Cloud Architecture and Strategy: Critical Success Factors

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1 Cloud Architecture and Strategy: Critical Success Factors An ENTERPRISE MANAGEMENT ASSOCIATES (EMA ) White Paper Prepared for ASG March 2012 IT & DATA MANAGEMENT RESEARCH, INDUSTRY ANALYSIS & CONSULTING

2 Table of Contents Executive Summary...1 Introduction...1 Cloud Benefits...1 The Basics...1 Advanced Cloud Services...2 Planning and Execution...3 A Brief Overview of Enterprise Architecture...3 Example...4 Conclusion...7 Resources...7 Sourcing and Vendor Management...7 Enterprise Architecture...8 About ASG...8

3 Executive Summary The role of the Enterprise Architect is critical to Cloud value. While Cloud computing may be a logical culmination of decades-long IT trends, it is here today at a scale and with business implications challenging the skillsets of IT organizations. Enterprise Architects are trained in whole systems thinking and are well suited to lead the complex, cross-functional analysis required for an enterprise to get maximum value from the Cloud. Introduction So, you have decided you need to do Cloud. Whatever that means. Guaranteed, it means something different depending on who you are, and like any amorphous shape, it seems Cloud can represent many things depending on the beholder. It s cheaper! It s more agile! It s more scalable! All of these may be true, but they will not automatically happen unless you clearly understand: Where you are today What your goals are what better would look like (preferably measurably) Exactly how Cloud delivery solutions will move you towards those measurable goals Outsourcing is a common theme in many IT discussions, but there are certain things you cannot outsource. First and foremost, you will always own your reasons for outsourcing the goals you have for entering into such a partnership. To use a building analogy, you as a Cloud customer won t be worrying as much about plumbing, but that worry will be replaced by worries about governing the relationship with the plumbing contractors, and higher-order concerns about designing an effective kitchen. And who do you look to for guidance on effective design? Architects, of course. Cloud Benefits The Basics There are many benefits to Cloud, covered in great detail elsewhere. Extensive Web resources and even dedicated journals and conferences have emerged. In brief, the following Cloud value propositions are frequently cited: Reduced infrastructure cost Increased agility Better focus on enterprise priorities You will always own your reasons for outsourcing. 1 Page 1

4 Of course, in order for any of them to be benefits, there must be some level of corresponding inefficiency or lack of focus. The basic forms of Cloud services are also widely understood: Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS) Again, the purpose of this paper is not to cover the basics, but the prospective Cloud consumer should consider the following kinds of concerns: For infrastructure as a service, is it truly cheaper? This value proposition is based to some extent on the assumption that the potential customer is using their infrastructure inefficiently. Is it truly more scalable? This depends on whether the applications can in fact make use of the scalability. And there are risks to making provisioning frictionless, starting with the need to maintain governance over software license consumption in an environment where hosts are readily available. For platform as a service, there are fundamental concerns with vendor lock-in for offerings like Force.com. The highly integrated workflow, data management, and related platform services of such offerings are powerful, but completely proprietary. Both IaaS and PaaS promise scalability on demand, but the reality of such scalability is that applications must be correctly designed to take advantage of scalable platforms. In particular, in-house applications not architected for dynamic scalability will not magically gain it just by being moved to a Cloud provider. Software as a service is perhaps the marquee Cloud style of offering, represented by SalesForce.com and its fast growing competitors and parallel offerings in other industry verticals and functional areas. These often multi-tenant offerings continue to grow rapidly in market share, as they do eliminate vexing problems in hosting and maintaining complex enterprise software in-house. The lock-in problem here is perhaps even more severe than in PaaS, however. Security and availability are concerns across all the layers of the Cloud stack as well. Advanced Cloud Services Beyond these widely cited approaches and their benefits, EMA identifies more advanced benefits from some forms of Cloud services. Multi-tenant analytics provide a powerful form of integrated benchmarking data, properly sanitized, is aggregated across users of the same Cloud service for comparison. Transactional professional services: Cloud providers of complex SaaS solutions are moving into a new kind of business service, midway between business process outsourcing and engagement-based consulting. In this model, the service user uses the service with ordinary technical support, but may call on business domain experts as well from the provider when complex business problems are encountered. Examples of this type of service are emerging in a variety of IT management areas, including software asset management, IT financial management, and configuration and change management. 2 Page 2

