Projective - Business Architecture and Operational Excellence

A Marriage Made in Heaven?

Banking & Finance Seminar

Business Architecture & Operational Excellence

Peter Knaepkens, Niki Serruys & Stephan Podevyn

Date: 31/05/2012

Introducing ourselves … … and Projective

Projective focuses on Project and Program Management for the financial sector: banks, insurance companies and market infrastructure players.

The majority of our consultants have extensive experience in Project Management and over ten years seniority in Banking and Finance.

Projective helps Financial Institutions define and design their Target Operating Model, linking Business Architecture (processes) to the underlying applications and infrastructure. By doing this FSIs create greater transparency and traceability between Business and IT which is a key success factor in achieving large change initiatives. We also assist our clients with installing a permanent governance around their Architecture.

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Peter KnaepkensProject Manager

Niki SerruysProject Manager

Stephan PodevynProject Manager

Sounds familiar?

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Business processes are executed inconsistently between teams, persons and therefore often underperform. Process knowledge is limited to specific process parts

(silos).

Business processes are often task oriented and application dependent.Internal controls are not embedded in the process creating efficiency leaks.

Roles and responsibilities within the organization are not clearly defined and internal SLAs are not respected.

Projects are not delivering what was required by the business and clients. Business requirements are not clearly defined allowing ICT to be in the driving seat for projects.

Transformation of processes and systems require huge efforts and produce disproportional costs for individual business streams.

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Years of growth have had a strange effect on organizations …

• An architect designs and supervises the construction of buildings or other large structures.

• Architecture is about managing complexity and setting boundaries: budget, scope and time.

• Architecture deals with constraints and structures reality.

Architecture: the Basics

Architecture

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Business Architecture offers a framework for transforming a company’s strategy into an adequate Operating Model

Mission

Goals & Objectives

Value Proposition

Target Operating Model

- Process model

- Organisation model

- Information model

External Factors

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The Target Operating Model defines how a company organizes itself to execute strategy & meet the current/future challenges

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Process model Organization model Information model

Value Proposition

Process: Describes how processes are run at the company at a conceptual and logical level and how responsibilities are assigned

Organization: Provides an overview of how the company’s functions and roles are hierarchically structured

Information: Gives a static map of the different information objects (and their definitions)

Value Proposition:The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment

It defines how the company will offer its products and services to the different client segments through the different channels


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Enter Switch Fund data

Create fund switch record

Data complete & correct?

Request Closed

Process: Switch Funds

XOR Cancel RequestSubmit Request for further analysis

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Request extra information

Request approved?

Send rejection letter

Analyse requests

Extra information necessary ?

No

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Yes

Confirm fund switch

Request closed

Funds updated

DRAFT FOR DISCUSSION

13.9.Investment

Yes

Yes Pending Trades?

Apply switch charges

Maximum free switches exceeded ?

Queue fund switch request

No

XORNo

Open pending Switch Fund

Request

XOR

5.1. Inquiries

Send Confirmation Letter

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No

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1. Product Development

2. Marketing 3. Sales 4. Channel Management 5. Underwriting 6. Commercial

Administration8. Claims Management

7. Policy Administration

9. Customer Contact Management

Facility Management & Support

Business Improvement Services

Procurement & Vendor Management

Legal

Finance

Risk Management

Reinsurance

Asset Management

Compliance

HR

IT

General Management

Target Operating Model ICE – Value Chain View

Value chain (level 1)

Conceptual processes

Logical processes IT Architecture


Strategic Objectives

Service Service Service Service

Business Services

ESB

Integration Services (messaging, orchestration, transformation, etc)

