Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group.
Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.
Today, we present a sponsored podcast discussion in conjunction with the latest Open Group Conference in Austin, Texas, the week of July 18, 2011. We've assembled a panel to examine the maturing use of The Open Group Architecture Framework (TOGAF), and how enterprise architects and business leaders are advancing and exploiting the latest Version 9.
We'll further explore how the full embrace of TOGAF, its principles, and methodologies are benefiting companies in their pursuit of improved innovation, responsiveness to markets, and operational governance. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]
Is enterprise architecture (EA) joining other business transformation agents as a part of a larger and extended strategic value? How? And what exactly are the best practitioners of TOGAF getting for their efforts in terms of business achievements?
Here with us to delve into advanced use and expanded benefits of EA frameworks and what that's doing for their user organizations is Chris Forde, Vice President of Enterprise Architecture and Membership Capabilities for The Open Group, based in Shanghai. Welcome, Chris.
Chris Forde: Good morning, Dana.
Gardner: We're also here with Jason Uppal, Chief Architect at QR Systems, based in Toronto. Welcome, Jason.
Jason Uppal: Thank you, Dana.
Gardner: Jason, let’s cut to the quick here. We hear an awful lot about architecture. We hear about planning and methodologies, putting the right frameworks in place, but is TOGAF having an impact on the bottom line in the organizations that are employing it?
Uppal: One of the things with a framework like a TOGAF is that, on the outside, it’s a framework. At the same time, when you apply this along with the other disciplines, it's making big difference in the organization, partially it’s because it's allowing the IT organizations to step up to the plate within the core enterprise as a whole and ask how they can actually exploit the current assets that they already have.
And secondly, [TOGAF helps] make sure the new assets that they do bring into the organization are aligned to the business needs.
One of the examples where EA has a huge impact in many of the organizations that I have experience with is that, with key EA methods, we're able to capture the innovation that exists in the organization and make that innovation real, as opposed to just suggestions that are thrown in a box, and nobody ever sees.
Gardner: What is it about capturing that innovation that gets us to something we can measure in terms of an achievable bottom-line benefit?
Evolve over time
Uppal: Say you define an end-to-end process using architecture development method (ADM) methods in TOGAF. What it does is give me a way to capture that innovation at the lowest level and then evolve it over time. Those people who are part of the innovation at the beginning see their innovation or idea progressing through the organization, as the innovation gets aligned to value statements, and value statements get aligned to their capabilities, and the strategies, and the projects, and hence to the end of the day.
Therefore, if I make a suggestion of some sort, that innovation or idea is seen throughout the organization through the methods like ADM, and the linkage is explicit and very visible to the people. Therefore, they feel comfortable that their ideas are going somewhere, they are just not getting stuck.
Forde: There's an additional point here, Dana, to underscore the answer that Jason gave to your question. In the end result, what you want to be seeing out of your architectural program is moving the key performance indicators (KPIs) for the business, the business levers that they are expecting to be moved out. If that is related to cost reduction or is related to top-line numbers or whatever, that explicit linkage through to the business levers in an architecture program is critical.
Gardner: Chris, you have a good view on the global markets and the variability of goals here. Many companies are looking to either cut cost or improve productivity. Others are looking to expand. Others are looking to manage how to keep operations afloat. There are so many different variables. How do things like the TOGAF 9 and EA have a common benefit to all of those various pursuits? What is the common denominator that makes EA so powerful?
Forde: Going back to the framework reference, what we have with TOGAF 9 is a number of assets, but primarily it’s a tool that’s available to be customized, and it's expected to be customized.
If you come to the toolset with a problem, you need to focus the framework on the area that's going to help you get rapid value to solving your particular problem set. So once you get into that particular space, then you can look at migrating out from that entry point, if that's the approach, to expanding your use of the framework, the methods, the capabilities, that are implicit and explicit in the framework to address other areas.
