Rationalizing an Enterprise IT Architecture presentation, as delivered by Ken Naylor at OTN Architect Day in Redwood Shores, CA, 7/22/09. Find an OTN Architect Day event near you: http://www.oracle.com/technology/architect/archday.html Interact with Architect Day presenters and participants on Oracle Mix: https://mix.oracle.com/groups/15511

1. <Insert Picture Here>
Rationalizing an Enterprise IT Architecture
Ken Naylor
Insight Program Director – North American Technology Organization

2. Businesses Challenges
PACE OF BUSINESS INNOVATION
Increasing expectations Companies are under
from customers and pressure to bring
partners to provide products and services
answers sooner to market faster
GLOBALIZATION REDUCE COSTS
Customers, supply chain, Relentless pressures
and competition have all to drive additional
become global efficiencies…do more
with less

3. IT Challenges
IT Environment History Resulting in
• Evolved through corporate, • Organizational and Information
organizational and technology silos
changes • Complex IT environment,
• Mergers & Acquisitions multiple skill sets, costly to
• Adapted to new business operate
processes • Inflexible IT infrastructure,
• Adhere to layers of regulatory difficult (and risky) to modify
requirements • Redundant application systems
• Integrate ‘best of breed’ and business processes
applications • Multiple versions of business
• Account for LOB IT ‘initiatives’ data

4. OK, Who Made This Mess?
Ellison’s Law
“The value of information increases exponentially as
fragmentation is reduced.”

5. Reinvent IT Economics
The architect’s dilemma
Strategic Savings
Investment
Annual
Strategic
IT Spend Investment
Infrastructure
IT Spending and Demand Survey
80% Maintenance Infrastructure
20% New Projects

6. IT Spend for World-Class Performers is
Comparable to Their Peers…
…But, they spend it differently

7. World-Class Performers Reduce Complexity
Characteristics How Do They Do It?
• They spend 18% less on IT • Better IT Vendor Management
• They require 36% fewer IT workers • 5% fewer hardware vendors
• They need 29% fewer apps • 29% less contractor services
• 65% fewer software suppliers
• They finish 91% of all projects to
spec, on time and on budget • Standardized best practices and
• 100% have their top IT exec on the good architecture
senior management committee • Simplification and standardization
• Higher levels of process discipline
• Improved overall alignment with
business objectives
• Eliminate Information Silo’s
• Intelligent Outsourcing
• Empowered change agent

8. Oracle Global Transformation
Phase One (1998-2003): Operational Excellence
ERP
Goal: Save $1 Billion Per Year Standardization & Enterprise
Performance
IT Consolidation Management
World
Class
Fusion
Middleware
Performance
Business Strategy:
1. Simplify information systems
Governance,
2. Standardize data, systems, and Risk and
business processes Compliance
3. Automate processes
4. Move to shared service
8

9. Oracle Rationalized IT Portfolio
Old State Current State
40 Data Centers 1 Global IT & Governance Model
Business 2300+ Staff 2 Data Centers + 1600 Staff
Architecture
Few standard business Standardized core business processes
processes
63 Financial databases 1 Financial single global instance
Information
Architecture
60 IT Support databases 1 IT Support single global
instance
40 Education registration 1 Education registration
Technical Architecture
Technical Architecture
systems system
App./Services
Architecture 27 IT Support applications 1 IT Support application
<100 applications – standardized on
>1000 applications E-Business Suite
97 Email servers on 1 cluster of 2 Email servers and
120 databases 4 databases
Infrastructure 501 Education servers 296 Education servers
Architecture
32 IT Support servers, 600 2 IT Support servers, 30 test
test servers servers
Copyright ©2009 Oracle Corporation. All rights reserved. 9

10. The Transformation Payoff for Oracle
The Ability to Scale Without Increasing Costs
+14
$20 acquisitions
9%
$18 G&A as % of revenue
+17 8%
$16 acquisitions
7%
$14 +4 acquisitions 6%
$12
Percentage
5%
Billions
$10
4%
$8
$6 3%
$4 2%
$2 Revenue in Billions 1%
$0 0%
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
Revenue G&A
Copyright ©2008 Oracle Corporation. All rights
reserved. 10

