Enterprise SOA Governance

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Enterprise SOA Governance

Janne J. Korhonen

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The Frequency and Amplitude of

Change are Escalating

1950 1960 1970 1980 1990 2000

Production Economy

Distribution and Sales-Driven Economy

Quality and Mass Marketing Economy

Customer Service and Niche Marketing

Economy

‘Customers of One’ Economy

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Effectiveness Integrity • Service-Dominant • Organismic • Holistic • Dynamic • Emergence • Coordination • Post-Formal • Dialectical C o m p le xi ty Efficiency • Goods-Dominant • Mechanistic • Reductionistic • Static • Planning • Control • Formal • Logical

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IT Governance

Traditional Definition

“IT governance is the

responsibility of executives

and the board of directors,

and consists of the leadership,

organisational structures and

processes that ensure that the

enterprise’s IT sustains and

extends the organisation’s

strategies and objectives.”

– IT Governance Institute;

CobiT 4.1 (2007)

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Basic CobiT Principle

Business

Requirements

drive the investment in that are used by

IT Resources

IT Processes

Enterprise

Information

that are used by to deliver CobiT Source: CobiT 4.1

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Business Goals for IT

Enterprise Strategy

CobiT Follows Top-Down Approach

IT Scorecard

Enterprise Architecture for IT

IT Goals

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CONFORMANCE

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Effectiveness Integrity • Business Technology • Value Creation • Performance • Business-IT Convergence • Interactions • Informated • In the Cloud C o m p le xi ty Efficiency • Information Technology • Cost Containment • Conformance • Business-IT Alignment • Transactions • Automated • On the Ground

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Highly Aligned

The Path to IT-Enabled Growth

”Alignment Trap”

11 % of respondents +13 % IT Spending -14 % 3-year Sales CAGR

”IT-Enabled

Growth”

7 % of respondents -6 % IT Spending +35 % 3-year Sales CAGR Alignment

Effectiveness

Less Effective Highly Effective

Less Aligned

+35 % 3-year Sales CAGR

”Maintenance

Zone”

74 % of respondents +0 % IT Spending -2 % 3-year Sales CAGR

”Well-Oiled IT”

8 % of respondents -15 % IT Spending +11 % 3-year Sales CAGR

S o u rc e : B a in A n a ly si s n = 504

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Today’s

All Too Common:

Higher cost No change of impact Higher Growth: Higher cost Higher impact Higher cost

Goal of IT Governance: Reducing Costs

and Improving the Bottom-Line Impact

Today’s situation

Stable Cost:

Same (current) cost Higher impact Sweet Spot: Lower cost Higher impact Reduced Cost: Lower cost

Same (current) impact

Typically Undesirable:

Lower cost Lower impact

Cost

Impact

Lower impact Higher impact

Lower cost

IT improvement zone

Adopted from Benson, Bugnitz & Walton (2004): From Business Strategy to IT Action

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Strategic Alignment Model

Business Strategy IT Strategy

Business Scope Distinctive competencies Business Governance Technology Scope Systemic competencies IT Governance Strategic Fit E xt e rn a l

Organizational infrastructure and

processes IS infrastructure and processes

Admin Infrastructure Processes Skills Architectures Processes Skills Functional Integration Strategic Fit In te rn a l Business Information Technology S o u rc e : H e n d e rs o n & V e n ka tr a m a n ( 1 9 9 1 )

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1. Strategic Execution

Admin Infrastructure Processes Skills Architectures Processes Skills Functional Integration Strategic Fit In te rn a l Business Information Technology

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2. Technology Potential

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3. Competitive Potential

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4. Service Level

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Fundamental System Perspectives

• ”Black Box”

–

Functional

–

Teleological

–

Control-oriented

–

Design irrelevant

• ”White Box”

–

Constructional

–

Ontological

–

Change-oriented

–

Design essential

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Enterprise Governance:

Equal Weight on Performance

“The set of responsibilities and

practices exercised by the

board and executive

management with the goal of

providing strategic direction,

ensuring that objectives are

Enterprise Governance

ensuring that objectives are

achieved, ascertaining that risks

are managed appropriately and

verifying that the organisation’s

resources are used responsibly.”

− Information Systems Audit

and Control Foundation (2001)

Corporate Governance i.e. Conformance Business Governance i.e. Performance Accountability Assurance Value Creation Resource Utilisation Source: IFAC (2004)

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Enterprise Governance: My Definition

Enterprise Governance

defines the requisite roles,

accountabilities and

policies to effectively

design and operate an

The word governance derives from the Greek verb κυβερνάω [kubernáo]: to steer

design and operate an

enterprise in continually

shifting contexts.

