Building a Business Architecture Practice:

TIAA-CREF's Journey through Building a

Business Architecture Practice 03/20/2013

Shawn Furgason Senior Director

Business Architecture

2

TIAA-CREF Fast Facts

Institutional Retirement, Health Savings, Executive

Compensation, Planned Giving, Endowments, etc.

Individual Retirement (403b,401k,IRA),

Educational Savings, Insurance, Brokerage, Banking/Lending, Health

Savings, Trusts, Annuities, etc.

Asset Management Global Equities, Fixed Income, Real Estate,

Institutional Investing, Alternative Investments, etc.

1 As of September 30, 2012.

3

Vision 2020 – The Case For Change

Vision 2020 is TIAA-CREF’s long-term strategic plan to grow the company

through the end of the decade and beyond.

• Changing client demographics

• Offer products / services supporting a greater range of financial needs

Expand the products / services to the broader not-for-profit market

Employees at not-for-profit institutions we do not

currently serve

Households and families of current and future

participants

Diversify our offering building our relationship

across more of our participants

Realizing Vision 2020 required significant business

transformation and new ways to work across lines of business

4

Our Business/Technical Challenges Traditional Portfolio Planning Created Barriers to Realizing Vision 2020

Business

Drivers Vision and Objectives

Project

Level

Activities

Business Case/Initiation

Requirements

Design

Develop/Test QA

Implementation/Support

• Duplication of capabilities

• Insufficient strategic/operational funding

to delivery required capabilities

• Too much focus on foundational vs.

distinctive capabilities

• Increase in technical debt

• Project portfolios are

developed based on

individual Line of Business

requirements

• Projects are justified, funded

and executed based on their

own merit

Socializing the component based design was a key turning in point in

shifting the conversation from how to what we do as a business.

5

Business Architecture: Key to Achieving V2020 Capabilities Centric Execution Portfolio

Business

Drivers

Business

Architecture

Vision and Objectives

Business Strategy

Business Model

Business Capabilities

Business Process

Information Architecture

Information Management Reference Architecture

Applications Reference Architecture

Infrastructure Reference Architecture

Technical

Architecture

Project

Level

Activities

Business Case/Initiation

Requirements

Design

Develop/Test QA

Implementation/Support

Portfolio

Management Capability Portfolio People Information Technology Process

6

Business Architecture Was Born

• Enterprise Architecture Introduces Component Based Design

– IBM’s Component Business Model (CBM)

Socializing the component based design was a key turning in point in

shifting the conversation from how to what we do as a business.

7

TIAA-CREF shifts from the CBM to Business Capabilities Map

• The CBM never resonated with

business leaders

– Too abstract

– Separation of Plan, Control, Execute

• Developed a multi-tiered Business

Capability Map (BCM)

