ea roadmapping

Getting There and Enjoying the Trip:

Using Roadmaps to Turn EA into Results

David Baker

Chief Architect

Diamond Management & Technology Consultants

[email protected]

October 24, 2007

EA typically delivers a future state that is impossible to reach in a

single step

Current

State

Future

State

?

The trouble is you cannot predict the economic climate that far in

advance

Some organizations immediately start implementing the future state

Usually results in questions being asked 6 to 12 months later

Why are we doing this?

How much longer will it take?

When can I expect to get my new capabilities?

Need to do SOME economic planning

Impossible to take the time to determine the exact number

(and type) of resources at the time of the EA plan

But SOME planning is absolutely necessary BEFORE

mobilizing the troops

Your EA plan MUST record your planning assumptions

Business priorities at the time of the plan

High level cost assumptions for the transformation

High level benefit assumptions for the transformation

What goes into a roadmap?

Business Capabilities

“I need the ability to….

Business Operations

…by doing….

Business

Capabilities

Requiring IT

Support

When each

capability is

delivered

1H06 2H06 1H07 2H07

Th

eme 1

Capability 01

Capability 12

Capability 04

Th

eme 2

Capability 07

Capability 09

Capability 02

Th

eme 3

Capability 03

Capability 05

Capability 08

Technical Solution

...with…”

Resulting in clear answers to questions held by key stakeholders

Have we done this before?

How do we get it done?

How do I make sure it’s done

correctly?

What’s possible?

Business

wants to know

IT

Managers

want to know

What’s possible?

When do I get it?

How much does it cost / save?

What are the business risks?

Technical

Staff

wants to know

What do I build?

What do I build it with?

When do I build it?

EA Roadmap

Your EA Roadmap is NOT a project plan!

A Roadmap is a time phased set of activities but at the

Program/Initiative level NOT a project level

You are planning the necessary transitions for a multi-year effort

NOT planning the implementation

The Roadmap defines key objectives, and a high-level, prioritized

approach to reach those objectives

Roadmaps have enough detail to test the business justification but

NOT detailed sourcing or budgeting detail

EA Roadmaps are created as part of the Strategy and Planning

cycle

Business

Strategic

Planning

IT Strategic

Planning

Release Planning(Portfolio Mgmt)

ProjectExecution(SDLC)

Business

Operations

Use enterprise and business unit

direction and goals to drive IT plans

Develop projects that

support businesses’

annual and strategic

plans

Prioritize the allocation of

IT resources to achieve

business strategy, in

alignment with enterprise

architecture

Run the

business

Portfolio 1

Blueprints

Portfolio 2

Blueprints

Portfolio 3

Blueprints

Enterprise

Blueprints

Filte

r

Project

Project

Project

Project

Project

Multi-Year Plans

(Roadmaps)

Budget Cycle

(Project Plans)

Project Cycle Continuous

The Roadmapping process

Current

State(strategy, process,

technology)

Future

State(strategy, process,

technology)

Identify Gaps

Identify

Themes &

Initiatives

Business

Prioritization

Mitigate Risk

Sequence

Initiatives

Business

Justification

Lay Out

Roadmap

Input

Identify the gaps between the current and future states

Identify the new and modified business capabilities

Consider changes to organization, processes, information and the

underlying technology

Rationalize your portfolio of applications

Retire some applications

Rehabilitate some applications

Replace some applications

Eliminate some applications

Bundle the changes into business themes and initiatives

Initiative Description Capabilities Addressed

Support

Service Model

Analytics

Enhance program through

improved strategies and data

analytics

• Ability to leverage any external data to perform member

identification and predictive modeling

• Ability to leverage utilization and outcome metrics at the

provider level to improve network management and

help shape the network

• Ability to access treatment utilization and efficacy and

deliver feedback to providers

Improve Financial

Reporting and

Analytics

Improve financial tracking and

analytics for products and

enable ROI calculations

• Ability to provide aggregate and individual information

regarding utilization and ROI

• Ability to track and predict medical costs and to

properly allocate the contribution margin of products

Support New

Products /

Segments

Create and support new

products to serve individual

and newly identified markets

• Ability to meet currently identified market opportunities

through new product offerings

• Ability to market to and service members with no plan

sponsors

Use the prioritized capabilities to determine priority order of

the initiatives

There are many ways to prioritize the list of capabilities

Prioritize them directly in a business workshop (hard)

