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E-Infrastructure Strategy

Solution Guide

E-Infrastructure Strategy Solution Guide


Table of Contents

Overview 1 Project Scope 1 Project Timeline 2 Project Resources 2

Current State Assessment 3 Plan and Coordinate the Assessment 4

Confirm Scope and Intended Outputs 4 Identify and Confirm Sources of Information 5 Prepare Assessment Materials and Interview Schedule 5 Confirm Extent of Client Involvement 6

Profile Current Information Technology Architecture 6 Review Strategy and Architecture Documents 7 Profile Business and Productivity Applications 8 Profile Application Development Environment 8 Profile Information Repositories 9 Profile Workstations and Servers 10 Profile Networks and Communications 11 Profile System and Network Management 12 Profile Security Management 13 Profile Disaster Recovery 14 Profile External Services 14

Profile Current Information Technology Organization 14 Profile Organization Structure, Functions and Skills 15 Profile Information Technology Sourcing Model 16

Profile Current Information Technology Processes 16 Identify and Map Major Information Technology Processes 16 Inventory Information Technology Policies and Procedures 17

Review Current Information Technology Architecture 17


Review Business and Productivity Applications 19 Review Application Development Environment 21 Review Information Repositories 22 Review Workstations and Servers 23 Review Networks and Communications 23 Review System and Network Management 24 Review Security Management 26 Review Disaster Recovery 28 Review External Services 29

Review Current Information Technology Organization 29 Review Organization Structure, Functions and Skills 29 Review Information Technology Sourcing Model 30

Review Current Information Technology Processes 30 Review Effectiveness of Information Technology Processes 31 Review Effectiveness of Information Technology Policies and Procedures 31

Deliver and Validate Current Technology Model 32

Gap Analysis and Action Plan 33 Identify Improvement Opportunities 33

Identify Opportunities from External Sources 34 Identify Opportunities from Current Technology Model 35

Develop Future Technology Model 35 Confirm Business Requirements 36 Identify Technology Implications of Business Requirements 37 Define Architecture Framework 37 Develop Conceptual Information Architecture 39 Develop Conceptual Application Architecture 40 Develop Conceptual Technical Architecture 42 Define Information Technology Organization and Processes 44 Deliver and Validate Future Technology Model 45

Analyze Gaps between New Model Requirements and Current State 45


Identify Technology Model Gaps 45 Analyze Impact and Alternatives 46 Deliver and Validate Gap Analysis 46

Define E-Business Next State 46 Prioritize Project Portfolio 47 Define Next State Objectives 47 Deliver and Validate Project Portfolio 48

Business Case Development 49 Establish Business Case Scope 49

Determine Business Case Expectations 50 Confirm Roles and Responsibilities 50 Develop Business Case Framework 51 Obtain Sponsor and Stakeholder Buy-In 52

Collect Business Case Information 52 Conduct Business Case Research 53 Leverage KPMG Consulting Resources 54 Verify Vendor Costs and Proposed Benefits 54 Leverage Client Financial Strategies and Information 55

Develop Business Case 55 Develop Cost Profiles 56 Develop Benefit Profiles 56 Complete Cost / Benefit Analysis 58 Apply Funding Model 59

Deliver and Validate Business Case 59 Obtain and Address Client Feedback 60 Obtain Agreement to Proceed 60

Implementation Planning 62 Define Performance Measures 62


Identify Functional Measurement Points 64 Identify Process Level Measurement Points 64 Validate Measures to Critical Success Factors 64

Establish Timeline 65 Define E-Business Implementation Strategy 65 Create E-Business Implementation Timeline 66

Develop Next State Project Plan 66 Develop WBS and Deliverables List 67 Estimate the Work Level of Effort 67 Identify Project Roles 68 Identify Training Requirements 69 Complete the Work Plan and Obtain Concurrence 69


Overview E-Infrastructure Strategy is an essential solution offered during the E-Strategy and Branding phase, which initiates an e-business solution development project. It is typically performed in parallel with the e-business strategy, which develops the business vision and brand strategy. E-infrastructure strategy analyzes the current information technology architecture, organization and processes to determine if they are an adequate foundation for the design, development and implementation of e-business solutions as defined by the future technology model created during the gap analysis. The diagram below illustrates the service components of an e-infrastructure strategy.

Current State Assessment – profiles and reviews the information technology architecture, organization and processes, collectively called the current technology model, that provide the foundation for the design, development and implementation of business solutions. Gap Analysis and Action Plan – identifies opportunities from the current technology model and external sources, develops a future technology model to support the business vision, analyzes the gaps between the future and current models, and then develops a project portfolio. Business Case Development – presents the financial justification for the recommended solution to enable senior management to make informed decisions about mobilizing for the detailed design and implementation of the solution. Implementation Planning – provides a 12-18 month timeline to realize the recommended solution. The project plan breaks the timeline into 2-4 month initiatives and identifies activity and task information for implementing the solution.

Project Scope The scope of an e-infrastructure strategy depends upon the selected service components, the activities within a service component and the focus areas of the activities. For example, if the client either completed a current state assessment project or has complete documentation for the current environment, the strategy project may not include a complete current state assessment, although the project may include a review of the documentation. Another example, if a client has already decided that they need a project like developing an e-business solution, the client may not need a business case to justify the cost. A “complete” e-infrastructure strategy includes all the service components and their associated activities and tasks as described in this guide. A “limited” e-infrastructure strategy focuses on 1


a specific e-infrastructure component. A “partial” e-infrastructure strategy includes all or most of the service components, but it does not include all the e-infrastructure components. For example, the e-infrastructure strategy project for an e-business solution usually includes a current state assessment, a gap analysis and future technology model, a business case and an implementation plan. However, it may only focus on the specific e-infrastructure components including: Application development tools required to develop the solution. Information repositories that will store the information collected and processed by

the solution. Workstations and servers that provide the user interface and processing platforms

for the solution. Networks and communications that connect internal and external users to the

solution. System and network management software to ensure the reliability, availability

and serviceability of the solution. Security management to detect and prevent unauthorized access, intrusion, service

interruptions and other destructive activities. Disaster recovery plans to address system or service outages.