You can start at the top and work your way down through the framework, from this kind of über value proposition, right down through delivery to the departmental level or whatever. Or, you can come into the bottom, in the infrastructure layer, in IT for example, and work your way up. Or, you can come in at the middle. The question is what is impeding your company’s growth or your department’s growth, if those are the issues that are facing you.
One of the reasons that this framework is so useful in so many different dimensions is that it is a framework. It’s designed to be customized, and is applicable to many different problems.
Gardner: Back to you, Jason. When we think about a beginning effort, perhaps a crawl-walk-run approach to EA and TOGAF, the promise is that further development, advancement, understanding, implementation will lead to larger, more strategic goals.
Let’s define what it means to get to that level of maturity. When we think about an advanced user of TOGAF, what does that mean? Then, we'll get into how they can then leverage that to further goals. But, what do we really mean by an advanced user at this point?
Uppal: When we think about an advanced user, in our practice we look at it from different points of view and ask what value I'm delivering to the organization. It could very well be delivering value to a CTO in the organization. That is not to say that's not an advanced user, because that’s strictly focused on technology.
But then, the CTO focus is that it allows us to focus on the current assets that are under deployment in the organization. How do you get the most out of them? So, that’s an advanced user who can figure out how to standardize and scale those assets into a scalable way so therefore they become reusable in the organization.
As we move up the food chain from very technology-centric view of a more optimized and transformed scale, advanced user at that point is looking at and saying that now I have a framework like TOGAF, that advanced user has all these tools in their back pocket.
Now, depending on the stakeholder that they're working with, be that a CEO, a CFO, or a junior manager in the line of business, I can actually focus them on defining a specific capability that they are working towards and create transition roadmaps. Once those transition roadmaps are established, then I can drive that through.
An advanced user in the organization is somebody who has all these tools available to them, frameworks available to them, but at the same time, are very focused on a specific value delivery point in their scope.
One beauty of TOGAF is that, because we get to define what enterprise is and we are not told that we have to interview the CEO on day one, I can define an enterprise from a manager’s point of view or a CFO’s point of view and work within that framework. That to me is an advanced user.
Gardner: When we talk about applied architecture, what does that mean? How is it that we move from concept into execution?
Uppal: The frameworks that we have are well thought-out frameworks. So, it moves the conversation away from this framework debate and very quickly moves our conversation into what we do with it.
When we talk about a framework like TOGAF, now I can look at and say that if I wanted to apply it now, I have an executive who has defined a business strategy, which typically is a two page PowerPoint presentation, sometimes accompanied by Excel. That’s a good starting point for an enterprise architect.
Now, I use methods like TOGAF to define the capabilities in that strategy that they are trying to optimize, where they are, and what they want to transition to.
This is where a framework allows me to be very creative, defining the capabilities and the transition points, and giving a roadmap to get to those transitions. That is the cleverness and cuteness of architecture work, and the real skills of an architect comes into, not in defining the framework, but defining the application of the framework to a specific business strategy.
Gardner: Jason, we mentioned that there is a great deal of variability in what different companies in different regions and in different industries need to accomplish, but one of the common questions I get a lot these days is what to outsource and what to manage internally and how to decide the boundaries between a core competency and extended outsourcing or hybrid computing types of models?
How does the applied architecture come to the rescue, when this sort of question, which I think is fundamental to an enterprise, comes up?
Uppal: That’s a great question. That’s one of the area where if architects do their job well, we can help the organization move much further along. Because, what we do in the business space, and we have done it many times with the framework, is to look at the value chain of the organization. And looking at the value chain, then to map that out to the capabilities required.
Once we know those capabilities, then I can squarely put that question to the executives and say, "Tell me which capability you want to be the best at. Tell me what capability you want to lead the market in. And, tell me which capability you want to be mediocre and just be at below the benchmark in industry."
Once I get an understanding of which capability I want to be the best at, that's where I want to focus my energy. Those ones that I am prepared to live with being mediocre, then I can put another strategy into place and ask how I outsource these things, and focus my outsourcing deal on the cost and service.