Map them to the prioritized business goals (easy)

Use weights, Harvey balls,

Assign each initiative the average priority of its associated

capabilities (or weight them, or . . . )

Initiative Priority Capability Priority

Support Service Model Analytics M Capability 1 H

Capability 2 M

Capability 3 L

Improve Financial Reporting and Analytics H Capability 4 H

Capability 5 H

Support New Products / Segments M Capability 6 H

Capability 7 L

Create business justifications for each initiative

Element Description Example

Problem statement Defines the reason for the project idea

to exist in the first place

“Cannot provide customers with

real-time information”

Project Goals What is the project trying to accomplish;

must address the problem

“Enhance operating costs by real-

time handling of claims information”

Market opportunity What is the total size (people,

revenues) of the potential market for

this project?

“$3M claims processed per year”

Value proposition For each target group, what is the

value?

“Provide Call Reps with real time

information”

Capital costs Upfront investment “$10M in systems”

Operating Costs Ongoing investment “$1.5M annually in labor, data

analysis, maintenance”

Benefits Increased revenues, decreased costs “Reduce customer turnover“

Risks / Mitigants Will conditions change to fundamentally

change the need for this project?

“Data in other projects will be

negatively impacted”

Use scorecards to show traceability amongst EA elements

INITIATIVE DESCRIPTION Enhance medical management programs through improved

strategies and data analytics

CAPABILITIES ADDRESSED Ability to leverage all client and any available external

experience information to perform member identification and

predictive modeling

Ability to leverage utilization, outcome, and satisfaction metrics

at the provider level to improve network management and help

shape the network

Ability to analyze the results of integration and Care

Management programs to validate medical offsets, help direct

program improvements, and develop new programs

Ability to assess treatment utilization and efficacy and deliver

feedback to providers

BENEFITS DESCRIPTION Sales: Client has been rejected for bids in the past because of

an inability to leverage data from external carriers and on all

services available to a member

Medical Costs: Improved ability to identify members and

approach them with treatment options tailored to their needs and

eligibility will increase the use of highly effective, low cost

services and will increase medical offset. Incorporating data, in

particular, can have benefits from being be the first experience in

the benefit path and may become aware of high risk members

before they are known elsewhere in the company (e.g.,

substance abuse pregnant woman). The benefits might not

accrue, but they will accrue to the company as a whole in terms

of medical cost reductions

AFFECTED IT COMPONENTS Enterprise Data Warehouse

Financial Books of Record

Compliance Systems

Provider Portal

DEPENDENCIES/CONSTRAINTS Project XYZ for integration of member data and enhanced

individualization (2Q06)

BUSINESS PRIORITY High

Duration

1-3 months

3-6 months

6-9 months

9-12 months

12 months +

Cost Range

$0 - $250,000

$250,000 - $499,000

$500,000 - $999,000

$1,000,000 - $4,999,000

$5,000,000 - $10,000,000

RANGE FOR BENEFIT, DURATION & COST

Benefit Range

$0 - $499,000

$500,000 - $1,999,000

$2,000,000 - $4,999,000

$5,000,000 - $7,999,000

$8,000,000 +

1

4

5

7

A word about costs and benefits

There is no need to do a rigorous cost/benefit analysis at this point in

the lifecycle

A roadmap is NOT a budget

The subsequent portfolio management phase will drive the

detail to a budget level (mobilize resources and costs)

The costs and benefits estimated during the roadmap phase are an

additional tool for determining the overall multi-year sequence

Do “just enough” estimation

Have business subject matter experts estimate the benefit

ranges

Have architects use engineering estimation techniques to

develop cost ranges

Consult your architecture models to understand and mitigate

risks

Consult your EA plan to understand the type of architecture risks

involved

New technology - risky

System replacements – complex and costly

Lack of skilled resources – risky

Foundational technologies - impact the schedule

Compliance requirements – schedule pressure

Sequence the architecture changes into slices

Account for technology dependencies

Account for architecture risks

Eat the elephant one bite at a time!

