application portfolio rationalization

OADP for IT OptimizationStage I: Portfolio RationalizationStage I: Portfolio Rationalization

IT OptimizationAn Applied OADP MethodologyAn Applied OADP Methodology

IT Optimization is Oracle's applied OADP methodology for aligning primarily the Application and Technology layers with the Business Architecture

3 Stages of IT Optimization1. Portfolio Rationalization Platform and Application Standardization

2. Data Center and Systems Optimization ClusteringClustering Virtualization Consolidation SecuritySecurity Management Automation

3. Shared Services / Cloud Computing IT as a ‘Business’ - ITaaB

Copyright ©2009 Oracle Corporation. All rights reserved. 2

IT as a Business ITaaB

IT Optimization (ITO)Applying a standard process methodology

Stage I: Portfolio RationalizationITOITO

A hit tA hit t Stage I: Portfolio RationalizationArchitectureArchitectureVisionVision

Stage II: Data Center & System Optimization

ness

&

men

t

Stage III: Shared Services/Cl d C ti

Stra

tegi

c B

usi

ITO

Alig

nm

Cloud Computing


Common Drivers for IT Optimization> Discover Business Challenges

IT Optimization Area Issues and ChallengesPortfolio Rationalization Multiple applications providing the same functions

g

Recent merger or acquisition

Complex and inefficiencies associated with maintaining stove-piped systems

D t C t d U d tili d d tData Center and Architecture Optimization

Under utilized servers and storage

HW refresh cycle or move to commodity HW platforms

Management Automationg

Data Center consolidation

Security challenges due to complexity

Shared Services / Cloud Increasing transactions and data volumesg

Financial Chargeback

Just in time scalability


y

Stage I: Portfolio Rationalization Prerequisites and InputsPrerequisites and Inputs

• CxO Sponsorship for Larger Efforts, LOB sponsorship for smaller efforts.• Overall IT Optimization Architecture Vision CompletedPrerequisites

• Catalog of Business Capabilities, including (for each capability)• Value to the Business Strategy/Goals (Hi or Low)• QoS requirements (Availability and performance)• Scalability requirements (xx growth within yy years)Inputs • Matrix of Business Capabilities / Organizational unitsInputs


How do you Rationalize a Portfolio?

Step 1 - Build inventory of existing applications /

Inventory

Map

technology

Step 2 - Map inventory to business / IT capabilities

Map

Analyze

Step 3 – Analyze the portfolio against evaluation criteria(Portfolio Scoring)

Transform

Step 4 – Propose the appropriate actions to transform the “Current State” into the desired “Future State”

Copyright ©2009 Oracle Corporation. All rights reserved.

Important Factors to Consider

1. What are the driving factors for the Portfolio Rationalization process ?

• Reduce Application Support Costs – Think about application consolidation

R d HW t Thi k b t h d lid ti h lid ti• Reduce HW costs – Think about hardware consolidation when consolidating applications

• Reduce Environmental Costs – Think about next generation hardware refresh to lower power consumption

• Reduce IT Complexity (including ongoing support costs) – Reduce overall number of applications and integrations that are supported

2. Is the Organization ready to move to a more centralized structure that may occur as a result of application consolidation ?a result of application consolidation ?

3. Does the organization have the required PMO structure to support the rationalization efforts (there may be numerous overlapping projects proposed to effect the end state architecture) ?

4. What is the organizations budget for the project (will affect roll out schedules and may necessitate cost saving quick hit projects over others to generate funds for the overall effort) ?


Architecture Vision Phase


Portfolio RationalizationArchitecture MaturityArchitecture Maturity

IT as a ServiceIT as a Service

• Standardize• Eliminate Redundancy

Service Group A Service Group B Service Group C

Integration Layer

Shared Services /

Optimized IT CoreOptimized IT Core

y• Modernize• Migrate

Pt. to Pt. Integrations

Data Grid Data GridData Grid

Security Layer

Application Grid Application Grid Application Grid

Virtualized and Consolidated

/Cloud

ComputingTransitionalArchitecture

FBT PAY GNTS

TRDS

Client

Customs NTS A/c

1

Data…….

FBT PAY GNTS

TRDS

Client

Customs NTS A/c

1

Data…….

Security

SFAProduct LMSInv

MGMTB2Bproduct SCM product DBERP MES-Dev

SFASFA-Test

SFA-Stage

Product

ProductERP-StageERP-

ProdMES-Stage

MES-Prod

productDB-

Stage B2B-StageB2B-

Dev

Security Security Security

SFAProduct LMSInv MGMT

product SCM product DBERP MES-DevProduct ERP-

Stageproduct

DB-Stage

Rationalized

Consolidated Infrastructure and ServicesIT SilosIT Silos

RRE IPS Integrated A/C Refunds

RBADef

PaymentsExcise

CR

PKI

ECI ADD AWA ELS

Client Staff RemoteStaff

TAXAGENTS

GCI

Call Centres

WOC

CCD

TASS

StaffPhone

ComplianceStaff

BOA

Refmaterial

Bus. Intel

B EP

CDCCCWMS

BANK

DDDR

Penalty

Business

IVR

1RRE IPS Integrated A/C Refunds

RBADef

PaymentsExcise

CR

PKI

ECI ADD AWA ELS

Client Staff RemoteStaff

TAXAGENTS

GCI

Call Centres

WOC

CCD

TASS

StaffPhone

ComplianceStaff

BOA

Refmaterial

Bus. Intel

B EP

CDCCCWMS

BANK

DDDR

Penalty

Business

IVR

1

Rationalized

IT Portfolio

Architectural


Complexity

Portfolio RationalizationAccording to industry analysts such as Gartner, a focused applications rationalization effort will typically result in a 20% cost savings while improving support for the lines of business.

