u10a2 Enterprise Architecture Proposal-Hagood.docx

Running head: ENTERPRISE ARCHITECTURE PROPOSAL 1

Bachelor in Information Technology Program

Enterprise Architecture Proposal

Hal Hagood

Mega-Corp Software Development Plan

ENTERPRISE ARCHITECTURE PROPOSAL 2

Executive Summary

This proposal is for Mega-Corp Corporation, its software departments and proposed

network architectures. Mega-Corp is a multi-national conglomerate consisting of six core

companies. Mega-Corp companies are administered by a distinct set of senior managers for each

organization, who all report to the same board of directors. The organization has not had an

acquisition or merger in over ten years. The product lines are stable; however, profits have gone

down in all sectors during the past two years. IT projects for Mega-Corp are proposed, funded,

and implemented for each organization independently. They are not a part of the oversight duties

of the corporate board. Each organization has an IT steering committee that evaluates, approves,

and funds projects. This includes industry specific systems as well as transactional systems, such

as HR and payroll.

The final proposal for Mega-Corp is an Optimized Core architecture that moves decision

making from local units into more of a standardized process designed to meet and support global

needs. Data would be shared across company lines and linked with standardized automated

technology along with networking, telecommunications and marketing strategies. Implementing

the use of Linux based systems makes sense not only from a shared infrastructure point of view

but also in cost savings. The savings in licensing costs alone justify this conversion. The

recommendation of moving Mega-Corp to an Optimized Core structure would facilitate and

focus the company’s information resources from one central source, the financial analysis and

reporting areas would also benefit. Both of these core processes would fall under the umbrella of

technological management or a technological business imitative.


Table of Contents

Page Number

Executive Summary...................................................................................................... 2

Table of Contents …………………………………………………………………… 3

Organization Selection Analysis/selection process/criteria …………………………. 4

Operating Model Definition …………………………………………………………. 5

Operating Model Implementation …………………………………………………… 6

Organization Maturity Level ………………………………………………………… 7

Changes in Management Practices ………………………………………………….. 8

IT Engagement Model ……………………………………………………………….. 10

Outsourcing Opportunities …………………………………………………………… 11

Growing the Organization ……………………………………………………………. 12

Cost Analysis …………………………………………………………………………. 14

Summary of Enterprise Architecture Proposal............................................................... 16

References ……………………………………………………………………………. 19

Appendixes

A. Gantt Chart ………………………………………………………….......... 20

B. Milestones and Activities …………………………………………………. 21

C. Network Diagram (Visio) …………………………………………………. 22


Organization Selection Analysis

The rationale in choosing Mega-Corp was rather simple; because of the very size of such

an organization it provides enough flexibility to provide a good case study. The planning

approach used in this study is a traditional one in that the problem is very much apparent in the

business model. There will of course be challenges going forward in any case study but the

assumption here is a change of operating models. The recommendation will be one of moving all

network architectures to Linux based systems. Linux will provide the performance and stability

going forward that the company needs as well as the cost saving requested by the board of

directors. Tools used will include Visio, Word documents, Excel and PowerPoint as well as web

based utilities and extensive research.

To summarize Mega-Corp is Multinational Corporation with six distinct units all

managed separately and independently The Company employs three different network

architectures for its IT systems. The board of director’s have identified this problem and asked

their IT managers to cut cost by 20%. To accomplish this, the introduction of new Linux based

systems to all six units is recommended. It is necessary to exploit the foundation of execution for

growth and use the foundation as a basis to encourage and reward creativity. A move to a system

of coordination or low standardization and high integration is also suggested. This will not only

produce the desired savings but also increase efficiency and profitability across the entire scope

of the company.


Operating Model Definition

The Operating Model Definition describes the chosen operating model in terms of

business process integration and process standardization. A comparison was made between the

selected organization and the sample organizations using the chosen operating model in terms of

business process integration. The selected organization was also compared to the other sample

organizations using the chosen operating model in terms of business process standardization. A

description of the chosen operating model in terms of the financial benefits available to the

organization as a result of the selection was also discussed.

Mega-Corp is Multinational Corporation with six distinct units; all are managed

separately and independently. The Company uses three different network architectures for its IT

systems. The board of director’s have identified this problem and asked their IT managers to cut

cost by 20%. To accomplish this task, the introduction of new Linux based systems to all six

units is recommended and would achieve the desired results not only in streamlining the business

but also in cost savings. The move to a system of Coordination or low standardization and high

integration from one of Diversification is suggested. This will produce the desired savings and

also increase efficiency overall. The savings results should have a relatively immediate impact

and help restore the company’s financial vigor.