This is opposed to having very confused contract with the outsourcer, where one day I'm outsourcing for the cost reasons. The other day, I'm outsourcing for growth reasons. It becomes very difficult for an organization to manage the contracts and bend it to provide the support.
That conversation, at the beginning, is getting executives to commit to which capability they want to be best at. That is a good conversation for an enterprise architect.
My personal experience has been that if I get a call back from the executive, and they say they want to be best at every one of them, then I say, "Well, you really don’t have a clue what you are talking about. You can’t be super fast and super good at every single thing that you do."
Gardner: So making those choices is what’s critical. Some of the confusion I also hear about in the field is how to do a cost-benefit analysis about what processes I might keep internal, versus either hybrid or external source processes?
Is there something about the applied architecture and TOGAF 9 that sets up some system of record or methodology approach that allows that cost-benefit analysis of these situations to be made in advance? Is there anything that the planning process brings to the table in trying to make proper decisions about sourcing?
Uppal: Absolutely. This is where the whole of our capability-based planning conversation is. It was introduced in TOGAF 9, and we got more legs to go into developing that concept further, as we learn how best to do some of these things.
When I look at a capability-based planning, I expect my executives to look at it from a point of view and ask what are the opportunities and threats. What it is that you can get out there in the industry, if you have this capability in your back pocket? Don’t worry about how we are going to get it first, let’s decide that it’s worth getting it.
Then, we focus the organization into the long haul and say, well, if we don’t have this capability and nobody in the industry has this capability, if we do have it, what will it do for us? It provides us another view, a long-term view, of the organization. How are we going to focus our attention on the capabilities?
One of the beauties of doing EA is, is that when we start EA at the starting point of a strategic intent, that gives us a good 10-15 year view of what our business is going to be like. When we start architecture at the business strategy level, that gives us a six months to five-year view.
Enterprise architects are very effective at having two views of the world -- a 5-, 10-, or 15-year view of the world, and a 6-month to 3-year view of the world. If we don’t focus on the strategic intent, we'll never know what is possible, and we would always be working on what is possible within our organization, as opposed to thinking of what is possible in the industry as a whole.
Gardner: So, in a sense, you have multiple future tracks or trajectories that you can evaluate, but without a framework, without an architectural approach, you would never be able to have that set of choices before you.
Chris Forde, any thoughts on what Jason’s been saying in terms of the sourcing and cost benefits and risks analysis that go into that?
Forde: In the kinds of environment that most organizations are operating in -- government, for-profit, not-for-profit organizations -- everybody is trying to understand what it is they need to be good at and what it is their partners are very good at that they can leverage. Their choices around this are of course critical.
One of the things that you need to consider is that if you are going to give x out and have the power to manage that and operate whatever it is, whatever process it might be, what do you have to be good at in order to make them effective? One of the things you need to be good at is managing third parties.
One of the advanced uses of an EA is applying the architecture to those management processes. In the maturity of things you can see potentially an effective organization managing a number of partners through an architected approach to things. So when we talked about what do advanced users do, what I am offering is that an advanced use of EA is in the application of it to third-party management.
Gardner: So the emphasis is on the process, not necessarily who is executing on that process?
Forde: Correct, because you need a framework. Think about what most major Fortune 500 companies in the United States do. They have multiple, multiple IT partners for application development and potentially for operations. They split the network out. They split the desktop out. This creates an amazing degree of complexity around multiple contracts. If you have an integrator, that’s great, but how do you manage the integrator?
There’s a whole slew of complex problems. What we've learned over the years is that the original idea of “outsourcing,” or whatever the term that’s going to be used, we tend to think of that in the abstract, as one activity, when in fact it might be anywhere from 5-25 partners. Coordinating that complexity is a major issue for organizations, and taking an architected approach to that problem is an advanced use of EA.
Gardner: So stated another way, Jason, the process is important, but the management of processes is perhaps your most important core competency. Is that fair, and how does EA support that need for a core competency of managing processes across multiple organizations?
Uppal: That’s absolutely correct. Chris is right. For example, there are two capabilities an organization decided on, one that they wanted to be very, very good at.
