Information FrameWork (IFW) - A Business Reference

Architecture framework for Banking and Financial Services industry

Prepared By

Ravi Sarkar

Solutions Architect/ BPM and Connectivity

Prolifics| 114 west 47th St, 20th Flr|NY 10036

ABSTRACT

Information FrameWork (IFW) provides the architectural foundation and framework

for a set of models developed to support agile, component-based IT systems.

Although these models were aimed primarily for the Banking, Finance and Securities industry

sector within IBM, the ideas and principles behind the architecture and the model have

much wider applicability.

The Information FrameWork (IFW) was built upon, but moved away from, the ideas presented

by John Zachman in his Framework for Information Systems Architecture now known asby John Zachman in his Framework for Information Systems Architecture now known as

Zachman Business Architecture Framework.

Challenges of Financial Industry in a nutshell

Agility and Change Management

Frequent changes to gain business competitiveness

Compliance to Regulations

(Dodd Frank Bill for Financial Services Industry, SOX compliance etc.

Business Transformation

IFW is designed to address all of the above challenges

Challenges in Banking and Financial Services Industry Contn…

Banks are challenged with the pace of changes, mergers and acquisitions resulting in

disparate systems, the introduction of channel architecture, the development of

technologies such as internet banking and telephone banking, the introduction of insurance

products into the branch network, and the shift in focus from transactional systems to

customer facing systems (e.g. operational single view of customer) have all

brought about extensive changes in the way financial services organizations Operate.

By necessity, stand-alone solutions have been developed, supported by an array of

Individual processes and procedures which often mimic and duplicate each other, but are

sufficiently disparate to cause cost and training issues for the financial services organization

compounded to the problem.

Adding new regulatory components (e.g. Basel II Accord and Sarbanes-Oxley Act) to this

Scenario compounds the change management issues, and makes it harder to accomplish

business objectives within a reasonable timeframe and at a reasonable cost.

Successful Business Transformation with IFW Process Models

The secret to success is the adoption of a top down strategic approach to the

transformation of the business that is not constrained by specific technology, particular

products or channels or organizational structure.

Such a transformation would be a daunting task if undertaken against a blank canvas, and in

reality would probably not succeed by virtue of the amount of management input needed

and the overall elapsed time to achieve results.

The IFW Process Models are a content rich set of models designed specifically for financial

services organizations. The models represent “leading practice”, and have been validated

through use with many of the world’s leading financial services organizations over several

years. They have been enhanced and extended so that the models are aligned with the

requirements for risk and compliance and STP payment solutions.

The IFW Process Models can be used for a number of different initiatives:

� Business Transformation (e.g. BPR for post merger/acquisition integration, process centralization and process outsourcing)

� Regulatory Alignment (e.g. Basel II Accord, Sarbanes Oxley, SEPA and Reg NMS)

� Process Automation (e.g. the creation of efficient STP payments or account opening processes amenable to automation )

IFW as an Enterprise Architecture Framework in a nutshell

Interlinking of this will be explained in the presentation……

Information FrameWork EVOLUTION

� The ISA framework (more popularly known as the

Zachman framework) helps to understand and classify

the components that make up an individual

application or “system”.

� Zachman defined information systems architecture in

two steps: firstly “by creating a descriptive framework

from disciplines quite independent of information

systems”, then specifying “information systems

architecture based upon the neutral, objective

framework”.

� Information Systems Architecture (ISA) framework

consisted of SIX columns (for data, process, network,

The Zachman Framework

consisted of SIX columns (for data, process, network,

people, time and purpose descriptions respectively),

and five rows, making a 30 cell grid structure.

Shortcomings of Zachman Framework� Deficient in showing IT components in a business

context, and the business context in a broader

management or organizational context.

� Deficient in simplifying the development of an

enterprise architecture by providing an industry

reference architecture.

� Deficient in managing the complexity of change across

many interlinked and interdependent pieces.

� Lacking in component-based design, managing

complex changes and reusability.

Objectives, Focus and Approach of the Information FrameWork (IFW)

1. Development of information assets designed for reuse2. Techniques for classifying information assets3. Viewing systems development from a fully integrated, holistic, perspective, that covered both

the business and the technology perspectives.

