Gail Verley: Assistant Director Enterprise Architecture, FDIC Enterprise Architecture: a focus on Communication and Stakeholder Engagement Gail Verley: Assistant Director Enterprise Architecture, FDIC

Goals/Scope of Presentation How to obtain high level stakeholder involvement in EA governing processes and address major challenges for building stakeholder engagement Identify vehicles to communicate with EA stakeholders while ensuring the architecture accommodates the style and priorities of the stakeholder community Provide examples of how stakeholder involvement can lead to consolidation and better management of IT investments Introduction: The thesis of this presentation is rooted in the proper modeling of EA governance. The development of specific tactics to attack a set of business circumstances should be a goal of any EA program. In the case of this presentation we will explore both general strategies to maximize EA success, as well as look at the FDIC’s EA model.

FDIC Organizational Profile An independent agency of the federal government that was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. Examines and supervises about 5,300 banks and savings banks. The FDIC is managed by a five-person Board of Directors, appointed by the President and confirmed by the Senate, with no more than three from the same political party 2006 proposed corporate operating budget- $1,050,075,522 2006 IT Budget-$170,336,799 Currently employs 4,466 people throughout the US (267 IT employees) Washington, D.C. Headquarters (209 IT employees) 6 Regional Offices (58 IT employees) First we’ll have a little history lesson to help familiarize you with the FDIC and give a frame of reference for the scope of our EA program

The FDIC utilizes EA to meet several business efficiency needs The FDIC utilizes EA to meet several business efficiency needs. The following slides document both the Corporations established Governance systems as well explores the theory behind those systems. This area of the presentation should answer the What? The How? and the Why? Of the FDIC’s architecture program Architecting the FDIC: A study in information integration and business alignment

Enterprise Architecture Run-down Architectural Framework blueprint of beginning to end progression integrates agreed upon goals to contrive a target architecture a continual process We are going to begin with a quick analysis of key components of EA that make it a successful business strategy. The first is to establish a blueprint for EA activities that documents the goals, strategies, and responsibilities relevant to the EA process Once the overarching/theoretical map is drawn, the next step in the EA discuss the step by step process of architecture Recognize that Enterprise Architecture is a work in process, and the process is continual and even repetitive so long as it is successful and in-line with target architecture goals.

Architecture Process Business needs and requirements Simply the theory behind implementing the Architectural Framework The process is manifest by advancing changes that are new and improved combined with the elimination of unnecessary systems or processes.  To support these process changes EA provides a data perspective, application perspective, technical perspective, and redefines the “people” perspective -Business needs and requirements provide the forward propulsion in the process as explained in the previous slide. -Those needs are then funneled thought a people perspective, a data perspective, an application perspective and finally a technical perspective: all contributing to the EA blueprint development that moves a business from mapping an EA strategy to target architecture, concluding with the elimination of worthless systems - The EA process, in specific terms, needs strict guidance and mapping to be carried out correctly. -Just as any one particular business process should have a start and end point, a problem and a solution, a foundation and a goal,-so too does EA. -The procedure by which Enterprise Architects carry out their intended goals is usually an Enterprise Architecture Blueprint. -This plot is designed with strong EA consideration and intended to meet target architecture in the most efficient way possible Step by step process in action Evaluate current architecture Strategize and carry out the transition blueprint To meet the intended outcome of target architecture Eliminate Worthless Systems

FDIC’s Architecture Framework This image depicts the architectural framework and the process of EA implementation that the FDIC follows. Talking Points: (from left to right in the picture) 1. Architecture is driven by business and design aims. These fuel the process from inception to completion 2. Those drivers force the evaluation of Current Architecture in the areas of business, data, applications, and technology which represent the critical architectural segments that build the goal architecture 3. Once the current status is broken down and business and design needs are set, a transitional plan is created with EA standards as the guiding principles. 4. The transitional phase is a continual process until the target business, data, applications, and technology are met.

Architectural Blueprint Conduct Business Process Reengineering Determine the scope and set strategy Analyze the business Analyze the information technology Construct a business case to support business needs Execute O&M strategy for minor recommendations Implement solution and conduct management tasks Conduct Business Process Reengineering Define detailed solution architecture Conduct data Standardization Now that we have outlined both the FDIC development and deployment of EA systems, and the creation of those systems in general, here is a step by step guide to developing the architectural blueprint: Determine scope and set strategy-seemingly logical first step, but vital as mentioned above. All actions in EA development should be guided by an overall strategy and goal so as to maximize efficiency and eliminate worthless systems Analyze the business-once the goals are constructed, the next step is to analyze the business. Identify problems, inefficiencies, think critically/outside of the box with a perspective to make the business processes of your specific organization meet EA ends Conduct business process reengingeering Analyze the information technology-once a business evaluation has been completed, the next step is to break down the nuts and bolts of a given businesses info tech. Which processes can be streamlined? How up-to-date is your technology? How does your business utilize IT? Construct a business case to support business needs-combining the status of both the business and IT, build an economic case to justify and meet business ends. a. Execute O&M strategy for minor recommendations b. Integrate major recommendations into investment requests Define detailed solution architecture Implement solution and conduct change management tasks Maintain the blueprint and the architecture Integrate major recommendations into investment requests Maintain the Blueprint and the architecture