Operating Model Implementation

Implementing of the Operating Model along with business process integration and

business process standardization and the resulting financial benefits are the factors to be

considered. Operating models have two dimensions, business process standardization and

integration. Although they can be thought of as two sides of the same coin they typically impose

different demands. Business managers need to recognize this and view standardization and

integration as two separate decisions. The assumption here is a change of operating models,

moving from one of Diversification to one of Coordination. The recommendation will be one of

moving all network architectures to Linux based systems. The use of Linux architecture going

forward will provide the performance and stability the company needs as well as the cost savings

requested by the board of directors. This will have the effect of expediting and increasing the

company’s productivity and business structure.

The most notable result of this changeover would be shared IT architectures and the

resulting cost savings in the overall business. This accomplishes two things; it streamlines the

overall business structure and satisfies the mandate of cutting costs by the board of directors. The

operationally unique business units would remain the same but some of the autonomous business

management and business unit control over business process design would change. This will

mean taking control over business processes that were previously controlled by business unit

leaders. The decision making process would shift into more of a standardized process designed

to meet and support global needs. The result would have the effect of leaving Mega-Corp’s status

as a diversified multinational untouched.


Organization Maturity Level

Organization Maturity Level Evaluation addresses Stage 3 or Optimized Core

architecture. An understanding of the different maturity levels is the key to the approach in

identifying an organizations maturity level. There are basically four, the business silo

architecture, the standardized technology stage, the optimized core stage, and the business

modularity architecture.

Mega-Corp while currently at the second stage or Standardized Technology would

benefit by moving to Stage 3 or Optimized Core. In this stage from an enterprise perspective

they would focus on shared data and enterprise systems. Business processes in this stage would

enable Mega-Corp to create solutions with an optimized core. This would necessitate

standardizing shared data and optimizing core business processes. It would also mean taking

control over business processes that were previously controlled by business unit leaders.

In this model a core business applications such as network/telecommunications

infrastructure would take on a global nature. This scenario would mean that the decision making

process would pass from the local units into more of a standardized process designed to meet and

support global needs. The use of several key core business processes that transcend business

units would occur. Shared data such as customer files shared across product lines, in this case the

six business units of Mega-Corp that institute a global supply chain. The key linking of

automated technologies such as the proposed Linux upgrade for the Mega-Corp companies

serves as an example. IT architecture will include standardized access to systems and customer

information across the entire company.


Changes in Management Practices

Changes in Management Practices; explores various management practices, formulizing

these new management practices and learning how to leverage IT capabilities and adopt business

process changes is essential. The architecture of an enterprise is critical for building a foundation

for execution; it maps the important processes, data and technology that enable the various levels

of integration and standardization. In this process the building of the foundation of execution or

the implementation of the enterprise architecture companies can achieve several benefits. The

successful implementation of each new stage generates new and expanded technology and

business benefits. These include strategic outcomes, IT and risk management and reduced IT

costs.

Key management strategies revolve around information. Information is a valuable asset

to be used for enabling end-to-end business processes and for making specific decisions at all

levels. This may sound simple but it is becoming more and more of a challenge with the ever

increasing flow of information. “ If not properly managed - can lead to unnecessarily high

operational costs, poor business decisions, damaged customer and partner relationships, lost

business opportunities, and steep penalties for failure to comply with regulations. In short,

enterprise data itself is useless unless it is converted into information and then into enterprise

knowledge” (SAP Community Network, 2011)

The evolving role of the CIO as the key driver at this point especially in regards to EA

benefits is crucial. As companies advance through the different stages they need different CIO

skills and governance models. For example if outsourcing, the question would need to be asked


about how would you approach managing partner relationships? Mega-Corp is already

outsourcing some IT work and that will change. With the move towards an Optimized Core IT

Systems Analyst will be reporting directly to the CEO. The challenge for Mega-Corp is to build

a foundation for execution that will map out important processes, data, and technology and will

enable the desired levels of integration and standardization.


