Enterprise Architecture

Business Analytics and Optimization - An EA View

Fri, 20 Apr 2012 19:26:28 -0400

Although advanced analytical methods and complex algorithms have been available, primarily in the domain of academics for some time, today’s tools and techniques have opened the door for their innovative use to solve formerly intractable business challenges and to provide superior insight and predictability to support management decision making.

Enterprise executives, performance managers and business analysts have traditionally leveraged business metrics delivered in role-tailored tools such as score cards, BI reports and forecast. A variety of business matrices are utilized to understand how well the organization or a particular Line of Business (LOB) aligns with the desired business goals. The traditional enhanced by the use of emerging analytics and business optimization techniques aimed to provide full support for collaboration within the decision making cycle. This is leading to a more efficient use of the information intelligence.

This higher maturity level in the use of business insights involves the full exploitation of the traditional BI technologies combined with the use of advanced analytical models, social network behavior techniques, predictive models and other advanced analytical models, social network behavior techniques, predictive models and other sophisticated analytical models, The new approach is also characterized by the use of real-time integration techniques, massive data collection architectures and newly developed approaches that apply the analytics arsenal to streaming data to deliver the high degree of scalability and low latency demanded by many fast-paced business environments.

Figure 1. Traditional flow in Business Process Management

A framework for business Analytics and Business Optimization

Holistic approaches to business analytics and Business Optimization have emerged as trends to address the new BPM challenges, incorporating all of the new and advanced BPM techniques and principles together with the business analysts and business performance optimization offers more thorough performance management. A holistic approach to Business Analytics and Business Optimization uses the EIA and the organizations Information Governance strategy and processes to align operational and strategic business objectives to fully mange the process of achieving the goals the enterprise has established.

Business Analytics and Business Optimization require that the EIA deliver the capabilities to enable data to be collected and analyzed from anywhere (including internal and external sources , sensors, instruments and other sources); access the wide variety of formats such as structured, Unstructured and societal data , and grouped ,categorized, and processed in to information that business users can access and consume at the right time and in context. This approach also dictates that beyond the performance measurement, the business insights enable detection, direction, and prediction of business outcomes, which are core characteristics of optimized business processes across an integrated enterprise.

In addition to the new technology trends in business analytics and business optimization, which are the subject of the business, organizations are required to consider several areas of competency and strategies. Such strategies include:

Creating a strategy for analysis and optimization: An important consideration in this approach is the creation of an enterprise strategy to better align the organization’s information assets with its business goals. This strategy describes how organizations achieve their business objectives faster, with less risk and at a lower cost by improving how information is recognized and acted upon across the enterprise, within a business function or an LOB. An effective business Analytics and Business Optimization strategy not only addresses what should be done with the information, bust also how to act on it. That is, it defines the recommended actions at all levels: policy, analytics, business process, organization, applications and data.

Designing an Enterprise Information Management (EIM) Strategy: The creation of an EIM strategy includes the methodology, practices, principles and technologies needed to effectively manage disparate data. The EIM is a driver for impacting individual and organizational performance, and it is as well as enabler of BI standardization because the resulting EIM must ultimately ensure that relevant and timely information is delivered to business application and users in a way they understand. The EIM strategy derived from the business analytics and business optimization framework focuses on solving specific information related problems that have direct impact in the creation of an organization –wide business performance strategy or the implementation of a specific advanced analytical solution. Common areas around which this EIM strategy is created include an EIA with components such as Enterprise Information Integration (EII), Master Data Management (MDM), and Enterprise content Management (ECM). The EIA supporting the EIM is governed by Information Governance. Among the area considered to create this EIM strategy, we include the EIA with focus on components such as EII, MDM and ECM, as well as Information governance.

Lets briefly examine how metrics are used to quantify, monitor and evaluate the performance of the business. Business metrics or Key Performance Indicators (KPI) represents performance measurements for specific business activities. Each metric is associated to a specific business goal or threshold used to determine whether or not the business activity performs within the accepted limits.

BI and analytic techniques are used to monitor these KPIs periodically or in the real-time and the values delivered to executives, managers and other information consumers through personalized, role-based tooling to facilitate the assessment of the present state of the business and to assist in prescribing a corrective action to achieve the desire result. By implementing the definition, monitoring analysis, and tracking of KPIs, BPM provides business users and decision makers with the insights required for implementing actions aimed to optimize business performance. The mechanism turns BPM into a powerful enabler of the close link that must exist between the IT and business communities.

