Running head: ENTERPRISE ARCHITECTURE PROPOSAL

Bachelor in Information Technology Program

Enterprise Architecture Proposal Hal Hagood Mega-Corp Software Development Plan

ENTERPRISE ARCHITECTURE PROPOSAL 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 companys 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.

ENTERPRISE ARCHITECTURE PROPOSAL Table of Contents

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Executive Summary...................................................................................................... Table of Contents Organization Selection Analysis/selection process/criteria . Operating Model Definition . Operating Model Implementation Organization Maturity Level Changes in Management Practices .. IT Engagement Model .. Outsourcing Opportunities Growing the Organization . Cost Analysis . Summary of Enterprise Architecture Proposal............................................................... References .

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Appendixes

A. Gantt Chart .......... B. Milestones and Activities . C. Network Diagram (Visio) .

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ENTERPRISE ARCHITECTURE PROPOSAL 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 directors 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.

ENTERPRISE ARCHITECTURE PROPOSAL 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 directors 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 companys financial vigor.

ENTERPRISE ARCHITECTURE PROPOSAL 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 companys 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-Corps status as a diversified multinational untouched.

ENTERPRISE ARCHITECTURE PROPOSAL 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.

ENTERPRISE ARCHITECTURE PROPOSAL 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

ENTERPRISE ARCHITECTURE PROPOSAL 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.

ENTERPRISE ARCHITECTURE PROPOSAL IT Engagement Model

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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.

ENTERPRISE ARCHITECTURE PROPOSAL Outsourcing Opportunities

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The question of outsourcing and various recommendations is often addressed. There are three outsourcing models, Strategic Partnership or managed services fully outsourced, Cosourcing 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.

ENTERPRISE ARCHITECTURE PROPOSAL Growing the Organization

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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 surefire 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 owners 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

ENTERPRISE ARCHITECTURE PROPOSAL 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,

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

ENTERPRISE ARCHITECTURE PROPOSAL Cost Analysis

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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

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

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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.

ENTERPRISE ARCHITECTURE PROPOSAL Summary

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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.

ENTERPRISE ARCHITECTURE PROPOSAL 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

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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 MegaCorp 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

ENTERPRISE ARCHITECTURE PROPOSAL moving Mega-Corp to an Optimized Core structure would facilitate and focus the companys

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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.

ENTERPRISE ARCHITECTURE PROPOSAL References

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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

ENTERPRISE ARCHITECTURE PROPOSAL Appendix A - Gantt Chart

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ENTERPRISE ARCHITECTURE PROPOSAL Appendix B - Milestones and Activities

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Milestone/Task First Milestone Evaluation/Submission Project Charter Submission Project Charter Charter Approved Planning Preliminary Scope Project Team Develop Project Plan Planning Complete Second Milestone Project Approval Execution System Design Testing Integration Final Testing Procurement Implementation Last Milestone 0d 5d 1d 20d 20d 13d 2d 3d 7d 1d 0d 27d 27d 7d 3d 5d 1d 2d 4d 0

Start Date Mon 1/9/12 Mon 1/ Fri 1/13/12 Mon 1/16/12 Mon 1/16/12 Fri 2/10/12 Mon 2/20/12 Wed 1/18/12 Wed 1/18/12 Fri 1/27/12 Fri 1/27/12 Mon 1/23/12 Mon 1/23/12 Tue 2/28/12 Wed 3/7/12 Wed 3/7/12 Wed 3/14/12 Mon 3/12/12 Mon 3/12/12 Fri 3/16/12

End Date Mon 1/9/12 Fri 1/13/12 Fri 1/13/12 Fri 2/10/12 Fri 2/10/12 Tue 2/28/12 Tue 2/21/12 Fri 1/20/12 Thu 1/26/12 Fri 1/27/12 Fri 1/27/12 Tue 2/28/12 Tue 2/28/12 Wed 3/7/12 Fri 3/9/12 Tue 3/13/12 Wed 3/14/12 Tue 3/13/12 Thu 3/15/12 Fri 3/16/12

ENTERPRISE ARCHITECTURE PROPOSAL

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Appendix C - Network Diagram (Visio)