Enterprise Architecture Repository (EA-Rep) 2005 Accomplishments January – Troux Contract Award Acquired Metis COTS product and implementation services April – Pilot Project Completed pilot project Iterative deployment plan developed Assembled requirements and extended model for v1.0 September – Production Release 1.0 Application, Project , and Organization Domains Retired CDR reporting tools Assembled requirements and extended model for v2.0 December – Production Release 2.0 CDR retired/replaced Business domain, security layer added to applications domain Custom UI for Application Managers 2006 Scheduled Activities June – Production Enhancement 2.6 Enhance/modify security layer Augment search capabilities for applications, applications systems, and projects Update associated reporting October – Production Release 3.0 Upgrade to Metis 5.5, Client Tools 5.2 Upgrade production hardware Extend model Implement Infrastructure and Data Domains Implement refinements to existing domains Expand Reporting Integrate FDIC-specific help facility December – Troux Contract Ends

Engaging the Stakeholder Now that we have discussed the important prerequisites to the development of a workable EA system, we will now discuss some specific strategy aims that aid in the smooth functioning of an EA Framework The first of which is engagement of the stakeholder…

Who are Stakeholders? Defined: an individual with a vested interest in the results of IT solutions and implementation. Include: business owners, data owners, developers and technical infrastructure operational staff We begin with the obvious and necessary question when it comes to stakeholder engagement, Who are the stakeholders? -individuals that have a vested interest in the results of IT solutions and implementation. Who does that include? -business owner -developers -technical infrastructure and operational staff

10 Ways to Maximize Stakeholder Engagement 1. Executive Management Buy-in 2. Connect Business Goals with IT 3. Link pay and performance with IT projects 4. Communicate Objectives Frequently 5. Clearly Defined Principles 6. Demonstrate Benefits 7. Govern from Different Perspectives 8. Active Leadership 9. IT gets a seat at the Business table 10. Recognition and Success shared by all There exist several mechanisms by which one can maximize stakeholder engagement in architecture goals. The most effective strategies are outlined in the diagram, and show the progression of stakeholder engagement in EA standards of governance. 1.Executive management “buy-in” provides the leadership and vision for ensuring that EA is considered when determining strategic and tactical IT investments 2.Business accountability for IT projects provides a direct link for achieving the business value of the IT solution and ensures that the success of the implementation is dependent upon the business engagement in developing the solution. 3.Linking pay and performance to IT investment success places financial value on the outcome and, therefore, the commitment of resources to successfully implement the results 4.Frequent communication of objectives, strategies and activities is key to ensuring that all affected parties are up to date on the project status, as well as the short-term and long-term results anticipated by the EA initiative 5.Clearly defined principles of EA are essential for the EA program to evolve. 6.Demonstrated tangible benefits to stakeholders with metrics such as cost savings, reduction in the duplication of IT technologies, and improved IT performance must be documented and tracked 7.Governance bodies based upon the types of decisions that are required by the IT solution are established and actively engaged in IT management. A well-designed IT governance arrangements distribute IT decision making to those responsible for outcomes. (Weill and Ross (2004)) 8.Stakeholders are given responsibilities in leading and participating in IT strategic initiatives 9.IT management has a seat at the business strategic table so that business strategies consider IT as a contributor, not simply the means to achieve the business result. 10. Successes are celebrated and all participants are recognized for their contribution

Why is stakeholder engagement is important? Stakeholder engagement is critical to applying enterprise architecture EA principles and methodologies in order to achieve value from information technology IT investments Multi-layered perspectives and comprehensive strategies result from high levels of stakeholder engagement in EA, from a project’s inception to completion Stakeholder experience and subsequent foresight of obstacles in respective program areas can prove invaluable to the smooth process toward target architecture. At this point in the presentation it should be fairly clear that EA is made viable by its ability to gather different viewpoints on the existing status of a business and transform those viewpoints into a workable solution to existing problems. Given that understanding, the level of stakeholder engagement in the EA process is tantamount to its success