• Fewer, more strategic vendors• Standardize processes

Eli i i f i “ il ” i d

Reduce Complexity and Cost

• Eliminate information “silos”, improve data quality & enable seamless sharing of information across the organization through integration

• Support strategies; Global Single Instance, Shared Services

• Eliminate redundant and niche applications• Reduce risk

M d i l li ti• Modernize legacy applications• Simplify / standardize technology infrastructure• Improve security and regulatory compliance• Delivery models; Buy vs Build ASP SaaS

Shift IT spending from Infrastructure to Strategic Investment


• Delivery models; Buy vs. Build, ASP, SaaSto Strategic Investment

Architecture VisionScope ConsiderationsScope Considerations

• Avoid “boil the ocean” approach. Attempt to define a scope that either

1. Reflects a “horizontal / vertical slice” of functionality, aligned with a business goal or objective. For example:business goal or objective. For example:

– Rationalize all applications that support Financial Control & Reporting, with the goal of improving the quality and timeliness of information

– Rationalize all applications that support Month End Close, with theRationalize all applications that support Month End Close, with the goal of reducing Month End Close from xx days to x days

– Rationalize all applications that support a Business Process in need of streamlining

2. Reflects a manageable set of layers of the enterprise technology capabilities, e.g.

• Servers – consolidate or upgrade to reduce “sprawl”

• Database – standardize/consolidate onto fewer instances

• Integration middleware – standardize onto a single platform –leverage technologies like AIA to reduce integration complexity


Architecture VisionConsiderations

• Confirm with Customer, their existing applications inventory will be mapped to Capabilities Model to identify redundancy/gaps

• Common portfolio scoring criteria include strategic value, functional fit,

Considerations

Common portfolio scoring criteria include strategic value, functional fit, conformance to IT standards, risk and TCO

• For Application Portfolio Rationalization– Business Capabilities approach is commonly employed with customers who

have low level of maturity in applications portfolio management and business process management

– Oracle Business Capabilities Model enables teams to accomplish the first iteration of Application Portfolio Rationalization in less time, with fewer resources

– The BCM can be used either in spreadsheet form or with a tool such as Primavera Prosight or Troux.

– For Technology Capabilities Rationalization– Use the Oracle Technical Reference Model(TRM) to categorize Assets

– The TRM can be used either in spreadsheet form or with a tool such as Primavera Prosight or Troux.


Architecture VisionConsiderations

• Make it clear that Portfolio Rationalization may effect a loss in functionality in order to enable greater agility.

• Apply the 80/20 rule to Application Functionality. If the target application

Considerations

Apply the 80/20 rule to Application Functionality. If the target application supports 80% of the required functionality then the remaining 20% should not preclude its adoption as the standard. When implementing the remaining 20% make sure that they are done in such a way as not to impede upgrades to the application.impede upgrades to the application.

• Composite applications can be set up to handle ‘missing’ functionality until such a time that the business processes change or the target application can support the given requirements.

• It is better to use the extensibility features of applications rather than customizing the application itself. This will enable easier application upgrades and result far less complexity.


Guiding PrinciplesSample Principles for Future State ArchitectureSample Principles for Future State Architecture

Business Architecture

Improve Operational Efficiency / Reduce

Costs

Simplified / standardized /

managed business processes

Enable agility to deploy new products & capabilities

Application Architecture

processes capabilities

Maintain Shared Reduce / Acquire COTS

Information Architecture

Maintain Shared Common Application

PlatformStandardize Application Footprint

products & customize only as

necessary

Information Architecture

Out of the Box analytics / schemas

Common Enterprise Object Models

Real-time information updates

/ monitoring

Technology Architecture

Optimized , scalable, agile environment

Open standards & systems

24x7 platform availability


Architecture VisionSample PrinciplesSample Principles

• Cost Optimization – Low cost across the lifecycle of a product or service is a compelling value

Business Architecture Principles

Cost Optimization Low cost across the lifecycle of a product or service is a compelling value proposition for targeted customer segments.

• Corporate Environment Responsibility – Going green is not only crucial from a social responsible and moral standpoint, it also has economic benefits. Eco-efficiency, eco-transparency and eco-innovation are critical for a greener future.

• Enterprise Balance – This principle embodies “service above self” and decisions made from t i id ti h t l t b fit th t ti l d i i d fan enterprise wide perspective have greater long term benefit than tactical decisions made from

a particular organizational perspective.

C U A li ti D li ti bilit i i d lif t fli ti

Application Architecture Principles

• Common Use Applications – Duplicative capability is expensive and proliferates conflicting data.

• Technology Independence – Independence of applications from the underlying technology allows applications to be developed, upgraded, and operated in the most cost-effective and timely way.

• Adherence to Open Standards - promote business / IT agility reduce risk and achieve a lowerAdherence to Open Standards - promote business / IT agility, reduce risk and achieve a lower overall TCO than proprietary applications.

• Common Development Methodology and Tools - Standard development methodologies increase the likelihood of high quality results and promote reusable components.

• Replace Obsolete Applications – Every application has a limited useful life span. Beyond this life span, the application becomes functionally deficient and costly to operate and maintain.


p pp y y p

Architecture VisionSample PrinciplesSample Principles

•Data Quality – Systems that consistently carry stale and incomplete data pose risk and inefficiency to the business and should be streamlined to only carry the information that it can realistically ensure quality for. M t D t M t M lti l f d t d t lit /i t it i th t tl i

Information Architecture Principles

•Master Data Management - Multiple sources of data cause data quality/integrity issues that greatly increase system complexity and overall cost, while reducing agility.

•Standard Data Exchange Format – Exchanging data in standardized representations lowers integration cost of supporting new and changing data model requirements.

Technology Architecture Principles

•Adherence to Open Standards - Standards compliance enhances flexibility.•Platform Standardization – simplifies maintenance and lowers support costs.•Availability - Loss of business service can be very costly and can often be underestimated.•Performance and Scalability - Responsive systems, with sufficient capacity, enable business success.•Service Level Objectives - If the Technology does not allow the business to meet its Quality of Service (QoS)

bj ti th th b i ill ffobjectives, then the business will suffer.

•Strategic Focus - Aligning the Enterprise Architecture with the business strategy increases the value of IT to the business.

Governance Principles

•Accountability - Accountability structures encourage compliance with the Enterprise Architecture. •Compliance to Enterprise Architecture - An effective Enterprise Architecture needs to be a guide for all IT projects

•Wide Participation - Wide participation by stakeholders throughout the enterprise ensures that the Enterprise Architecture will meet the optimal requirements of the enterprise, not just a select group of LOB requirements.