The reference models and patterns defined in IFW are used to ensure that each step on the transformation process adds architectural value.

IFW was designed to accommodate a variety of different approaches or methodologies providinga comprehensive structure to manage architectures. Research suggests five different approaches for strategic information systems planning (SISP).

The five different approaches for Strategic Information Systems Planning (SISP) are:

IFW covers this approach through the Business View.

IFW provides a number of Routemaps which describe

Business-Led - where the emphasis is on the business leading change through business plans and needs, rather than being technology driven.

Method-Driven - where the emphasis is on selection of the

IFW supports Strategic Information Systems Planning

IFW provides a number of Routemaps which describe methodological routes or pathways through the framework.

The IFW structure in total supports administration of resources, with explicitly defined responsibilities for governing these resources.

IFW covers this approach through the Business and Technical Views.

IFW covers this approach through the Organization View.

Method-Driven - where the emphasis is on selection of the “best”, formal method.

Administrative - where the emphasis is on identification and allocation of resources to meet agreed needs within the firm’s rules, management planning and control procedures.

Technological - where the emphasis is on the production of models and blueprints, and planning is regarded as an exercise in business and information modeling.

Organizational - where the emphasis is on organizational learning about business issues and information technology contribution, and planning is seen as a continuous decision-making activity the shared by the business and information systems.

Reusable IFW Assets Drive Tangible Benefits

• IFW contains industry content that has been proven on hundreds of client engagements, and reflects over 400,000 hours of real world experience

• Models support the latest risk and reporting requirements

• Significant savings on project analysis and design phases.

• Reduces project risk by employing proven content

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• Reduces project risk by employing proven content and approaches, expressing issues in business terms, and defining scope in manageable phases

• More to be added …….

Information FrameWork (IFW) Assets

The IFW models provide pre-defined financial services specific templates to accelerate project analysis and design

• IFW Process Models provide approximately 80% of the content required for process re-engineering.

• The IFW Data Models accelerate data warehouse design for compliance, risk management, regulatory reporting, CRM, profitability and asset & liability management.

• IFW Integration Models leverage the IBM software solutions to accelerate the analysis and design of services and components for SOA solutions through the customizable service and class models.

• The IFW models provide pre-defined financial services specific templates to accelerate project analysis and design

IFW Value Chains

The IBM Information FrameWork (IFW) uses the concept of Value Chains to represent key line of business functions that are supported by a set of long running business processes.

Value chains are composed of a set of chevrons, each chevron represents a phase of processing which results in the change of state in the acquisition, creation and consumption of resources for the creation of wealth or value.

One or more long running processes occur within a single chevron. Listed on the Value Chains are a partial subset of the recommended IFW Process Model “To Be” templates.

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Chevron

Operational, Credit & Market Risk Management

Monitoring, Control and Customer Insight

Identify Maintain Service TerminateVerify Establish

Identify Potential Customer

Identify Customer

Identify Involved Party from Role

Recommended IFW Process Model “To Be” templates

1. Lending

2. Sales & Relationship Management

3. Savings, Investments & Deposits

4. Payments

5. Transfer Services

IFW VALUE CHAIN

5. Transfer Services

6. Wealth Management

7. Product & Marketing Management

8. Regulatory & Compliance

9. Asset & Liability Management

10.Human Resource Administration

IFW Lending context

Administer Review SettleOfferPropose Activate

Provide Loan Arrangement Offer

Apply Lending Policy

Determine Product Conditions

Review Offered Arrangement Status

Provide Loan Disbursement

Modify Arrangement Service Frequency

Administer Repayment Collection

Provide Interest Rate Change

Provide Arrangement Statement

Modify Involved Party Details

Administer Dispute Resolution

Settle Loan Arrangement

Administer Business Account Closure

Administer Arrangement Termination

Administer Legal Collection

Determine Arrangement Profitability

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Provide Arrangement Proposal

Gather Customer Details

Compare available PD details with Cust. Reqs.

