Big Data

Enterprise IT Architecture: Goals, Trends and Perspectives

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An IT department manager’s primary responsibility is to satisfy and respond to the needs of the business. For many IT managers, responding to evolving needs is the challenging part, with 90 percent or more of their department’s time spent reacting to current situations and merely 10 percent of staff time allocated to innovative activities that may lead to new business opportunities. For example, interest and growth in the use of mobile devices and mobile application platforms allows greater flexibility in a workforce that may result in greater productivity and profitability, but developing such solutions takes considerable IT resources. Unfortunately, many managers can’t dedicate staff to investigate, design and implement new technologies and applications to support mobile workers.

Practical approach to future requirements

The practical approach to putting more focus on future requirements is to develop a long-term IT strategy including multi-year objectives, activity planning and staff requirements to support evolving business needs and interests. This approach requires investment of time and personnel to satisfy today’s requirements while identifying and reserving resources to spend in support of future projects. The strategy supports the company’s strategic goals and takes into consideration known business risks and opportunities. Corporate goals may include becoming a leader in a particular market, reaching a particular portfolio size, ensuring the launch of a number of products within a given period of time, etc.

Enterprise architecture is designed to lead IT activities according to the greater needs of the company and provide opportunities for innovation within a business strategy. IT goals are then aimed at either achievement of business goals or allowing a company to pursue something new.

Prospective strategic IT goals include:

  • Implementing a new business process management methodology
  • Automating and optimizing primary business processes
  • Supporting new products
  • Adapting IT systems to meet new market requirements
  • Estimating required investments in technology modernization
  • Calculating potential financial and efficiency returns from the strategic IT plan.

To aid the formulation of a strategic plan, IT managers find it helpful to adopt an enterprise architecture framework to define, organize and structure technology and application and staffing requirements in support of a company’s strategic goals.

The Zachman framework (illustrated in Figure 1) is a particularly helpful framework to employ; it’s a formal and highly structured way of viewing and defining enterprise architecture. The Zachman framework is possibly the best such business architecture framework for analysis of an enterprise IT strategy as it identifies individual components in a strategy as they relate to processes, organizational structure and key stakeholders.

This framework is a two-dimensional depiction of an enterprise, equally applicable to companies ranging from financial, healthcare or manufacturing markets, allowing assessment of the dependence of each component within an architecture supporting a company’s strategic goals (Figure 1).

1. zachman

Figure 1: Current Zachman Framework

Source: Zachman International

In the Zachman framework, the columns of the table represent basic questions (What? How? Where? Who? When? Why?) based on the goals set by the enterprise. Rows represent viewpoints from stakeholders such as senior management, business directors, architects, engineers, subcontractors and end users. Basic models appear at the intersection of columns and rows, excluding irrelevant information, allowing staff to focus on the most important aspects of a support plan.

While evaluating and designing prospective enterprise architectures and analyzing associated models, it’s essential to be aware of which components of the architecture are dependent on others. In particular, the following three factors should be considered.

  1. Operational productivity. If an operation such as uploading a document into a system takes five minutes and the company processes 50,000 documents per month, then by reducing the time to three minutes, the company saves over 20,000 working hours per year! For financial companies, where most of the expenses are salary costs, every second the user spends waiting on system response costs the company money. In most cases, highly efficient information systems, as well as those that support great availability, provide a quick return on investment and significantly contribute to a company’s profitability.
  2. Optimization of business processes. A comprehensive approach to system architecture and strategic support planning should include an analysis of the entire process, not just its separate parts. For example, a loan application process may take a long time to complete because the person responsible for risk analysis is consistently busy processing manual tasks and performing routine data look-ups. A process-oriented solution to this business problem may be to automate some of the approval process and limit human involvement to allow more applications to be processed in a given period of time.
  3. Mass customization. It’s commonly understood and agreed that responding to customer needs, particularly in the early stages of product and service development, is very important. Customer involvement results in greater levels of client and market satisfaction. If there’s a disadvantage of this model it’s that extensive customer involvement often results in slower development and is more costly than developing with lesser direct customer input.

However, while lesser customer involvement in a development results in less cost and time to launch a product, there’s an increased likelihood that customers will have to adapt to the product once it’s made available for market consumption. Customer adaptation may result in less satisfaction and end-user use of a given product or service.

An alternative solution to meeting customer needs may be customizing components for assembly into a final product. This can offer a best of both worlds’ solution where customers can customize elements of a solution without creating a wholesale change to the product or service being developed or adding extensive cost or time to launch a product.

Situation assessment

Until recently, common enterprise IT strategies were comprised of CRM and ERP systems. While these systems offer a level of flexibility and automation to critical functions within a company, the disadvantage of this approach is other areas of the business often aren’t integrated or able to take advantage of sharing data and information interdepartmentally.

For the past five to 10 years, a new trend has emerged to integrate all business functions and build on the ability to share meaningful data throughout an enterprise. This has resulted in more flexible and shared applications such as business process modeling and process management through BPMS (Business Process Management System) and ESB systems (Enterprise Service Bus), as well as new solutions that track the dynamics of enterprise processes and automation. Such solutions are known to significantly increase the efficiency of management decisions.

An advantage of the new BPMS and ESB implementations is not only the possibility to provide flexible business process automation, but also supporting the company with a full-scale integrated platform comprised of all available and new information systems. IT services and applications can be integrated more easily by excluding many dependencies between applications and creating configurable interfaces to integrate new services.