We worked with a large concrete manufacturing company in the northern part of the country. If you're a concrete manufacturing company, your biggest cost is the cement. If you can exploit your capability to optimize the cement and substitute products with the chemicals and get the same performance, you can actually get a lot more return and higher margins for the same concrete.
In this organization, the concrete manufacturing process itself was core competency. That had to be kept in-house. The infrastructure is essential to make the concrete, but it wasn’t the core competency of the organization. So those things had to be outsourced.
In this organization we have to build a process -- how to manage the outsourcer and, at the same time, have a capability and a process. Also, how to become best concrete manufacturers. Those two essential capabilities were identified.
An EA framework like TOGAF actually allows you to build both of those capabilities, because it doesn’t care. It just thinks, okay, I have a capability to build, and I am going to give you a set of instructions, the way you do it. The next thing is the cleverness of the architect -- how he uses his tools to actually define the best possible solutions.
Gardner: Of course, it’s not just enough to identify and implement myriad sourcing or complex sourcing activities, but you need to monitor and have an operational governance oversight capability as well. Is there something in TOGAF 9 specifically that lends itself to taking this into the operational and then creating ongoing efficiencies as a result?
Uppal: Absolutely, because this is one of the areas where in ADM, when we get back to our implementation of governance, and post implementation of governance, value realization, how do we actually manage the architecture over the life of it? This is one of the areas where TOGAF 9 has done a considerably good job, and we've still got a long way to go in how we actually monitor and what value is being realized.
Our governance model is very explicit about who does what and when and how you monitor it. We extended this conversation using TOGAF 9 many times. At the end, when the capability is deployed, the initial value statement that was created in the business architecture is given back to the executive who asked for that capability.
We say, "This is what the benefits of these capabilities are and you signed off at the beginning. Now, you're going to find out that you got the capability. We are going to pass this thing into strategic planning next year, because for next year's planning starting point, this is going to be your baseline." So not only is the governance just to make sure it’s via monitoring, but did we actually get the business scores that we anticipated out of it.
Gardner: Another area that’s of great interest to me nowadays is looking at the IT organization as they pursue things like cloud, software as a service (SaaS), and hybrid models. Do they gather a core competency at how to manage these multiple partners, as Chris pointed out, or does another part of the company that may have been dealing with outsourcing at a business process level teach the IT department how to do this?
Any sense from either of our panelists on whether IT becomes a leader or a laggard in how to manage these relationships, and how important is managing the IT element of that in the long run? Let’s start with you, Jason.
Uppal: It depends on the industry the IT is in. For example, if you're an organization that is very engineering focused, engineers have a lot more experience managing outsourcing deals than IT organizations do. In that case, the engineering leads this conversation.
But in most organizations, which are service-oriented organizations, engineering has not been a primary discipline, and IT has a lot of experience managing outside contracts. In that case, the whole cloud conversation becomes a very effective conversation within the IT organization.
When we think about cloud, we have actually done cloud before. This is not a new thing, except that before we looked at it from a hosting point of view and from a SaaS point of view. Now, cloud is going in a much further extended way, where entire capability is provided to you. That capability is not only that the infrastructure is being used for somebody else, but the entire industry’s knowledge is in that capability.
This is becoming a very popular thing, and rightfully so, not because it’s a sexy thing to have. In healthcare, especially in countries where it’s a socialized healthcare and it's not monopolized, they are sharing this knowledge in the cloud space with all the hospitals. It's becoming a very productive thing, and enterprise architects are driving it, because we're thinking of capabilities, not components.
Gardner: Chris Forde, similar question. How do you see the role of IT shifting or changing as a result of the need to manage more processes across multiple sources?
Forde: It’s an interesting question. I tend to agree with the earlier part of Jason’s response. I am not disagreeing with any of it, actually, but the point that he made about it is that it's a "it depends" answer.
Under normal circumstances the IT organizations are very good at interacting with other technology areas of the business. From what I've seen with the organizations I have dealt with, typically they see slices of business processes, rather than the end-to-end process entirely.