– Functionally organized

– Vetted with a broad cross section of business

• Applied the BCM

– Every project undergoing an Enterprise Architecture Solution Definition Review

– Produced historical capability investment heat maps

– Produced the first forward looking portfolio investment heat map

Servicing & Recordkeeping

Investment Management

Enterprise Services

Business Management

Products & Services Management

Financial

Mgmt

Marketing and Sales Management

Client

Relationships & Experience

Risk Mgmt

Level 1

Servicing & Recordkeeping

Investment Management

Enterprise

Services

Business Management

Product & Service Management Financial

Management

Marketing, Sales & Distribution Channel Mgmt

Client Relationships &

Experience

Risk Management

Servicing

Strategy

Client

Relationship

Strategy

Investment

Strategy

Risk

Management

Execution

Risk Planning

Governance

Product Development

LifecycleProduct Strategy

Servicing

Management

Servicing & Recordkeeping

Administration

Investment

GovernanceTrading & Settlement

Information Technology

Product Portfolio

Management

Marketing,

Sales &

Distribution

Channel

Strategy

Marketing

Execution

Marketing,

Sales &

Distribution

Channel

Oversight

Sales

Delivery

Distribution

Channel

Execution

Human Resources

ManagementFacilities Management

Enterprise Strategy and Planning

Procurement

Management

Client

Relationship

Analysis

Client Experience

Financial

Strategy &

Planning

Risk

Management

Oversight

Financial

Execution

Financial

Oversight

Level 2

Enterprise

Services

Human Resources Management Facilities Management Information Technology

Human Resource Strategy

Facilities Mgmt & Operations Technology Delivery & Operations

Technology Strategy & Planning

Document, Image & PrintTalent and Resource Mgmt

Resource Acquisition & Retention

Procurement Management``Vendor and

Partner Strategy

Sourcing & Procurement

Vendor and partner

Management`

Servicing & Recordkeeping

Investment Management

Business Management

Product & Service Management Financial

Management

Marketing, Sales and Distribution Channel Mgmt

Client Relationships &

Experience

Risk

ManagementProduct Development LifecycleProduct Strategy Product Portfolio

ManagementProduct & Service Portfolio

Strategy

Product & Service Contribution Strategy

Product & Service Sourcing Strategy

Product & Service

Sourcing

Product & Service Dev, Configuration & Pricing

Product & Service Filing

Product & Service Profile

Product & Service

DeploymentProduct & Service Performance

Tracking

Product & Service Lifecycle Oversight

Financial Strategy &

Planning

Capital & Reserves Strategy

Accounting & Allocation Strategy

Treasury & Cash Strategy

Risk Strategy

Corporate Risk and Controls Strategy

Portfolio Risk Strategy

Compliance and Regulatory Strategy

Marketing, Sales

& Distribution

Channel Strategy

Branding & Competitive Positioning Strategy

Marketing & Sales Strategy & Planning

Distribution & Channel Strategy & Planning

Marketing

Execution

Market Research & Analysis

Marketing & Advertising

Campaign Planning & Execution

Marketing, Sales &

Distribution

Channel Oversight

Distribution Channel Effectiveness, Oversight &

Management

Marketing Advertising & Campaign Effectiveness

Sales Effectiveness,Oversight & Management

Client Relationship

Strategy

Client Experience

Client Relationship

Analysis

Client Relationship and Experience Strategy

Segmentation Strategy and Planning

Client Advisory Service Strategy

Client Activities & Events

Communications and Correspondence

Client Advisory Services

Touch Point Handling

Client Profile

Client Lifecycle Management

Client Value Management

Client Service Performance Management

Touch Point Management

GovernanceEnterprise Strategy and PlanningExternal Relations

ManagementBusiness Performance

ManagementPolicies , Architecture & Standards Governance

Enterprise Business Strategy & Visioning

Continuous Process Improvement

Sales Delivery

Sales Execution

Sales Enablement

Servicing Strategy Servicing

Management

Product Delivery & Servicing Performance Mgmt

Product Delivery & Servicing. Audit & Exception Handling

Eligibility, Enrollment & Delivery Oversight

Servicing & Recordkeeping Administration

Plan, Product, Portfolio & Service

Performance

Plan Lifecycle Management

Contributions &

Remittances

Benefits, Payouts &

Claims

Eligibility, Enrollment & Entitlement

Billing & Collections

Positions & Balances

Accounts & Contracts

Lifecycle Mgmt

Statements & Reports

Investment Strategy

Investment Philosophy

Investment Planning

Investment Strategy

Investment

GovernanceAllocation & Trading

Oversight

Portfolio Performance Analysis & Oversight

Portfolio Performance Benchmarking

