An Architecture for the Future

Today, organizations need to learn to make workflow changes on the fly. Otherwise, consumers and trading partners alike are ready to move on. This puts tremendous pressure on organizations to fully automate business operations wherever possible and adjust them dynamically without any disruption.

Obviously, if this were easy, everyone would be doing it. Good architectural design isn't enough. You also need flexibility and resilience. Businesses seeking to compete on a global scale should consider the following approach:

Step 1: Architecture Framework The first step is to establish a framework that presents a set of architectural principles that support the organization's business goals and strategic drivers.

For example, Fifth Third Bancorp, a $US105.8 billion diversified financial services company headquartered in Cincinnati, adopted these architectural principles:

• A multitiered processing environment is necessary to enable the distribution of processing capabilities.
• Applications should be independent of the underlying technology on which they are implemented.
• Interchangeable hardware components must be used on all platforms and tiers.

Step 2: Baseline Environment It's important to get a baseline of the current environment - both business operations and IT systems - to define what works well and what must be improved in order to meet the future needs of the organization.

Page Break

What's striking about baseline assessment work is that it usually reveals issues that the organization already is aware of intuitively - such as a need to speed process redesign. However, what were once only hunches about the environment can now be supported by hard data.

Step 3: Target Definition The target definition phase is designed to identify the new IT projects that must be staffed and funded down the road. Start by asking the management team (either in a workshop or an interview setting) to paint its vision for the future deployment of IT within the enterprise.

For example, the Metro Group, one of the largest trading and retail groups in the world with more than 2300 stores across 28 countries, envisioned what it calls a "store of the future". Making that happen called for exploiting RFID technology to track products through their entire lifecycle - from production to the shelves to the sale. RFID-tagged items would be placed on pallets and scanned upon leaving the warehouse; shipping data would be sent to the store manager for review; upon receipt at the store the pallets would be scanned again, and any discrepancies would immediately generate a report. Anything missing or damaged could be replaced through a follow-up order. RFID-equipped shopping carts would be used to monitor customer length of stay and average purchase. Item replenishment would be triggered by the system when low volume is indicated. Misplaced items would be flagged for restocking.

Clearly, this vision will require many IT initiatives: from RFID vendor selection to new order processing and inventory control applications. But this exercise helps ensure that all those IT initiatives are targeted to strategic business goals.

Step 4: Gap Analysis A gap analysis is required to compare the baseline with the target and identify what's missing. For example, besides the RFID selection and new inventory applications, the Metro Group also needed to identify projects to address skill gaps, and to process redesign needs and a whole host of standards and best-practice-based initiatives needed to help it bridge the gap between its current and future IT environments. It's not unusual for this work to spawn 20 to 30 new IT initiatives.

Page Break

Step 5: Implementation Planning Implementation planning is performed in two parts. The first part takes the project opportunities, documents them fully and organizes them into three tiers or implementation plateaus. The second part produces first-cut project plans for each of the initiatives on the implementation agenda.

The first-cut plans include details about the initiative such as project name, description, critical success factors, task lists, key deliverables, essential skills required and project interdependencies - all the information that an organization needs to drive execution. These plans are a handy way for the architecture development team to pass its insights on to the project managers who will follow them.

Step 6: Architecture Administration Once an architecture has been developed, it's important to create a governance mechanism to ensure that it remains synchronized with the strategic direction of the organization - an important continuous process improvement step that is often overlooked.

It's not unusual for an enterprise to establish a project management office (PMO) to oversee the execution of the architecture plan. Myriad communication vehicles - newsletters, intranet sites, sponsor-review meetings and post-project assessment documents - emerge from the PMO as a means of improving cross-project and cross-company knowledge sharing and transfer.

Clearly, robust and easily modifiable automation is fundamental to achieving an enterprise's vision for the future. However, such benefits don't come without their price. Hard work and management commitment, both from IT and from the highest levels of the business - including the CEO - are needed to build the kind of integrated IT architecture plans that will make the difference between success and failure in today's highly competitive business climate. Your customers and trading partners are waiting.

James Kerr is the former CIO of Mitsui Sumitomo Insurance Group and is adjunct professor at the Lally School of Management at Rensselaer Polytechnic Institute. His latest book, The Best Practices Enterprise, contains a chapter on the Resilient IT Architecture (RITA), on which this article is based. He can be reached at jkerr@kerr-consulting-group.com