Managing the Business of IT - Integrating Enterprise Architecture and Application Portfolio Management

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1 Managing the Business of IT - Integrating Enterprise Architecture and Application Portfolio Management Tim Hahn IBM 2 August 2010 Session:

2 Acknowledgments Martin Owen - providing the bulk of the content for this presentation 2

3 Organizations face challenges optimizing their application portfolio Complex application portfolios with unclear total cost of ownership & business benefits Redundant applications amassed through mergers, acquisitions and organic growth Legacy applications that no longer meet the business needs; have high maintenance costs Lack of visibility into the inventory of applications, metrics and KPIs Keeping current with new releases of packaged applications; risk losing of support and costly license compliance Lack of visibility into IT owned assets 3 3

What you should know about your critical applications How do your key applications create business value? Do your applications support your operational processes?

4 What you should know about your critical applications How do your key applications create business value? Do your applications support your operational processes? What applications are overconsuming scarce resources and investment capital? Where are you over-investing in outdated or aging applications that need to be modernized, replaced or retired? Are your overall applications costs increasing, decreasing or stabilizing? Which critical applications are currently at risk? for every $1 of discretionary spending (i.e., new projects and major enhancements), up to $5 is spent on support, maintenance and infrastructure during the life of an application Gartner Group 4 4

5 Where does Application Portfolio Management fit in? Project Portfolio Project Portfolios are the proposed, and in-flight capabilities that will drive new business value Service portfolios are a consolidated view of the functional and shared business capabilities that the organization uses to operate Service Portfolio Application Portfolios captures and organizes information about the application portfolio so that business and IT executives can make prudent decisions around investing/replacing/retiring applications Application Portfolio IT Portfolio management encompasses applications, services & projects, and bring organizational, market & product decisions into focus for strategic alignment Enterprise architecture is a dynamic map of the organization Connecting business and IT in one view IT Portfolio Enterprise Architecture 5

Traditional application portfolio management -- enhanced Enhanced APM from IBM Enterprise Decision Support Analysis and Optimization Goals of Application

Gain detailed understanding of applications, their composition. 3. Gain detailed cost structure information at the right level 4.

6 Traditional application portfolio management -- enhanced Enhanced APM from IBM Enterprise Decision Support Analysis and Optimization Goals of Application Portfolio Management Increased Visibility Business and IT Alignment 1. Understand what applications exist in the portfolio 2. Gain detailed understanding of applications, their composition. 3. Gain detailed cost structure information at the right level 4. Drive development and divestiture activities based on business goals 5. IT Planning and Transformation Business Driven Innovation Track and trend key performance indicators for the application portfolio 6

7 Managing the Business of IT in Four Steps 7

8 Step 1. Build a holistic view Strategy Resources & costs Architect the Enterprise Opportunities Business Impact and Risk Analysis Change / Transformation Implementation Link Business & IT Perspective Information Systems Technology Optimized Solution / IT Planning Cost-cutting Harvest Enterprise Information Consolidation Planning Increased Visibility Business & Technology Impact Architecture Vision Business and IT Alignment Business & IT Architectures Opportunities & Solutions Solutions Planning Solution Implementation & Governance 8

Roadmap Goals Objectives Needs Enhanced APM Portfolio Management: Financial

Holistic business-it views Business and technology risk analysis Business

9 Step 2. Balance current needs and long-term demand Sustained Business Value Execution Roadmap Goals Objectives Needs Enhanced APM Portfolio Management: Financial Analysis and Optimization Enterprise Architecture: and dem Enterprise Planning Holistic business-it views Business and technology risk analysis Business Intelligence Dashboard Services ServicesPortfolio Portfolio Enterprise Decision Support Application and IT Discovery Application ApplicationPortfolio Portfolio 9 Analysis and Optimization

Sustained Business Value Goals Objectives

Enterprise Architecture: and dem Holistic

risk analysis Services ServicesPortfolio

10 Step 3. Understand the business risk of change Sustained Business Value Goals Objectives Needs Targeted Strategy and Direction Enhanced APM Portfolio Management: Financial Analysis and Optimization Enterprise Architecture: and dem Holistic business-it views Business and technology risk analysis Services ServicesPortfolio Portfolio Application and IT Discovery IT Planning and Application Portfolio Application Portfolio Transformation 10

and clearly articulated as scope Align execution activities to the application strategy (future state) Reduce risk by quickly determining

11 Step 4. Execute and govern your portfolio new and existing Develop roadmap one view of business and IT architectures, linked to business decisions and clearly articulated as scope Align execution activities to the application strategy (future state) Reduce risk by quickly determining the full impact of proposed changes Ensure application lifecycles do not erode APM optimization Measure, monitor, and control new proposals and transformational activities Minimize impact on vision and value of ad-hoc or non-collaborative activities Business Driven Innovation 11

12 Managing the Business of IT : Workflow 2 11) Map the organization s business & IT direction and strategy 4 Connected business & IT architectures Key operational processes Finalize application portfolio management recommendations and execute Translate enterprise roadmap into prioritized portfolio proposals and execution roadmap Inventory and evaluate applications Identify, categorize and define major application groups Identify hardware and software dependencies Compare the value of applications 3 Perform a financial review and application portfolio assessment Summarize current support costs Collect and analyze financial data 12