Review Proposed Arrangement Status

Activate Loan Arrangement

Acquire Security

Open Business Account

Activate Customer

Review Loan Arrangement

Record Payment Performance History

Review Loan Portfolio

Schedule Past Due Communication

Modify Arrangement Condition

Administer Arrangement Suspension

Operational and Credit Risk Management

Monitoring, Control and Customer Insight

Determine Arrangement

Profitability

Generate Credit Risk Report

Generate Operational Risk Report

Review Arrangement Safeguard Collateral

Provide Past Due Communication

A framework of related business models, describing different aspects of the analysis and design required to support a financial institution

IFW FOUNDATION MODELS

FSDM FSFM FSWM

IFW DATA

MODELS

BDWM

IFW PROCESS &

INTEGRATION MODELS

IFW PROCESS MODELS

The Information Framework (IFW) Building Blocks

IFW FOUNDATION MODELS:

SCOPING AND DEFINITION OF BUSINESS TERMS

IFW PROCESS MODELS:

DETAILED ANALYSIS OF BUSINESS PROCESSES

IFW INTEGRATION MODELS:

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BSTs

FS-BOM

FS-IDM

ANALYSIS AND DESIGN OF REUSABLE SERVICES

IFW DATA MODELS:

ANALYSIS AND DESIGN OF DATA WAREHOUSE AND DATA MARTS

IFW Process Models Relationship Triangle

•The Financial Services Data Model (FSDM)

• The Financial Services Function Model (FSFM)

• The Financial Services Workflow Model (FSWM)

There are three individual Models that make up the IFW Process Models-

IFW Financial Services Data Model (FSDM)

FSDM is an enterprise-wide classification model. It provides an enterprise-wide view of the concepts and information within the bank and forms the basis of an enterprise-wide information architecture. The fundamental purpose of the FSDM is to enable business concepts to be clearly understood and communicated and as a result help accelerate project scoping.

How the FSDM is used:

Managing the Enterprise Data Resource

Agreeing on the scope of an initiative or

application

Carrying out impact and gap analysisCarrying out impact and gap analysis

Deriving logical specifications

Data warehouse planning

Benefits of the FSDM:

-Provides a predefined, readily customizable

enterprise data model.

-Provides enterprise-wide definitions of concepts

and data.

-Forms part of a common language between

business and IT

-Provides a rapid and accurate scoping tool for

new initiatives - saves time and cost.

-Reduces data redundancy by providing

transparency as to the meaning of data items.

-Encourages re-use and consistent data structures

across the enterprise

Information FrameWork (IFW)Information FrameWork (IFW) Application ArchitectureApplication Architecture

Design Implement

INTERFACE LAYER

PROCESS LAYER

IFW alignment with simple Application Architecture

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Enterprise Definition & Enterprise Definition & Design… … toto …Rapid Solution Implementation …Rapid Solution Implementation

Design Implement

Design Implement

Design Implement

PROCESS LAYER

SERVICES LAYER

DATA LAYER

Service Oriented Architecture is based on a 3-layer model of “components”,

“services” and “processes”

BUSINESS PROCESSES

INTEGRATIO

N ARCHITECTURE

(ENTERPRISE SERVCIE BUS)

QoS, SECURITY, M

ANAGEMENT A

ND MONITO

RING

(INFRASTRUCTURE SERVICES)

� LONG RUNNING

� INTERRUPTABLE

� INTERRACTIVE

� HUMAN AND SYSTEM ROLES

� ALTERNATIVE FLOWS FOR NON STANDARD CONDITIONS

� SHORT TERM

� NON-INTERRUPTABLE

SERVICE

CONSUMER

Layers of SOA

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SERVICES

COMPONENTS

NEW / EXISTING APPLICATIONS AND RESOURCES

INTEGRATIO

N ARCHITECTURE

(ENTERPRISE SERVCIE BUS)

QoS, SECURITY, M

ANAGEMENT A

ND MONITO

RING

(INFRASTRUCTURE SERVICES)