Even within the IT organizations typically, because of the size of many organizations, you have some sort of division of responsibilities. As far as Jason’s emphasis on capabilities and business processes, of course the capabilities and processes transcend functional areas in an organization.
To the extent that a business unit or a business area has a process owner end to end, they may well be better positioned to manage the BPM outsourcing-type of things. If there's a heavy technology orientation around the process outsourcing, then you will see the IT organization being involved to one extent or another.
The real question is, where is the most effective knowledge, skill, and experience around managing these outsourcing capabilities? It may be in the IT organization or it may be in the business unit, but you have to assess where that is.
That's one of the functions that the architecture approaches. You need to assess what it is that's going to make you successful in this. If what you need happens to be in the IT organization, then go with that ability. If it is more effective in the business unit, then go with that. And perhaps the answer is that you need to combine or create a new functional organization for the specific purpose of meeting that activity and outsource need.
I'm hedging a little bit, Dana, in saying that it depends.
Gardner: It certainly raises some very interesting issues. At the same time that we're seeing this big question mark around sourcing and how to do that well, we're also in a period where more organizations are being data-driven and looking to have deeper, more accessible, and real-time analytics applied to their business decisions. Just as with sourcing, IT also has an integral role in this, having been perhaps the architects or implementators of warehousing, data marts, and business intelligence (BI).
Back to you Jason. As we enter into a phase where organizations are also trying to measure and get scientific and data-driven about their decisions, how does IT, and more importantly, how does TOGAF and EA come to help them do that?
Uppal: We have a number of experiences like that, Dana. One is a financial services organization. The entire organization’s function is that they manage some 100-plus billion dollars worth of assets. In that kind of organization, all the decision making process is based on the data that they get. And 95 percent of the data is not within the organization. It is vendor data that they're getting from outside.
So in that kind of conversation, we look and say that the organization needs a capability to manage data. Once we define a capability, then we start putting metrics on this thing. What does this capability need to be able to do?
In this particular example, we put a metric on this and said that the data gets identified in the morning, by the afternoon we bring it into the organization, and by the end of the day we get rid of it. That’s how fast the data has to be procured, transformed into the organization, brought it in, and delivered it to end-use. That end-user makes the decision whether we will never look at the data again.
Having that fast speed of data management capability in the organization, and this is one of the areas where architects can take a look at, this is the capability you need. Now I can give you a roadmap to get to that capability.
Gardner: Chris Forde, how do you see the need for a data-driven enterprise coincide with IT and EA?
Forde: For most, if not all, companies, information and data are critical to their operation and planning activities, both on a day-to-day basis, month-to-month, annually, and in longer time spans. So the information needs of a company are absolutely critical in any architected approach to solutions or value-add type of activities.
I don’t think I would accept the assumption that the IT department is best-placed to understand what those information needs are. The IT organization may be well-placed to provide input into what technologies could be applied to those problems, but if the information needs are normally being applied to business problems, as opposed to technology problems, I would suggest that it is probably the business units that are best-placed to decide what their information needs are and how best to apply them.
The technologist’s role, at least in the model I'm suggesting, is to be supportive in that and deliver the right technology, at the right time, for the right purpose.
Gardner: Then, how would a well-advanced applied architecture methodology and framework help those business units attain their information needs, but also be in a position to exploit IT’s helping hand when needed?
Forde: It's mostly providing the context to frame the problem in a way that it can be addressed, chunked down to reasonable delivery timeframes, and then marshaling the resources to bring that to reality.
From a pure framework and applied methodology standpoint, if you're coming at it from an idealized situation, you're going to be doing it from a strategic business need and you're going to be talking to the business units about what their capability and functional needs are. And at that time, you're really in the place of what business processes they're dealing with and what information they need in order to accomplish what the particular set of goals is.
This is way in advance of any particular technology choice being made. That's the idealized situation, but that’s typically what most frameworks, and in particular, the TOGAF 9 Framework from The Open Group, would go for.
