0. What is the Value of Architecture
In collaboration with
Microsoft Architect Insight Conference
What is the Value of Architecture
Drive the Debate
Andrew L Macaulay
Global Head of Architects Community
March 2006
© 2004 Capgemini - All rights reserved

1. Agenda Introduction Issues Facing Business How Can Architecture Help?
What Does Service-Oriented Architecture Add?
Critical Success Factors
Summary
Copyright © 2006 Capgemini - All rights reserved
March 2006
© 2004 Capgemini - All rights reserved

2. Introduction What is the true value of architecture? Cost Reduction?
Risk Reduction?
Improved Business/IT Alignment?
Improved Business (and IT) Agility?
And how does the culture and behaviour of an organisation affect the outcome?
To answer these questions, we need to understand …
What we mean by Architecture
What we mean by Value
And how we might start measuring Value
Copyright © 2006 Capgemini - All rights reserved
March 2006
© 2004 Capgemini - All rights reserved

3. Architecture means different things to different people
Enterprise Architecture
Business Architecture
Security Architecture
Enterprise
Governance Architecture
Enterprise
Solution Architecture
Information Architecture
Enterprise IT Architecture
Enterprise IT
Information Systems
Architecture
Enterprise IT
Technology Infrastructure
Architecture
Software Architecture, Network Architecture, Storage Architecture…
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March 2006
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4. Aligning Business Strategy and Project Delivery
Enterprise architecture represents the desired future state of the business & IT landscape
Enterprise Architecture Transition Roadmap (As-Is to To-Be)
Business Strategy
Roadmap represents the “route” to realising strategic business & IT goals and the EA vision
IT Strategy
Enterprise Business & Information Architecture
Are the target architecture & defined standards still “fit for purpose”?
Influence choice & timing of projects to ensure progress along the roadmap towards the EA vision
Is the EA roadmap still taking us where we want to go?
Enterprise Architecture Governance
Enterprise IS & IT Architecture
Business & IT Project Prioritisation & Planning
Are projects getting expected value from the architecture?
Ensures “project level” architecture work is properly planned & costed
Enterprise architecture establishes and sets the standards by which solutions should be architected, and provides guidance across the project delivery lifecycle
Is the architecture being complied with in the way we want?
Project Delivery Lifecycle
Project Initiation & Start-up
Business Case
Project Mandate
Project & Stage Plans
Project Execution
Project Closure
Transition to Run
Solution Outline
Solution Design
Build/Test Cycle
Deploy
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March 2006
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5. Value is also measured from an individual viewpoint
Increasing Business Advantage
Increasing Business/IT Alignment
Improving IT/Project Effectiveness
Reduced IT Complexity
Reducing Cost of IT
CEO 
CIO
CFO
IT/System Manager
Business Manager
Indicative Example Only
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6. Issues Facing Business Today
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7. Many Business Drivers – Often Conflicting
Cost reduction
More value from IT
More flexible IT
Cheaper solutions and faster
Reduce project failures
Integrated and interoperable information services
Better service from SOE/SOA solutions
Guarantee of Quality
Compliance …
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March 2006
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8. Typical Current State – Project-focused Silos
There is rarely an alignment of functional requirements across business units and even less often alignment with service level and other non-functional requirements across the business
Business or Organisation
Business Unit A
Business Unit B
Business Unit C
Business Unit D
Processes optimised for specific BU requirements result in considerable overlap and redundancy
70% of IT projects fail to deliver their expected results because of this ‘silo’ mentality
With increased complexity and integration of function, cost of change and maintenance is increasing
Business processes
Business processes
Business processes
Business processes
Functional Requirements
Version 1
Functional Requirements
Version 2
Functional Requirements
Version 3
Functional Requirements
Version 4
Infrastructure and Governance
Infrastructure and Governance
Infrastructure and Governance
Increasing complexity = increasing £££ for each change
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9. IT Landscapes often locked in a ‘vicious circle’
Continual business improvement and new initiatives are inhibited by IT due to the slow and costly nature of implementing change
Things have been made worse by projects attempting to deliver in an isolated fashion to bypass inhibitors – but this has only resulted in further constraints for subsequent projects in the medium term
CxOs often cannot understand why relatively straightforward business changes are costly, risky and slow to implement
Copyright © 2006 Capgemini - All rights reserved
March 2006
© 2004 Capgemini - All rights reserved