•Quantitative Decision Making - Utilizing quantitative processes and metrics provides a consistent and equitable f l ti d i i d i th ff ti f E t i A hit t G


means of evaluating decisions and increases the effectiveness of Enterprise Architecture Governance.

Business Case DevelopmentPerformed Architecture Vision Phasee o ed c tectu e s o ase

Architecture Vision

Current State

Future State

Strategic Roadmap

EA Governance

Business Case

• Strategy Map- Customer Perspective- Financial Perspective

• Understand the existing Business Case culture

• Identify existing:Goals / Drivers

• Agree to Architecture Future State:- Quantifiable Measures

• Business Value

• Identify timelines and milestones for measurement

• Identify alignment with existing auditing and other financial

• Define Future State Costs/Risks

• Estimate EA Roadmap InvestmentsPerspective

• Business Model- Value Proposition- Cost Structure- Revenue Stream

- Goals / Drivers- Priorities- Measures used- Metrics preferred- Monetization numbers

- Metrics for calculation- Non-tangible or Soft criteria

measurement structures and processes

Investments

• Perform Cost/Benefit analysis

• Build the actual

Business Case Development

Activitiesand

Artifacts Revenue Stream

• Business Capability Model

• Operating Model- Level of Business

numbers

• Assess against benchmarks

Build the actual Business Case document

Process Integration and Standardization

WorkEffort


Effort

Current State Architecture Phase


Step 1 - Inventory

Inventory Current Portfolio• The process of rationalizing your portfolio begins with capturing an inventory of

ll li ti d th d l i t h l l tf tl iall applications and the underlying technology platform, currently in use.

• Capture information pertaining to an application’s underlying technology (e.g., hardware, operating system, database, etc.) as well. Standardization and lower TCO can be realized through migration of applications to run on a commonTCO can be realized through migration of applications to run on a common technology platform.

• Automated tools can quickly identify servers and software applications installed on your network, but there may be no substitute for human intervention when it

t d t i i b i i f ti f li ti tf li i hcomes to determining basic information for application portfolio scoring such as business capabilities mapping, strategic value, functional fit, conformance to IT standards, risk and TCO.

• Completing such an inventory will usually reveal many overlapping and duplicateCompleting such an inventory will usually reveal many overlapping and duplicate applications that are candidates for consolidation.

• Spreadsheets or a tool like Treux can be used to capture the inventory list.


Current State ArchitectureInventory of Existing ApplicationsInventory of Existing Applications


Current State ArchitectureDeliverable Details Applications InventoryDeliverable Details – Applications Inventory


Step 2 - MAP

Map Current Portfolio to business functions• Once you have captured the pieces of the portfolio, they must be mapped to the

b i f ti th t th tbusiness functions that they support.

• The mapping does not necessarily need to be at a very granular level. Level 1 or 2 business process flows can be used for this effort. You could also use a simple matrix showing the applications and which business functions they support.matrix showing the applications and which business functions they support.

• It is especially important to capture where a particular business process is duplicated. Through an iterative process, when new business processes are discovered relative to a given portion of the portfolio, the remainder of the

tf li h ld b l d ( t l t t l l) t d t i if thportfolio should be analyzed (at least at a summary level) to determine if those pieces are also supporting this process. Think in terms of a company that has more than 1 ERP system. While the multiple system may each support unique business processes, it it more likely that there is overlap among them.

• Spreadsheets or a tool like Treux can be used to capture the inventory list to business process mapping.


Current State Applications MatrixCurrent State Applications Layer PerspectiveCurrent State Applications Layer Perspective

Customer

Relations Mgt

Accounts

PayableBilling ReimbursementInternet

Marketing

Service &

Repair

AMER MCCMCC

Relations Mgt. PayableMarketing Repair

CREMAMIS QuickBooksRecipient

Web StoreMCC BigTree

EMEACREMACT Navision

Web Store

CREM ISCALA EVA 3EMEA

APACCREMBusiness EBSMCC Filemaker

APAC Works

SAP EBS

Pro


Australia

Current State ArchitectureDeliverablesDeliverables

• Applications Inventory• OwnersOwners• Business Users• Costs (* to be used in generating the business case)• EtcEtc…

• High Level (Just Enough Just in Time)• Current Applications Architecture• Current Data Architecture• Current Data Architecture• Current Technology Architecture• Current Integration Architecture

• Current IT Organization Chart (* t b d i t bli hi )• Current IT Organization Chart (* to be used in establishing governance)• Current PMO Structure (* to be used in establishing governance)


Business Case DevelopmentPerformed During Current State Architecture Phasee o ed u g Cu e t State c tectu e ase

Architecture Vision

Current State

Future State

Strategic Roadmap

EA Governance

Business Case





• Business Value









Investments




Activitiesand




numbers




WorkEffort


Effort

Step 3 – AnalyzeAnalyze the Portfolio information gathered in Phases 1 and 2 applyingAnalyze the Portfolio information gathered in Phases 1 and 2 applying

objective criteria

• The analysis should be done in the context of what the portfolio should look like in the future, not where is it now.,

• Portfolio evaluation can be simple or elaborate, depending on organizational maturity. For some organizations, just reviewing support for mission objectives and capturing an estimate of application costs will be a substantial accomplishment and is often enough to identify “low hanging fruit”accomplishment, and is often enough to identify low-hanging fruit .

• When a recommendation for an application isn’t obvious, a more detailed analysis is required. While this could involve a wide array of criteria, some obvious considerations would include: strategic value, functional fit, conformance gto IT standards, risk and TCO.

• Whatever level of analysis is applied, when the process is completed, you are able to recommend actions to take for each application including replacement, retirement consolidation upgrade modernize etcretirement, consolidation, upgrade, modernize, etc.

• Make sure to take integration and information architecture changes into account when developing the future state architecture. Portfolio Rationalization almost always involves changes to interfaces (integrations) and the underlying data for


y g ( g ) y gthe applications.