Gardner: We're just beginning these conversations about advanced concepts in EA and there are going to be quite a bit more offerings and feedback and collaboration around this subject at The Open Group Conference in Austin. Perhaps before we sign off, Jason, you can give us a quick encapsulation of what you will be discussing in terms of your presentation at the conference.
Uppal: One of the things that we've been looking at from the industry’s point of view is saying that this conversation around the frameworks is a done deal now, because everybody accepted that we have good enough frameworks. We're moving to the next phase of what we do with these frameworks.
In our future conferences, we're going to be addressing that and saying what people are specifically doing with these frameworks, not to debate the framework itself, but the application of it.
In Austin we'll be looking at how we're using a TOGAF framework to improve ongoing annual business and IT planning. We have a specific example that we are going to bring out where we looked at an organization that was doing once-a-year planning. That was not a very effective way for the organizations. They wanted to change it to continuous planning, which means planning that happens throughout the year.
We identified four or five very specific measurable goals that the program had, such as accuracy of your plan, business goals being achieved by the plan, time and cost to manage and govern the plan, and stakeholders’ satisfaction. Those are the areas that we are defining as to how the TOGAF like framework will be applied to solve a specific problem like enterprise planning and governance.
That's something we will be bringing to our conference in Austin and that event will be held on a Sunday. In the future, we'll be doing a lot more of those specific applications of a framework like a TOGAF to a unique set of problems that are very tangible and they very quickly resonate with the executives, not in IT, but in the entire organization.
Forde: Can I follow along with a little bit of a plug here, Dana.
Forde: Jason is going to be talking as a senior architect on the applied side of TOGAF on this Sunday. For the Monday plenary, this is basically the rundown. We have David Baker, a Principal from PricewaterhouseCoopers, talking about business driven architecture for strategic transformations.
Following that, Tim Barnes, the Chief Architect at Devon Energy out of Canada, covering what they are doing from an EA perspective with their organization.
Then, we're going to wrap up the morning with Mike Wolf, the Principal Architect for EA Strategy and Architecture at Microsoft, talking about IT Architecture to the Enterprise Architecture.
This is a very powerful lineup of people addressing this business focus in EA and the application of it for strategic transformations, which I think are issues that many, many organizations are struggling with.
Gardner: Looking at, again, the question I started us off with, how do TOGAF and EA affect the bottom line? We've heard about how it affects the implementation for business transformation processes. We've talked about operational governance. We looked at how sourcing, business process management and implementation, and ongoing refinement are impacted. We also got into data and how analytics and information sharing are affected. Then, as Jason just mentioned, planning and strategy as a core function across a variety of different types of business problems.
So, I don’t think we can in any way say that there's a minor impact on the bottom line from this. Last word to you, Jason.
Uppal: This is a time now for the enterprise architects to really step up to the plate and be accountable for real performance influence on the organization’s bottom line.
If we can improve things like exploiting assets better today than what we have, improve our planning program, and have very measurable and unambiguous performance indicator that we're committing to, this is a huge step forward for enterprise architects and moving away from technology and frameworks to real-time problems that resonate with executives and align to business and in IT.
Gardner: Well, great. You've been listening to a sponsored podcast discussion in conjunction with The Open Group Conference in Austin, Texas, the week of July 18, 2011.
I would like to thank our guests. We have been joined by Chris Forde, Vice President of Enterprise Architecture and Membership Capabilities for The Open Group. Thanks, Chris.
Forde: Thanks, Dana.
Gardner: And also Jason Uppal, Chief Architect at QR Systems. Thank you, Jason.
Uppal: Thank you, Dana.
Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks for joining, and come back next time.
Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group.
Transcript of a sponsored BriefingsDirect podcast, in conjunction with The Open Group Austin 2011 Conference, on advances in enterprise architecture and The Open Group's Architectural Framework use for business benefits. Copyright The Open Group and Interarbor Solutions, LLC, 2005-2011. All rights reserved.
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