10. How Can Architecture Help?
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11. The Four Quadrants of Enterprise Architecture Value
Expand IT Reach
Increase Business Agility
You can collaborate more effectively than your competition with your customers, suppliers and partners through your IT
You can continuously adapt your business more quickly and with lower risk than your competition by changing your IT
Increase
Value
Increase Project Success
Reduce IT Cost
You can significantly improve your success with your investment in IT-enabled business projects
You can deliver new IT solutions and manage your existing IT services at lower cost than your competition
Reduce Cost
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12. Where Does the Value Come From?
Business Strategy and Goals
Increased Understanding of the Business
can drive
Reducing complexity of IS & IT systems
Enabling consolidation of servers
Enterprise Architecture Capability and Governance
Holistic View of Business & IT Systems
Reducing project risk
Reducing Costs
Improving Project Success
Enterprise Architecture
Technology and Systems Roadmaps
Integrating existing systems easier
Value to the Business
More Reactive to Business Change
Project Portfolio Management
Consistent (or Managed) View of Non- functional Req
Availability and reuse of shared services
Enabling Competitive Advantage
Innovating & leveraging new technologies
Solution Architectures
Design with Knowledge of Context and Enterprise
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13. Understanding the Different ‘Types’ of Value
Small % decrease in costs frees significant % increase in ability to invest
Architecture can enable
Business Benefit
Compliance
What you have to do to be in business
Cost
What you have to do to run your business
Compet- itiveness
Improved responsiveness to Business Change
Increase flexibility within the Business and IT
Innovation/leveraging of new technology
Reduced costs of environment
Increased project success
Reduced project risk
Leverage new capabilities for competitive advantage
Reduced costs
Spend
Based on Maslow's Hierarchy of Needs
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14. Taking a Holistic View of the Architecture
WHY?
Contextual
Information Systems
Technology Infrastructure
Business
Information
Security
Governance
WHAT?
Conceptual
HOW?
Logical
WITH WHAT?
Physical
Integrated Architecture Framework, version 3.9, Copyright © Capgemini
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March 2006
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15. Architecture Maturity/Culture Affects Delivery of Value
Level
Reduced Cost/Risk
Biz-IT Alignment
Added Value -1
Not Needed
Not Understood 1
Appreciated 2
Product Standardisation ££ 3
Strategy Development 4
Architecting Projects
£££ 5
Enterprise Architecture Development
££££ 6
Enterprise Architecture Service
Indicative Only
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March 2006
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16. Where Does Service-Oriented Architecture fit?
Moving to a Services view of the world …
Fosters reuse
Enables flexible Orchestration rather than fixed process
Allows you to leverage virtualisation and consolidation
Traditional organisation
Tightly coupled processes/systems Stovepipes - Integration “spaghetti”
Services organisation
Loose coupling of processes/systems
Service Webs - Standard Interfaces TO
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17. SOA Delivering Business and IT Value
Externally created Value
through more efficient
market interaction
Service-Oriented
Enterprise
Internal Value created
through process
redesign
Service-Oriented
Applications
Internal Cost
Reduction by shared
resources
Service-Oriented
Infrastructure
Mobility
License cost
savings
Process based
Platform Rationalisation
Storage Area Networks
Server Virtualisation
Grid Computing
Security
Web Services
Business Intelligence
Management tools
Development Tools
Service Orientated Architecture
Mobility
Event Driven
Real Innovation
………… etc
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March 2006
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18. Measuring Value (Quantitive and Qualitative) Examples
Reduced Project Risk and Complexity
Reduction in project over-runs both in terms of cost and time without reduction of required scope
Improved Project Success
Measure around quality of solution; the delivery on-time and within budget
Cost Control and Improved ROI
Measuring ROI of projects over time – there is, however, an investment cost to start this (building reusable services)
Reduced Costs for Business As Usual
Operational costs of the IT estate to reflect the total cost of ownership and does not just shift (hide) costs elsewhere
Facilitate Delivery of IT Strategy
Progress in the delivery and sustaining of the IT Strategy, which itself will be delivering Value through IT 
Improved Business Requirements
This should become visible through better development metrics around faults due to incorrect requirements
Better Alignment with Business
Quality-related feedback from the business, for example through annual surveys
Increased Agility & Competitiveness
IT seen as an enabler and partner with the business and not just a cost and constraint on the business
Improved Business Knowledge
Measure through effect, with the business becoming better connected, business units able to see themselves in context
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March 2006
© 2004 Capgemini - All rights reserved