Project Timeline The length of an e-infrastructure strategy ranges from a few weeks to a few months and depends upon the scope of the strategy and the size of the organization. A complete strategy that includes all e-infrastructure components could take 3-6 months. A limited e-infrastructure strategy that focuses on a single component such as the wide area network or enterprise application integration (middleware) usually takes 3-6 weeks. A partial e-infrastructure that concentrates on a particular business challenge like an e-business solution takes about 4-12 weeks.

Project Resources An e-infrastructure strategy has primary and secondary resources. The primary resources are committed to the project full time. The secondary resources are subject matter experts (SME’s) who provide specific skills and knowledge on a part-time basis. The primary resources include the project manager and consultants with the primary skills needed for the project. For example, an e-infrastructure strategy for an e-business solution would include an application architect with Internet application development and tool selection experience, an application architect with enterprise application integration experience, and a technical architect with wide area network, remote access and Internet access experience. The secondary resources could include an Internet security architect, an information architect to design the information repositories, a financial analyst to assist with developing the business case, an organization design specialist, and a disaster recovery planning specialist.

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Current State Assessment The team develops a current technology model by conducting a current state assessment that analyzes the information technology architecture, organization and processes that provide the foundation for the design, development and implementation of business solutions. A current state assessment provides knowledge about the current architecture design (applications, databases, network operating systems, server platforms, etc.) and the architecture’s ability to support future business growth. Thus, a current state assessment will help to discover inconsistent or inadequate architecture components that can delay future enhancements and limit scalability, flexibility and maintainability. In addition, the analysis of the current organization and processes highlights potential impediments to implementing new technology. Current state assessment is offered both as a standalone service and in combination with other e-strategy services. The scope of a current state assessment ranges from one component to all components in an enterprise. A common focus is the technology, processes and people associated with one e-business solution. For example, before starting the development of an e-commerce application, an analysis of the current technology infrastructure, application development tools, technology support processes and the skills of the application development staff can help an enterprise adequately plan the design, development and implementation of the solution. Activities

A complete current state assessment includes the following activities. However, individual clients may require additional or fewer activities. Plan and coordinate the assessment. Profile current information technology architecture. Profile current information technology organization. Profile current information technology processes. Review current information technology architecture. Review current information technology organization. Review current information technology processes. Deliver and Validate Current Technology Model.

Deliverable

The Current Technology Model includes an information technology architecture review, an information technology organization review and an information technology process review. The architecture review provides a current technology model, technology trends and an analysis of the current technology components. Likewise, the process review provides a current process model that documents the current processes used by the information technology organization. The organization review documents the current organizational structure and provides an organization assessment. All three reviews identify improvement opportunities. Tools and Templates

Architecture Profile Template (E-I CSA Architecture Profile_xx.dot)

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Current Technology Model Template (E-I CSA Current Technology Model_xx.dot)

Examples

TBD

Plan and Coordinate the Assessment This activity enlists client support and participation in the assessment and obtains agreement regarding scope, expected outcomes, and client staff involvement, which helps to facilitate an effective current state assessment. This activity also organizes the data gathering and analysis efforts to enable the assembly of a reliable current state picture of the enterprise and helps to minimize the need to re-visit information sources and client interview contacts. The tasks for this activity include: Confirm scope and intended outputs Identify and confirm sources of information Prepare assessment materials and interview schedule Confirm extent of client involvement

The following tables provide the details for each task.

Confirm Scope and Intended Outputs

Description The team validates the scope (e.g., geographic, organizational, functional) and depth of the current state assessment with the client and, if necessary, revises the original proposal. The team also reviews sample deliverables with the client to obtain agreement on the output produced from the current state assessment.

Guidelines Reaching agreement on the scope and depth of the assessment and the format and content of the final deliverable is crucial to ensuring that we meet the client’s expectations. The proposal should list the areas included in the assessment. If it does not, develop a list and have the client sign off on the list. For example, does the review include all processes in the information technology organization or only a few? In addition, what applications are included in the assessment? Putting boundaries on the assessment now will prevent disputes on the completion of the assessment in the future. The best method to confirm the depth of the assessment is to show the client a sample of the deliverable produced by the assessment. By reviewing the sample deliverable, the client can quickly confirm that it is the expected output from the assessment. For example, does the profile of the information repositories include data entity diagrams? The answer to this question greatly changes the depth of the assessment and thus the duration and cost.

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Identify and Confirm Sources of Information

Description The team collaborates with the client to identify and obtain access to the critical information sources including interviewees, documents and information repositories. The team also works with the client to set up and confirm interview schedules and topics.

Guidelines Partnering with the client will help the team execute a reliable and more complete assessment. Seek client sponsorship and support to gain timely access to required sources. Agree with client on the number of sources and interviews to set expectations that are consistent with the project scope and objectives. Enlist client staff to identify appropriate contacts, locate data sources and schedule data gathering efforts. In addition, the team should coordinate with other information gathering efforts to maximize the re-use of collected information, avoid covering the same ground with client interviewees, and ensure that the accumulated information is timely and relevant to subsequent tasks.