Trading, Settlement and Asset Management

Portfolio Asset Allocation & Balancing

Investment Decisioning &

Trading

Research & Analytics

Investment Ops, Custody, Clearing

& Settlement

Investment Perf. Reporting

Investment Valuation

Investment Accounting

Transfer Agency

Risk Management

Execution

Risk Management

Oversight

Product Risk Management

Market &Credit Risk Mgmt

Operational Risk Mgmt

Legal

Security &Privacy Mgmt

Fraud Detection & Mitigation

Actuarial &Underwriting

Portfolio Risk Oversight

Corporate Risk Oversight

Compliance Oversight

Financial Execution

Financial Oversight

Treasury & Reserves Management

Finance & Accounting Controls

General Ledger Operations

Internal Mgmt / External Reporting

Accounts Payable

Treasury & Cash Flow Operations

Financial Performance Measurement & Reporting

Strategic Planning

Distribution

Channel

Execution

Distribution Channel Profile

Distribution Channel Compensation

Enterprise Business Strategy Development

Case & Exception Handling

Product Delivery & Servicing Strategy & Design

Product Delivery & Servicing Cost Strategy

Product Delivery & Servicing Policies & Procedures

Loan Fulfillment

Budgeting, Planning & Forecasting

Accounts Receivable

Legal Strategy

Audit and Process Assurance

Regulatory Compliance

Audit Oversight

Legal OversightAsset

ManagementAcquisition & Disposition

Level 3

Level 4

Business Component Names Associated Capabilities

Touch Point Handling

• Manages all inbound and outbound contact handling activities between the company and all applicable parties (including exceptions)

• Records interactions with clients via one or more access channels & the internal actions taken as a result

• Manages the classification and activities of internal/external client interactions

• Administers all client interaction routing per established client handling rules

• Handle the client dialogue and provide response• Authenticates user credentials

Business stakeholders must be able to see and

describe their business using the model to accept it.

8

IT & Business Partner to Develop Business Architecture

• The CIO and COO Partner to develop Business Architecture

– Institutionalize Capabilities Orientation

– Establish a Center of Excellence

– Integrate into Business Cadence

– Strategy -> Execution Linkages

• Partnered w/ Booz & Co

– Capabilities Driven Strategy

– Coherence Concept

– Distinctive Capability System

– Resonated w/ Executives

– Resisted by Sr. Leaders who

were more focused on closing

gaps in foundational

capabilities

Right to

Win

How are we going to create value for our customers in this market?

What do we need to do well to deliver that value proposition?

What are we going to sell in this market and to whom?

9

Business Blueprints to Strategy Implementation

Capability Blueprint,

including overlays of: – Products and

Services – Cost structure – Investment – Ownership – Cost Model – Risk

Blueprint of the Business Strategy Implementation & Reporting

Capability Analysis – Health and Parity – Gap Assessment

Capability Roadmap – Initiative Roadmap

and Investment Prioritization

– Business Case

Way to Play Capability Definition

Strategy

1

2

3

The complexity of the linkages between capabilities, process,

people, and technology requires a supporting data model

10

Pilots Uncover Strategy Gaps and Alignment Issues

• Traditional LoB strategies and execution were strong but generally not aligned

with the overall vision of the firm

• One executive challenged the business strategy for their business unit,

designed a new strategy, and obtained CEO / board approval

• Most investments were not developing “strategic” or “differentiating”

capabilities

• We experienced difficulties between functional capability alignment and the

distinctive capability system

• Sr Business leaders aligned with functional capabilities while executives

aligned with the distinctive capability system

• The business architecture engagement was redirected to focus on the largest

business unit and to align our work with LEAN process re-engineering efforts

Anticipate gaps in strategy and prepare to

work through the gaps or quickly redirect.

11

Capability to Process Linkage Model

1. Business Architecture Common Language:

A Capability represents WHAT we do and

serves as a common process classification

language. A Process is one element of HOW

we deliver value (along with people, technology

and information).

• Level 1 Capabilities serve as Process

Categories (APQC* L1)

• Level 2 Capabilities serve as Process

Groups (APQC L2)

2. Business Contextual Dimensions allow us to

transition from Capabilities to Physical

Processes. The three key business contextual

dimensions are Customer, Product, and

Channel.

