june 4, 2008 investments in new architecture on razor-thin margins ibi summit, nashville, tn
TRANSCRIPT
June 4, 2008
Investments in New Architecture on razor-thin
marginsIBI Summit, Nashville, TN
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AgendaWho is Tesch Consulting?Brief rewind… How did we get here?Side-effects of the journey…What have we learned?Change StrategyAdoption approachesCosts of approachesRisks / CautionsQ & A
Agenda
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Who is Tesch Consulting?
Who is Tesch Consulting?
Will Tesch Over 20 years of Business
Management experience Former CIO Owner and President of
Tesch Consulting Successful track record Today we’re delivering
services to some of the largest organizations in the US
The Team Seasoned enterprise
integration expertise Proven experience
matching technology solutions to business needs
Significant Project Management experience
Strong technical acumen Across all technologies “Lived in our solutions”
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Tesch Consulting Practice FocusThought Leadership
• Enterprise Innovation• Domain Experience (Retail, Supply Chain, Oil, Healthcare,
Document Management, Manufacturing)• Learning and Education
Executive Coaching• Project Quality Assurance• IT Department Assessments• Strategic Organizational Counseling
Business Intelligence• Retail Solution Framework• Data Warehouse Design• Enterprise Reporting Evaluations
Enterprise Integration• iWay integration expertise• Infrastructure Expertise• Mentoring Services
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Tesch Consulting – National Presence
Who is Tesch Consulting?
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Companies we’ve worked with…
Who is Tesch Consulting?
Impact21 Group ExxonMobil US Coast Guard Eby Brown Pamida Stores Red Prairie Manhattan Associates Infor Kehe Food Distribution Hayes-Lemmerz Information Builders (IBI) Large Health Care Provider
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Momentary rewind…
‘What business is’ – Sales, Acctg, Ops … hasn’t changed.
‘How business is’ has changed significantly.
‘How business has learned to be’ is fundamentally important as it will be a crucial input into what is ‘needed for the business to continue to operate.’
Business is…
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Convergence of innovations
40 years of technological advancesContinued personalizationMarkets are defined by effective uses of
innovationsEnterprise systems have grown organically
Convergence
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Convergence of Innovations
Technology disparity escalates complexity• Myriad of environments• Multitude of languages• Near-term Asset Obsolescence
Evolution of the Technologist• Competing topologies / infrastructure• Governance continues to rise in importance• Marketplace competition drives company initiatives
Convergence
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Side-effects
Skilled and knowledgeable resources across many technologies
Slower organizational response times due to challenges in managing the technologies
Lack of interoperabilityComplexity is significant IT methodology
continues to get re-shaped
Reuse is compounded by knowledge of same styles across the technology expertise
Entrenchment as a strategy for technologists
Today’s Landscape
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Shortly before 4:11 p.m. (est) on August 14, 2003, a series of power surges over a 12-second period triggered a cascade of shutdowns at more than 100 generating plants throughout eight U.S. states and Ontario. The result was the biggest blackout in North American history. 61,800 megawatts of power were lost to over 50 million people. - ieso, Ontario Power
On could argue that we are rather dis-integrated?
Toronto, August 22, 2003 (6:00 p.m.) -- Ontario's power emergency will end at 8:00 p.m., marking the return to service of the majority of the province's generating capability. Consumers are urged to continue with their conservation efforts until 8:00 p.m. - ieso, Ontario Power
Only 8 days…
Side-effects
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IT Characteristics
Common attributes and constraints• Operationally driven• Innovation occurs outside of IT• Black-box syndrome• Shoe-string budgets
Technologist is tactically minded…• Point-to-point interface approaches• ‘Quick and Dirty’, ‘Hard-coded’, etc…
Side-effects
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Sunshine Moment!
Change Strategy
“While there are proud moments, ingenious alternatives and quick-fix acts of wonder, the recognition of the fatal nature of the on-going behavior of the organization isn’t abstract any longer.” - (IBI whitepaper)
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What have we learned?
The heritage of the organization’s learning resides in the existing operational systems and resources
Internal and external pressures on the organization to become more efficient will not change so there must exist continuous responsiveness by the organization’s business systems.
The technologist reflects the temperament of the organization as they tend toward quick remedies
Organizational Learning
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Gleicher’s Formula
Working in organizational change management David Gleicher’s seminal research work discovered that organizations will change at a pre-determined rate based on the following ingredients.