ServiceService

Business ProcessesBusiness Process Manager

Life Policy Administration

Policy Administration

Services

Business Rules Engine

Business Rules

Pension Policy Administration

Policy Administration

Services

CIF

Client Information Services

Document Composition

Document Composition Rules

Distribution Mgmt

Distribution Services

Actuarial Services

Business Rules

Finance

Financial Services

Policy dataCIF

Client Directory

Agent Directory

Document management

Document Management

Services

Document storage

Agency & commission data

DataStores

Info Hub

Au

the

ntic

atio

n &

Au

tho

riza

tion

Se

rvic

es

Access Manager

User Meta Directory

User Provisioning

Local user directories

Local user directories

Identity Manager

Paper channel

Scanning / ICR

Electronic channel

E-mail / fax /SMS

Phone channel

IVR / Phone

Web channel - Portal

Clientportlet

Agentportlet

Brokerportlet

Bankportlet

Otherportlets

Exrtact services

Transform services

Load services

Agent Client Broker Bankassurance

Employee

Product Development & Management Pensions

Idea Generation

Product Feasibility

Product Design & Pricing

Product Implementation

Product Monitoring

Product Portfolio

Management

Monitoring & Needs

Identification

Monitoring of Product Content Quality

Review of Product

Related OPS Processes

Marketing

Leads Generation &

Channel Marketing

Leads Generation

Local & Agent Marketing

Step by Step Sales Cycle Support

Marketing Support for Brokers, Banks, Direct

Marketing Intelligence

Strategic Recommendations

Market & Consumer

Research and Analysis

CRM Capabilities & Data Management

Customer Insights

Customer

Intelligence

Customer Advocacy

Marketing Communication & Services &

PR

Media Strategies

Local Sponsorship

Corporate Social Responsibility

Brand Marketing

Public Relations

Internet Marketing

Sales

Lead Management

Sales Force Network Management

Channel Management

Contact Data

Maintenance

Relationship Development

Maintenance

Claims Management

Claim Notification

Claim Investigation Reinsurance Collection

Pay- outs

Underwriting Pensions

Data Entry

Investigation

Reinsurance

Acceptance

Contract Issuance

Billing & Collection

Distribution Support

Remuneration

Calculate Remuneration & Bonuses

Process Cost

Declarations

Pay- out

Contracting

Due Diligence

System Activation

End Relationship

Contract

Contract Maintenance

Reinsurance

Reinsurance Negotiation & Contracting

Reinsurance Billing

Reinsurance Reporting

HR

Manpower Planning

Training & Development

Compensation & Benefits

Performance Management

Communication

Culture

Administration

IT

Architecture

Enterprise Architecture

Solution Architecture

Data Architecture

Business Architecture

Infrastructure

Hosting & Housing

Operations & Maintenance

Configuration & Change Management

Incident & Problem Management

Infrastructure ArchitectureSupport & Helpdesk

Inventory Management

Strategic Planning

Application Development

& Maintenance

Software Development

Testing & QA

Maintenance

Requirement Management

Service Management

Organisation

Delivery Management

Service Management

Reporting

Coordination with BU

Finance Management

Security

Access Management

Security Management

Risk Management

Underwriting & RE Risk

Management

Market Risk Management

Balance Sheet

Management

Operational Risk

Management

Risk Modelling &

Concepts

Customer Contact

Management

Customer Inquiries

Customer Complaints


Rent - HO & Agencies

Occupancy Services

HO & Agencies

Incoming Documents

Outgoing Documents

ArchivingMotor Fleet

Asset Management

Develop Investment

Strategy

Perform Investment

Analysis

Maintain Investment

Network

Monitor Portfolio

Performance

Approve Reserving

Methods

Perform Contract

Valuations

Develop Portfolio

Structure

Maintain Customer Fund

Accounts

Legal

Contract Negotiations

Intellectual Property

Protection

Legal Advice

Litigation ResolutionBusiness Improvement Services

Project Management

Portfolio Management

Resource Management

Tracking & Reporting

Project Management

Business ConsultancyBusiness Process

Improvement

Finance

Finance & Accounting

General Accounting

Finance Reporting

Regulatory Reporting

Capital Allocation

Treasury

Financial Policies &

Procedures Management

Cost Management

Cost Accounting

Decision Support

Planning

Budgetting

Forecasting

Performance Measurement

Processing

Expense Reimbursements

Accounts Payable Processing

Tax

Tax Reporting

Tax Advisory

Procurement & Vendor

Management

Procurement

Underwriting Savings/Investments & Protection

Data Entry

Investigation

Reinsurance

Acceptance

Contract Issuance


Policy Administration Pensions

Administrative

Changes

Surrenders/MaturitiesCancellations

Endorsements

Billing & Collection Statement Generation

Policy Administration Savings/Investments &

Protection

Administrative

Changes


Endorsements


Business Service

Sub Services

Cluster of Activities

Lege

nd

General Management

General Management

Sales Force Recruitment

& Training

General Administration

Payroll

Client Data Maintenance

Relationship Management

Remuneration

Relationship Termination

Global Brand &

Sponsorship

Administrative Support

Commercial Support

Technical Implementation

