that matter
establishing clear architecture
governance linked to business
initiative portfolio
focusing on target platforms
retiring redundant applications
stopping messy projects early
~ 10
~ 90
65
35
Today Target
"Grow"
"Shrink"Run the
company
Change the
company
Source: McKinsey & Co.
Refocus IT on renewing the business systemRefocus IT on renewing the business system
M t d h i t fM t d h i t f
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23
Unit of measure
* FootnoteSource: Source
2004+
Infrastructure-centric
architecture
Application-centric
architecture
Regain
infrastructure
manageability
Begin to unleash
the potential of
service-oriented
architectures for
business and IT
Early 1990's
Today
Managing the full stack
Applying service orientationto the full stack
Coherently revamping
applicationsand infrastructure
Infrastructure operated like anutility
Application services
Infrastructure services
Profession-
alized ADprocess
Utility
operations
Source: McKinsey & Co.
Move toward comprehensive management ofMove toward comprehensive management of
applications, application delivery & infrastructureapplications, application delivery & infrastructure
M i Th F ll St kM i Th F ll St k d d td d t
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24
Unit of measure
* FootnoteSource: Source
Reusable business
logic
Business service
specifications Business data schema Business domain
architecture governance
A
Desktop infrastructure Server infrastructure Network and Telco
infrastructure
Storage infrastructure
Elements
Applications/core business
logic
App/data service
plumbing
Virtualized physical
infrastructure
Integration backbone Run-time platform
Data management Portal services
Resource pooling Resource provisioning
and connectivity
Service-levelmanagement
B
C
The twoservice layers
fully decouple
applications
from physical
infrastructure
Application
services
Infrastructure
services
Commoditized
hardware
D
Physical
infrastructure
Source: McKinsey & Co.
Managing The Full StackManaging The Full Stack depends on twodepends on two
distinct service layersdistinct service layers
SOA h ffi i & fl ibilit t dSOA h ffi i & fl ibilit t d
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25
Unit of measure
* FootnoteSource: Source
ITefficie
ncy
Business flexibility
Best practice:standardized
business processes
(e.g., financial
controlling)
Next practice:innovative, frequently
changing processes
Service-oriented
architecture
Today's
architecture
Today's
position
Service-oriented architecturescreate value by allowing
enterprises to pursue Best
Practice and Next Practice
simultaneously in different parts
of their business architectures
Higher efficiency forcommoditized business
processes
Higher flexibility forinnovative, frequently
changing processes
Source: McKinsey & Co.
SOA pushes efficiency & flexibility towardSOA pushes efficiency & flexibility toward
the next frontierthe next frontier
Ali i B i d IT A hit tAli i B i d IT A hit t
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26
Unit of measure
* FootnoteSource: Source
Forces at Work Reshaping BusinessArchitectures
The Challenge and Opportunity for IT
The Central Role of Business Domains
Aligning IT Architecture Management with the
Changing Business Context
Moving from Planning to Execution
Aligning Business and IT ArchitecturesAligning Business and IT Architectures
Business domains are key to managingBusiness domains are key to managing
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27
Unit of measure
* FootnoteSource: Source
Business view
Technology view
Domains ofcoherentfunctionality andinformation
Services asstable businessrelationships
Business/
IT architecture:domains/services
Strategic
aspirations Business
plan
Businessinitiatives
Executionmodel
Business strategy
Business
processes Business
relationships
Businessrules
Processes
Hardware,
storage, OS,networkinfrastructure
Middleware,databases,
Systemsmanagement
Technology
Application
programs andmodules
Informationdeliveryportals
Data model &query tools
Applications
Source: McKinsey & Co.
Business domains are key to managingBusiness domains are key to managing
application and data servicesapplication and data services
B i d i hi h l lB i d i hi h l l
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Unit of measure
* FootnoteSource: Source
UseUse
ServeServe
Receive
information
Receive
information
Provide
information
Provide
information
Calculate profitabilityCalculate profitability
DefineDefine
BuyBuy
Offered toOffered to
HistoryHistory
ChannelsChannels
RelationshipRelationship PlanningPlanning
ProductsProducts
ProductionProductionCustomersCustomers DeliverDeliver
MANUFACTURINGEXAMPLE
Source: McKinsey & Co.
Business domains a high-levelBusiness domains a high-level
exampleexample
B i d i d iBusiness domains are mapped using
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Unit of measure
* FootnoteSource: Source
Typical design criteria
Enable end-to-end support along core business processes (e.g.,customer acquisition)
Support differentiated performance need (e.g., flexibility vs.reliability)
Grouping domains
along logical
functionality and
business purpose
Prioritization of new capabilities needs to
Provide required performance without inhibiting performanceof existing capabilities Fit logically with existing capabilities Address IT and business trade-offs
allowing support of
foreseeable business
challenges
Potential opportunity for future outsourcing needs to be ensuredby e.g.,
Grouping capabilities eligible for sharing/outsourcing together
and enabling
potential carve-outs
Enable simplification of application rationalization and interfacecleanup by Carving out most critical capabilities which are buried under
complex IT architecture Designating a clear owner in the organization to enforce
cleanup
while reflecting
current IT starting
point
Rationale
Source: McKinsey & Co.