� NON-INTERRUPTABLE� SYSTEM ROLES ONLY� LOOSE COUPLING

� COLLABORATIONS OF FINER GRAINED

SERVICES� PERFORMANCE FAVOURED ABOVE LOOSE COUPLING

SERVICE PROVIDER

SERVICE

CONSUMER

IFW models provide the Financial Services Specific content to accelerate SOA

development using business definitions to maximize business benefit

BUSINESS PROCESSES

SERVICES

INTEGRATIO

N ARCHITECTURE

(ENTERPRISE SERVCIE BUS)

QoS, SECURITY, M

ANAGEMENT A

ND MONITO

RING

(INFRASTRUCTURE SERVICES)

SERVICE

CONSUMER

IFW Processes

IFW Accelerates SOA

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COMPONENTS

NEW / EXISTING APPLICATIONS AND RESOURCES

INTEGRATIO

N ARCHITECTURE

(ENTERPRISE SERVCIE BUS)

QoS, SECURITY, M

ANAGEMENT A

ND MONITO

RING

(INFRASTRUCTURE SERVICES)

SERVICE PROVIDER IFW FS-IDM

IFW FS-BOM

BDW & FSDM

The IFW Process Models contain pre-built processes and tasks that cover all the main customer facing activities.Many of the IFW processes need to retrieve full customer details as part of their processing and this example shows how IFW can support this requirement.

Retrieve Customer Details

One step downstream, the process activity is expressed as a Use Case

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The Business Scenario – UML Class Model and Use Cases to Support Processes

Each step in the IFW Process model that has been identified as an automated

step (or service) is represented by an IFW Use Case. The Use Case contains data inputs

and

outputs. Each data input and output is fully defined in the IFW UML model.

IFW Use Case – Retrieve Full Customer Details

IFW UML Model – Involved Party

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Customer details are fully defined and attributed in the Involved Party area of IFW UML model

The Business Scenario – Services Support the Use Cases

Each IFW Use Case becomes a Service. The Retrieve Full Customer Details Use Casebecomes a Service called retrieveFullCustomerDetails. The Service input and output definitions are taken from the IFW Use Case.

IFW Use Case – Retrieve Full Customer Details

IFW Service - retrieveFullCustomerDetails

retrieveFullCustomerDetails Service

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retrieveFullCustomerDetails input and output parameters

The Business Scenario – Define Collaborations Based on the Use Cases

The internal logic of an IFW Use Case can be expressed in terms of finer grained re-

usable

services which are represented using the IFW collaboration diagrams. This provides

the optimal granularity of services and enables maximum service reuse.

IFW Use Case Detail – Retrieve Full Customer Details

Retrieve Full Customer Details – Collaboration Diagram

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WebSphere Banking Content Packs Assets

Key Components of Reference Architecture for Websphere

Industry Content Packs

Industry Capability Models

Industry Process Models Models

Industry Service Models

Industry Common Components

Industry Business Vocabulary

Industry Business Object Models

Industry Solution Scenarios

WebSphere Banking Content Packs Reference architecture

WebSphere Banking Content Packs Component details

Framework of components in the WebSphere Industry Content PacksThe WebSphere Industry Content Packs aim at accelerating the delivery of industry BPM solutions using the WebSphere Business Process Management offering. The framework of components in the WebSphere Industry Content Packs is a logical expansion of a service-oriented architecture (SOA), which promotes loose-coupling of assets for consistency and reuse across business processes.

Industry Capability ModelsThis asset is used to provide a hierarchical view of business capabilities and business processes used in an industry.

Industry Process ModelsIndustry Process Models are used to expose the application scenarios using well-defined process flows.Industry Process Models are used to expose the application scenarios using well-defined process flows.

Industry Service ModelsThe Service Models are used to aid interoperability across diverse platforms for an industry. These Service Models are based on industry standards that provide messaging schemas, which are then used to define the Service Models.

Industry Common ComponentsThe Common Components includes common services that can be used as-is or can be extended to enable transactional functions.

Industry Business VocabularyThis asset is used to provide more information about the relationships between industry-specific terms.

Industry Business Object ModelsThis asset is derived from industry standards and serves as an input to the logical data model for a business domain.

Solution ScenariosThe Solution Scenarios provide a starting point for Proof Of Concept (POC) and solution delivery.

Why License the IFW Models?