IT Engagement Model

The IT Engagement Model discusses building a foundation one step at a time and

requires the help and consent of key stakeholders in the design, implementation and use of new

IT and business capabilities.“Research on IT Governance has taken a top-down approach and

specified how management allocates decisions. The other stream of research, with a more

bottom-up approach, focuses on how projects can be coordinated and managed. According to

the CISR study, neither of these approaches is sufficient. Successful approaches address two

fundamental goals – alignment between IT and the rest of the business and coordination across

multiple organizational levels” (Business/IT-Alignment, 2011).

Good engagement involves pulling together the three levels aforementioned and creating

business value. Without effective IT governance there is no clarity about who makes what

decision. Without good project management project costs rise along with schedule overruns and

failure to meet objectives. Without effective linking mechanisms there are no regular

opportunities to have discussions and make decisions. Together the engagement model

ingredients reinforce desirable behavior to create a foundation for execution one project at a

time.

In this stage of architecture, maturity standardized technologies are the motor to move

from local applications to a shared infrastructure. Mega-Corp will benefit by moving to Stage 3

or Optimized Core. Companies mainly decrease the number of platforms by establishing a small

set of technology standards at this point. By doing so, the standardized technologies can reduce

the complexity of the systems and offer greater flexibility and cost savings.


Outsourcing Opportunities

The question of outsourcing and various recommendations is often addressed. There are

three outsourcing models, Strategic Partnership or managed services fully outsourced, Co-

sourcing or Co-managed and Transaction or Professional Services/ Staff Augmentation. While

these models are primarily governance based there are also Project/Engagement and hybrid

models available.

Outsourcing can facilitate the maturation of enterprise architecture but it cannot radically

transform the company as the architecture matures. Many of the technical challenges can be

transferred to a vendor at least in part. Those technical challenges will be replaced with technical

management challenges. This does not diminish the organizational change challenges. You can

outsource to support the building of your foundation for execution but you should not outsource

your architecture. Management practices remain the responsibility of every company looking to

evolve its architecture.

Mega-Corp while currently outsourcing some of its IT work is ultimately aimed a Core

Optimization model. There are several processes that can be considered, financial functions,

business processes and HR, recruitment, payroll and secretarial services. Many organizations use

a consultant or an agency to handle marketing communications. Outsourcing of sales to specialist

agencies and most IT functions can be outsourced, from network management to project work,

website development and data warehousing. Benefits can be achieved from the latest technology

and software upgrades without having to invest in expensive systems or keep up with industry

trends.


Growing the Organization

When dealing with Organizational Growth Strategies there are two basic concepts that

can be addressed, organic growth and or growth by acquisition. Growth by acquisition is a sure-

fire way to build ‘size’ quickly. The motivation to acquire is fairly obvious, and when done well,

goals can be achieved. Acquisition does not come without financial challenges however. Buying

another business can be a stressful process and the owner of the acquired business wants the

highest possible enumeration, as they only have one shot at getting the best possible price. On

the other hand as the acquirer, one will want to pay the least amount possible. The price you pay

determines the return on your investment (ROI). This scenario immediately creates a conflict.

The negative consequence of the process, which is more than often drawn out, takes the owner’s

eye off his or her current business.

The definition of a growth strategy is a “Strategy aimed at winning larger market share,

even at the expense of short-term earnings. There are four broad growth strategies,

diversification, product development, market penetration, and market development” (Business

Dictionary, 2012). The current model of low standardization and low integration or

diversification should be changed to one of low standardization and high integration or

coordination.

Streamlining of the business applications/networking can be achieved by the use and

conversion to Linux based systems. While two of the units already have Linux based systems the

other four units either outsource or use Windows 2003 Active Directory-based networks. The

savings in licensing costs alone justify this conversion. Software that is even two or three years


can quickly become outdated. To keep up with the latest features and ensure compatibility with

others, many are forced to upgrade. However, upgrading isn't always as simple as doing a

software installation. In most cases, a new license needs to be obtained, usually with the

purchased upgrade software.

In addressing key implementation risks for the Mega-Corp technology plan there are

three milestones. The first milestone is at the actual start of the project and includes quality

assurance plans to address such issues as lack of top management, commitment and support,

insufficient training of end-users, failure to redesign business processes and underestimation of

organizational structure and business processes.


Cost Analysis

Having determined that new servers will be needed the question arises as to cost? The

most likely numbers quoted will not include the total cost of ownership. The three main

components to a server's overall costs are the cost of hardware, cost of server or operating

system/applications and the cost of administration. Depending on the complexity these costs can

vary widely. The question of how many servers also needs to be addressed. Some companies

such as Intel have over 75,000 servers and ATT over 20,000. Mega-Corp although a large

corporation will probably only require 50-100 servers with 50 being the low end.