Business domains are mapped usingBusiness domains are mapped using
several design criteriaseveral design criteria
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Key enterprise architect role manage aKey enterprise architect role manage a
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Unit of measure
* FootnoteSource: Source
Time
Opportunity lies in
IT efficiencyTab l e S t akesTab l e S t akes
Basic capa-
bilities that
represent theprice to play
Opportunity is impact on
todays business
performance
Pe rform anc ePe rform anc e
Capabi-
lities that
help you
win today
Adoption
Phases of technology adoption
Innovat ionInnovat ion
Capabilities
that could
change the
game
Opportunity is potentially strategic for
tomorrows business
i.e. in creating option value
Managefor
efficiency
Leveragetechnology for
competitiveadvantage
Objectiv e
s
Source: McKinsey & Co.
Key enterprise architect role - manage aKey enterprise architect role - manage a
portfolio within and across domainsportfolio within and across domains
Aligning Business and IT ArchitecturesAligning Business and IT Architectures
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32
Unit of measure
* FootnoteSource: Source
Forces at Work Reshaping Business
Architectures
The Challenge and Opportunity for IT
The Central Role of Business Domains
Aligning IT Architecture Management with the
Changing Business Context
Moving from Planning to Execution
Aligning Business and IT ArchitecturesAligning Business and IT Architectures
Vision roadmap and governance are keyVision roadmap and governance are key
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Unit of measure
* FootnoteSource: SourceSource: McKinsey & Co.
IT Architecture Governance
IT Architecture Vision / Principles
IT Architecture Roadmap
IT Architecture
Management
Target architecture blueprint
IT architecture standards
Mission
Structure, role and responsibilities
Processes and tools
Skills
Performance management
Architecture inventory
Projects sequenced in a managed evolution approach
IT architecturemanagement consists of the vision, governance structure and
processes, androad map that guide the sourcing and deployment ofIT assets
To enable greater productivity for todays business To support business evolution
Vision, roadmap and governance are keyVision, roadmap and governance are key
elements of IT architecture managementelements of IT architecture management
City planning principles for IT architectureCity planning principles for IT architecture
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Unit of measure
* FootnoteSource: SourceSource: McKinsey & Co.
1.1. Create modular zonesCreate modular zones::
Follow a long-term city planFollow a long-term city plan
that defines the keythat defines the key
components of the city,components of the city,
such as residential,such as residential,
industrial, and natureindustrial, and nature
preservespreserves
2.2. Reuse and integrateReuse and integrate
assetsassets::
Exploit the assets andExploit the assets and
functionality that existsfunctionality that exists
already in the city andalready in the city and
create connectivitycreate connectivity
3.3. EvolveEvolve::
Manage change byManage change by
evolving the city step-evolving the city step-
by-step; revolutionize onlyby-step; revolutionize only
where necessarywhere necessary
4.4. Federal GovernanceFederal Governance::
Have a central zoningHave a central zoning
board, but allow localboard, but allow local
decisions in different zonesdecisions in different zones
City planning principles Target IT architecture blueprint
Domain Domain Domain
DomainDomain
Integration backbone
City planning principles for IT architectureCity planning principles for IT architecture
Pivot IT architecture management aroundPivot IT architecture management around
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35
Unit of measure
* FootnoteSource: Source
Key roles and accountabilities
Business Sponsor
Defining metrics that matter Driving value capture initiatives
Business Domain Architect
Demand assessment Service prioritization Complexity reduction
Service Portfolio Manager
Delivery of service levels to
promise inside and outside thedomain
AD program management Data quality & integrity
Business domains become theprimary axis for
Definition of key business metrics
Management and funding of
application project portfolio
Stewardship of master data
Definition of services anddocumentation of services
Delivery and service levelmanagement
Organizing application development
Source: McKinsey & Co.
Pivot IT architecture management aroundPivot IT architecture management around
business domainsbusiness domains
Moving from projects to domain-basedMoving from projects to domain-based
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Unit of measure
* FootnoteSource: SourceSource: McKinsey and Company
FromProcess-driven project model
Few big programs with big budgets
Aimed at wiring in new processes
ROI at the project level
Projects drag along and fundinfrastructure
Business needs change by the timeproject is delivered
Ruthlessly managed to the criticalpath
Heroes deliver bigger projects
on time/on budget
ToDomain-driven portfolio model
Many, much smaller projects
Aimed at building in future flexibility
ROI primarily at the portfolio level
Infrastructure investment based oncapacity planning for key resources
Project duration shorter than theclock speed of the business
Leaders motivated to delivercapability for the present & future
Heroes maximize effort vs.
