Approach IT Functional Reviews

Transcription

1 Executive Summary Functional reviews of academic and corporate services departments will be performed on a rolling basis and input to the Vice-Chancellor s Operational Reviews. This paper describes a standard approach that documents each department, the business functions and processes that it performs together with its main assets including systems. The object of the exercise is to gain an increased understanding of the business of the University and how it is served by systems and technology. This information will serve to identify gaps and opportunities that can be used to inform IT Services strategic planning. The analysis is a business architecture activity performed by enterprise architects in partnership with senior members of the academic or business teams. It is a relatively quick and efficient way of evaluating IT support for a business domain intended to inform strategic decision making. Business Capability Modelling is used to define a set of business capabilities that go to make-up a given business domain, where a capability consists of a business function associated with a set of business processes, people (in the sense of organizational entities capable of performing behaviour) and assets (including systems, information and physical assets). Focussing on information assets and systems, assets are analysed against capabilities to give a score for business value delivered. The assets are also evaluated for technical quality and the two sets of scores combined in an integrated approach to Application Portfolio Management. The scores for Business Value and Technical Quality are plotted against each other for each business capability using the matrix shown in Error! Reference source not found.. This yields a result for each capability / asset combination and identifies any major gaps in the IT coverage. Results are one of: Invest high business value and technical quality merits further investment. Migrate high business value but poor technical quality upgrade or replace the system. Tolerate low business value but high technical quality system can be tolerated for now. Eliminate low business value and poor technical quality get rid of as soon as possible. The evaluation gives a result as of a given point in time. The analysis may be repeated periodically to add a time dimension that takes into account the evolving business environment and technical changes. Methodology Background Business Capability Modelling is based on business functional analysis, not business process modelling. It promotes a functional view of the enterprise that is more powerful and flexible than either structural or process-centric approaches. Unless we start with business functions then the models produced are likely to be fatally flawed because they may be based on elements that have no logical foundation. This is especially true for process modelling which, due to errors introduced by large consultancies in the heyday of big Business Process Reengineering projects, has regressed. Business Capability Modelling is part of an integrated approach that brings together Business Architecture, Information Architecture and Information Security. This document focusses on the use of capability modelling with Application Portfolio Management. Business Capability Modelling Capability modelling promotes a functional view of the enterprise that is more useful, flexible and durable than an approach based on processes or organisation structures. Both processes and organisational structures change and evolve more quickly than capabilities which are relatively static. In Business Capability Modelling [3][4] a capability is defined as the ability or capacity for an organisation to deliver value. Business capabilities are useful abstractions because they represent the next level of detail below the business strategy. They are usually defined as core rather than occasional activities and are either: Customer-facing delivering value to customers, or Operational delivering value to the organisation. Business capabilities are valuable as a mechanism to translate strategy into action; they represent ways an organisation generates measurable value so that costs and benefits can be attributed to them. They are hierarchical and can be David Deighton, IT Services 1 / 8

2 modelled using a stepwise refinement approach allowing analysis at multiple levels of detail. They can be managed as assets, like a portfolio of investments. Capabilities can be modelled in a series of simple steps: 1. Develop the capability hierarchy. 2. Identify key relationships between capabilities and other planning elements. 3. Create demand models for the capabilities. 4. Develop financial models for the capabilities. The technique is used here to provide a structure for the evaluation of IT systems but this is only one of a range of possible applications. For the purpose of analysis, a business capability is defined as a business function with associated business processes, people and assets [Glossary]. The select of a business capability, or business function, for the purposes of modelling is largely a question of convenience, or preference, but there are a number of principles that help in the definition of a suitable capability: Understandability the capability should be comprehensible in its own right without undue reference to other capabilities. Internal Cohesion the people, process and assets with a capability should be linked or closely associated in some way. For example, high-level capabilities often have their own business culture or specialised vocabulary. Scope capabilities should cover a distinct service or problem area that is well defined. Established capabilities often map very closely to organisational units as with Finance, Human Resources, Teaching and Learning but this may not be true of newer capabilities such as MOOCS. The systems that serve each capability are evaluated in line with an Application Portfolio Management approach that takes into account the business value delivered by the system and its technical quality. Figure 1 Business Capability Assets Function Anything that has value to the organisation or its customers, including physical assets, information, systems etc. A convenient grouping of business behaviour based on criteria such as competences, resources or organisational hierarchy. The sum of the Processes that are in scope. Information Information that has business value. People Organisational entities capable of performing behaviour. 2 / 8