3. Physical Processes must be measurable and

assignable and are documented at one of next

three APQC layers within a specific business

context

• Level 3 Process/ Activity (End to End –

Voice of Customer Value Stream

• Level 4 Activity / Task / Step (Standard

Work, commonality opportunity)

• Level 5 Task / Step / Data (Procedures)

* APQC - American Productivity & Quality Center

12

Business Capability Model L1 Capability and Contextual Dimensions

Operations &

Administration Client Servicing Onboarding Sales

Client Relationship & Experience Management

Marketing

Data Analytics & Information

Technology Risk, Fraud, Law &

Compliance Human Resources

Management

Finance, Accounting &

Vendor Management

Facilities Management &

Operations

Governance & Program / Change

Management

Strategic Planning & Business Modeling

Co

nte

xtu

al D

ime

nsio

ns

F

ou

nd

ati

on

al

L1

Busin

ess C

ap

ab

ilitie

s

Busin

ess C

onte

xt

Investment Management

Product

Management

Va

lue

Ch

ain

Client Types Individual / Participant Institution / Sponsor

Dollar Stretchers Life Builders Accumulators Transitions Established Premier / Jumbo Partner / Large & Medium Direct / Small

Mass Affluent High Net Worth Higher Ed K-12 Hospitals Government

Product Lines Individual Products Asset Management Institutional Products

Life Insurance (Term & Perm)

Education Savings

Brokerage Checking Loans Mutual Funds

Planned Giving Trusts

Retirement Plans

Retirement Health Svgs Plans

Non-Qual. After Tax Annuities

Personal Trusts

Managed Accounts Savings & CDs Real Estate

Secured Loans Annuities Accounts Endowments

Executive Compensation

Deferred Compensation

Ind. Retirement Accounts (IRAs)

Prepaid Cards Management /

Advisory Services

Channels TIAA-CREF / Partner Channels

Internet (Dot Com, Social, Chat)

Authenticated (Online, Chat, ATM)

Mobile Email

(Out /In) Inbound Calls /

IVR Inside Sales

(Outbound Calls) High Touch Sales

(Wealth, FCG, etc.) Intermediaries

Specialized Sales & Service

Mail / Image /Fax

OGSM

13

Business Architecture Value Propositions Durable, Model Driven Approach

Business Architecture Framework

Operational Excellence

Customer Experience

Portfolio Optimization

A durable, model driven approach is the key to analyzing, managing and

optimizing the design of TIAA-CREF’s increasingly complex business

Each engagement leverages

the knowledgebase speeding analysis and reducing

cost/effort

Engagements builds upon

the depth and breadth of the knowledgebase

Layer maturity

development effort immediately benefits

the engagements

Process Complexity Technology Complexity

Vendor Analysis & Leverage

Employee Productivity Onboarding and Experience

Customer Experience Consistency

Competitive Parity (Product, Channel and Service)

Gap Ranking

Competitive Advantage

Cross Portfolio Impact Strategic Portfolio

Outcome Alignment

Cross Portfolio Collisions –

Efficient Execution

14

Business Drivers Define the overall purpose for analyses

Business Drivers:

• Provide the underlying

business purposes for

defining an analysis’

scope

• When linked to Process

Patterns, insights can be

gained around: • Competitive Advantage

• Competitive Parity

• Project Change Impact

• Gap Ranking

• Strategic to Portfolio

Alignment

• Customer Experience

• Risk Alignment

Process Pattern

Customers

Market Group

Segment/Sector

Sub-segment

Business Capabilities

Level 1 Capability / Process Group

Level 2 Capability / Process Category

Level 3 Capability/Process

Products

Product Group

Product Family

Product

Channels

Channel Method

Channel Type

Channel

Activity

Task

Step

Linking and Leveraging:

When each Business Driver is linked to defined

Process Patterns we will be able to provide

further insights into Business Enablers linked

to the same Process Patterns. For example: • Process efficiency opportunities

• Operational complexity

• Operational costs

• Vendor analysis

15

Process Patterns The Hub for Business Insights

Process Pattern

Customers

Market Group

Segment/Sector

Sub-segment

Business Capabilities

Level 1 Capability / Process Group

Level 2 Capability / Process Category

Level 3 Capability/Process

Products

Product Group

Product Family

Product

Channels

Channel Method

Channel Type

Channel

Activity

Task

Step

Process Patterns :