metrics that matter while keeping
complexity in check
Moving from projects to domain-basedMoving from projects to domain-based
service portfoliosservice portfolios
U it fAligning Business and IT ArchitecturesAligning Business and IT Architectures
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37
Unit of measure
* FootnoteSource: Source
Forces at Work Reshaping Business
Architectures
The Challenge and Opportunity for IT
The Central Role of Business Domains
Aligning IT Architecture Management with the
Changing Business Context
Moving from Planning to Execution
Aligning Business and IT ArchitecturesAligning Business and IT Architectures
U it fAgenda for actionAgenda for action
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Unit of measure
* FootnoteSource: Source
Create theCreate theconditions forconditions for
successsuccess
Think bigThink big
Start smallStart small
Agenda for actionAgenda for action
Unit of measureThinking big: HR example unbundling capabilities in aThinking big: HR example unbundling capabilities in a
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Unit of measure
* FootnoteSource: Source
Traditional
bundled HRactivities
Typical issues in HR Overlapping global, regional,
and local responsibilities
Unclear division of laborbetween central HR and BU HR
Mix of repetitive processes,projects and roles
Strategic HR
leadership Management
(self-)services
e.g., Project staffing Personnel
evaluation
Employee self
servicee.g.,
Online personal datamanagement (e.g.,
address change,benefits)
Information delivery ERM capabilities
3rd party BPO&O
providers
Transactionalactivities (e.g., payroll
Process activities(e.g., exportmanagement
Shared services
Utility services
Servicefactory
operations
Captive globaldelivery model
Source: McKinsey & Co.
Sourcingcapability
Processimprovement
capability
Advisory
capability
Access
capability
1
23
4
complex domaincomplex domain
Unit of measureThinking Big: Resetting priorities across theThinking Big: Resetting priorities across the
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40
Unit of measure
* FootnoteSource: SourceSource: McKinsey & Co. (disguised client engagement example)
-75
-50
-25
0
25
50
75
-30 -20 -10 0 10 20 30
Unprofitable growingUnprofitable declining
Profitable growing Profitable declining
BU D
BU H
BU K
BU FBU E
BU G
BU C
BU A
BU B
Profit (2003 EBITDA proxy)
Percent
Growth (2001-03 revenue CAGR)
Percent
Client IT Application Development spend
Index
Unprofitable
declining
B With no ROI
C
Current
A
With questionable
ROI
Strong business
cases in strong
businesses
Opportunitiesto reprioritize
spending and
redeploy
resources onhigher impact
efforts
25
25
20
30
100
Thinking Big: Resetting priorities across theg g g p
business portfolio Telco examplebusiness portfolio Telco example
Unit of measureStarting Small:Starting Small: Defining the domain-based service oriented architectureDefining the domain-based service oriented architecture
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Unit of measure
* FootnoteSource: Source
Web service
START: Identify
business priorities
and starting point
Define business priorities and vision of new
architecture :
New channels, new products
Customer relationship management acrosschannels and products
Streamlined back-office
Starting
position
New
architecture
Starting
position
Ensure business /
IT support by
building a first
release
Select first domain functionality to build into web
service
Scope a first release with low risks and strong
business impact
Select connectivity a new functionality that isreusable or anticipate an application replacement
Connec-tivitylayer
First release
new
Roll-out and
adjust road map
Extend web service model
Gradually renovate or replace existing applications by moving
applications into domains (e.g., printing services, customer
information, credit applications), including sunset domain
Joint ownership of domain design and segregation by IT and
business
Adjust role and skill
of IT organization
Establish architecture board (business and IT) to
manage web services domains
Revisit business priorities and road map
Establish clear SLAs for each domain
Source: McKinsey & Co.
Unit of measure
Migrate via managed evolutionMigrate via managed evolution
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Current Business impact Target
Curren
t
ITeffic
ien
cy
Targe
t Long lead time to delivery with
little business impact during
the interim Solution likely not well aligned
with business needs
Unrealistically fastIT response
required to deliver
business value Results in
unsupportablespaghetti IT
systems
Architectural
island 1
While the typical IT
path returns little
short-term
business impact
and the typical
business pathcreates an
inefficient IT
architecture,
stepping stones
balance business
impact with
efficiency
Typical
business
path
Typical
IT pathArchitectural
island 2
Architectural
island 3
Target to-be
architectureCity-planning
approach
Source: McKinsey & Co.
g gg g
Unit of measureKey TakeawaysKey Takeaways
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Business architectures are under unprecedented pressures to
change
Flexibility to unbundle, decompose, and reshape has strategicvalue
IT architects must help to enable these changes and the SOA
model together with emerging technology underpinnings offerhope for success this time around
Aligning architecture management around business domainsfacilitates the shift in perspective
But managing domains of services demands fundamentalchanges in the way IT is governed
Key TakeawaysKey Takeaways
Unit of measure
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Thanks!Thanks!Roger Roberts Partner, McKinsey and Company
Business Technology Office
Palo Alto, CA
+1 650-842-5864
mailto:[email protected]:[email protected] -
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