3 Physical Assets Processes Services Systems Approach IT Functional Reviews Physical assets such as buildings, vehicles, computers, communications networks. Business Processes group behaviour based on ordering of activities; intended to produce a defined set of products or business services. Externally visible functionality which is meaningful to the environment and is realised by systems or business behaviour. A system is a combination of interacting elements organised to achieve a defined objective. A system can include hardware, software, processes, human interactions (or work), information, techniques and facilities. This term includes, but is not limited to, IT systems. The assets belonging to a given business capability may include anything that has value to the organisation, including participation by people in processes and systems. These are the same assets used for strategic planning, information security risk analysis and management as well as other related activities. Business capabilities are documented using business capability maps as shown in the diagram: Figure 2 Business Capability Map Business Actor Business Function An organisational unit that is capable of performing behaviour. This represents the organisational unit(s) being studied and does not necessarily include all people shown in Figure 1 Business Capability. Business behaviour grouped according to a chosen set of criteria such as resources, competences or business culture. Capabilities are listed in a table along with the associated business processes, people and assets. The convention is to refer to a business capability using the business function name. Business Capability Processes People Assets Capability 1 1. Process name 2. Process name 3. Process name Dept or team System names Database names Capability 2 Capability 3 Capability 4 Capability N 1. Process name Dept or team System names 1. Process name 2. Process name 3. Process name 1. Process name 2. Process name 3. Process name 1. Process name 2. Process name 3. Process name Dept or team Dept or team Dept or team System names System names System names 3 / 8

4 These business capabilities are known as Level 1 capabilities where Level 0 refers to the business domain itself (e.g. Human Resources Management, Finance, Registry, Library Services). People The People component of a business capability refers to organisational units that perform business behaviour. It concerns the work they contribute and their skills, business culture etc. An ethnographic study of the organisational units is part of the method, although not an aspect that is currently emphasized. Models include ontologies, personas, roles. Some business functions match very closely the organisational units that participate in them, others cut completely across the organisational structures of the enterprise. Where such a mismatch occurs, it can indicate an inappropriate organisational structure or a new, emerging capability. Processes The processes that fall within the ambit of a given business capability may operate entirely within the scope of the business function or be part of a larger process that traverses multiple business capabilities. The business function itself encapsulates business behaviour and can be considered as the sum of the processes in scope. Assets The next stage involves an analysis of the value delivered by individual assets against specific business capabilities. Unlike some other approaches, capability modelling focuses on the knowledge and judgement of senior managers and specialists who, unlike most front line staff, understand how things are intended to work rather than how they work in practice. This allows the relevant information to be collected quickly and shortens the time needed to deliver results. Here we are mainly interested in information assets and IT systems in particular so the exercise combines the judgement of senior business managers and IT specialists in an approach that takes into account both the business value delivered by assets and the technical quality of the information assets. Assets may be shared across multiple business functions or belong to a single function. As functions are more durable and flexible than organisational structures, so information organised along functional lines is more future proof. A well-known fundamental error in the field of Information Architecture is to create an enterprise file plan based on organisational structures rather than business functions. Application Portfolio Management Application Portfolio Management focuses on how each business capability is supported by IT. Individual applications are judged according to their technical quality and delivered business value. In this way a picture of gaps and areas for improvement can be built-up. The business value delivered by a system is evaluated in the context of each defined business capability. It is a subjective measure that relies on the experience and knowledge of the individuals involved, and combines a view of the business value actually delivered with an external-facing view of what is possible with new products and technology. This approach is aimed at systems, but equivalent techniques may be used for other asset types. Figure 3 Application Evaluation Grid 4 / 8