5 Planning and Execution With this breadth of value propositions and cautions, the question of execution is key. And execution starts with having the right people on the job. Someone needs to own and drive any outsourcing efforts, and that person needs the utmost clarity about goals, objectives, means, and risks clarity that cannot solely depend on the advice provided by the prospective Cloud provider! A senior executive may be on point for the ultimate results of the engagement, and this is appropriate for any significant enterprise commitment to a partnership. But someone needs to do the deep analysis of the value proposition, the costs, benefits, impacts, and risks. Such a person, or more typically a small team, needs a variety of skills, and must have the prospective Cloud customer s best interests at heart. Usually, though not always, this calls for a team of full time employees. Who in your organization has the skills? There are a number of people in various areas who might be called on: IT business relationship or customer relationship professionals (i.e., those tasked with managing the IT/business interface as a primary role) Vendor and contract management professionals IT finance professionals Enterprise architects Of these areas, the enterprise architects are often the least well understood. Yet, as a professional discipline tasked with a whole systems view of a problem, they may be the best qualified to lead the overall effort under the supervision of the senior executive. The ideal enterprise architect is a broad thinker, a diplomat, and a careful analyst of complex and multifaceted questions skills needed by any Cloud implementation! Therefore, they will be the focus of the rest of this paper. A Brief Overview of Enterprise Architecture Architecture: The fundamental organization of a system, embodied in its components, their relationships to each other and the environment, and the principles governing its design and evolution. 1 - International Standards Organization Enterprise Architecture emerges in large IT organizations over time, as the need for coordination and a systemic vision increases with the size and complexity of IT services. In general this is some of the highest level, most long-range work to establish the principles and strategies of the IT organization in its service to its customers. Supporting long-term objectives remains a challenging topic in enterprise IT. Information technology is continually presenting new opportunities for adding business value, opportunities that may be well justified, but that can also introduce redundancy and complexity into the IT environment. Architects seek to support new IT functionality by simplifying and optimizing its introduction into the existing IT landscape, seeking economies of scale and efficiencies of re-use. 1 (ISO/IEC 2007) Execution starts with having the right people on the job. 3 Page 3

6 The actual missions of the architecture capability may include strategic planning, standards setting, IT portfolio management, internal analysis and consulting, and many other related concerns. Enterprise architecture traditionally employs various views for different perspectives on an enterprise problem: Business Architecture Business Processes Business Capabilities Data Architecture Systems Architecture Processes (a.k.a. value chains or value streams) are the end-to-end pipelines, crossing functions, that deliver some value for stakeholders. The classic example is the order to cash lifecycle in manufacturing. Functions (a.k.a. capabilities or business services) are ongoing organizational components. Hire Employee is a process, while Human Resource Management is a function or capability. IT systems support application and infrastructure services. Like functions, systems can be decomposed into subsystems. Finally, data is the subject and object of the processing. The information concepts, like Customer or Server, are the endless inputs and outputs of the processes and capabilities, supported by the IT systems. There are several enterprise architecture frameworks and methods, and all reflect the above views as an essential core. The views are supplemented additionally by techniques like matrixing and current/ target/gap analysis. Example To make the above section a little more real, let s show a very simple example. Suppose an organization is considering whether to replace its legacy CRM system with a Cloud competitor. An enterprise architect is brought in to evaluate whether this makes sense. He or she identifies that there are three systems of concern: The internal directory services application The CRM system itself The Accounts Receivable system Architects seek to simplify and optimize the IT landscape. Figure 1: As-is architecture Figure 2: To-be architecture 4 Page 4

7 Architects use a variety of tools to represent structures such as Figure 1and Figure 2. For example, the lines connecting the boxes represent data that is flowing from one system to another, and a matrix can be used to represent the presence of data in a given system: Sales Representative Customer Accounts Receivable RO RO CRM System RO SOR Employee Directory SOR Figure 3: Data/system matrix (SOR: System of Record, RO: Read Only) Figure 3 uses a matrix to show the data that is being produced in various systems. Notice that these matrices imply a number of organizational stakeholders: Corporate Finance Sales Directory Services Human Resources The good enterprise architect is a seasoned diplomat, able to bring these different parties together in a cross-functional view. Finally, these systems all use some sort of platform technology: The good enterprise architect is a seasoned diplomat. Windows Server HP-UX Oracle AIX DB2 Websphere Accounts Receivable X X X Legacy CRM System X X Employee Directory X Figure 4: System to platform matrix Real world examples are of course much more complex, but even the above information can generate a number of questions and insights. The architect might initiate a round of interviews with stakeholders to ask the following questions: What will it take to integrate the employee directory and the accounts receivable system with the new Cloud CRM system? Can the WebSphere-based accounts receivable system (which is known to be an older legacy system with some integration challenges) easily receive data from the Cloud system? Are there potential bandwidth issues? If we have designated the employee directory as system of record for employee data, can we prevent its being edited in the CRM system? What security risks must we mitigate if our customer data is stored in the Cloud? How can we keep it secure as it is being communicated back to the accounts receivable system? In partnership with the financial or contract analysts, the architect asks what are the implications of retiring our legacy CRM system for our HP and Oracle contracts? What are the savings, or, perhaps, penalties? 5 Page 5