Future State Architecture Phase


IT Portfolio ScorecardPrioritize Future State Capabilities (Specific Criteria)

Likelihood of Success Criteria

X-Axis Weight Score Business Value Criteria

Y-Axis Weight Score

Out of the Box Functionality

X1: 15% Financial Return Y1: 30%Functionality

Number of Interfaces X2: 15% Risk Y2: 20%

Development Effort X3: 20% New Business Benefits Y3: 15%

Support X4: 10% Technology Efficiency Y4: 10%

Business Critical X5: 25% Impacts Revenue Stream Y5: 15%Business Critical Functionality

X5: 25% Impacts Revenue Stream Y5: 15%

Standards Based X6: 15% Implementation Time Y6: 10%

X 100% Dimension Total Y 100%


Source: Kraft Foods, 2002

Weighting Criteria Examples

• % utilization – currently at peak would suggest a need for upgrade

Hardware Characteristics

% utilization currently at peak would suggest a need for upgrade.• Energy Efficiency – older machines will have higher power requirements, need

more cooling and generally have a larger physical footprint in the datacenter• Scalability – can the machine be scaled internally (add processors or memory)

or is it at full capacity?p y• Purpose – what applications are currently running on the particular machine and

are they supporting business critical functionality?• Standards – it the machine in the currently recommended architectural

standards?S t h l th i th i ti th t t th• Support – how many people are there in the organization that can support the hardware?

• Lease Term – is the machine leased or owned, and is the lease term due to expire?

• Manageability is the machine easy to manage (does it have built in sensors• Manageability – is the machine easy to manage (does it have built in sensors, can it to predictive self healing or it limited to failure notifications)?

• Interfaces – does the machine support all the interfaces required for maximum availability and performance (does it support Infiniband, does it meet HA redundancy requirements)?


y q )


• Number of Customizations - will the customizations need to go into the targetapplication – or will the business change to deal with less customizations?

Application Characteristics

application – or will the business change to deal with less customizations?• Number of Interfaces - they will need to be re-written if the application is

being removed• Number of Developers - how many are currently supporting an application

that is being removed? They will need to be re-trained which will eat into short g yterm cost savings.

• Number of Support Personnel – the more that are re-purposed the lower the overall cost

• Number of Versions Back - is it still supported by the manufacturer or will it d d t b d d?needed to be upgraded?

• Adheres to Target Standards - helps achieve a simplified infrastructure –which will lower costs and improve agility in later stages of maturity

• Has functionality to differentiate company in the marketplace – this would be a reason not choose a COTS application as a replacementbe a reason not choose a COTS application as a replacement

• Number Users - how many people will need to be trained/re-trained on the target application?



• Eliminates HW/Support/Licensing will reduce TCO

Business Value

• Eliminates HW/Support/Licensing – will reduce TCO• Reduces Risk – systems that are easy to implement have reduce risk and can

generate faster ROI.• Lowers HVAC/Electric/support – more energy efficient systems are more

efficient and will reduce costsefficient and will reduce costs• Directly Impacts Revenue Stream - talks to risk – back office rationalization

may be lower risk than a CRM or Customer Facing system directly tied to revenue.

• Provides needed functionality to grow the business - may rationalize an y g yapplication with an upgrade that the business currently needs

• Enables quicker response to market factors – agility is a key differentiator for businesses. Those that can react quickly to market demands and opportunities will have a competitive edge.Meets/Increases Compliance Requirements as regulations increase• Meets/Increases Compliance Requirements – as regulations increase, businesses need to ensure their stakeholders that they are compliant to maintain shareholder confidence.


IT Portfolio Matrix> Prioritize Future State Capabilities

100

Difficult to execute but high value to the business Some low hanging fruit

ness

ue to

the

Bus

i

50

Do not fund these projects Fund Selectively

Valu

0

0

10050


Ability to SucceedSource: Kraft Foods, 2002

Future State ArchitectureApplication Portfolio AnalysisApplication Portfolio Analysis


Future State Architecture Artifact Details – Application DiagramArtifact Details Application Diagram


Future State Architecture Applications Technology FootprintApplications Technology Footprint


Future State ArchitectureArtifact Details – Information ArchitectureArtifact Details Information Architecture


Future State ArchitectureArtifact Details – Applications Integration DiagramArtifact Details Applications Integration Diagram

ICC EAI Architecture

PO INTF361

ASNINTF362

BUNZL THAI IDS E WMS

Ni t

INTF359INTF358

INTF357 INTF360

COMCAREInvoice INTF338

RMF

Bill of Material INTF340PO INTF361

ASNINTF362

INTF361

Order Transportation

INTF363USSTCMN0 FTP

Server

Nistevo

WBIC

SAP

TRACKX WMS

MAPICSOrder INTF357

Goods Receipt INTF360

ASN INTF359PO INTF358

PO INTF306Invoice INTF307

Order INTF112

Vendor INTF127Item Basic INTF104

JD Gen Inventory

Movement INTF339

PO INTF116 Order Transportation

INTF363

SAP

WCMtBPCS

SATTSTORE WMS

ASN INTF332/335

EdwardsMovement INTF339Item Basic INTF334

Order PO INTF333

Goods Receipt INTF337

Dual Inventory INTF121/122

Order INTF 324/325/326Customer INTF327

e 8

Price List INTF330

e

WERCSOPTIVA Bill of Material INTF304

Inventory Report INTF298/300 Inventory Report INTF299/301

Product DB

Cat

alog

uePr

oduc

t IN

TF32

8

Catalogue Item INTF329

Cat

alog

ueIte

m

INTF

331

A2A


B2B

Reference ModelsArchitecture Component FrameworkArchitecture Component Framework

Collectively, the Architecture Component Framework assets map onto the Technology, Information and Application Architecture layers of an enterprise architecture framework.architecture framework. OFRA - The OFRA best practices framework maps directly onto the technology architecture layer of an enterprise architecture framework. OFRA is based on a number of architectural design perspectives that address specific architecture

tt f d i i l ti SOA E2 0 d E h tipatterns for designing solutions – SOA, E2.0 and so on. Each perspective embodies the sum knowledge and experience of Oracle, its partners and customers gained from implementing Oracle-based solutions. Each perspective is defined to maximize the benefits of the Oracle technologies that are exploited in th d ithe design.

ORA – is a high level classification of software capabilities spanning technology, information and application architecture layers .