11. The Role of the Enterprise Architect
• Practically speaking…
- You’re not likely to achieve meaningful levels of IT
Rationalization without Enterprise Architecture
- You’re not likely to develop an effective Enterprise
Architecture without employing IT Rationalization practices
Vehicle Domain Model , BI Analytics, Sessions, etc
Web Site
Oracle Weblogic Application Server
Data Grid & Caching Layer
Oracle Coherence Grid
VDM, BI Analytics , etc Events & Messages Business Processes
SOA – Oracle Enterprise Service Bus (ESB) web services SOA – BPEL Process Manager
business events
Real
BI
Analytics
Time BI Applications
Oracle BI Applications
(Finance, HR, etc.)
Operational & Existing E2.0
Proactive Events Decision Support Databases JDBC / ODBC / Web Services Confluence Wiki, Oracle Portal
SOA – Business Activity Monitoring (BAM)
(Media and D/W ) Dashboards &
Enterprise BI
(Enterprise Business
Model, Caching, BI
Web Site
Engine ) Reporting Search
(pre-built & ad-hoc) Consolidated Oracle Enterprise Search
Oracle Business intelligence User Interface
Batch EE (Portal, Community,
Files Collaboration )
Media Microstrategy &
Ad-Hoc Tools (e.g., SQL
Oracle WebCenter
ETL Data Warehouse Navigator
Informatica Powermart
Financials
Statistical Analysis
Oracle Database EE (10g & 11g)
RAC, RAT, OLAP, Partitioning , Advanced
& Data Mining
Compression SAS SAS

12. Information Technology Rationalization
Guiding Principles
• Driven by Business Strategy and value-based priorities
• Standardizes & Simplifies the technical architecture
• Broad perspective for enterprise solutioning efforts
• Reuses best practice Business Models, Process
Models and Reference Architectures from industry and
commercial vendors
• Initially focused on speed-of-delivery for high
level guidance
• Matures iteratively & evolutionary for breadth & depth
• Can be enforced
Copyright ©2009 Oracle Corporation. All rights reserved. 12

13. IT Rationalization Process
1 Identify the Establishes the vision for business and
Business Strategy information technology.
Establish Enterprise Involves the right mix of people for success.
2 Architecture Program
Establishes objectives, “future state” and
roadmap.
3 Define “Future State” Provides prescriptive guidance, process and
Architecture standards for Business and Information
Technology.
4 Define Rationalization Documents current state and path to future state.
Roadmap
Establish EA Promotes adherence to EA guidance and plans
5
Governance while architecting business-driven, enterprise
solutions.
Copyright ©2009 Oracle Corporation. All rights reserved. 13

14. Business Goals
1 Identify the
Business Strategy
Reduce Costs
Establish Enterprise
2 Architecture Program
Faster to Market
3 Define “Future State”
Architecture
Innovate
4 Define Rationalization
Roadmap
Globalize
Establish EA
5
Governance
Copyright ©2009 Oracle Corporation. All rights reserved. 14

15. TASKS
• Establish goals, leadership and resources
1 Identify the • Define scope and the next iteration of work
Business Strategy
product
• Gain Executive sponsorship and support
Establish Enterprise • Conduct Stakeholder analysis
2 Architecture Program • Establish plan for an EA Governance Board
• Develop a communication plan
3 Define “Future State” PEOPLE
Architecture
• Executive Sponsors
• Business Stakeholders
Define Rationalization • Chief Enterprise Architect
4
Roadmap • Program Manager
• Business Architects & Industry Experts
• Information Analysts
Establish EA
5 • Solution Architects
Governance
• Strategic Vendors
Copyright ©2009 Oracle Corporation. All rights reserved. 15

16. How do you…
1 Identify the • Stay current with technology and
Business Strategy
applications,
• Implementing best practice business
Establish Enterprise models,
2 Architecture Program
• Yet be able to integrate these business
processes
• To improve business visibility, agility
3 Define “Future State” and efficiency
Architecture
4 Define Rationalization
Roadmap
Establish EA
5
Governance
Copyright ©2009 Oracle Corporation. All rights reserved. 16

17. Defining “Future State” Architecture
Business
Strategy
EA Inputs
EA Inputs
Business Industry
Architectural
Requirements Best Practices
Principles
& Objectives & Models
EA/Solutioning Process & Guidance
Business Architecture Business Process &
GRC Models
EA Artifacts
EA Artifacts
Application Architecture Capability & Service
EA Views
Descriptions
Information Architecture Data/Info Objects
& Models
Technology Standards
Technical Architecture & Reference Models
Copyright ©2009 Oracle Corporation. All rights reserved. 17