Change Strategy
1. Awareness of why the change is needed2. Desire to support and participate in the change3. Knowledge of how to change4. Ability to implement new skills and behaviors5. Reinforcement to sustain the change
1. Awareness of why the change is needed2. Desire to support and participate in the change3. Knowledge of how to change4. Ability to implement new skills and behaviors5. Reinforcement to sustain the change
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Think Psyche-logically
Maneuvering in your company is unique to your style, but critical for long-term planning building an architecture
The #1 factor for successfully adopting an enterprise integration framework is getting your IT team to change
Architectural planning begins a new chapter in your IT department / company
Instills a framework for software development disciplines
Map your goals to the business needs
Change Strategy
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What is the ‘New’ Architecture?
New Architecture
It is a FRAMEWORKIt depends on the effective deployment of the
following components
• IT leadership change - a commitment to adopt new methods of integration
• Technology tools (iWay Service Manager, iWay developer workbench, adapters suitable to the existing operational systems of the organization)
• Resilient commitment to stay the course
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Adoption Approaches…
1. Start with Integration• Stop custom point-to-point development;
adapt existing systems; build a custom adapter
• Eliminate system redundancies and breakdown points
Adoption Approaches
2. Remove inter-system dependencies• Cascading FTP scenarios;
reduces Help Desk support
• Use to leverage the removal of legacy systems
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Adoption Approaches…
3. Align Integration effort with new business functionality• Sell to Sales; Market to Marketing; Show
Accounting the beans
• Visibility of approach should be pronounced
Adoption Approaches
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Adoption Approaches…
Adoption Approaches
4. Consider an Integration Layer for Enterprise System replacements / strategic projects• Higher risk, but richer
rewards
• Force the philosophy, require the immediate commitment by dedicated resources
• Mentoring critical for long-term success of integration
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What are the costs?
Adoption Approaches
Initial Investment considerations• Negotiate up-front for the long-term investment• Build into budget• Work with business vertical areas to include in
integration strategy within overall project
Managing related costs depend on the ongoing commitment…
• By IT Leadership• By the Technology team• By ability to deliver value quickly to
gain momentum
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IT efficiencies
Smallest impact $
Tool Investment
Targeted IT Cost
Reduction
SameInvestment $
Tool Investment
New BusinessFunctionality
Overtakes Cost
Internal Costs rise
Tool Investment
Enterprise Critical Path;
Must existulterior rationale
Most Impact $
Tool InvestmentDifferent Adoption Approaches
“The best practice for architecture adoption is to follow on the heels of a business feature enhancement that is politically charged!” – IBI Whitepaper
Timid Driven Leveraged Versatile Glue
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Adoption Approaches
Best ways• Market to Marketing• Sell to Sales• Show Accounting the beans
Plausible but boring ways• IT efficiencies• Human Resources• Internal Portal
Worst ways• Executive Information Systems• NON-Strategic; backlog projects
Think Psyche-logically
GOAL…
TO GET
MOMENTUM!
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Market to Marketing
Corporate-wide EDI initiatives (Supply Chain)
Real-time feeds of competitive information
Market differentiator opportunities with new functionality
Think Psyche-logically
GOAL…Need Support From Internal Innovators
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Sell to Sales
Enhance the company image through tight integration
Reusability creates quicker customer response
CRM integrationMessaging medium
constantly changing… (Lots of opportunity here)
Think Psyche-logically
GOAL…
Have Sales Sell I.T.!
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Show Accounting the beans
Review Accounting Batch Job interfaces
Post-Audit your implementation
Comparable estimating metrics for old-fashioned integration
Establish your plan for future reusability
Think Psyche-logically
GOAL…
Give your CFO the
eyes to see the value of
the new
architecture
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Risks and Cautions
Business Issues• Cost of initial investment• Architecture cant’ be deployed fast enough• Toolset doesn’t solve all ills
Design Issues• Master Data Management needs planning• Effect on operational systems for up-to-the-
minute data requests• Old practices impede approach to designing the
architecture
Risks
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Risks and Cautions
Change Issues• Internal ‘expert’ inhibits momentum• Unsubstantial training on toolset• Inexperienced technology team• ‘Not invented here’ blind spots• ‘Why consider a new approach’
personalities• Feeling that one’s job may be
threatened
Risks
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SummaryTechnologists embrace problems naturally… Organizations
and their systems grown organically… They’ve been doing it for 40 years…
The ability for the organization to grow is directly related to the commitment by the technology team to change
Investments in new architecture are required for organizations positioned to grow quickly
IT budgets do not have to impede the ability to consider a new architecture
Begin a strategy to invest in a new architecture or you will continue to have ‘razor-thin’ margins…
Risks
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Questions & Answers
TeschConsulting.com
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E-Marketplace
6a. Sales reporting3. Check credit
5.
Submit order
4.Record purchase
2.Validate order1.
Enter order
8b. Billing
6c. Notify service department
7. Order parts
6b. Manufacturing
8a. ShippingBusiness Customer
Supplier
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