This results in a highly flexible and manageable enterprise-wide IT infrastructure: administrative (strategic planning and management, sales, human resources management), operational (primary processes bringing profit), support (incident management, users feedback, data storage), and investment in IT resources and support (Figure 2).

Many processes, in particular those related to investment, are often outsourced. Even for large enterprises, it remains costly to continually develop internal IT resources to meet the needs of evolving technology initiatives and trends. Countries such as Ukraine, widely recognized as a technology-rich country of leading software development and implementation service providers, continue to provide such outsourcing services to companies worldwide.

 Figure 2: Business Processes

© 2012. SoftServe Inc.

While optimizing processes it is also important to realize the difference between processes and practices (Figure 3).

 Figure 3: Processes and Practices

© 2012. SoftServe Inc.

A common misconception among developers is that standardization of all tasks within a process often leads to project failure. The most efficient way to handle tasks (fully standardized operations) is to fully automate them. While automation is the goal, developers must realize business processes involve both automated and manual functions, requiring the participation of a human. An example is loan approval overseen by a credit committee whereby routine tasks can be automated and exceptions can be handled by expert human involvement. In this case, software’s role is to provide as much useful information as possible for decision making.

Forecast and outlook

Solutions addressing these challenges have matured over the last three to five years. Among business process management systems, the most popular in the CIS market are IBM Business Process Management 7.0/7.5, Oracle Business Process Management Suite 11g, Software AG and Pega SmartBPM. Microsoft SharePoint’s 2010 platform has grown in popularity, originally designed as a platform for content management equipped with flow control tools. Among case management systems, it is worth mentioning Pega, Singularity and HandySoft.

According to a Gartner forecast, as soon as 2013 these systems will replace the traditional BPM / ACM solutions. Experts tend to agree that by 2014, 40 percent of global companies will be using business process management, considerably more extensively employed than in 2009, when only six percent of companies reported the use of business process management systems.

It’s important to note implementation of business process systems requires commitment from the entire company, not just one department or organization. Successful implementations are based on corporate-wide information architectures. An example is the IBM Banking Reference Architecture.

 Figure 4: IBM Banking Reference Architecture

Source: IBM

IBM’s reference architecture is an ESB used for system integration and coordination of business processes using BPMS systems. Users access the system through standardized interfaces and protocols (branch offices, ATMs, the Internet and mobile devices), integrating with external clients using standard B2B interfaces.

Analysts predict the market for Business Process Management System (BPMS) will continue to grow through the next decade.

 Figure 5: BPMS in Gartner Hype Cycle

Source: Gartner

Systems such as these are an evolution of older ERP systems, which performed fairly static functions of accounting and statistics. These systems existed prior to implementation of more dynamic solutions that more accurately reflect actual enterprise-wide business processes. Here are more trends to note:

  • BPM and case-management approaches combine into one system
  • Document workflow functions are added to BPM for improved integration with ASM systems
  • Mobilization of business processes to extend services to mobile devices
  • Modeling standardization (using BPMN 2.0)
  • Employee collaboration (Social BPM)

Companies are benefiting in new ways as a result of the most recent trends, such as:

  • Management of different types of processes (both standard and customized) with increased flexibility to meet customer needs and market requirements
  • Optimization of the process timeframes, both from beginning to end and the time assigned to certain steps in the process
  • A single integrated platform at the enterprise level for all existing IT systems and applications
  • Modeling and automation of business processes are partially or wholly outsourced to IT companies

While many IT managers struggle to respond to their company’s evolving needs, there are proven methods they can employ to help them develop long-term IT strategies to support new business opportunities. While practical approaches to IT planning remain viable, BPMS and ESB systems provide greater flexibility than their CRM and ERP-based predecessors. As BPMS and ESB systems continue to mature, the solutions they support are expected to significantly increase the efficiency of management decisions, further raising the profile of IT departments and their value to an enterprise.

IT managers will always face struggles of one kind or another, but the struggle between supporting existing applications and business process or new business opportunities is nearing an end. Balanced support between the two needs is possible and an achievable reality.

Serhiy Kharytonov is CTO, and Oleksandr Sukholeyster is technology consultant for SoftServe, Inc., a leading global provider of software development, testing and technology consulting for Independent Software Vendors (ISVs) and software-enabled enterprises. Serhiy Kharytonov is responsible for developing and driving SoftServe’s strategy for independent software vendor & enterprise consulting services. He can be contacted at [email protected]. Oleksandr Sukholeyster is focused on enterprise architecture and information management technologies, including BPM, SOA, Big Data, Enterprise Security, and Content Management. Oleksandr can be reached at [email protected].

 

Comments

By Vladimir Trukhin

Hi!

What is a source of statement “with 90 percent or more of their department’s time spent reacting to current situations and merely 10 percent of staff time allocated to innovative activities”?

Kind regards,

Vladimir

By Oleksandr Sukholeyster

The 90/10 rate (it’s even more than Pareto’s 80/20) is from our experience with enterprise client, which also is confirmed by CEO/CIO we are communicating with. As enterprise methodologies and frameworks suggest at their basic levels, Business is pulling IT (reaction) and in turn, IT is pushing Business (innovations, enablers), there is huge disproportion in efforts spend for reacting and innovating. One of reason is risks of investments into innovations. Average company will rather spend money into questionnable automation, than into risky innovation.

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