Application Rationalization Effort Example PROBLEM Many organizations accumulate large and technically diverse portfolio of systems Unmanaged, this portfolio is too expensive and unresponsive to change. The result, restricting the organization from taking on IT initiatives that are strategically important to its mission FDIC SOLUTION Engaged both the IT Department and Business Stakeholders in a systematic and joint effort to make targeted reductions in the inventory of applications This effort served to raise the awareness of staff and management throughout the FDIC of the life-cycle costs of applications and the increasing need for application integration and consolidation This allowed the FDIC implement several new enterprise-wide integrated applications that not only met the need to improve business operations, but at the same time, replaced older, stove-piped legacy applications.

Corporate Data Sharing CDS Data Families FDIC Conceptual Data Model describes the relationships between FDIC's data across the data families and the entire enterprise The Collaborative Working Groups (CWGs) were established to verify that the data has been defined and categorized correctly in their data family. The corporate data sharing procedure at the FDIC is premised in an effort to increase efficiency of data and information sharing at the FDIC, both interagency and between agency and client. The corporate data sharing program in particular has been a great success of the FDIC. Transition Moving past the concept of data sharing, lets now discuss the actual CDS program at FDIC Data Families: 14, Administrative, Facility and Support Service Data, Corporate Training Data, Enterprise Operating Data, Information Resources Management Data Received industry recognition for the Corporate Data Sharing program and work with CWGs from the Zachman Institute for Framework Advancement (ZIFA)™ Enterprise Architecture Excellence Award. This prestigious award was bestowed to FDIC as a direct result of the CDS program and participants

Bank Call Reports Use XBRL FDIC is one of the biggest proponents of XBRL 8,200 U.S. banks use XBRL to submit balance sheets and income statement reports. XBRL has proven its value: All XBRL-tagged data received from banks was 95% accurate, compared with 70% accuracy before implementation An analyst who could handle 450 to 500 banks before implementation can now handle 550 to 600 of them. What is it? The idea behind XBRL, eXtensible Business Reporting Language, is simple. Instead of treating financial information as a block of text - as in a standard internet page or a printed document - it provides an identifying tag for each individual item of data. Banks and other financial services firms could use XBRL to label and automate the content of financial documents. XBRL places a unique tag on, say, a company's net profit figure. The software then selects, sorts, stores, and exchanges tagged information with other companies or regulators, without having to manually re-enter numbers and copy them to spreadsheets. Accountants "can perform analysis of a company, of a sector, of a specific topic in a matter of seconds, instead of spending all their time finding the data, accessing it, and validating it…Mike Willis, a partner at PricewaterhouseCoopers and founding chairman of XBRL International Regulators say XBRL is helping banks - Generate cleaner data, including written explanations and supporting notes - Produce more accurate data, with fewer errors that require follow-up by regulators - Transmit data faster to regulators and meet deadlines - Increase the number of cases and amount of information that staffers can handle - Make information available faster to regulators and the public - Address issues and concerns in their filings rather than after the fact Data: Federal Financial Institutions Examination Council The FFIEC reports that only five percent of Call Reports in the most recently finished quarter-the first using XBRL tagging-set off audit flags. That compares with about 33 percent in prior quarters "That's the 'Wow,'" says Dan Roberts, chair for the XBRL-U.S. Steering Committee Consortium. "The FDIC is only now entering its fourth reporting cycle using this new environment. They went from 66 percent data accuracy to 95 percent data accuracy within the first quarter it was implemented."

Maximizing the Impact of the Stakeholder Ultimately stakeholder compliance with EA must be governed through a comprehensive system that divides responsibilities to take full advantage of individual strengths as well as increase the efficiency of the corporate structure There exist a few mechanisms to reach this end. Two of the most important and effective are Established Governance Systems and Business Metrics In theory, incorporating the viewpoints of all relevant entities into a melting pot of beneficial business ideas sounds great, however it is easier said than done. -It is essential that a chain of command be developed, through which the multitude of business and IT ideas are channeled and cultivated -This point is further established in the next sections that speak to the construction of a governance system to direct EA proposals and initiatives

Governance Structures Coupled with the engagement of stakeholders, the establishment of a cooperative and planned governance structure is critical in the smooth operation of EA Governance Structures

Governance Mapping A key step in the EA process is to establish a system of governance. One in which rules and order of operation are hashed out between relevant actors to meet the target architecture. Every Corporation is different, but the basic requirements for a healthy Governance body are similar to all Just as the EA process requires an overall mapping and strategizing effort, so too does the Governance system in particular. Rules and requirements, division of labor, and communication networks are all essential parts of a healthy governance body.