Prepare Assessment Materials and Interview Schedule

Description The team assembles and customizes the tools for collecting assessment information and develops an interview schedule with the client’s assistance. The tools include manual and electronic forms and questionnaires. The interview schedule lists the interviewee, subject matter area, requested documents, the interviewer, and the date and time of the interview.

Guidelines It is important to determine the detail needed for the current state assessment, as well as, future information needs. It is better to collect more information now than to request another interview later. In addition, request documents before the interview to increase the interviewer’s knowledge of the client’s environment.

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Confirm Extent of Client Involvement

Description The team identifies client personnel, referred to as stakeholders, who can affect the quality or acceptance of the current state assessment. Agree upon the extent of the stakeholders’ involvement from the beginning. Actively involving the essential stakeholders enables them to contribute substantially to changing the organization. This change contribution also ensures that those who participate in the activities of the assessment agree on the output and its importance to the overall success of the initiative. Client involvement also ensures that communication of the right messages about the assessment will go to the right people at the right time.

Guidelines Client involvement is essential to success. Without client involvement, the client’s staff may view the assessment as an evaluation of the organization’s people, processes and technology. With client involvement, the client’s staff will use the assessment as an opportunity to improve the organization’s people, processes and technology. Therefore, it is important to identify stakeholders who are respected and trusted in the organization. In addition, it is important to identify stakeholders who appear willing to accept change and have a proven record of accomplishment.

Profile Current Information Technology Architecture In this activity, the team develops a profile of current information technology from an architectural perspective. The purpose of the activity is to identify and document the technology components used by the organization. Therefore, this activity is not an inventory of every technology component owned by the organization. A complete profile includes the following components: Strategy and Architecture Documents Business and Productivity Applications Application Development Environment Information Repositories Workstations and Servers Networks and Communications System and Network Management Security Management Disaster Recovery External Services

The scope can be limited to a specific business solution, application or technology component. The insert below describes the profile for the information technology architecture components associated with an e-business solution. 6


E-Business Architecture Profile A client contacts KPMG Consulting requesting assistance in developing and implementing an e-business solution. We conduct a Current State Assessment focused on the people, processes and technology related to the e-business solution. The first activity in the assessment is a profile of the current information technology architecture, which includes the following components: Sections in the client’s strategy and architecture documents that define architecture components for an e-business solution. Business and productivity applications that will interface with the solution. Application development tools required to develop the solution. Information repositories that will store the information collected and processed by

the solution. Workstations and servers that provide the user interface and processing

platforms for the solution. Networks and communications that connect internal and external users to the


and serviceability of the solution. Security management to detect and prevent unauthorized access, intrusion,

service interruptions and other destructive activities. Disaster recovery plans to address system or service outages.

The following tables provide the details for each component.

Review Strategy and Architecture Documents

Description The team requests and reviews the client’s current information technology strategy and architecture documents to clearly understand the client’s current and future plans for information technology. It is important to understand the scope (enterprise, region, business unit or department) and update frequency of the documents, as well as the implementation success history of previous information technology strategies and architectures.

Guidelines The documents maintained by clients to document their current information technology vary greatly. If the documents provided are very detailed, the remaining tasks in this activity may not be necessary (i.e., the client has already completed this activity for us). In that case, begin the “Review Information Technology Architecture” activity. However, in most cases, the information is not detailed and the remaining tasks are required.

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Profile Business and Productivity Applications

Description Business applications include enterprise (finance, human resources, etc.) and industry-specific applications. For example, insurance industry applications include underwriting, policy management, claims processing and other applications. Therefore, it is important to determine which applications are included in the inventory. In addition, it is important to determine the level of detail required. Productivity applications include office suites (word-processor, spreadsheet, personal database, presentation tool, etc.), groupware, e-mail and fax services.

Guidelines The information requirements greatly depend upon the purpose for collecting the information. If the purpose of the current state assessment is to document the current technology components and compare them to industry standards and reference architectures, document the following summary information about each application. Application name and version Vendor (if applicable) Licenses (unlimited if custom developed) Functions Users and location Platform (hardware and operating system) Information repository Programming language Maintenance provider and cost (optional)

However, if the purpose of the analysis is to understand the design details of the current applications to design a future application architecture, document the following detailed information about each application. Application interfaces Information repository interfaces

A picture is usually the most effective method to document the application and information repository interfaces.

Profile Application Development Environment

Description The application development environment includes application design, development and testing tools; enterprise application integration software (middleware); process modeling and workflow tools; industry reference models; configuration management software; software

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Profile Application Development Environment distribution software and application development methodologies. It is important to profile the complete application development environment since successful application development depends upon an effectively integrated environment.

Guidelines A current state assessment of an application development environment requires adequate information to effectively understand how the components integrate within the environment. Many vendors provide multiple products that integrate together as a development suite. Some examples include Rational Software’s Development Studio for Windows and Microsoft’s Visual Studio. In addition, other vendors supply add-on tools that “integrate” with the suites. Therefore, the information required depends upon the selected application design, development and testing tools; industry reference models; and configuration management software. Document the following information about each component. Component name and version Vendor (if applicable) Licenses (unlimited if custom developed) Functions Users and location Platform (hardware and operating system) Information repository Programming language Maintenance provider and cost (optional) Component interfaces Information repository interfaces

A diagram is an effective method to document the application and information repository interfaces. However, enterprise application integration software (middleware) usually requires a more detailed analysis.

Profile Information Repositories

Description Information repositories store data, voice, video, image and multimedia information. The repositories include relational database management systems (RDBMS), object database management systems (ODBMS), sequential access files, document management systems and document imaging systems. The tools associated with the repositories help administrators to design, build, modify, backup and restore the repositories. The scope also includes data warehouses, data marts and their associated tools.