8 The previous is actually a fairly technical example, but perhaps easier to understand as a start. Let s dig further into more of a true business architecture example. An architect skilled in higher level capability modeling might develop a simplified representation of customer relationship management, such as the following: Figure 5: CRM capability architecture This is a true business architecture; it is a graphical representation of enterprise activity with no reference to supporting systems. But as the capabilities are assessed against the Cloud CRM system, a gap appears. With social media, sentiment analysis is essential, but the CRM Cloud provider s capabilities there are not yet as mature as the CRM strategists believe is necessary. Customer satisfaction metrics are a strategic priority this year. 6 Page 6

9 Again, the architect initiates a round of discussions with stakeholders, to investigate the following alternatives: Ship the data to a specialized sentiment analysis provider with their own platform. Work with the Cloud CRM vendor to find a partner to implement the needed functionality on their platform. Import the necessary data from the Cloud provider and build and run the analytic platform internally. All have tradeoffs that can be quantified, and would keep an enterprise architect and his or her partners busy for some time. At the end of the effort, the senior executive should have a consolidated set of results from the Cloud sourcing group. The group should thoughtfully consider the tradeoffs, risks, and costs, delivering an integrated picture across the affected enterprise areas. Because the architects are accustomed to working across silos, they should be able to serve as a much needed mix of technologist and diplomat, bringing together diverse perspectives from functional users, financial sponsors, and governance interests. And only through such integrated, boundaryspanning efforts can the enterprise truly maximize the potential of Cloud services. Conclusion There is great potential in Cloud delivery, but there is also risk and complexity. A whole-systems view is required to understand the costs, benefits, and tradeoffs. Multiple perspectives are needed, under the guidance of senior personnel possessing both technical acumen and diplomatic skills. Enterprise architects have been trained along just these lines since before Cloud became a buzzword, and are some of your most valuable allies and assets in your journey to more effective IT services. Resources Sourcing and Vendor Management There is much information available on the general topic of sourcing, IT sourcing, and vendor management. Some places to start would be the CMMI for Acquisition ( Control Objectives for Information Technology (CObIT) version 4.1, especially AI5 (Procure IT Resources) and DS2 (Manage Third-party Services) ITIL version 2011, especially Service Design, sections on Service Level Management and Supplier Management IT Financial Management Association ( ) International Association of Outsourcing Professionals ( ) Only through such integrated, boundaryspanning efforts can the enterprise truly maximize the potential of Cloud services. 7 Page 7

10 Enterprise Architecture There is not currently a well recognized talent pipeline for enterprise architecture professionals. Certification in The Open Group Architecture Framework (TOGAF) is gaining traction. See About ASG A recognized innovator in enterprise IT software solutions, ASG Software Solutions has been optimizing 85 percent of the world s most complex IT organizations for over 25 years. We create and deploy unique software solutions that reduce cost, mitigate risk and improve service delivery throughout the IT lifecycle. ASG s comprehensive solutions help you solve today s challenges, such as cloud computing and big data, while driving your business forward by providing insight and control across cloud, distributed and mainframe environments. About Enterprise Management Associates, Inc. Founded in 1996, Enterprise Management Associates (EMA) is a leading industry analyst firm that provides deep insight across the full spectrum of IT and data management technologies. EMA analysts leverage a unique combination of practical experience, insight into industry best practices, and in-depth knowledge of current and planned vendor solutions to help its clients achieve their goals. Learn more about EMA research, analysis, and consulting services for enterprise line of business users, IT professionals and IT vendors at or blogs.enterprisemanagement.com. You can also follow EMA on Twitter or Facebook. This report in whole or in part may not be duplicated, reproduced, stored in a retrieval system or retransmitted without prior written permission of Enterprise Management Associates, Inc. All opinions and estimates herein constitute our judgement as of this date and are subject to change without notice. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies. EMA and Enterprise Management Associates are trademarks of Enterprise Management Associates, Inc. in the United States and other countries Enterprise Management Associates, Inc. All Rights Reserved. EMA, ENTERPRISE MANAGEMENT ASSOCIATES, and the mobius symbol are registered trademarks or common-law trademarks of Enterprise Management Associates, Inc. Corporate Headquarters: 5777 Central Avenue, Suite 105 Boulder, CO Phone: Fax: Page 8

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