13 Managing the business of IT: Workflow details Tivoli Insight / RPE / Cognos Harvest current infrastructure from CCMDB/TADDM Define Strategy & Vision Executive Dashboards Report on Portfolio, project and process Status Build/Update Current State Architecture Analyze to Define Future State of Business IT Support Practitioner / Project feedback loops Governance and Review Board Extended Team CEO Team System Architect System Architect Capture Future State in TOGAF 9 Define Key Capabilities Compare to Current State, Perform Gap Analysis Define Transition Initiatives Architect & Design the Prioritized Solutions CIO & CTO, LoB Executives, Enterprise Architects Focal Point Collect and Analyze stakeholder / financial priorities Analyze and prioritize Initiatives Project Planning Define scope & roadmap initiatives Project Execution Steering Cmte, IT & LoB Executives, PMO Project and Program Managers Rational Project Conductor with Integration to delivery 13

14 14 14

15 Managing the business of IT: Workflow details Tivoli Insight / RPE / Cognos Harvest current infrastructure from CCMDB/TADDM Define Strategy & Vision Executive Dashboards Report on Portfolio, project and process Status Build/Update Current State Architecture Analyze to Define Future State of Business IT Support Practitioner / Project feedback loops Governance and Review Board Extended Team CEO Team System Architect System Architect Capture Future State in TOGAF 9 Define Key Capabilities Compare to Current State, Perform Gap Analysis Define Transition Initiatives Architect & Design the Prioritized Solutions CIO & CTO, LoB Executives, Enterprise Architects Focal Point Collect and Analyze stakeholder / financial priorities Analyze and prioritize Initiatives Project Planning Define scope & roadmap initiatives Project Execution Steering Cmte, IT & LoB Executives, PMO Project and Program Managers Rational Project Conductor with Integration to delivery 15

16 Define strategy & vision: business motivation model 16

17 Build Architecture and Business Architecture Current State 17

18 Report on portfolio, project and process status 18

19 Utilize Executive Dashboards 19

20 Managing the business of IT: Workflow details Tivoli Insight / RPE / Cognos Harvest current infrastructure from CCMDB/TADDM Define Strategy & Vision Executive Dashboards Report on Portfolio, project and process Status Build/Update Current State Architecture Analyze to Define Future State of Business IT Support Practitioner / Project feedback loops Governance and Review Board Extended Team CEO Team System Architect System Architect Capture Future State in TOGAF 9 Define Key Capabilities Compare to Current State, Perform Gap Analysis Define Transition Initiatives Architect & Design the Prioritized Solutions CIO & CTO, LoB Executives, Enterprise Architects Focal Point Collect and Analyze stakeholder / financial priorities Analyze and prioritize Initiatives Project Planning Define scope & roadmap initiatives Project Execution Steering Cmte, IT & LoB Executives, PMO Project and Program Managers Rational Project Conductor with Integration to delivery 20

21 Define Future state 21

22 Compare to current state, perform gap analysis 22

23 Define transition initiatives 23

24 Managing the business of IT: Workflow details Tivoli Insight / RPE / Cognos Harvest current infrastructure from CCMDB/TADDM Define Strategy & Vision Executive Dashboards Report on Portfolio, project and process Status Build/Update Current State Architecture Analyze to Define Future State of Business IT Support Practitioner / Project feedback loops Governance and Review Board Extended Team CEO Team System Architect System Architect Capture Future State in TOGAF 9 Define Key Capabilities Compare to Current State, Perform Gap Analysis Define Transition Initiatives Architect & Design the Prioritized Solutions CIO & CTO, LoB Executives, Enterprise Architects Focal Point Collect and Analyze stakeholder / financial priorities Analyze and prioritize Initiatives Project Planning Define scope & roadmap initiatives Project Execution Steering Cmte, IT & LoB Executives, PMO Project and Program Managers Rational Project Conductor with Integration to delivery 24

25 Collect and analyze stakeholder & financial priorities 25

26 Analyze and prioritize initiatives 26

27 Architect & design prioritized solutions 27

28 Managing the business of IT: Workflow details Tivoli Insight / RPE / Cognos Harvest current infrastructure from CCMDB/TADDM Define Strategy & Vision Executive Dashboards Report on Portfolio, project and process Status Build/Update Current State Architecture Analyze to Define Future State of Business IT Support Practitioner / Project feedback loops Governance and Review Board Extended Team CEO Team System Architect System Architect Capture Future State in TOGAF 9 Define Key Capabilities Compare to Current State, Perform Gap Analysis Define Transition Initiatives Architect & Design the Prioritized Solutions CIO & CTO, LoB Executives, Enterprise Architects Focal Point Collect and Analyze stakeholder / financial priorities Analyze and prioritize Initiatives Project Planning Define scope & roadmap initiatives Project Execution Steering Cmte, IT & LoB Executives, PMO Project and Program Managers Rational Project Conductor with Integration to delivery 28

29 Define scope & roadmap initiatives 29

30 Plan projects for Integrated Execution and Feedback 30

31 Managing the business of IT Increased Visibility Four steps to success Build a holistic view Balance current needs and long-term demand Understand the business risk of change IT Planning and Transformation Execute and govern your portfolio Analysis and Optimization Significant efficiency gains through visibility in decision making Savings in the investment budget through better management of transformational projects Improvement in the operations budget by better aligning applications with business demand Business and IT Alignment Enterprise Decision Support Business Driven Innovation 31

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