Significantly Reduce Project Risk

Optimise re-use across business process and supporting IT services

Ensure quick start based on pre-built models

Benefit from experience

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Significantly reduce analysis and design time

and effort while improving quality

Benefit from experience of, and lessons learned by, other customers who are also using the IBM

Models

Benefit from experience and a defined roadmap

and approach to successful SOA projects

Benefit from a proven models and tools

approach supporting the path from analysis through design to implementation

Reduce chance of project failure –

maximize chance of project success

In the next few slides each of these items are elaborated

Significantly Reduce Project Risk

•Use of tried and tested “outside” models will minimize contention and enable more speedy decisions

Difficulty getting agreement across organizational, product and channel boundaries (politics)

Difficulty tying down Business Requirements and getting alignment between Business Processes and supporting IT

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•Using well structured and fully defined models – across Function, Data, Process and Services (Object / Components)

•For example, Activities in the Process Models are expressed as Use Cases in the Object (UML) Models, and are mapped to each other.

alignment between Business Processes and supporting IT Services

• IFW provides this best practice blueprint for banking and financial services

Rationalization / Simplification projects such as those at Citigroup require standards and an enterprise “blueprint” to ensure re-use and cooperation across project teams

Optimize re-use across business process and supporting IT services

•For example the IFW Process Models provides:

•27 Major Processes

•250 reusable workflows

•1600 Activities and 2100 triggers

•All are fully defined and customizable with support and designed to promote reuse

Re-use for Process Modelling requires standards and agreed set of fully defined building blocks to ensure re-use across project teams.

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•All are fully defined and customizable with support and designed to promote reuse

•The IBM Process and Object models are linked and complement each other

•Every use case in the IFW Object Model is derived from an Activity in the IFW Process Model with traceability between then

•Consistent naming and definitions are used where applicable

•This means that there is a quick and easy way to link the activities selected in the process design, and which are appropriate for automation or supporting by a service through to the appropriate use case in the object model.

Business Process design is normally handled within the business unit or by a business support group - there needs to be a way to tie this process work and its results to IT Services Analysis and Design.

Ensure quick start based on pre-built models

•Build your own while doing the projects

•License a customizable model such as IFW

An enterprise blueprint or model is required to achieve reuse on SOA projects, choices are:

For an organization to build its own models to the strength and For an organization to build its own models to the strength and completeness of the IBM models, we estimate it would take between 20 and 100 person-years of effort. There are about

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between 20 and 100 person-years of effort. There are about 500 person-years of experience in the IFW/IAA models currently.

Risks inherent with building your own include distractions from the core task at hand, delivering standardized processes and supporting services.

Organizations who take the IBM models can immediately start using them on projects and gain all the benefits

Saves by other customers include up to 18 months in project re-work and project start up times, and in avoiding project realignment and restarts

Significantly reduce analysis and design time and effort while improving quality

•Savings of 40% to 50% in analysis and design time across projects

•while improving quality

•and maximizing re-use across business processes and IT services.

Experience from other projects indicated:

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•In addition to this - significantly minimized the need for re-work

50% saving applies across analysis and design of both Processes and Services

This will rise to 70% or greater as experience is gained and significant reuse is experienced across future projects.

IFW Value Proposition Summary

•proven approach and methodology•proven approach and methodology

•proven business content and tools integration

Risk Reduction - value = up to 10% of overall project cost based

on

•Based on experience from a number of projects•Based on experience from a number of projectsProcess analysis and design savings - value = 40% saving in

this effort

•Based on experience from a number of projects•Based on experience from a number of projectsSavings in Use Case analysis and

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•Based on experience from a number of projectsSavings in Use Case analysis and design effort - value = 50%

saving in this effort

•Experience shows that lack of models and consistency•Experience shows that lack of models and consistencyof approach leads to significant rework and lack of reuse in both initial development and post-implementation support

Saving in AD rework and reuse –saving of at least 20 % of this

effort

•Savings in development of models – harvesting from work – saving = 4 FTEs over 3 years (average) Additional item:

Note: Experience from various IBM customers indicated that increased benefits, reduced risk, and rates of

savings grow as more projects use IFW.