Technology Capability Blueprint – an alternative viewpoint of the software capabilities required to meet logical architectural requirements


Reference ModelsIndustry Reference / Solution DesignIndustry Reference / Solution Design

An Industry Reference Architecture is an industry specific rendering of ORA. It maps against the technology, information and application architecture layers of an EA framework An IRA provides a definition ofarchitecture layers of an EA framework. An IRA provides a definition of Oracle’s technology stack and industry footprint capabilities that are relevant for meeting the needs of a specific industry or industry domain.

Solution Designs include industry solutions & technology patterns.

Industry Solutions - Technology focused solution architectures defining high level functions and process flows, and with Oracle Technology and industry footprint mapping

Technology Patterns Technology focused solution architectures definingTechnology Patterns - Technology focused solution architectures defining functions and process flows, and with Oracle Technology stack mappings


Reference Architecture TaxonomyOracle Enterprise Architecture

FrameworkDesign Offer

Oracle Reference

Architecture

FrameworkBest Practices Framework

Architecture Component Framework

Business Architecture

Application Architecture

Information Architectureetho

dolo

gyG

overnan

Architecture

SOA

OFRA

Technical Reference

Technology Architecture

Me

nce

Perspectives Oracle product mappingsSOA

Reference Architecture

E2.0 Reference Architecture

S it

Reference Model

Solution Designs

O ac e p oduct app gs

(3rd party mappings)

Industry Reference

Architectures

Industry Solutions

Technology Patterns

SecurityReference

Architecture

GridReference

Architecture

BI/DWReference

Architecture Technology(Capability) BlueprintMaximum

Availability Architecture


OracleOracle Technology Reference ModelTechnology Reference ModelJune 2010

Development Middleware Security Management

User Interaction

Content Mgmt BI CollaborationAuthentication Incident

Mgmt

SOA & BPM

Application Grid

Di t

Authorization

g

Service Level Mgmt

Programming Languages

Database Storage Mgmt

Grid MgmtInfo Mgmt Analytics

Directory

Auditing Configuration MgmtIDE

I f t t

Data Security Encryption

Provisioning

Backup Recovery

Disaster Recovery Replication Embedded

In-MemoryPerformance

MgmtS/W Configuration

MgmtInfrastructure

VMOS StorageServer Network IRMSecurity

Mgmt


Oracle ApplicationsCapability Reference Model– Financial IndustryCapability Reference Model Financial Industry

Access the IBU Portal Here


Future State ArchitectureFuture State Applications FootprintFuture State Applications Footprint

OM, SCM, FinancialsOM, SCM, Financials

Analytics CRM LoyaltyLoyalty iStoreiStore SalesSales Field ServiceField ServiceMarketingMarketing Order MgmtOrder Mgmt PricingPricing CTOCTOiStoreiStore

Supply ChainPlanning

DemandPlanning

Business OperationsOrder

ManagementProcurement Services

Store Inventory MgmtStore Inventory Mgmt

Point-of-SalePoint-of-SaleReplenishmentOptimizationReplenishmentOptimization

Advance InventoryPlanningAdvance InventoryPlanning

PIMPIMConfiguratorConfigurator

lanninglanning

ItemPlanningItem Planning

Trade ManagementTrade Management

Invoice MatchInvoice MatchReturns ManagementReturns Management






DemandPlanning







lanninglanning





DemandPlanning







lanninglanning




ASCPASCPASCP

Supplier SchedulingSupplier SchedulingSupplier Scheduling

DemantraForecastingDemantraDemantra

ForecastingForecasting

DemantraAdvance Forecasting

DemantraDemantraAdvance ForecastingAdvance Forecasting

ConfiguratorConfiguratorConfigurator

Order ManagementOrder ManagementOrder Management

ProcurementProcurementProcurement Service ContractsService ContractsService Contracts

QualityQualityQuality

OM, SCM,FinancialsOM, SCM,OM, SCM,FinancialsFinancials

Field ServiceField ServiceField Service

Corporate Administration

Indirect ProcurementIndirect Procurement ProjectsProjectsEPMEPM FinancialsFinancials

CompensationCompensationHuman ResourcesHuman Resources Real EstateReal Estate

ITITHRHRHelpdesk

Workforce SchedulingWorkforce Scheduling

Learning MgmtLearning Mgmt

Store HelpdeskStore Helpdesk

Workforce CommsWorkforce Comms

Transportation ManagementTransportation Management

Warehouse ManagementWarehouse Management

Home DeliveryHome Delivery

Supply NetworkOptimizationSupply NetworkOptimization

Value Chain AllocationValue Chain Allocation

Value ChainCollaborationValue ChainCollaboration

Item Planningg

Category MgmtCategory Mgmt

Price OptimizationPrice Optimization

Promotion Planning& OptimizationPromotion Planning& Optimization

Merchandise ManagementMerchandise Management

Price ManagementPrice Management

Sales AuditSales AuditDemand ForecastingDemand Forecasting

Returns ManagementReturns Management




ITITHRHRHelpdesk




ITITHRHRHelpdesk











Item Planningg







Returns ManagementReturns Management











Item Planningg







Returns ManagementReturns ManagementCollaborative

PlanningCollaborativeCollaborative

PlanningPlanning Advanced PricingAdvanced PricingAdvanced Pricing

Global Order Promising

Global Global Order PromisingOrder Promising

FinancialsFinancialsFinancials

“AS IS” “TO BE”

Master Data ManagementIntegration and CollaborationIntegration and Collaboration

Enterprise InfrastructureEnterprise Infrastructure

Indirect ProcurementIndirect Procurement ProjectsProjects CompensationCompensation ITITHRHRHelpdesk





Indirect ProcurementIndirect Procurement ProjectsProjects CompensationCompensation ITITHRHRHelpdeskIndirect ProcurementIndirect Procurement ProjectsProjects CompensationCompensation ITITHRHRHelpdesk

Customer OnlineCustomer OnlineCustomer Online Customer Data Hub

Customer Customer Data HubData Hub TCATCATCA

Apps you ownApps you ownApps you own Proposed New AppsProposed New AppsProposed New Apps

FIN

HC

M


Future State ArchitectureDeliverable Details – Apps/HW FootprintDeliverable Details Apps/HW Footprint


Future State ArchitectureDeliverable Details – Integration DiagramDeliverable Details Integration Diagram


Future State ArchitectureDeliverable Details – MDM DiagramDeliverable Details MDM Diagram


Business Case DevelopmentPerformed During Future State Architecture Phasee o ed u g utu e State c tectu e ase

Architecture

Vision

Current State

Future State

Strategic Roadma

p

EA Governa

nceBusiness

Case





• Business Value









Investments




Activitiesand




numbers




WorkEffort


Effort

Strategic Roadmap Phase


Step 4 - Transform

Propose the appropriate actions to transform the “Current State” to the desired “Future State” using Transitional Architecture(s)

• Once you have completed the Application Portfolio Analysis and developed a Future State Architecture, you are able to recommend actions to take for each application.