“If your server will primarily be used for tasks like print serving and office document file

sharing among fewer than 25 users, a server with a low-end processor, as little as 1GB to 2GB

of RAM, and 500GB to 1TB of RAID storage will most likely suffice, and should cost your

business as little as $400. SmallBusinessComputing.com has a helpful server buyer's guide that

lists several small business server options that range from $499 to a little over $1,000.

On the other end of the scale are high-end servers for tasks like data-intensive Web and

database serving, video storage and sharing and enterprise-grade messaging and conferencing.

These servers will typically include multiple processors, 16GB or more of RAM, expansive

storage with multiple redundancies, end server operating systems, and they can cost in the

thousands or tens of thousands of dollars. High-end servers may also be deployed in multiple

server configurations known as clustering” (webopedia.com, 2011).

A server's hardware and software costs represent only a small part of the total cost of

ownership. Hardware and software costs are 15 to 25 percent of the overall costs involved.


Since this is the lifeline of the business it is extremely important to have a solid plan in place to

deal with cost and administration. This is no simple matter, the addition of a dedicated server

including the hardware, software and administration costs can quickly get out of hand. The initial

cost of hardware and software for this project is calculated at roughly $1000 per server based on

the lower limit of 50 and the highest of 100. This does not take into account reoccurring

maintenance and administrative costs. The issues of pay and remuneration will be addressed at

the executive level along with other costs and obligations.


Summary

The real issue with Mega-Corp concerns moving the company from a standardized

technology stage to an Optimized Core and this in turn will enable a new infrastructure to be put

in place. Streamlining of the business applications/networking can be achieved by the use and

conversion to Linux based systems. While two of the units already have Linux based systems

the other four units are either outsourced or use Windows 2003 Active Directory-based

networks.

The changes involved deal specifically with standardizing data and optimizing the core

business processes. This will also involve taking control over business processes that were

previously controlled by business unit leaders. The decision making process would pass from the

local units into more of a standardized process designed to meet and support global needs. The

role of the CIO is the key driver at this point especially of EA benefits. As companies advance

through the different stages they need different CIO skills and governance models.

This leads directly into the question of outsourcing, while implementing the Optimized

Core and standardizing the telecommunication applications and network architectures there are

other areas that can be outsourced. Areas such as financial functions, auditing, accounting

functions, including bookkeeping, tax management and invoicing can all be outsourced. Other

business processes such as HR, recruitment, payroll and secretarial services as well as health and

safety compliance tasks are all candidates for outsourcing. Those units in specialized markets

such as the smaller units can also outsource sales to specialist agencies as well as non-strategic

activities.


The final recommendation concerns Organization Growth Strategies or growth by

acquisition or organic means. Since Mega-Corp is already a large global company the most

expedient course to follow at this time would be that of organic growth. Although the most

appropriate strategies depend on the industry and the individual company. Key themes run

throughout success stories, by reducing the set of technological platforms in use and replacing

them with companywide standards significant cost savings and increased flexibility can be

achieved.

Implementing the use of Linux based systems makes sense not only from a shared

infrastructure point of view but also in cost savings. The savings in licensing costs alone justify

this conversion. Software that is even two or three years can quickly become outdated. To keep

up with the latest features and ensure compatibility with others, many are forced to upgrade.

However, upgrading isn't always as simple as doing a software installation. In most cases, a new

license needs to be obtained, usually with the purchased upgrade software.

“In the Coordination operating model a company leverages a strong IT infrastructure to

share data across unique businesses. As a company matures its architecture the foundation of

shared easily accessible data becomes increasing powerful” (Ross, 2006). This is where Mega-

Corp is now with its six separate business units. Profitable growth comes from superior customer

service, new products and services come from business units that are not bound by standard

processes but from those that encourage local innovation.

The final proposal for Mega-Corp is an Optimized Core that moves decision making

from local units into more of a standardized process designed to meet and support global needs.

Data would be shared across company lines and linked with standardized automated technology

along with networking, telecommunications and marketing strategies. The recommendation of


moving Mega-Corp to an Optimized Core structure would facilitate and focus the company’s

information resources from one central source, the financial analysis and reporting areas would

also benefit. Both of these core processes would fall under the umbrella of technological

management or a technological business imitative.