Consult your EA plan to understand the type of architecture risks

involved

New technology - risky

System replacements – complex and costly

Lack of skilled resources – risky

Foundational technologies - impact the schedule

Compliance requirements – schedule pressure

Sequence the architecture changes into slices

Account for technology dependencies

Account for architecture risks

Eat the elephant one bite at a time!

Use your work to sequence the initiatives

Sequenced Initiatives

You can also use any number of cash based indicators to adjust

the sequence (or to rule out individual initiatives)

NPV

IRR

Payback /

Breakeven

Peak

Funding

ROI

Definition Pros Cons• Net Present Value

• Discounted sum of all cash flows

for the project

• Invest where NPV > 0

• Measure of value

creation… should lead to

good (best) investment

decisions

• Difficulty / uncertainty in

choosing discount rate

• Does not account for

amount of investment

required

• Internal Rate of Return

• Discount rate that produces an

NPV of zero

• Invest where IRR is greater than

an established “hurdle” rate

• Easily scaleable by

investment size

• Can lead to bad

investment decisions…

use with care!

• Point in time where cumulative net

cash flow = 0

• Amount of time required to recoup

the original investment from a

project

• Under uncertain ´flight to

quality´ stock market

conditions, Payback can

become the indicator

• Can often lead to bad

investment decisions

• The maximum negative cumulative

net cash flow over the lifetime of

the project

• Represents the total amount of

money required to be put into the

project

• Appropriate to its

objective

• …the nature of the

funding is a whole other

issue...

• Return on Investment

• The total returns of the project

divided by the total cash outflow

• Allows for easy

comparison across

projects

• Does not take into

account the amount of

capital needed

Initiatives can also be sequenced into stages based on business

need and dependency to deliver incremental capability

Costs of achieving capabilities

CostIllustrative

Stage 2

Stage 3

Stage 4

Portfolio Management Strategy

1Stay in

business

Non-optional level of investment

Address regulatory

environment, align with current

projects, keep current on

software releases, etc.

2Build

foundation

Enable initial capabilities

Establish foundation for

realizing additional capabilities

in stages 3 and 4

3Improve

effectiveness

Delivers additional capabilities

in response to pain points

Dependent on stage 2

4Improve

efficiency

Delivers efficiency focusing on

migrating capabilities to new

strategic platforms

Dependent on stage 2

Capability

Stage 1

Lay out the roadmap

Interim Solution

Reporting Tool Re-architecture

Core View

End-to-End Workflow

Electronic Receipt/ Submission and Data Validation

End-to-End Solution

Analytics Tools Re-architecture1

2

3

4

5

6

7

8 Training Tools Re-architecture

9 External Constituent Integration

System Foundation & Information Management

High Quality Data Capture & Information Exchange

Dynamic Processing & Workflow

Advanced Analysis & Reporting

Multi-Channel Access

IT Portfolio Management & Strategic Enterprise Architecture

Integrated Organization & Communication

2006 2007 2008 2009

Theme▼ 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

1

2

4

5

3 6

7

8

9

Milestones

Another exampleS

F &

IM

HQ

DC

&

Info

Ex.

Dyn P

roc

& W

FA

A&

RM

CA

ITP

M &

S

EA

Int O

rg &

C

om

m

2006 2007 2008 2009

THEME / INITITIVE▼ 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

• Define High-Level Process Flows• Define Data Architecture Strategy• Create Book of Record• Implement Interim Solution• Select Vendor Package• Implement Enhanced Tool• Retire Acquisition and Data Collection Apps

• Develop Business Information Model• Define Process Flows• Define Integration Strategy• Implement Electronic Receipt & Submission• Provide Automated Data Validation

• Optimized Business Process (OBP)• Select Technology Tools• Implement WF & BR Process Improvements

• Define Process Flows• Define DW/DM Architecture Strategy• Implement DW/DM Structures & Feeds• Develop New Reports• Select Data Analytics Tool• Implement Data Analytics Tool• Retire and Re-architect Reporting/Analytics