Commercial Implementation

Product Development & Management

Savings/Investments & Protection

Idea Generation

Product Feasibility



Product Monitoring

Product Portfolio

Management

Monitoring & Needs

Identification

Monitoring of Product

Content Quality

Review of Product




Compliance

Ensure Compliance

Credit Risk

Business Risk

Demand management

Procurement Execution

Vendor Management

Product Development & Management Pensions

Idea Generation

Product Feasibility



Product Monitoring

Product Portfolio

Management

Monitoring & Needs

Identification

Monitoring of Product Content Quality

Review of Product


Marketing

Leads Generation &

Channel Marketing

Leads Generation

Local & Agent Marketing

Step by Step Sales Cycle Support

Marketing Support for Brokers, Banks, Direct

Marketing Intelligence

Strategic Recommendations

Market & Consumer

Research and Analysis

CRM Capabilities & Data Management

Customer Insights

Customer

Intelligence

Customer Advocacy

Marketing Communication & Services &

PR

Media Strategies

Local Sponsorship

Corporate Social Responsibility

Brand Marketing

Public Relations

Internet Marketing

Sales

Lead Management

Sales Force Network Management

Channel Management

Contact Data

Maintenance

Relationship Development

Maintenance

Claims Management

Claim Notification


Pay- outs

Claims Management

Claim Notification


Pay- outs


Data Entry

Investigation

Reinsurance

Acceptance

Contract Issuance



Data Entry

Investigation

Reinsurance

Acceptance

Contract Issuance


Distribution Support

Remuneration

Calculate Remuneration & Bonuses

Process Cost

Declarations

Pay- out

Contracting

Due Diligence

System Activation

End Relationship

Contract

Contract Maintenance

Reinsurance


Reinsurance Billing


Reinsurance


Reinsurance Billing


HR

Manpower Planning

Training & Development

Compensation & Benefits

Performance Management

Communication

Culture

Administration

IT

Architecture

Enterprise Architecture

Solution Architecture

Data Architecture

Business Architecture

Infrastructure

Hosting & Housing

Operations & Maintenance

Configuration & Change Management

Incident & Problem Management

Infrastructure ArchitectureSupport & Helpdesk

Inventory Management

Strategic Planning


& Maintenance


Testing & QA

Maintenance



& Maintenance


Testing & QA

Maintenance


Service Management

Organisation

Delivery Management

Service Management

Reporting

Coordination with BU

Finance Management

Security

Access Management

Security Management

Risk Management

Underwriting & RE Risk

Management

Market Risk Management

Balance Sheet

Management

Operational Risk

Management

Risk Modelling &

Concepts

Customer Contact

Management

Customer Inquiries

Customer Complaints


Rent - HO & Agencies

Occupancy Services

HO & Agencies

Incoming Documents

Outgoing Documents

ArchivingMotor Fleet

Asset Management

Develop Investment

Strategy

Perform Investment

Analysis

Maintain Investment

Network

Monitor Portfolio

Performance

Approve Reserving

Methods

Perform Contract

Valuations

Develop Portfolio

Structure

Maintain Customer Fund

Accounts

Legal

Contract Negotiations

Intellectual Property

Protection

Legal Advice

Litigation ResolutionBusiness Improvement Services

Project Management

Portfolio Management

Resource Management

Tracking & Reporting

Project Management

Business ConsultancyBusiness Process

Improvement

Finance

Finance & Accounting

General Accounting

Finance Reporting

Regulatory Reporting

Capital Allocation

Treasury

Financial Policies &

Procedures Management

Cost Management

Cost Accounting

Decision Support

Planning

Budgetting

Forecasting

Performance Measurement

Processing

Expense Reimbursements

Accounts Payable Processing

Tax

Tax Reporting

Tax Advisory

Procurement & Vendor

Management

Procurement


Data Entry

Investigation

Reinsurance

Acceptance

Contract Issuance



Data Entry

Investigation

Reinsurance

Acceptance

Contract Issuance



Administrative

Changes


Endorsements



Administrative

Changes


Endorsements


Policy Administration Savings/Investments &

Protection

Administrative

Changes


Endorsements


Business Service

Sub Services

Cluster of Activities

Lege

nd

General Management

General Management

Sales Force Recruitment

& Training

General Administration

Payroll

Client Data Maintenance

Relationship Management

Remuneration

Relationship Termination

Global Brand &

Sponsorship

Administrative Support

Commercial Support



Product Development & Management

Savings/Investments & Protection

Idea Generation

Product Feasibility



Product Monitoring

Product Portfolio

Management

Monitoring & Needs

Identification

Monitoring of Product

Content Quality

Review of Product




Compliance

Ensure Compliance

Credit Risk

Business Risk

Demand management

Procurement Execution

Vendor Management

Achieving Operational Excellence starts with detailing the TOM…

1. Making sure OPEX is derived from a company’s strategy

2. Defining how the parts of the VC should be sourced

3. Removing waste from processes & standardizing

4. Aligning Business & IT

5. Consolidating service components

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Business Architecture Maturity Model: most FSI are at level 1 or 2