18. Business Architecture
Decomposed
Business Architecture
Order to Cash
QuickTime™ and a
decompressor
are needed to see this picture.
Procure to Pay
QuickTime™ and a
decompressor
are needed to see this picture.
QuickTime™ and a
decompressor
are needed to see this picture.
Hire to Exit
…
Service & Support
Industry Specific & Custom
Copyright ©2009 Oracle Corporation. All rights reserved. 18

19. Applications Architecture: Retail Example
Analytics Customer CRM & Marketing Loyalty Call Center Sales Field Service
Demand &
Enterprise Web Store Marketing Order Mgmt Pricing CTO
Business Operations
Supply Chain Supply Chain Merchandise Planning Merchandise Store
Planning Execution & Optimization Operations Operations
Merchandise
Replenishment Financial Planning Trade Management Point-of-Sale
Optimization PIM
Assortment Planning Store Inventory Mgmt
Advance Inventory Invoice Match
Planning Sourcing
Item Planning Returns Management
Supply Network Warehouse Category Mgmt Merchandise
Management Management Workforce Scheduling
Optimization
Price Optimization Learning Mgmt
Value Chain Transportation Price Management
Collaboration Management Promotion Planning
& Optimization Store Helpdesk
Value Chain Home Delivery Sales Audit
Allocation Demand Forecasting Workforce Comms
Corporate Administration
EPM Financials Human Resources Real Estate
Indirect Procurement Projects Compensation Helpdesk HR IT
Infrastructure
Integration and Collaboration
Enterprise Infrastructure

20. Information / Data Architecture
Decomposed
Information Architecture
ERP Data Models
Process Data Models
Data Hubs
Customer
Product
Healthcare …
Industry Data Models
Copyright ©2009 Oracle Corporation. All rights reserved. 20

21. Technical Architecture
Decomposed
Technical Architecture
SOA & Integration Architecture
Business Intelligence Architecture
Data & Information Mgmt Architecture
Security Architecture
Infrastructure Architecture
Application Development Architecture
Copyright ©2009 Oracle Corporation. All rights reserved. 21

22. IT Rationalization is an Iterative Journey
1 Identify the
Business Strategy
EA Transformation Focus:
Management Excellence
Establish Enterprise
2 Architecture Program
Enterprise Solutioning:
Business-Driven
Initiatives
3 Define “Future State” EA Transformation Focus:
Architecture Operational Excellence
(Business, IT)
Define Rationalization EA Future State:
4 Applications,
Roadmap
Technology
Establish EA
5
Governance
Copyright ©2008 Oracle Corporation. All rights
reserved. 22

23. Rationalization Deliverables
Key findings and conclusions including targeted analyses of the
Current State Gap & current state environment and its key performance gaps and
Opportunity Analyses opportunities
Target architecture and process model that defines the
applications, services, information and infrastructure required to
Future State Vision satisfy key business goals and requirements
High level, multi track program of phased actions, initiatives and
implementations that provides a framework for planning and
High Level Roadmap managing the future state migration
Identification of potential cost savings and other business benefits
Targeted Benefits to be derived from the future state

24. RESPONSIBILITIES
1 Identify the • Establish an EA Governance model and an
Business Strategy
Architecture Review Board
• Promote the EA agenda and adherence to
“Future State” EA Prescriptive Guidance:
Establish Enterprise
2 Architecture Program • Review IT project designs
• Review proposed enterprise solution
architectures and major initiatives
• Provide direction
3 Define “Future State”
Architecture
BOARD MEMBERS
• Chief Information Officer
4 Define Rationalization • Chief Enterprise Architect
Roadmap
• At least one Executive Sponsor
• At least one major Business Executive
Establish EA • At least one Business Architect
5 • Lead Solution Architects pulled in on an as-needed
Governance
basis
Copyright ©2008 Oracle Corporation. All rights
reserved. 24