Let us look at a business scenario that involves many of the core elements of the holistic approach for business analytics and business optimization to establish a framework for a solution that addressed a common business challenges in the banking and financial sectors around Enterprise Risk Management (ERM).

ERM at a financial institution requires full transparency and visibility into the many areas of risk where the institution is exposed, and this requires the EIA to be the enabler of risk-related information management capabilities to:
• Facilitate the use of more robust risk modeling engines.
• Use a larger number of risk metrics to capture and promote the understanding of the institution’s full exposure.
• Provide an integrated view of risk information including correlation across the institution asset classes, portfolios and the relationship of different types of risks.
• Enable real-time and intra-day information delivery capabilities to account for the rate of change of risk factors.

Under these conditions, the traditional risk reporting schedule aimed at compliance with government institutions and regulatory agencies is no longer sufficient to understand the overall risk the organization has and what are the different risk exposures by product, geography, business units and other dimensions. To satisfy these wider and more up-to-date risk demands, organizations use advanced risk modeling engines and scenario analysis tools that use near real time or real-time analysis to predict external threats to the institution stability such as changes in the dynamic of the market. To satisfy the business requirements of today, risk officers and the business manager must be able to align risk management with the existing business silos to have visibility into an enterprise-wide view of the risk exposures(for example counter party credit risk)
Among the main factors forcing banks and other financial institution to define and implement effective ERM strategies are several industry regulations. These regulations are also major drivers for implementing a wide array of enterprise business Analytics and Optimization solutions by yond the ERM area. Is is also interesting to note that for many financial institutions embarked in initiatives to support regulations such as surbane-Oxley act, the legislation is seen as an opportunity to streamline systems and improve the efficiency of business processes. At the same time, supporting Based II requires companies to implement a strategy to integrate data nad processes that are ofter split between finance, operational and risk management functions and this is another strong incentive to speed up the development of strategies to turn the EIA into a more streamlined, agile and responsive asset that is capable of providing trusted and relevant insights for better risk management, better performance management, and better decisions around capital allocations.

Banking Use Case:

We briefly examine the core requirements for an integral ERM view at a banking institution and validate what capabilities the components of the EIA must deliver to meet the requirements of providing business insights into enterprise risk.

A comprehensive strategy for management of enterprise risks in the banking industry involves business capabilities such as:
• Understand the various financial risks across business silos, which involves obtaining accurate information about risk exposure across business lines.
• Detect and address the risks associated with internal and external financial crime and fraud. This involves analytical and business rules and the capacity to detect time patterns in a timely manner while processing vast amount of data from a large number of sources in real time.
• Anticipate and mitigate potential risk from failed internal processes, people or systems including the capacity to understand correlation of risks across asset classes and risk types.
• Comply with risk-related regulations across jurisdictions where the organization operates, and delivers useful risk insights to the right people.

In below figure we present a high level view f a framework for the information dlow in a risk solution. The figure illustrates the major levels of this framework : an information integration layer to extract risk related information from the enterprise operational systems, a trusted information delivery level that consolidates and makes information available in a timely manner, a level containing is a rich set of traditional and advanced analytical and reporting capabilities to generate risk insights from the consolidated data and a variety of delivery channels so risk intelligence can be made accessible to the users and decision makers in time and in context.

The framework highlights the core information architecture technical capabilities and major information flows but it does not explicitly address key dimensions such as the latency allowed for the information intelligence to be available.

EA Certifications

Wed, 18 Apr 2012 21:17:48 -0400

Today there is a focus on specific architecture or EA certifications. Year after year I am finding that Enterprise Architecture certifications are becoming more important to architects. Back in 2007, I remember reading an article from Gene Leganza called, “Is EA Certification Important?”. In that article he stated that 65% of the people he had surveyed stated that EA certification is not important but he also noted that a significant minority stated they were including EA certification criteria in their hiring processes.

I believe this has changed quite a bit.