Dimension Level 1 Level 2 Level 3

Defining architecture Architecture as a project Architecture as a process Architecture as a facilitating process

Use of architecture Architecture is used informatively Architecture is used for steering design

Architecture embedded in the organization

Involvement of business Architecture related to business goals

Architecture driven by business goals

Architecture process integrated in business

Involvement within development process

Ad hoc Structural Interactive

Relation to current situation Attention to current situation Attention to migration Attention to migration

Roles and responsibilities Responsibility for architectural content assigned

Management responsible for architecture process

Top management responsible for architecture effectiveness

Coordination of activities Steering per project Coordination between projects Coordination between projects

Maintenance architecture process & products

Maintenance is fragmented Maintenance procedures available

Continuous process improvement & Maintenance Policy available

Architecture roles and training Role recognized Role described Role supported & appreciated

Use of architecture method Project specific Organization generic Method optimization

Consultation Internal architecture meetings Meeting commissioners and users

Organization wide discussion of the quality of the architecture process

Architecture tools Ad hoc and product centred Structural and process oriented Integrated tools

Workshop: What are the most important roadblocks preventing Financial Institutions – YOU - to achieve a mature Business Architecture?

• “We have no time!”

• “We have no money!”

• “We don’t see the (immediate) benefits!”

• “We can’t decide where to start & who should sponsor this initiative!”

• “There is no common opinion about definitions & scope of BA!”

• “We have tried this before, doesn’t work!”

• “We are happy with what we got!”

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APPENDIX: Business Architecture Maturity Level

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Dimension Description

Defining architecture Architecture development approaches vary between isolating, autonomous projects and a continuous facilitating process. In the first case architecture is seen as a product, in the second case as a process

Use of architecture Developing an architecture is not a goal in itself. Architecture has to be used in an organization to achieve something. Architecture can be used in various ways: purely informative, to guide individual projects, or as a management instrument for the complete organization.

Involvement of business Architecture finds its justification in enabling the realization of business goals. It isimportant to synchronize the architecture content with business goals and capabilities.Cooperation between architects and business lines is a necessity

Involvement within development process Architecture needs to steer changes to optimize the realization of business goals.Cooperation with the development process, the relationship between the architectureprocess and the development process, is very important. This holds for process-,organization- and IT-development

Relation to current situation Architecture is often associated with a new, desired situation. But organizations also have the current situation. It is important for architecture to consider this current situation with its challenges and opportunities. This will enhance the applicability of the architecture. If the current situation is neglected, chances are that the organization can only dream the architects dream

Roles and responsibilities Clear assignment of architecture roles and responsibilities will prevent architecturediscussions and differences of opinion from not being addressed, and ending up in anorganizational vacuum. Furthermore parties can be hold accountable for theircontribution to the architecture

Coordination of activities Within an organization there are often many different developments which areundertaken simultaneously. These developments share resources, and are oftendepending on each others results. Architecture can be used for coordination ofdependencies and can help project prioritization

Source: Sogeti

APPENDIX 1: Business Architecture Maturity Level

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Dimension Description

Maintenance architecture process & products It is not sufficient to deliver architecture products like principles, guidelines and models.They need to be maintained: new insights are included, and what has become out-datedis deleted.

Architecture roles and training Being an architect is a demanding profession. The architect not only needs to developarchitecture products, but also needs to have knowledge of process and systemdevelopment and infrastructures. And (s)he needs strong interpersonal and managerialskills. This makes training a necessity.

Use of architecture method Developing architecture is done by a methodology using activities, techniques, tools andproducts. When this method varies over time or user, or when parts of it need furtherdetailing before they can be applied, the usability of the method is limited.

Consultation The development of architecture asks for extensive consultation with variousstakeholders, like business managers, process owners, information managers, projectmanagers and IT staff. An orchestrated exchange of ideas is an important part of thearchitecture process. It ensures that the architecture is based on business requirements,and that the architecture products are accepted by the organization.

Architecture tools The architecture process can be supported by tools. When they are used in an integratedfashion, preferably supported by a repository, their effectiveness and efficiency is at thehighest. Provided, of course, that the tools are suited to the chosen architecture method

Source: Sogeti

Projective - Business Architecture and Operational Excellence

Business

Transcript of Projective - Business Architecture and Operational Excellence