25. The Road to Operational Excellence
Opportunities to standardize, consolidate and automate
1 2 3 4
Standardize Consolidate
Consolidate Standardize
Standardize Standardize
Standardize Modernize
Modernize
Business Information
Information Corporate Services
Corporate Services Front Office
Front Office Applications
Applications
Improve visibility and Improve efficiencies and Grow revenue, improve Preserve applications
Processes Improve visibility and Improve efficiencies and Grow revenue, improve Preserve applications
reduce cost:
reduce cost: reduce costs:
reduce costs: customer retention and
customer retention and investment while
investment while
Customers Financial Mgmt reduce cost:
reduce cost: transitioning to aa
Customers Financial Mgmt transitioning to
Financials Human Capital Mgmt Marketing lower cost platform
lower cost platform
Financials Human Capital Mgmt Marketing
Organizations
Organizations Procurement
Procurement Sales & Service
Sales & Service
Consolidate Data Warehouses
Data Warehouses Budgeting & Planning
Budgeting & Planning Relationship Mgmt
Relationship Mgmt
Applications Documents
Documents Facilities & Projects
Facilities & Projects Collaboration
Collaboration
& Data
5
Standardize Service Delivery Platform
Standardize Process
Process Business
Business User
User
Governance,
Governance,
Integration
Integration Risk &
Risk &
Service Management
Management Intelligence
Intelligence Interaction
Interaction Compliance
Compliance
Platform
6
Optimize Deploy Grid Platform
Deploy Grid Platform
Infrastructure
7
Source Outsource Application & Infrastructure Management
Application
Outsource Application & Infrastructure Management
Management
Copyright ©2008 Oracle Corporation. All rights
reserved.

26. IT Standardization Strategy
Driven by business model
Common Processes
Common Data

27. Accelerate Transformation Benefits
Leverage Integration and BI platforms
End-to-end visibility
Unified workplace
Compliance Composite business processes
and business analytics accelerate
Composite Business Process
Composite Business Process
business results
• Deploy standardized business processes
over legacy application silos using
Application & Data Silos standards-based services.
No single source of truth
Redundant applications • Improve process management and controls
Incomplete and conflicting data enforcement.
Labor intensive compliance
• Improve visibility through common
Long-term goal: Standardize processes, consolidate enterprise information model.
redundant applications and eliminate data silos
• Improve business analytics using out-of-
the-box analytics capabilities.
• Publish key performance indicators
Common Enterprise Information Model
• Shelter users from changes to underlying
Common view of information
systems as they are consolidated over time.
Key Performance Indicators
Business reporting and analytics
Compliance reporting

28. Case Study: Large Manufacturing Company
Current State Future State
• 217 Disparate systems • 9 process chains including Order-to-
Business Make
• Plant autonomy – no
Architecture process integration • Integrate processes across 3 plants
Information • 100,000 attributes • 15,252 attributes (down 85%)
Architecture • Data element standardization
App./Services
Technical Architecture
• 62,300 programs • 12,309 programs (down 80%)
Technical Architecture
Architecture
• 5,500 interfaces • 1,561 interfaces (down 72%)
SOA & Integration
Architecture • SOA and EDI Integration
• Plant autonomy – separate • Replicated financial data &
Data Mgmt databases, duplicate data integrated into single global data
Architecture warehouse
Infrastructure • Legacy systems on • Mainframes plus HP
Architecture Mainframes Superdome HP/UX for Grid
computing
App. Dev. • COBOL • JDeveloper tool for creating
Architecture J2EE apps
2
8

29. Case Study: Large Manufacturing Company
Results:
$3 Billion ROI
Reduced production lead time from 30 to 14 days
Increased the delivery hit ratio from 82.7% to 95%
Customer inventory days reduced from 30 days to
less than 24 hours

30. Recommendations
1 Identify the
Business Strategy • Integrate IT rationalization with
enterprise architecture efforts (or use
as catalyst to initiate EA efforts)
Establish Enterprise
2 Architecture Program • Start at the business level and drive
your down to technology
• Align with the broader business
3 Define “Future State” strategy – not simply a IT cost-cutting
Architecture initiative
• Involve the right mix of Business/IT/EA
Define Rationalization people/Strategic vendors
4
Roadmap
• Treat IT Rationalization as an ongoing
process – not a discrete project
Establish EA
5
Governance

31. Architect a More Competitive Enterprise
• Mergers & Acquisitions : Guide
strategic fit assessment and post-merger
consolidation
• Business Processes : Provide insights
into gaps or redundancies ; Enhance
customer service
• Compliance & Audit : Facilitate
transparency across applications ;
Manage users & applications life-cycle
management
• Enterprise Architecture : Consolidated
technical infrastructure ; Reduced costs &
Increase agility
• Vendor Management : Negotiate terms ;
Risk Reduction