We continue to see the very positive trends in terms of investment in EA skills throughout the industry and the world. Below is a snapshot of some of the trends in a presentation I gave on certifications internally at Microsoft.

But there is one small wrinkle in this. The hypothetical question I ask is, “Does the business value your EA certification? Does that EA certification alone instill confidence in the business leaders?” To some degree. I would assert that alone it doesn’t because it doesn’t cover all the concerns of the business but does cover all the concerns of an EA.

Why do I say this? The reason for this is that the business expects you to have those certifications because you are an EA. That part is a given. However, if you want to be a true partner, they expect you to operate like the business and truly empathize with the business. Use their methods, models and tools. If that is the case, complement your EA certification with a MBA or equivalent is in order.

Enterprise Architecture Certification Reference Guide

The Enterprise Architect Certification Reference Guide serves as an atlas to navigate the specific certifications for a Enterprise Architecture (EA). Other areas of architecture such as domain or solution architecture are within the corresponding Certification Reference Guides. The reference guide decomposes certifications into a framework that allows the EA to identify the certifications that are right for them. Starting with certifications that validate an EA’s competencies (experience and skills), then to certifications that derive from a specific business or industry set of concerns to the foundational certifications that enhance the skills of EA’s and will aid in the acquisition of competencies.

As shown above, the Enterprise Architect Certification Guide provides a framework to how to think about EA certifications.

Below is a description of each aspect:

Competency Based Certifications – These certifications are focused at evaluating your experience to validate that you are indeed an architect. Much like many other certifications in the industry (e.g., PMP). These are much different to others that determine what you know instead of how you applied the knowledge.
Industry / Specialized Certifications – Driven from a predetermined set of concerns such as the federal government or a specific industry is where these derive from. While these certifications are critical in that vertical, often times they do not transfer well across verticals given the difference in drivers and motivations of these very specific bodies of knowledge.
Foundational Certifications – Provides the essential skills for EA’s. These certifications are different from the other two in the respect that they validate that you’re an architect while foundational certifications validate that you know a specific methods, models and/or tools. These certifications are essential to EA’s as they populate the EA’s toolbox. For example, without an overall enterprise architecture framework how would we be truly effective as EA’s?
Applied – Divided into two primary areas, Academic and Vendor Tailored they either support a certification or provide a certification highly tailored. These are in a supporting function to Competency Based Certifications.
Supporting Certifications and Learning’s – These certifications make a well rounded enterprise architect. These are often referred to or leveraged in the day in the life of an EA.

Apple Architect: Steve Jobs

Sat, 31 Mar 2012 12:03:06 -0400

Recently I met with Group of Architect and discuss about Steve Jobs and its impact on Enterprise Architect. During that meeting, i note down some important points which we should learn from Steve Jobs as an Enterprise Architect.

1. Simplicity: We all know that Apple products are simple but this is a real art to take something complex and make it really intuitive and easy to use.
2. Results Driven: By combining the focus, clarity and purposefulness with performance based and intuitiveness Jobs really stood out. EA’s could leverage this principle to go back and make sure they are producing results and not just pontificating.
3.Focus and clarity: Know your business and focus on what is important. Job’s established rules that there will be a core focus and spent hours declining projects because they didn’t align to the priority areas. It’s so easy for EA’s to be randomized by things that frankly don’t matter to the business of EA. In an EA program or an engagement/project determine what architecture models, descriptions or even meetings align to your business goals and objectives.
4.Purposefulness: Uniquely, Jobs was able to get to the root of “why” or the purpose behind all things he did. Likewise with EA we must make sure we always get to the root of our purpose and how to fulfill it.
5.Discipline: Jobs and the overall apple team is known for their extreme rigor and discipline. This shows in their products as the quality is extremely high. The overall EA industry is maturity but there are still well adopted practices that we as EA’s could be more rigorous in our delivery.
6.No Compromise:When it came to quality and meeting the vision there was no compromise. EA’s could use this principle to protect the business such as regulatory compliance, non-functional and functional requirements. This one needs careful balance though, EA’s don’t want to be viewed as stonewalling the organization either. However, you could also argue that if our business model of EA was perfected and we had better traceability to what the business wants we could execute on this principle more?

It’s not about Complexity it’s about Simplicity

Sat, 31 Mar 2012 11:45:42 -0400