• Define a common

vocabulary and

methodology for

organizing business

processes across any

combination of product,

customer and channel

dimensions

• Provide the “connective

tissue” that links

Business Drivers (Strategy, Change Programs,

Risk, and Gaps) to

Business Enablers (People, Technology and

Information)

16

Business Enablers Provide the underlying data for analysis

Business Enablers:

• Represents the

components utilized to

support company

processes/capabilities

• Each “layer” provides

details and attributes

which deliver insights into

HOW (and how well)

processes are being

supported (or could be

better supported) from an

organizational and

technology infrastructure

• Each Business Enabler

is linked to each Process

Pattern component at

defined levels

Process Pattern

Customers

Market Group

Segment/Sector

Sub-segment

Business Capabilities

Level 1 Capability / Process Group

Level 2 Capability / Process Category

Level 3 Capability/Process

Products

Product Group

Product Family

Product

Channels

Channel Method

Channel Type

Channel

Activity

Task

Step

Examples of Data

Requirements captured and

stored for each “Layer”

Technology

Description

Lifecycle stage

Business Health

Tech Health

(complexity an

attribute)

Run cost

Platform Owner

Host

(internal/external)

Information

Segment

Quality Rating

SOR Flag

Required data

elements

People

Sourcing (Internal,

Outsource/Contractor,

Offshore)

Required Skill Set

Engagement Level

Location

Coverage hours

Costs per employee

Enablers

People

TIAA-CREF

Organization / Legal Entity

Department / Group / Team

Role / Job

Skill / Competency

Technology

Business Platform

Business System

Application

Information

Library

Collection

Group

Vendor

Location

Region

State

County

Fascility

Country

17

Where We Are Now

• Preliminary mapping of the 2013 Strategic Investment Portfolio

– Key insights: Collisions, Efficiency opportunities, Readiness / Impact Assessment

• Model Applied to Business Engagements

– Helping visualize technical and process complexity.

– Process optimizations appear to return 10x the value of technical platform

simplification

• Model / Reporting rapidly produces insights and enables “pivoting” on any layer

– Process, Technology

• Dramatic reduction in analysis time

– Leverage model for focused analysis

– Estimate a 40-60% reduction in analysis effort – focus expensive consulting resources

• Developing the depth and breadth of the model

• Adoption of “Capabilities” in addition to “Process”

• Pull vs. Push

18

Looking Forward

• Technical Roadmaps are truly Business Driven / Prioritized

• Business Architecture as a key foundational component of a new business

strategy

• Integrated Process Pattern Mapping into 2014 Planning

– All 2014 projects will identify process patterns before funding consideration

– Influence the design of the investment portfolio

– Influence / structure the execution portfolio (stretch)

• Operationalize the data model

– Add quantitative measures & data to qualitative

– Process optimizations appear to return 10x the value of technical platform

simplification

• Integrate Business Architecture into every major consulting engagement

• Revisit strategic / differentiated capability

19

Business Architecture Challenges & Lessons Learned

• Top-down Business Architecture

exposes strategy gaps

• LoB vs. the Enterprise value

• Difficulty of business leaders to

see value in an abstract concept

• Delivery teams can be threatened

• Business engagement is critical

• Business resistance

• The “right level“ of tool support is

critical

• Nuances of capabilities

• Skilled / experienced Business

Architects are difficult to find and

grow

• Business expertise matters

• Where your team reports matters

• Work through the strategy gaps or

course correct quickly

• Deliver LoB value first

• Find and support partners and

advocates

• Engage delivery teams

• Educate and engage at all times

• Demonstrate value quickly

• Simple databases/models and

avoid PowerPoint hell

• Get “close enough” and move on

• Be patient for the right skills,

leverage peer groups, grow your

own

• Consider senior business leaders

• Align reporting to objectives of BA

Challenges Lessons Learned

Ap

pro

ach

To

ols

Te

am

20

Thank you!