5 For each business capability, the support provided by systems in scope of the study is evaluated, taking into account technical quality and delivered business value. Scoring is based on a scale of 0 9 as shown in the following diagram: The diagram shows a simple grid that can be used to drive decision-making concerning future investment in technology for each application serving a given business capability; where. KEY Business Value Delivered Technical Quality Action Eliminate Low Low Remove and replace with a new system. Tolerate Low High Replace with something useful but no urgent technical reason to remove. Migrate High Low Fix the technology by upgrading or migrating to a new system. Invest High High Continue to invest, upgrade and build upon current system. In the interest of simplicity, the evaluation of Business Value is based on the value delivered by a given system. The individual scores for the rows in the following table are averaged to give a net business value. Functionality Information Return on Investment (ROI) Business Value (average) Overall rating. A judgment of functional coverage, breadth and depth, of a given system for a given business capability. The business value of the information contained within the system. This may increase as more information is added, or reduce to reflect declining integrity. A score reflecting opinion of whether a system represents a good or bad return for the money spent. The criteria used to assess technical quality are the System Quality Attributes defined in the Enterprise Architecture Framework (EAF) [1], which is based on the University s IT Strategy. The quality attributes are combined to arrive at a technical quality value that is the applied to each capability / system combination. They are as follows: Performance The speed at which the system performs defined functions. Scalability The ability to handle increasing or decreasing volumes. Availability The readiness of the system to perform its functions when needed in spite of errors and exceptions. Operability The compatibility of the system with its environment and its ability to interact with the environment and other systems. Usability A systems ease of use and accessibility. Security The ability to protect information from unauthorised access. Regulation Conformity with laws and regulations. Systems should deliver adequate performance for all functions. Systems should be both vertically scalable by adding resources such as CPU power, memory and storage and horizontally scalable by adding multiple, parallel instances. Systems should be available as and when needed, or at least fulfil their service level agreements. This also takes into account the overall fit of the system into the technical environment. Systems with different or incompatible technology will score lower. The user friendliness and ease of use of applications as perceived by the users. The score for security should take into account the vulnerabilities and controls associated with each information asset or system. e.g. The Data Protection Act 5 / 8

6 Flexibility Ease of change to meet changing business requirements. Approach IT Functional Reviews Gradual evolutionary change is preferred to a high-risk big bang new release approach. Feasibility The ability to deliver the system with available expertise, technology, time and resources. Systems that fall outside the available technical expertise will involve a steeper learning curve and may score lower. Business Value Business value is calculated by scoring each system against the business capabilities on a scale of 0 9, where 0 is the lowest score and indicates that the business capability is not covered at all by the system in question. Capability 1 Business Capabilities System1 System2 System3 SystemN Capability Capability 3 6 Capability 4 2 Capability 5 Capability N 8 Technical Quality The evaluation of technical quality is based on the System Quality Attributes that were developed as part of the Enterprise Architecture Framework (EAF) [1]. These are used to evaluate every system in a standard way using a scale of 0 9, where 0 is the lowest score. System Quality Attributes System1 System2 System3 SystemN Performance Scalability Availability Operability Security Flexibility Feasibility Usability Regulation Technical Quality (average) For the sake of simplicity, the individual scores are averaged to give an overall technical quality score. 6 / 8

7 Results The final evaluation is arrived at by plotting the business value against technical quality according to Error! Reference source not found. and summarized in a table: Business Capabilities System1 System2 System3 SystemN Capability 1 Capability 2 Invest Eliminate Capability 3 Invest Capability 4 Migrate Tolerate Capability 5 Capability N Tolerate The table shows the actions by capability and system. Blank lines indicate gaps that may indicate the need to acquire new applications. KEY Business Value Delivered Technical Quality Action Eliminate Low Low Remove and replace with a new system. Tolerate Low High Replace with something useful but no urgent technical reason to remove. Migrate High Low Fix the technology by upgrading or migrating to a new system or platform. Invest High High Continue to invest and build upon. Gap investigate the need for new applications The results are used in decision making for each business capability. Capabilities must be treated individually in order to give meaningful results. The trajectory of a system over a sequence of evaluations and is based on the idea that the business and technical environments are constantly changing and therefore a similar rate of change is required for systems to maintain their value. Without such change both business value and technical quality will tend to decline over time. Recommendations Recommendations are presented, based on the results of the evaluation and informed by the IT Strategy and the Enterprise Architecture Vision. Gaps and areas for improvement will be listed together with any guidance concerning future actions and suggestions for further investigation. 7 / 8

8 Glossary Business Capability Business Domain Business Function CPU Service System An activity, or Business Function, that is usually part of the core business together with associated business processes, actors (people) and assets. The assets may be physical assets, intangible or information assets such as systems and databases. For the purposes of this exercise, business domain is assumed to be the area covered by an organisational unit such as a college, school or corporate services department. A convenient grouping of business behaviour based on criteria such as competences, resources or organisational hierarchy. Central Processing Unit the processor unit of a computer. This is often expressed as MIPS (millions of instructions per second) and MFLOPS (millions of floating-point arithmetic operations per second). A bundle of visible, meaningful functionality that is realised by systems or business behaviour. A combination of interacting elements organised to achieve a defined objective; includes hardware, software, processes, people, information, techniques and facilities. This term includes, but is not limited to, IT systems. References [1]. Enterprise Architecture Framework [2]. IT Strategy [3]. Business Capability Modelling: Theory and Practice. Architecture and Governance Magazine, 2009 [4]. Gartner Enterprise Architecture Summit (Europe) / 8