Guidelines

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Profile Information Repositories The information requirements greatly depend upon the purpose for collecting the information. If the purpose of the current state assessment is to document the current technology components and compare them to industry best practices, document the following summary information about each repository. Repository or tool name (e.g., customer information database) Repository or tool vendor (if applicable) Licenses Functions Users and location Platform (hardware and operating system) Information repository Programming language Component interfaces Maintenance provider and cost (optional)

However, if the purpose of the analysis is to understand the design details of the current information repositories to design a future information architecture, document the following detailed information about each repository. Data flow diagrams Data entities and relationships (high-level)

Documenting this information with the applications that use it is an alternative. However, if multiple applications use one information repository, it is sometimes clearer to show the repository as the focal point with its associated data flows.

Profile Workstations and Servers

Description Workstations include hardware (desktop computers, laptop computers, terminals and mobile devices), operating systems and web browsers that provide a user interface. Servers include hardware (mainframes, midrange and LAN-based) and operating systems that provide the execution platforms for applications, the storage platforms for data repositories, print services, fax services and remote access. The associated peripherals (printers, scanners, modems, etc.) are also included.

Guidelines Develop profiles that represent the “standard” workstation and server configurations by documenting the following information. Also, document the following information for each “non-standard” server. Manufacturer and model

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Profile Workstations and Servers CPU type, speed and configuration (e.g., 2X Intel Pentium 133 MHz) Memory (e.g., 128 MB RAM) Storage (e.g., 12GB hard disk, 24X CD-ROM) Peripherals Network/remote connectivity (e.g.,10MB Ethernet, 100MB Ethernet) and

protocols (e.g., TCP/IP, IPX/SPX) Operating system Web browser Users and location Maintenance provider and cost (optional)

For “standard” and “non-standard” servers document the following additional information. Server function (e.g., application, data, print, fax, remote access) Number of concurrent users CPU utilization Location of server Location of users

Profile Networks and Communications

Description Networks and communications connect workstations (desktop computers, laptop computers, terminals and mobile devices), servers (mainframes, midrange and LAN-based), peripherals (printers, scanners, modems, etc.), multimedia devices (teleconferencing, etc.) and telephones via intelligent wiring hubs, routers and gateways, and PBX equipment. The scope includes the local area networks (LANs) at all locations, the wide area network (WAN), the connection of the individual LANs to the WAN, remote access, wireless communications, and the access to external sources such as the Internet. The scope may also include voice, image and multimedia communications.

Guidelines The information requirements greatly depend upon the purpose for collecting the information. If the purpose of the current state assessment is to document the bandwidth of the available WAN/LAN circuits, document the following information for each WAN/LAN site. Description of WAN/LAN components Network topology (e.g., 10MB Ethernet, 1GB Ethernet) and protocols (e.g.,

TCP/IP, IPX/SPX) Environment (e.g., shared, switched)

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Profile Networks and Communications Backbone topology (e.g., 1GB Ethernet, FDDI) Number of users or devices supported

However, if the purpose of the current state assessment is to document the current technology components and compare them to industry best practices or to understand the design details of the WAN/LAN architecture to design a future architecture, document the following detailed information about each component. Manufacturer and model Type of equipment (e.g., hub, switch, router, gateway) Location of component Software / firmware and versions Maintenance provider and costs (optional)

For each wide area network (WAN) circuit, document the following information. Circuit type Circuit speed Locations connected Number of users Network protocols Maintenance provider and costs (optional)

Profile System and Network Management

Description System and network management tools provide centralized control of the distributed devices including personal computers, midrange computers, mainframes, local area network servers and routers. The functions provided by system and network management tools include application management, network and system administration, automated storage management, network fault detection and performance monitoring. In many cases, system and network management requires multiple products.

Guidelines Document the following information for each system and network management tool. Tool name and version Vendor (if applicable) Licenses Functions Users and location

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Profile System and Network Management Platform (hardware and operating system) Information repository Programming language Communication protocols (e.g., SNMP) Application interfaces Information repository interfaces Maintenance provider and costs (optional)

Profile Security Management

Description Security management is a collection of technology components that provide and deny access to information technology resources by providing one or more of the following functions: Authentication – verifies the user’s identity Authorization – determines the user’s permission to access information

technology resources Data Integrity – protects data transmission from inception and unauthorized use Audit – monitoring and recording user activities

Authentication and authorization products include single sign-on software, directory services, digital certificates, firewalls. Data integrity products include hardware and software encryption. Audit products include intrusion detection and prevention.

Guidelines Obtain and read the client’s security policies and procedures. Also, document the following information for each security management component. Product name and version Vendor Licenses Functions Users and location Platform (hardware and operating system) Information repository Programming language Communication protocols Application interfaces

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Profile Security Management Information repository interfaces

Profile Disaster Recovery

Description Disaster recovery enables information technology resource continuity by providing alternatives to the primary resources when they become unavailable due to an equipment failure, fire, flood, natural disaster or other event. Disaster recovery includes hardware redundancy, alternate network routes, off-site data storage and an alternate data center.

Guidelines Obtain and read the client’s disaster recovery plans for the previously identified business applications, information repositories, servers (mainframe, midrange and LAN-based), local area networks (LANs), the wide are network (WAN) and telecommunications.

Profile External Services

Description External services include network carriers and service providers, communication carriers and service providers, application service providers, facilities management providers, equipment maintenance and support providers, application maintenance and support providers, information repository maintenance and support providers, and consultants and contractors providing specific services.