• The recommended actions may include:

– Replacing existing applications with Oracle Applications and retiring existing applications, resulting in Global Single Instance or Shared Services model

– Upgrading existing Oracle applications

– Modernizing legacy mainframe applications, leveraging Oracle SOA / AIA Foundation Pack – see Appendix or Modernization site

– Migrating existing applications to run on a common platform (Oracle DB / RAC / Linux)Linux)

– Enterprise SOA: Integrating existing applications leveraging Oracle SOA / AIA and optimizing Business Processes leveraging Oracle BPA


Step 4 - Transform

• The recommended actions may include (continued):

– Introducing a single User Interface layer, leveraging Oracle WebCenter, across all applications to establish a common ser e perience andacross all applications to establish a common user experience and collaborative work environment for End Users

– Enterprise BI / DW / Reporting solution, leveraging Oracle Business Intelligence EEg

– Enterprise Content Management solution, leveraging Oracle Universal Content Management

– Enterprise Security solution, leveraging Oracle Identity Management p y , g g y g

– OnDemand vs. OnPremise, Buy vs. Build, SaaS, etc…

• A Single Global Instance of Oracle Applications may be the desired goal however a “big bang” approach may not be practical Angoal, however a big bang approach may not be practical. An Implementation Roadmap reflecting a phased-rollout approach (employing one or more of the recommended actions on the previous slides) is a means of achieving a GSI incrementally, thus mitigating risk

d i f h i i


and impact of change on an organization.

Strategic RoadmapDeliverable Details – Prioritized Candidate ProjectsDeliverable Details Prioritized Candidate Projects

ntia

ting

Primary Targets Secondary Targets

Future StateFuture State1

Build &Customize as

Diff

eren

Med

ium

usin

ess

Valu

e

1

342

Future StateFuture State

necessary to differentiate

Buy &customize as

necessary

Tabl

esta

ke

Bu

7

56

Future StateFuture StateBuy be st practice A

C

Core ApplicationsHig

hct

B Unstructured Data Management

The Oracle Insight identified 5 major recommendation categories that were evaluated for prioritizationA C BD

E

Business Process

Current Operating Performance

Best PracticeMarginal Stable AdvantageCD Single, Common UI

Med

ium

Impa

E Protected Enterprise

Business Process Optimization

Low

Effort

HighMedium


Strategic RoadmapFunctionality Driven Transitional Architecture

Current State (CS)Current State (CS) Establish Common Establish Common Payroll ApplicationPayroll Application

Migrate to Common Migrate to Common ApplicationApplication

Single Payroll ApplicationSingle Payroll Application

• MA& Growth resulted in 4 payroll systems

• Define Standards for common payroll application.

• Establish common business processes for payroll data

• Execute common business processes for Payrolls

Functionality Driven Transitional Architecture

p y y p y pp• Set up PeopleSoft rules to

support entire employee population

p p ycapture and processing

p y

• Multiple payroll • Set up PeopleSoft instance • Consolidate Payroll apps • All new employees set up in

Bus

ines

applications – 1 PeopleSoft Payroll instance

• Build migrations from existing payroll applications into PeopleSoft

• Establish interfaces to Payroll Data (i.e. budgeting apps)

• Train payroll users on new application

• Execute Migration plans to move employee data into new instance

PeopleSoft Payroll.• Retire obsolete payroll

applications.

App

s

• Payroll data stored in multiple applications

• Establish single view of the employee for Payroll data

• Establish Data Governance Processes

• Formalize data governance procedures.

• Validate migrated employee data.

• Establish metrics for business processes

• Data Governance Processes in Place

• Product metrics for business process

info

• No standard hardware or software for payroll applications

• Set up infrastructure to support Enterprise PeopleSoft Instance

• Run instance on new platform. • Tune application as required to support Payroll functions

Tech


Strategic RoadmapBusiness Process Driven Transitional Architecture

Current State Current State (CS)(CS)

Rationalize Sales Rationalize Sales ProcessProcess

Rationalize Financial Rationalize Financial ProcessesProcesses

Rationalize HCM Rationalize HCM ApplicationsApplications

Ready for Ready for OptimizationOptimization

• Define Current State Here

• Establish common business processes for



• Common use business processes can be ss

Business Process Driven Transitional Architecture

sales Finance people related functions optimized on a new infrastructure platform for grown


• Consolidate disparate sales applications onto a

• Consolidate Financial applications onto a

• Consolidate ERP applications onto a single

• Consolidate Applications can be optimized on a

Bus

ine

State Here sales applications onto a common platform

• Standardized Application Interfaces in Place

applications onto a common platform


applications onto a single platform


can be optimized on a shared platform

D fi C t Si l i f l d t Si l i f fi i l Si l i f C /Sh d d t i

App

s


• Single view of sales data for the organization


• Single view of financial data for the organization


• Single view of employee/partner/etc… data for the organization


• Common/Shared data is ready to be consolidated into a single database instance or common database platformin

fo


• Apps and process standardized on architecture standards



• Standard Infrastructure platform optimized for HA and scalability – enabling growthTe

ch


Oracle@Oracle Architecture RoadmapC SC S SSCurrent State: Current State: Business Silos Business Silos

(1998)(1998)

<Transitional <Transitional States>States>

Future State: Future State: Operational Excellence Operational Excellence

(2003)(2003)

Business Business • 40 Data CentersS ff

• Centralize and Globalize ITC G

• Multiple Transition PhasesArchitectureArchitecture • 2300+ Staff • Centralize IT Governance

• Gain IT efficiencies via IT standardization & optimization

• Reduce Data Centers (2)/Staff (1600)• Save on expenses ($1B/year)

Phases

• 1998 65 ERP inst.