19. Case Study: National Assembly of Wales
£500k avoided cost in one year joining up projects and delivering common requirements as corporate services rather than siloed functionality
Currently predicting over £2m of avoided integration cost across 3 projects by taking an enterprise view early in the project lifecycle
The are indications (although not fully quantified yet) from projects that have worked independently to meet siloed needs, that the cost of ignoring the Architecture are orders of magnitude higher than aligning to the Architecture
Copyright © 2006 Capgemini - All rights reserved
March 2006

20. Capgemini Research: Added Value of Architecture
Used Six Sigma methodology for analysis
Work to date summarises the first results of the research of benefits of architecture and other factors on project results. A sample is shown on this page
The results are based on a survey of 30 projects. Currently developing revised figures based on between 100 and 300
A 95% confidence level is used to test the significance of our hypothesis
Role of Project Architecture
Role of IAF
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March 2006

21. Summary
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22. Critical Success Factors for Enterprise Architecture
Connect
Deliver
Developing an EA Capability is a major change programme that will not happen in a few months (acknowledge/plan for this)
Strong executive sponsorship from within IT and Business
Work collaboratively with both business and IT as partners
Regular targeted communication with both the Business and IT, effectively driving a Marketing Plan
Understand key stakeholders and communicate specifically with them
Make your success and value visible
A common language/framework and approach, with supporting tools if appropriate
A clear governance model over projects/Solution Architectures, including sufficient Authority
A pragmatic approach so that you can delivery some results early and you are not seen as just an ivory tower doing strategy stuff
Architecture is a living thing. Use feedback from projects to learn and track the changing priorities and goals in the business
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March 2006

23. Critical Success Factors for Solutions Architecture
Governance
Approach
Work collaboratively with both business and IT as partners
Leverage and conform to the Enterprise Architecture
Work under the right level of EA governance and provide the right level of solution governance to the design/engineering teams
Reuse services and infrastructure wherever possible and appropriate
A common language/framework and approach with supporting tools, if appropriate
Solution Architects with the correct mix of Business and IT skills, and subject-matter-specialists available, maybe through a ‘T-model’
A pragmatic approach, knowing where to focus and when to stop (when it is ‘good enough’)
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March 2006

24. Summary Enterprise Architecture is a journey
The business change to implement the capability, the evolution of the Architecture itself, the cycle of awareness to acceptance to adoption of the approach, the change it can foster in the business …
Governance, Authority and Sponsorship are critical
Getting a governance model that reflects the corporate culture but can deliver the goods, together with the authority and support are critical for EA to be able to function – and then deliver value
Communication is key
As with Architecture as a whole, communication of the EA function, the Architecture and the value is something that needs to become business as usual
Value is ‘in the eye of the beholder’
Value can come in many forms - never forget that you must understand the business context, culture and stakeholders to be able to really demonstrate value
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March 2006

25. Andrew L Macaulay andrew.macaulay@capgemini.com www.capgemini.com
© 2004 Capgemini - All rights reserved