Guidelines Document the following information for each external service provider. Provider name Description of services and contractual agreement Cost (optional)

Profile Current Information Technology Organization This activity documents the current information technology organization. The structure of the organization, the functions it performs, and how it communicates usually depends upon the size of the organization and the users that it serves. The organization may use internal, as well as, external sources to serve its users. For example, many functions like hardware and software installation and maintenance may be outsourced, while the internal staff may provide functions like custom application development, help desk support and user training. A complete profile includes the following components: Organization Structure and Functions

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Information Technology Sourcing Model The following tables provide the details for each component.

Profile Organization Structure, Functions and Skills

Description The organization structure identifies the information technology teams that support the end users. The teams may include corporate, business unit, regional and local staff. In addition, the extended information technology organization may include information technology teams embedded in non-information technology organizations. The functions provided by the information technology organization may include information technology planning, strategy and architecture, application development and maintenance, computer center operations management, network and communications administration, system administration and help desk support. The organization may also provide additional functions. The interaction between the information technology organization and the users it serves varies from organization to organization. The information technology organization may operate as a service provider with formal service offerings and service agreements or the information technology organization may act as a "best efforts" support organization. The experience, skills and competencies of the information technology staff determine the support available for information technology initiatives. The staff usually has the skills to meet the current needs of the organization. However, a profile of the staff’s experience, skills and competencies can quickly identify strengths and weaknesses in the context of the future business requirements and their implications on technology.

Guidelines Document the following information about the structure, functions and skills of the information technology organization. Organization charts including internal, external and extended teams Organization charters defining functions, roles and responsibilities Service model (e.g., service provider, “best efforts” support) Skills profile defining areas of knowledge and level of experience

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Profile Information Technology Sourcing Model

Description The sourcing model describes the sourcing approach for each function performed by the information technology organization. An in-sourcing approach uses internal resources to provide the function. An outsourcing approach uses external resources to provide the function. A co-sourcing approach is a combination of both internal and external resources. The sourcing model should include the names of the external resources and the terms of their contracts.

Guidelines Document the following information to build an information technology sourcing model. Functions performed by information technology organization Sourcing approach employed for each function Contracts and agreements with external sourcing organizations Management approach used to manage external sourcing organizations

Profile Current Information Technology Processes This activity documents the current processes in the information technology organization to understand how the organization interacts with itself and other organizations. This activity produces a high-level process flow that shows major activities, interactions and decision points. This activity does not create detailed process charts for in-depth analysis. This activity also documents policies and procedures. A complete profile includes the following components: Major Information Technology Processes Information Technology Policies and Procedures


Identify and Map Major Information Technology Processes

Description The major information technology processes include technology planning, strategy and architecture, project management, application design, development and testing, configuration management, problem tracking and resolution, capacity planning, implementation planning and financial management.

Guidelines Document the following information for the major information technology processes using the available documentation and by interviewing information technology managers. Process name Activities in the process

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Identify and Map Major Information Technology Processes Person (or organization) responsible for each activity Interactions with other organizations or processes Management and control activities Decision points within the process External customers and stakeholders (e.g. suppliers)

Inventory Information Technology Policies and Procedures

Description The team requests and reads the client’s current information technology policies and procedures. Most organizations have documented policies and procedures. The policies and procedures provide the additional details behind the information technology processes. They also indicate how the organization operates. If the organization does not have any documented policies and procedures, it is probably extremely dynamic and difficult to manage. If the organization has precise policies and procedures that cover any event, it is probably easily managed, but difficult to change. The ideal point is in the middle, which is an organization with well-defined policies and procedures that offer flexibility to dynamically accept change.

Guidelines The documented policies and procedures vary greatly by client. If the documented procedures do not provide enough information to understand the policies and procedures, interview information technology organization managers and document the unofficial policies and procedures.

Review Current Information Technology Architecture In this activity, the team reviews the current information technology from an architectural perspective. The purpose of the activity is to compare the information technology components used by an organization to industry trends and reference architectures, and to identify and document missing or inconsistent components. Sources for industry trends and reference architectures include: Gartner, Meta, Forrester and other analyst reports Vendor web sites User group web sites Technology magazine web sites KPMG Consulting knowledge bases

A complete review includes the following components: Business and Productivity Applications

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Application Development Environment Information Repositories Workstations and Servers Networks and Communications System and Network Management Security Management Disaster Recovery External Services

However, the scope can be limited to a specific business solution, application or technology component. The insert below provides an example of an e-business architecture review.

E-Business Architecture Review A client contacts KPMG Consulting requesting assistance in developing and implementing an e-business solution. We conduct a Current State Assessment focused on the people, processes and technology related to the e-business solution. After completing a profile of the current information technology architecture, the team reviews the following components to determine if the components can meet the requirements of the e-business solution: Business and productivity applications that will interface with the solution. Application development tools required to develop the solution. Information repositories that will store the information collected and processed by

the solution. Workstations and servers that provide the user interface and processing

platforms for the solution. Networks and communications that connect internal and external users to the


and serviceability of the solution. Security management to detect and prevent unauthorized access, intrusion,

service interruptions and other destructive activities. Disaster recovery plans to address web site outages.


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Review Business and Productivity Applications

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Description The scope of the review includes the business and productivity applications identified in the Profile Current Information Technology Architecture activity.

Guidelines If the purpose of the current state assessment is to document the current technology components and compare them to industry standards and reference architectures, use the following criteria to review each application to determine its strengths and possible limitations. Functional Quality – Do the functions provided by the application meet the

client’s business needs and requirements? Are the users satisfied with the functions offered by the application? How do the functions provided by the application compare to the functions offered by industry standard applications?