• 2001 20 ERP inst.

• 2002 10 ERP inst.

• 2003 1 ERP inst p ( y )

Application Application ArchitectureArchitecture

• Few standard business processes

• 40 Education registration systems27 IT Support apps

• Standardize core business processes and rationalize apps

• Education Sys Rationalization (1)• IT Support Rationalization (1)

S S /

• 2003 1 ERP inst.

• For BPs, started with RevRec/Financials

• Phase I Capabilities

• Acct• 27 IT Support apps• >1000 applications

• E-Bus Suite Std/Rationalization (< 100 applications)

Information Information ArchitectureArchitecture

• 63 Financial databases• 60 IT Support databases

• Financial Data Rationalization (1 single global instance)

• IT Support Data Rationalization

• Acct Reconciliation

• Corporate Submissions

• Process pp(1 single global instance)

Technology Technology ArchitectureArchitecture

• 97 Email servers on 120 databases

• 501 Education servers600 t t

• Email Consolidation (2 server cluster/4 DBs)

• Education Server Consolidation (296)T t S C lid ti (30)

Efficiency

• Phase II Capabilities

• Full Balance Sheet & P&L

E ti


• 600 test servers • Test Server Consolidation (30)• Exceptions

• Analysis/Review

…

Strategic RoadmapDeliverable Details – Implementation RoadmapDeliverable Details Implementation Roadmap

Q1 Q 2 Q 3 Q4 Q 1 Q 2 Q3 Q 4 Q 1 Q 2 Q 3 Q 4

FY 2009 FY 2010 FY 2011

Design GVSP

BI Analytics

PROJECTTHEME

Global Platform

BTO Setup & Operations

Managed Services and Hosting Assessment

Business Intelligence

Q1 Q 2 Q 3 Q4 Q 1 Q 2 Q3 Q 4 Q 1 Q 2 Q 3 Q 4

FY 2009 FY 2010 FY 2011

Design GVSP

BI Analytics

PROJECTTHEME

Global Platform

BTO Setup & Operations

Managed Services and Hosting Assessment

Business Intelligence

Plan & Projection

y

ELM OnDemand and UpgradeOptimize HR / Migrate Point Solutions

Portal Deployment

CRM (HR Help Desk )

Hum an Resources

US / Mexico Migration

HR Rest of World

Intelligence

Plan & Projection

y

ELM OnDemand and UpgradeOptimize HR / Migrate Point Solutions

Portal Deployment

CRM (HR Help Desk )

Hum an Resources

US / Mexico Migration

HR Rest of World

Intelligence

Jan-2009 Jan-2010 Jan-2011Jul-2009 Jul-2010Apr-2009 Oct-2009 Apr-2010 Oct-2010

Finance Optimization

Finance & Procurement

Infrastructure

Replatform Hardware and Grid

SO A Based Integration

Security & Rights Mgmt

Upgrade to 9 .0

On Going / Steady State

Proj ect

Foundational

Key

Srv Proc ., Procurement & eSettlements

Program , Resource and IT Asset Management

Finance Optimization

Finance & Procurement

Infrastructure

Replatform Hardware and Grid

SO A Based Integration

Security & Rights Mgmt

Upgrade to 9 .0

On Going / Steady State

Proj ect

Foundational

Key

Srv Proc ., Procurement & eSettlements

Program , Resource and IT Asset Management

Implement Core Modules & CDHImplement Core Modules & CDH

Implement Demantra& ASCPImplement Demantra& ASCP

Retire SalesForce.comRetire SalesForce.com

Implement Document & RecordsImplement Document & Records

Implement CRMImplement CRM

Retire SCORES, ABLAZE, GetPaidRetire SCORES, ABLAZE, GetPaid

Implement BI & AnalyticsImplement BI & Analytics

1 /11 /2009

Benefit Point

1 /11 /2009

Benefit Point

Laboratory Improvement Program Business Processes OptimizationLaboratory Improvement Program Business Processes Optimization

Replace existing CAP.comReplace existing CAP.com

Retire DocumentumRetire DocumentumImplement Web ContentImplement Web Content

Integrate ApplicationsIntegrate Applications

Iterative, On-goingIterative, On-going

Deploy iStoreto CustomersDeploy iStoreto Customers

It ti O iIt ti O i

Deploy Self-Service BI/ReportingDeploy Self-Service BI/Reporting

Oracle Apps/BI

Implement Identity Management & SSOImplement Identity Management & SSO

Oracle UCM Oracle BPA/SOA Oracle WebCenter Oracle IdM

Extend Optimized Business Processes to CustomersExtend Optimized Business Processes to Customers Iterative, On-goingIterative, On-going

Implement Federation & Access ManagementImplement Federation & Access Management

Automate Provisioning / De-provisioningAutomate Provisioning / De-provisioning


pp

Business Case DevelopmentPerformed During Strategic Roadmap Phasee o ed u g St ateg c oad ap ase

Architecture Vision

Current State

Future State

Strategic Roadmap

EA Governance

Business Case





• Business Value









Investments




Activitiesand




numbers




WorkEffort


Effort

EA Governance Phase


EA Governance> Assess and Recommend Risk Management

Intent• EA Governance primarily revolves

around strategic decisions that are taken

Focus1. What decisions need to be made?

• Decisions about major IT domains

g

that will influence the future design of the IT environment.

• EA Governance sets in place design related Policies, Standards, Guidelines

2. Who should make those decisions?• Rights are exercised in different

governance styles

and Procedures that must be complied with.

• EA Governance is concerned with ensuring a design integrity of the

3. How will these decisions be made and measured?• Multiple mechanisms make

governance workg g g ybusiness as a whole and will govern decisions that are outside of the domain of IT.

governance work

Without EA Governance, Strategic Initiatives are likely to fail• May be possible to realize a few incremental benefits• No real business benefits will be realized from major IT Initiatives


EA Governance Guiding PrinciplesGuiding Principles

• Aligning the Enterprise Architecture with the business strategy increases

Strategic Focus

• Aligning the Enterprise Architecture with the business strategy increases the value of IT to the business.

