THE DATA ADMINISTRATION NEWSLETTER – TDAN.com
ROBERT S. SEINER – PUBLISHER

System Architecture: Jargon or Strategic Weapon

Published: September 1, 1997

A systems architecture is a tool for senior management to identify and define the companies applications portfolio.

Its 2:00 am and you have just arrived home from seeing a play; Berlin. A good night out on all accounts. You open the door, walk past the bed room and catch the clock radio flashing in the corner of your eye. As you turn around you recognize the familiar flashing 12:00 PM alert.

There has been another power failure! You check the house and find that you need to manually reset the time on several clocks; television, video, hi-fi, oven, microwave, and two clock radios.

Figure 1. Appliance Plan

Imagine picking up the video remote pointing it at each devise and resetting all the appliances with a press of a button.

To achieve this vision our electronics manufacturers would have to re-design their appliances so they support a common remote control interface between all household appliances. In effect creating a household appliance architecture.

In a similar way, companies can design their computer systems to inter-operate cooperatively. This design is called a systems architecture. The following diagram (Fig 2) illustrates all the system appliances that need to support a telecommunications business office.

Systems Architecture

A systems architecture is a tool for senior management to identify and define the companies applications portfolio. It is used to set system priorities that are competing for finite capital resources. Taking these decisions to an executive level ensures the systems priorities are aligned with corporate strategy. It gives management the opportunity to articulate how they wish to use technology to realize their business strategy and obtain competitive advantage.

Figure 2. A telecommunication company's systems architecture

Planning for Strategic Advantage

Porter's value chain provides a high level view of the primary and support activities an organization performs to add value between its suppliers and the products it sells.

The following value chain activities are extracted from the telecommunications company system architecture. The primary activities are:

• Serve Customers
• Support Distribution Channels
• Develop Service Products
• Provision Service
• Supply Goods & Services
• Maintain Network

These activities are supported by Set Business Directions, Manage Staff, Delivery Support Systems and Optimize Financial Resources.

This high level model provides a framework to illustrate how the proposed systems will automate the business.

By assessing the proposed applications portfolio against the businesses strategy, management can influence how systems are designed and used. For example:

• Significantly reducing the cost of internal processes to make it difficult for competitors to compete on price.
• Initiatives that tie the customer to your products make it impossible for the competitor to establish a foot hold in your markets.

By driving IT strategy in this way, management can make decisions to guide the delivery of their systems portfolio at a strategic level and which are beyond the project teams delegated authority. As a result, leverage the maximum potential from their investment in technology.

Business Process Re-engineering

In addition to achieving strategic advantage organizations can achieve competitive advantage by delivering their products to market more efficiently and at less cost. Competitive advantage is achieved by:

1. eliminating delays between primary value chain activities, or
2. performing one value chain activity well and orienting the whole business around this centre of excellence.

For example, one of the major challenges faced by the telecommunications industry is developing and releasing new products in ever decreasing cycle times. Especially as the Telcos move from being public utilities to becoming private customer focused organizations operating in a deregulated market.

In many of the companies I have worked, product to market is delayed due to the time taken between creating the product and making all the details available in the ancillary legacy customer, sales commission, provisioning supply and back office accounting systems. In many cases a new product can be delayed from 6 to 18 months, whilst changes are made to the code of these systems.

Figure 3. Product to Market

Taking an end to end process view of the product to market process, whilst preparing a systems architecture would ensure that all systems are designed around a core table driven product catalogue. Developing table driven systems based on common data structures ensures that a new product is launched in a similar fashion to the remote control device that can update all appliance clocks at a press of a button. That is, all systems are updated with the new product at a press of a button.

Application partitioning

The telecommunications system architecture, Figure 2, partitions the business into, front office, production and back office functions. Each functional area is further partitioned into business areas. The business areas provide a strategic framework for determining the systems required to support one aspect of the business and describing how they will support the business.

A business area may require from one to five computer systems, depending on the nature, complexity and size of the business. The applications identified using this approach, allows the management team to identify the optimum systems portfolio required to support their business. They can then describe the scope of each system in terms of the activities the system will automate, the data it will capture and the features they want it to deliver.

These descriptions allow management to determine system priorities based on the corporate strategy the system will help realize and the resources available for each of the approved projects.

Assessing Legacy Systems

Once the applications portfolio descriptions have been completed then an assessment of the existing systems can be made. Those systems that are closely aligned to the systems architecture and meet the businesses requirements are kept.

Systems described in the systems portfolio that have no existing equivalent, or it has been decided that an existing system should be replaced, are included in the new applications development plan.

Justify Technology Infrastructure

Now the technical architects can play a major role in assessing technology and tool options (standard operating environment) for delivering this new systems portfolio. The benefit of considering tools at this stage is that infrastructure components, such as databases, workflow, middleware layers for sharing data across environments, development tools and hardware platforms are more easily justified and the business case more credible.

Figure 4: Choosing a complete tool set

By selecting a standard system delivery and operating environments, your organization will minimize the hidden delivery costs of automation. Hidden delivery costs include:

• purchase price for duplicate software development tools,
• maintenance fees for development tools that provide the same features, and
• staff training costs for multiple tool sets necessary to support existing systems.

Selecting a corporate system development tool set means the business can reap the benefits of developing systems with a complete tool set, rather than missing functionality because technology enablers are not included in the tool set.

Managing the applications portfolio

Now your company is in a position to manage the delivery of its application portfolio. You can make informed decisions about the best way to deliver the new applications portfolio, using the systems architecture framework, ie build, out source or purchase.

Build

The high priority applications or core systems that will deliver strategic advantage should be build internally. Only by building these systems internally can you guarantee the proprietary knowledge of your new strategic applications will remain confidential.

Out Source

External companies can be invited to develop departmental systems, which are not crucial to the organizations competitive position. The contract must ensure the external software houses adhere to the companies overall standard operating environment to minimize system infrastructure costs.

Purchase

The systems that support secondary activities or non-strategic functionality should be sourced from third party vendors. Often these products contain more functionality than any organization could hope to develop internally. In order to maintain the internal standard operating environment it is worth remembering that it may be cheaper to have a favoured application redeveloped using the companies standard operating environment than training staff to use a new tool set to maintain it.

Invest In Your Business Future

Returning to the original question System Architecture: Jargon or Strategic Weapon?

I would have to agree the path contains lot of jargon. But the benefits are evident. An executive team working in partnership with senior technologists can realize many strategic solutions. Strategic solutions that can give your company a window of opportunity to dominate in the market place.

System architectures can be a strategic weapon. Will it be yours?

REFERENCES

(1) - Perspectives, The end of Delegation? Information Technology and the CEO, Harvard Business Review, September - October 1994, pp. 161-172
(2) - Martinez, E.V. Successful Re-engineering Demands IS/Business Partnerships, Sloan Management Review, Summer 1995, pp 51 - 60.
(3) - Zachman, J.A. A Frame work for Information Systems Architecture, IBM Systems Journal 261987: pp276-292.
(4) - Influencing Corporate Policy, I/S Analyser, June 1988 Vol. 26, No. 6.
(5) - New Tools to Capture Old Data, Computerworld April 25, 1994, pp99-103

© Copyright 1996 — Stephan Streitberger

The copyright for this article is held by Stephan Streitberger.