Technical Quality – Do the technologies (hardware platform, operating system, information repository and programming language) used by the application provide a reliable, available and serviceable application (i.e., stable, with acceptable performance during normal and peak loads and easily maintained)?

Architectural Design – Does the application use the “standard” technologies defined by the client’s information technology strategy and architecture documents? Are these technologies considered “industry standard” technologies?

Vendor Attributes (if applicable) – Is the application at the current release level (version)? Has the client customized the application? If yes, will the customization prevent an easy upgrade to the next release from the vendor? Does the client have a support agreement with the vendor? If yes, has the vendor provided an acceptable level of support? Is the vendor “viable”?

However, if the purpose of the analysis is to understand the design details of the current applications to design a future application architecture, use the following additional criteria to review each application. Application interfaces – Does the application interface to other applications?

If yes, do the application interfaces provide sufficient integration between applications? Are the application interfaces used by the application the “standard” interfaces defined by the client’s information technology strategy and architecture documents? Are these interfaces considered “industry standard” interfaces? (Note: If components in the application development environment provide the application interfaces, the team can review the interfaces once in the Application Development Environment review section and then reference them in this review section.)

Information repository interfaces – Do the information repository interfaces provide sufficient access to the information repositories? Are the information repository interfaces used by the application the “standard” interfaces defined by the client’s information technology strategy and architecture documents? Are these interfaces considered “industry standard” interfaces (e.g., ODBC)? (Note: If components in the application development environment provide the information repository interfaces, the team can review the interfaces once in the Application Development Environment review section and then reference them in this review section.)

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Review Application Development Environment

Description The scope of the review includes the application development environment components identified in the Profile Current Information Technology Architecture activity.

Guidelines A review of an application development environment determines the level of integration among the technology components. It also compares the components to industry standards and reference architectures. Use the following criteria to review each application development component to determine its strengths and possible limitations. Functional Quality – Do the functions provided by the component meet the

needs of the application developers? How do the functions provided by the component compare to the functions offered by industry standard components?

Technical Quality – Is the component easy to use and configure? Does the component integrate easily with the other components in the environment? Do the technologies (hardware platform, operating system, information repository and programming language) used by the component provide a reliable, available and serviceable environment (i.e., stable, with acceptable performance during normal and peak loads and easily maintained)?

Architectural Design – Is the component a “standard” technology defined in the client’s information technology strategy and architecture documents? Is the component considered “industry standard”? Is the component “status quo” (i.e., long, proven track record)? “State-of-the-art” (i.e., generally accepted as the “right” choice)? “Leading edge” (i.e., only used by early adopters)?

Vendor Attributes (if applicable) – Is the component at the current release level (version)? Has the client customized the component? If yes, will the customization prevent an easy upgrade to the next release from the vendor? Does the client have a support agreement with the vendor? If yes, has the vendor provided an acceptable level of support? Is the vendor “viable”?

Application interfaces – Does the component interface to other components? If yes, does the interface provide sufficient integration between the components? Are the interfaces used by the component the “standard” interfaces defined by the client’s information technology strategy and architecture documents? Are these interfaces considered “industry standard” interfaces?

Information repository interfaces – Does the component interface sufficiently with the required information repositories? Are the information repository interfaces used by the component the “standard” interfaces defined by the client’s information technology strategy and architecture documents? Are these interfaces considered “industry standard” interfaces (e.g., ODBC)?

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Review Information Repositories

Description The scope of the review includes the information repositories and tools identified in the Profile Current Information Technology Architecture activity.

Guidelines If the purpose of the current state assessment is to document the current technology components and compare them to industry standards and reference architectures, use the following criteria to review each information repository and tool to determine its strengths and possible limitations. Functional Quality – Do the functions provided by the information repository

or tool meet the client’s business needs and requirements? Are the users satisfied with the functions offered by the information repository or tool? How do the functions provided by the information repository or tool compare to the functions offered by industry standard information repositories or tools?

Technical Quality – Is the information repository or tool easy to use and configure? Do the technologies (hardware platform, operating system, and programming language) used by the information repository or tool make it reliable, available and serviceable (i.e., stable, with acceptable performance during normal and peak loads and easily maintained)?

Architectural Design – Is the information repository or tool a “standard” technology defined in the client’s information technology strategy and architecture documents? Is the information repository or tool considered “industry standard”? Is the information repository or tool “status quo” (i.e., long, proven track record)? “State-of-the-art” (i.e., generally accepted as the “right” choice)? “Leading edge” (i.e., only used by early adopters)?

Vendor Attributes (if applicable) – Is the information repository or tool at the current release level (version)? Has the client customized the information repository or tool? If yes, will the customization prevent an easy upgrade to the next release from the vendor? Does the client have a support agreement with the vendor? If yes, has the vendor provided an acceptable level of support? Is the vendor “viable”?

Application interfaces – Does the information repository or tool interface sufficiently to the required applications? Are the interfaces used by this information repository or tool the “standard” interfaces defined by the client’s information technology strategy and architecture documents? Are these interfaces considered “industry standard” interfaces?

Information repository interfaces – Does the information repository or tool interface to other repositories or tools? If yes, does the interface provide sufficient integration between the repositories or tools? Are the interfaces used by this repository or tool the “standard” interfaces defined by the client’s information technology strategy and architecture documents? Are these interfaces considered “industry standard” interfaces?

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Review Information Repositories However, if the purpose of the analysis is to understand the design details of the current information repositories to design a future information architecture, review the data flow diagrams and the data entity diagrams using the following criteria. Accuracy – How current are the diagrams? How often are they updated? What

change control policies are in place to ensure that the diagrams remain accurate? Completeness – Do the diagrams include every information repository? At

what level are the diagrams maintained?