• Define Process Flows• Select Technology Tool• Design & Implement Core Safety View• Define Integration Strategy• Integrate External Systems• Retire Doc Mgmt Systems & Integrated Sys

• Define & Deploy Communication Strategy• Establish Process Improvement Governance• Create Acquisition Assessment Framework• Institute Regulations Pipeline Management• Select & Implement Training Tools

• Program Management Office• Institute IT Investment Management• Enhance SEA Competency• Develop Arch. GPs, Governance, & Processes• Develop Strategic Architecture Blueprints

Retire: System 5, System 7

Retire: System 9, System 10,

System 11

Re-architect: System 12,

System 13

Re-architect: System 14,

System 15, 16

Retire: System 18, 19, 20, 21

Retire: System 22, 23

Maintain: SRM Portal

Re-architect / Retire: System 8

Re-architect: Training systems

Retire: System 4

Retire: Fsystem 1, System 2,

System 3

One more example

Support Service Model Analytics

• …Leverage all Aetna and external experience data…

• …Leverage utilization, outcome, and satisfaction metrics…

• …Analyze the results of Behavioral Health integration…

• …Assess treatment utilization and efficacy…

Support Enhanced Service Model

• …Identify high risk, highly actionable Members…

• …Monitor progress and track the adherence…

• …Provide constituent-targeted service experience…

Financial Reporting & Analytics

• …Provide aggregate and individual information…

• …Track and predict Behavioral Health medical costs…

Enhance Provider Web Experience


Enhance Member Web Experience


Enhance Plan Sponsor Experience


• …Provide a single bill (i.e. including all products)…

Operational Improvements

• …Deliver flexible and customized products and services…


• …Administer BH products in a cost effective manner…

• …Perform cost effective pricing for targeted business…

New Products / Segments

• …Meet currently identified market opportunities…

• …Market to and service Individuals…

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2006 2007 2008

A

1

4

5

7

B

2

3

10

C

6

9

D

10

E

10

F

10

12

G

8

10

14

15

H

11

13

ID Theme / Initiative

$3,856 $3,214 $3,983 $4,129 $2,864 $2,349 $1,696 $1,121 $880 $389 $0 $0$24,518TOTAL COSTS ($000)

Remember, the level of detail is commensurate with the lifecycle

stage

Portfolio 1

Blueprints

Portfolio 2

Blueprints

Portfolio 3

Blueprints

Enterprise

Blueprints

Business

Strategic

Planning

IT Strategic

Planning

Roadmap created

here

Sequenced list of

initiatives


stage

Portfolio 1

Blueprints

Portfolio 2

Blueprints

Portfolio 3

Blueprints

Enterprise

Blueprints

Filte

r

Project

Project

Project

Project

Project

Business

Strategic

Planning

IT Strategic

Planning


Roadmap created

here

Sequenced list of

initiatives

Filter and refine into

Projects

Apply resource and

financial constraints


stage

Portfolio 1

Blueprints

Portfolio 2

Blueprints

Portfolio 3

Blueprints

Enterprise

Blueprints

Filte

r

Project

Project

Project

Project

Project

Business

Strategic

Planning

IT Strategic

Planning


ProjectExecution(SDLC)

Business

Operations

Roadmap created

here

Sequenced list of

initiatives

Filter and refine into

Projects

Apply resource and

financial constraints

Use prioritized

initiatives and

capabilities to

govern project

execution

A few considerations for service orientation

The move to services means that the business capabilities will be

mapped to services, not systems or applications

Services will be retired, rehabilitated, rearchitected or removed

Roadmaps may have to become more granular to address the

impact to services

Service-level roadmaps will be especially important during

governance of implementation projects

Recap: What is a roadmap?

Prioritized business capabilities

Prioritized initiatives

Initiative scorecards

Cost and benefit estimates, estimated duration

Risk mitigation strategies

Sequence architecture time slices

Sequenced initiatives

Input to portfolio management

Thank You

Questions?

ea roadmapping

Business

business capability

capabilities capability

new ability

business themes

modified business capabilities

capability isrequiring

business justification

business risks