References

Business Dictionary, (2012). Retrieved February 19, 2012 from

http://www.businessdictionary.com/definition/growth-strategy.html

Business/IT-Alignment, (2012) Retrieved February 11, 2012 from

http://businessitalignment.wordpress.com/2011/01/02/it-engagement-model/

Ross, J. Weill, P. Robertson, D., (2006). Enterprise Architecture as Strategy. Boston,

Massachusetts: Harvard Business Press.

SAP Community Network, (2011) Retrieved February 4, 2012 from

http://www.sdn.sap.com/irj/scn/index

Webopedia, (2011). Retrieved March 8, 2012 from

http://www.webopedia.com/DidYouKnow/Hardware_Software/Server/

server_cost_summary.html


Appendix A - Gantt Chart

ID Task Name Duration Start Finish Predecessors

1 First Milestone 0 days Mon 1/9/12 Mon 1/9/12

2 Evaluation/Submission 5 days Tue 1/10/12 Mon 1/16/12 13 Project Charter Submission 14 days Tue 1/10/12 Fri 1/27/12

4 Project Charter 20 days Mon 1/30/12 Fri 2/24/12 35 Charter Approved 20 days Mon 1/30/12 Fri 2/24/12

6 Planning 13 days Wed 2/1/12 Fri 2/17/12

7 Preliminary Scope 2 days Fri 2/17/12 Mon 2/20/12

8 Project Team 3 days Mon 2/20/12 Wed 2/22/12 69 Develop Project Plan 2 days Wed 2/22/12 Thu 2/23/12

10 Planning Complete 1 day Fri 2/24/12 Fri 2/24/12 911 Second Milestone 0 days Fri 2/24/12 Fri 2/24/12 1012 Project Approval 8 days Fri 2/24/12 Tue 3/6/12 813 Execution 8 days Fri 2/24/12 Tue 3/6/12

14 System Design 5 days Fri 2/24/12 Thu 3/1/12

15 Testing 2 days Thu 3/1/12 Fri 3/2/12

16 Intergration 2 days Thu 3/1/12 Fri 3/2/12

17 Final Testing 12 days Mon 3/5/12 Tue 3/20/12 1618 Procurement 2 days Thu 3/1/12 Fri 3/2/12

19 Implementation 1 day Tue 3/6/12 Tue 3/6/12 520 Last Milestone 2 days Mon 3/5/12 Tue 3/6/12 18

1/9

2/24

W S T M F T S W S T M F T S W S T M F T S W S T M F T S W S T M FDec 11, '11 Dec 25, '11 Jan 8, '12 Jan 22, '12 Feb 5, '12 Feb 19, '12 Mar 4, '12 Mar 18, '12 Apr 1, '12 Apr 15, '12


Appendix B - Milestones and Activities

Milestone/Task Start Date End Date

First Milestone 0d Mon 1/9/12 Mon 1/9/12

Evaluation/Submission 5d Mon 1/ Fri 1/13/12

Project Charter Submission 1d Fri 1/13/12 Fri 1/13/12

Project Charter 20d Mon 1/16/12 Fri 2/10/12

Charter Approved 20d Mon 1/16/12 Fri 2/10/12

Planning 13d Fri 2/10/12 Tue 2/28/12

Preliminary Scope 2d Mon 2/20/12 Tue 2/21/12

Project Team 3d Wed 1/18/12 Fri 1/20/12

Develop Project Plan 7d Wed 1/18/12 Thu 1/26/12

Planning Complete 1d Fri 1/27/12 Fri 1/27/12

Second Milestone 0d Fri 1/27/12 Fri 1/27/12

Project Approval 27d Mon 1/23/12 Tue 2/28/12

Execution 27d Mon 1/23/12 Tue 2/28/12

System Design 7d Tue 2/28/12 Wed 3/7/12

Testing 3d Wed 3/7/12 Fri 3/9/12

Integration 5d Wed 3/7/12 Tue 3/13/12

Final Testing 1d Wed 3/14/12 Wed 3/14/12

Procurement 2d Mon 3/12/12 Tue 3/13/12

Implementation 4d Mon 3/12/12 Thu 3/15/12

Last Milestone 0 Fri 3/16/12 Fri 3/16/12


Appendix C - Network Diagram (Visio)

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