Model Governance Structure Requirements A governance model should have 3 key ingredients to be considered a proper body: Suitable to the needs and aims of the EA program, not excessive in its governance. Simple-Simplicity is a benefit in terms of EA governance. It should be a goal of any Governance structure to maximize corporate involvement in EA, one way to ensure that is by establishing a simple and accessible governance system that has clearly outlined goals and objectives. Transparent-Confusion and poor communication can be the death of an EA program, and in turn a governance structure. Contributing members to EA activities need a clear line of vision to articulated goals and the process of achieving those goals. A transparent governance system greatly benefits active members of an EA program as well as facilitates the achievement of target architecture

The Capital Investment Review Committee (CIRC) Comprised of Senior Level Division Directors Evaluate the impact of IT investment decisions on the Corporations capital investment portfolio Reviews proposed major investments and makes the final funding recommendations to the FDIC’s Board of Directors Indicates Success in integration of EA and the capital investment management process. PURPOSE To implement a systematic management review process that supports budgeting for the FDIC’s capital investments, once funded To develop a comprehensive capital investment portfolio, complete with ongoing analysis of investment performance that supports the FDIC’s strategic plan

FDIC Governance Bodies Capital Investment Review Committee (CIRC) CIO Council Enterprise Architecture Board (EAB) Collaborative Working Groups (CWG) Internet Coordinators Group Information Security Management Committee Technical Review Group Enterprise Architecture Advisory Forum Pass out Governance Spreadsheet

An additional mechanism that aids in the EA process from inception until completion comes in the development of business and IT metrics Metrics

Utilize Metrics Metrics guide architecture IT desirables are reflected in the IT metrics Measure accountabilities An additional means that works toward a strong EA and stakeholder engagement is the use of Metrics to guide architecture Measure accountabilities are key to any good governance system. Articulating who is responsible for what and how they will be evaluated provides clarity, ownership, and tools to assess governance performance.-Weill and Ross Metrics outline correct and optimal behavior within business and IT operations in EA. They are crafted to meet agreed upon goals and aid in the transition to target architecture. Essentially metrics put on paper desired steps in the direction of an EA goal, setting timetables to measure progression and adherence to the EA plan.

Metrics’ Importance Identify specific EA and Business related metrics early to guide decisions Enable the tracking and recording of data required to report results and evaluate the impact of EA related strategies The importance of identifying specific EA and Business related metrics early on cannot be overstated As the EA progresses there will be a need to quantify the impacts and results. Establishing the formulae for attribution of various business results to the EA and its implementation is critical to the long term success and ability of the EA to actually transform the Agency’s business Enables the tracking and recording of the data required to report results and that later will be used to determine if the cost/benefits have, are or will soon be achieved. Chris Curran March 21, 2005, Enterprise Architect It is critical that the metrics related to both the IT and the business process be established early on and that the relationships between the two are understood. It is too late to start thinking about establishing metrics after the investment has been made, installed and is either being tested or is in production

Linking Business and IT via Metrics You need at least three kinds of metrics to begin establishing a linkage from the business needs and the implementation of them as guided by EA. Chris Curran March 21, 2005, Enterprise Architect 1. Business Alignment 2. EA Compliance 3. EA Governance Each of the metric types supports the others. The EA governance metrics help management see if the processes are working. EA adoption (as measured by EA compliance metrics) is facilitated by effective governance (as measured by EA governance metrics). Finally, cost-effective delivery of business capabilities is supported by the other two. Chris Curran March 21, 2005, Enterprise Architect

Metric Types Definition Examples EA Metric Business Alignment Measures the number, completeness, and quality of business and IT capabilities delivered against those defined in the EA blueprint(s) Post implementation review that asks two questions. 1. Was the Benefit achieved 2. Has it met the Target Architecture EA Compliance Measures the number of systems and projects in compliance with EA standards New technology to meet target architecture Amount of time to implement Applications retired % reuse of standard services, patterns EA Governance Measures the degree of participation and effectives of EA governance processes and practices Quarterly Investment Project Reviews Portfolio Review by CIO Council

Lessons Learned by FDIC EA Work with and enable the business first- critical first step of any EA organization is to identify the problem/business need first and work cooperatively with Business Professionals to show the value of IT and EA setup to the Corporation. Optimize EA to enable organizational transformation- continuing on the theme of a complete and stated goal with a strategy to achieve that goal, EA allows, via open communication and cooperation between IT and EA, for a comprehensive evaluation of all business processes and IT involvement to maximize EA goals while serving IT purposes and business needs.

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