Review Workstations and Servers

Description The scope of the review includes the workstations and servers identified in the Profile Current Information Technology Architecture activity.

Guidelines Review the “standard” workstation and server configurations using the following criteria to determine the strengths and possible limitations. However, if “non-standard” server configurations exist, review each server using the following criteria. Functional Quality – Does the workstation or server have the functionality

required by workstation and server users? Technical Quality – Is the workstation or server easy to use and configure?

Using the available system logs, determine if the workstation or server component is reliable, available and serviceable (i.e., stable, with acceptable performance during normal and peak loads and easily maintained)?

Architectural Design – Is the workstation or server a “standard” defined in the client’s information technology strategy and architecture documents? Is the workstation or server considered “industry standard”?

Vendor Attributes (if applicable) – Is the workstation or server at the current release level (version)? Does the client have a support agreement with the vendor? If yes, has the vendor provided an acceptable level of support? Is the vendor “viable”?

Review Networks and Communications

Description The scope of the review includes the network and communication components identified in the Profile Current Information Technology Architecture activity.

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Review Networks and Communications

Guidelines A review of network and communications architecture determines the quality of service provided to end-users and evaluates the ability of the current network infrastructure to support the business in both the present and the anticipated future environments. It also compares the network and communication components to industry standards and reference architectures. If the purpose of the current state assessment is to review the bandwidth of the available network and communication circuits, review the recent traffic analyses from network performance management and modeling tools to analyze usage-based data to determine network utilization and available capacity. This will provide a baseline for subsequent analyses of network improvement opportunities and alternative designs. However, if the purpose of the current state assessment is to review the current design details to design a future architecture, use the criteria below to review each network and communication component to determine its strengths and possible limitations. Functional Quality – Does the network or communication component have the

functionality required by network or communication users? Technical Quality – Is the network or communications component easy to use

and configure? Using the available system logs, determine if the network or communication component is reliable, available and serviceable (i.e., stable, with acceptable performance during normal and peak loads and easily maintained)?

Architectural Design – Does the network or communications component use the “standard” network topology and protocols defined in the client’s information technology strategy and architecture documents? Are network topology and protocols considered “industry standard”?

Vendor Attributes (if applicable) – Is the network or communication component at the current release level (version)? Does the client have a support agreement with the vendor? If yes, has the vendor provided an acceptable level of support? Is the vendor “viable”?

Review System and Network Management

Description The scope of the review includes the system and network management components identified in the Profile Current Information Technology Architecture activity.

Guidelines A review of system and network management determines the level of integration among the system and network management components. It also compares the components to industry standards and reference architectures. Use the following criteria to review each system and network management component to determine its strengths and possible limitations.

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Review System and Network Management Functional Quality – Do the functions provided by the component meet the

needs of the system and network administrators? How do the functions provided by the component compare to the functions offered by industry standard components?

Technical Quality – Is the component easy to use and configure? Does the component integrate easily with the other system and network management components? Do the technologies (hardware platform, operating system, information repository and programming language) used by the component provide a reliable, available and serviceable environment (i.e., stable, with acceptable performance during normal and peak loads and easily maintained)?

Architectural Design – Is the component a “standard” technology defined in the client’s information technology strategy and architecture documents? Is the component considered “industry standard”? What protocols does the component support? Are those protocols considered “industry standard”?

Vendor Attributes (if applicable) – Is the component at the current release level (version)? Has the client customized the component? If yes, will the customization prevent an easy upgrade to the next release from the vendor? Does the client have a support agreement with the vendor? If yes, has the vendor provided an acceptable level of support? Is the vendor “viable”?


Information repository interfaces – Does the component interface sufficiently to the required information repositories? Are the information repository interfaces used by the component the “standard” interfaces defined by the client’s information technology strategy and architecture documents? Are these interfaces considered “industry standard” interfaces?

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Review Security Management

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Description The scope of the review includes the security management components identified in the Profile Current Information Technology Architecture activity.

Guidelines Review the client’s security policies and procedures using the following criteria. Physical Security – How do you obtain access to a technology center? Who

must approve your access? How often is your access reviewed? What actions (e.g., misconduct, resignation, etc.) can revoke your access? How quickly is access revoked and how do you ensure that access is revoked?

Access Controls – How do you obtain access to a technology resource (e.g., network, server, application, etc.)? Who must approve your access? How often is your access reviewed? What actions can revoke your access? How quickly is access revoked and how do you ensure that access is revoked?

Information Integrity – How is information integrity maintained? How do you obtain access to information resource (e.g., database, file system, etc.)? Who must approve your access? How often is your access reviewed? What actions can revoke your access? How quickly is access revoked and how do you ensure that access is revoked?

External Security – How is external access controlled and managed? How do you obtain external access? Who must approve your access? How often is your access reviewed? What actions can revoke your access? How quickly is access revoked and how do you ensure that access is revoked?

Security Monitoring – How are the security policies and procedures monitored? How are physical security, access controls, information integrity and external security monitored and are they monitored continuously?

Also, review each security management component using the following criteria to determine its strengths and possible limitations. Functional Quality – Do the functions provided by the component meet the

needs of the security administrators? How do the functions provided by the component compare to the functions offered by industry standard components?

Technical Quality – Is the component easy to use and configure? Does the component integrate easily with the other security components? Do the technologies (hardware platform, operating system, information repository and programming language) used by the component provide a reliable, available and serviceable environment (i.e., stable, with acceptable performance during normal and peak loads and easily maintained)?