Compliance to Enterprise Architecture

• An effective Enterprise Architecture needs to be a guide for all IT projects. IT projects that do not comply with the Enterprise Architecture have a much higher chance of not aligning with the Business Strategy of the organization and dilute the value of the Enterprise Architecture to theorganization and dilute the value of the Enterprise Architecture to the organization.

Wide Participation

• Wide participation by stakeholders throughout the enterprise ensures that the Enterprise Architecture will meet the optimal requirements of the enterprise, not just a select group of LOB requirements


EA Governance

CIO/CTOCIO/CTOSets Direction Sets Direction

Info

rms

Advises

G

Steering CommitteeSteering

CommitteeArchitecture

BoardArchitecture

Board PMOPMOAdvises

GuidesProject Teams

Project TeamsControls

DeterminesPriorities

Executes Change


Executes ChangeProjects

Governance Environment


Source: TOGAF

EA Governance roles and responsibilities matrixDeliverable DetailsDeliverable Details

Architecture Implementation GovernanceSteering

CommitteePMO EA Board Project

TeamsCommittee TeamsProvide Communication & Awareness and of standards & assets

I C A & R C

C d t C h & C liConduct Coherence & Compliance Reviews I C A & R I

Provide cross-project Communication and Guidance I A R I

Escalation Resolution A & R C C I

Allowance for Deviation and Dispensation I A R I

Define Degree of EA team engagement I R A C

Identify Resource Capability & Capacity I A & R C C


yUpdate Architecture Repository & Capture change requests I C A RR Responsible

A AccountableC ConsultedI Informed

Business Case DevelopmentPerformed During EA Governance Phasee o ed u g Go e a ce ase

Architecture

Vision

Current State

Future State

Strategic Roadma

p

EA Governa

nceBusiness

Case





• Business Value









Investments




Activitiesand




numbers




WorkEffort


Effort

Business Case Phase


Business Case• Business Case Deliverable Outline:

– Alignment – better alignment between the business and IT enables a shared understanding of the business goals and IT opportunities available to more effectively

th b i Thi k it ibl t id tif th li ti th t tt t trun the business. This makes it possible to identify the application that matter most to the business.

– Financial Benefits

– Lower Costs through application consolidation and/or retirementg pp

– Non-Financial Benefits

– Frees up resources to work more on applications that will support future business needs and less on just keeping the lights on.

– Expenditures

– Hardware / Software / People – all can be reduced through rationalization

– Risk

– Compliance – through fewer systems and simplified interactions, comliance is more easily achieved.

– Fewer systems mean less moving parts that can break

– Assumptions and Constraints


– Assumptions and Constraints

Business Case DevelopmentPerformed during Business Case Phasee o ed du g us ess Case ase

Architecture

Vision

Current State

Future State

Strategic Roadma

p

EA Governa

nceBusiness

Case





• Business Value









Investments




Activitiesand




numbers




WorkEffort


Effort

Portfolio Rationalization Benefits

• Lower licensing costs • Lower and more manageable

• Increased business agility• Increased IT flexibility

Tangible Intangible

grisk• Reduced costs for IT development

y• Reduced risk on non-compliance

Quantified

• Standardized technologies enables standardi ed skillsetsenables standardized skillsets• Increased utilization of IT skills• Simplified IT management

Non Quantified

• Simplified IT management


Business Value Discovery Matrix Developed during Roadmap OADP Phase

Simplification6

Primary Targets Secondary

Targets

Financial Impact for Portfolio Rationalization

p g p

1. Vendors2. Redundant Functionality3. Standardization (e.g. OS)4. Info. Lifecycle Mgmt

Consolidation

Hig

hest 4 6

71

2 911

12

1315

5. Databases6. Applications7. Data8. Servers9. Test / Dev Environment10. Backupav

ings

3

Hig

h

5810

111417

1610. Backup

Virtualization11. Middle Tier12. Data Tier13. Application Appliances14 Serversed

Sa 3

14. Servers15. Databases

Automation16. Management17. Backup Processes1 Yr

M

3+ Yrs2 Yrs


Avg. Time to Value

Risk Mitigation TemplateAssess and Recommend Risk Management

Risk Category Risk Description Probability of Occurrence

Potential Business Impact

Recommended Risk Mitigation Actions

Operational Service Disruption due to Application Low High Ensure proper planning for application

g

Downtime migration – schedule off hours

Slow Performance of new applications because of increased demand

Low High Ensure that target application goes through full load/performance testing prior to implementation

Financial Loss of revenue due to new application complexity

Med High Ensure Proper training on new application to all end-users

Increased SW maintenance costs High Low Ensure that retired application support contracts are not renewed

Compliance / Legal Security for new application Low Med Ensure that security performs a full audit of new system prior to implementation

PII data being migrated to new system High Low Ensure that new system meets PII li i tcompliance requirements

Strategic Loss of business functionally Med Med Ensure that end to end process testing is completed prior to implementation


Outputs of Stage I: Portfolio RationalizationRationalization

• Matrix of Business Capabilities / Supporting gApplication software

• Matrix of Applications / Supporting Technology capabilities/Assetscapabilities/Assets

• Catalog of IT Standards(Interfaces and Assets)• Transitional Architectures (up to ArchitectureTransitional Architectures (up to Architecture

Optimization)• Governance models• Business Case to support Portfolio Rationalization


Next Steps


IT Optimization (ITO):Stage II

Stage I: Portfolio RationalizationITOITO

A hit tA hit t Stage I: Portfolio RationalizationArchitectureArchitectureVisionVision

Stage II: Data Center & System Optimization

ness

&

men

t

Stage III: Shared Services/Cl d C ti

Stra

tegi

c B

usi

ITO

Alig

nm

Cloud Computing


application portfolio rationalization

Technology

oracle corporation

business strategygoals

lines of business

application consolidation

optimization itoapplying

application support

rationalization efforts

business architecture3