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To Optimize the System, One Needs

to Pareto-Optimize the Sub-Systems

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”Structure Follows Strategy”

– Alfred Chandler

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VIII

VI+ Executive Leadership

Strategic organizational leadership: culture, values, vision; business portfolio

Board Member,

Super Corporation CEO

Corporate CEO

Business Corporate EVP VII

VI VII-VIII Long-term sustainability

V-VI Innovation, transformation III-IV Effectiveness

I-II Efficiency

Requisite Organization as Metadesign

IV

IV−V General Management

Business models, products, services III I II

I−III Operations

Day-to-day work, supervision, first-line management, departmental management Business Unit President General Manager Unit Manager First-Line Manager; Specialist Supervisor; Operator V

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Internal External Business Domain Client Interaction Event or Transaction Service Invocation Internal External IT Domain I II III IV V VI VII Service Instance VII VI V IV III II I

Korhonen, Hiekkanen & Heiskala (2010): ”Map to Service-Oriented Business and IT”

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Strategic, internal Strategic Decision-Making Enterprise Coordination Tactical Domain Strategic Steering Strategic, external

Agile Governance Model 1.1

Design, Planning and Support

Real-Time Tactical Operational Tactical Decision-Making Domain Coordination Operational Decision-Making Operations Planning & Support

Development and Execution

Adapted from Korhonen, Hiekkanen & Lähteenmäki (2009)

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Benefits of SOA at Different Levels

Business Processes

Business Strategy

• Business modularity →Agility

• Outsourcing

• Rapid service development

• Agile business processes

Application Infrastructure

Information Systems

Business Processes • Agile business processes

• Composite applications

• Process automation

• Reusability

• Interoperability

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Levels and Dimensions of Enterprise SOA

Process Information Service IT/IS

Value Network Industry Ontology Service Strategy IT Strategy End-to-end Processes Enterprise Ontology Enterprise Services Technology and Systems Processes Ontology Services and Systems

Portfolio Functional Processes Domain Ontology Procedural Services Technology Platforms, Enterprise Information Systems Workflows, Orchestrations Logical Data Model Declarative Services Application Infrastructure Process Activities Technical Data Model Infrastructure Services Technology Infrastructure

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SOA Governance Strategy and Goals SOA Principles and Policies

SOA Governance Organization and Stakeholders

G o ve rn a n ce P e rf o rm a n ce M g t F u n d in g a n d B u d g e ti n g M o d e ls D e fi n e /E n fo rc e P o li ci e s b y G o ve rn a n ce T ie rs

SOA Governance Reference Model

•Who governs What?

•Who owns what and how? What events trigger policy enforcement?

•Who is responsible for enforcing what? •Who provides services? Who consumes services?

•What behavior do we need? •How do we incentivize that Governance Processes

Governance Roles and Responsibilities Governance Behavior and Reinforcement Model

Governance Metrics and Process Performance

G o ve rn a n ce P e rf o rm a n ce M g t F u n d in g a n d B u d g e ti n g M o d e ls

Governance Enabling Technology & Implementation

D e fi n e /E n fo rc e P o li ci e s b y G o ve rn a n ce T ie rs

•Govern Whatand Why?

•What must be governed now? •To what end?

•SOA goals, principles, and policies

•How do we incentivize that behavior?

•What rewards, penalties and reinforcement mechanisms will work for us?

•What metrics are needed?

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Agile Governance Model Applied to

SOA Governance

Enterprise/ Strategic Governance Enterprise/ Strategic Governance SOA Architecture SOA Architecture SOA Operating Model SOA Operating Model

•SOA Opportunity Management

•Service Portfolio Management

•SOA Reference Architecture

•Services Reference Architecture

•Strategic Management

•Budgeting and funding

•Enterprise Architecture

•Business and Technology Alignment

•Compliance Architecture Governance Architecture Governance Model Governance Model Governance SOA Services Governance SOA Services Governance SOA and Services Lifecycle Governance SOA and Services Lifecycle Governance SOA Governance Enabling Technologies SOA Governance Enabling Technologies SOA Projects / Operations SOA Projects / Operations Planning, coordination, support Implementation, operations, control

•Service Portfolio Management

•Service Promotion/Demotion •Management Reviews •Service Identification •Modeling, Design •Publishing •Composition, Orchestration •SOA Development •QA/Testing

•Execution and monitoring

•Maintenance

•Services Reference Architecture

•SOA Platform Architecture

•Services Reference Model

•Design Patterns and Standards

•Runtime Standards

•Versioning/Naming Conventions

•Development Tools

•Registries and Repositories

•Policy Engines

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