Architectural Design – Is the component a “standard” technology defined in the client’s information technology strategy and architecture documents? Is the component considered “industry standard”? What protocols does the component support? Are those protocols considered “industry standard”?

Vendor Attributes (if applicable) – Is the component at the current release level (version)? Has the client customized the component? If yes, will the

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Review Security Management customization prevent an easy upgrade to the next release from the vendor? Does the client have a support agreement with the vendor? If yes, has the vendor provided an acceptable level of support? Is the vendor “viable”?


Information repository interfaces – Does the component interface sufficiently to the required information repositories? Are the information repository interfaces used by the component the “standard” interfaces defined by the client’s information technology strategy and architecture documents? Are these interfaces considered “industry standard” interfaces?

Review Disaster Recovery

Description The scope of the review includes the disaster recovery required by the business applications, information repositories, servers (mainframe, midrange and LAN-based), local area networks (LANs), the wide are network (WAN) and telecommunications identified in the Profile Current Information Technology Architecture activity.

Guidelines Review the client’s disaster recovery plans using the following criteria. What disasters are included in the plans? For example, natural disasters include

fires, floods and earthquakes. Other disasters include network outages, hardware failures and security breaches.

How frequent are the disaster drills to ensure disaster readiness? Where are the disaster recovery sites? How quickly can they become

operational? Where are the backups for the information repositories stored? How quickly can

the backups be retrieved? How frequently are the plans updated?

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Review External Services

Description The scope of the review includes the external services identified in the Profile Current Information Technology Architecture activity.

Guidelines Review the client’s external services using the following criteria. Do the external services meet the business needs? Are the users satisfied with the external service provider? Has the service provider fulfilled its commitments in the service level

agreement? Is the service provider’s problem resolution acceptable?

Review Current Information Technology Organization This activity reviews the current information technology organization. The purpose of the activity is to determine how well the information technology organization supports the needs of the business and the users of its services, and to document missing or inconsistent functions and skills. In addition, the review evaluates the effectiveness of the information technology sourcing model. A complete review includes the following components: Organization Structure, Functions and Skills Information Technology Sourcing Model


Review Organization Structure, Functions and Skills

Description The scope of the review includes the organization structure, functions and skills identified in the Profile Current Information Technology Organization activity.

Guidelines Review the information technology organization structure, functions and skills using the following criteria. Does the organization structure logically group common services? For example,

are networks, servers and operating systems grouped in a technology operations team?

Does the organization structure include “checks and balances” to maintain an equilibrium of power and ensure quality decisions? For example, does the strategy and architecture team report directly to the CIO, or does the person responsible for technology operations manage the team?

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Review Organization Structure, Functions and Skills Do the functions provided by the information technology organization meet the

needs of the business users? Are the business users buying any functions externally? If yes, why?

Does the information technology organization have the capacity to provide additional functions especially functions to support future business requirements?

What service model (e.g., service provider, “best efforts” support) is used by the information technology organization? Is it effective?

Does the information technology organization have the skills required to meet current business needs? Future business needs?

Review Information Technology Sourcing Model

Description The scope of the review includes the information technology sourcing model built in the Profile Current Information Technology Organization activity.

Guidelines Review the information technology sourcing model using the following criteria. How does the organization manage its ongoing outsourcing relationships? How does the organization continually evaluate its relationships? Do the contractual agreements include performance penalties, rewards, or

termination clauses due to unsatisfactory performance or for competitive reasons?

Review Current Information Technology Processes This activity reviews the current processes in the information technology organization to understand how well the organization interacts with itself and other organizations. A complete review includes the following components: Effectiveness of Information Technology Processes Information Technology Process Problems and Opportunities


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Review Effectiveness of Information Technology Processes

Description The scope of the review includes the information technology processes identified in the Profile Current Information Technology Processes activity, which produced a high-level process flow that showed major activities, interactions and decision points.

Guidelines Review the effectiveness of the current information technology processes using the following criteria. Are projects completed on time and within budget? Do the processes adequately serve the information technology organization? Do the processes adequately serve the information technology users? Do members of the information technology organization understand the

organization’s processes? Do the members of other organizations understand the information technology

organization’s processes? Do the processes create an efficient information technology organization, or do

they create a bureaucratic, inefficient organization?

Review Effectiveness of Information Technology Policies and Procedures

Description The scope of the review includes the information technology policies and procedures identified in the Profile Current Information Technology Processes activity.

Guidelines Review the effectiveness of the current information technology policies and procedures using the following criteria. Are the policies and procedures documented? Are they well defined? Do the policies and procedures permit flexibility? How often are they reviewed and updated? When was the last update? Do members of the information technology organization understand the policies

and procedures? Do members of other organizations understand the information technology

organization’s policies and procedures?

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Deliver and Validate Current Technology Model The Current Technology Model includes an information technology architecture review, an information technology organization review and an information technology process review. The architecture review provides a current technology model, technology trends and an analysis of the current technology components. Likewise, the process review provides a current process model that documents the current processes used by the information technology organization. The organization review documents the current organizational structure and provides an organization assessment. Deliver the final draft of the deliverable to the client for review and validation. After the client has the opportunity to comment on the deliverable, produce the final copy and deliver it to the client. A current state assessment is usually followed by a gap analysis and action plan, which is sometimes included in the same proposal.

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Gap Analysis and Action Plan The team performs a gap analysis by identifying opportunities from external sources and the current technology model, developing a future technology model and then analyzing the gaps between the future and current models. Thus, the gap analysis identifies the necessary initiatives to implement the business vision defined by the business requirements. Performing a gap analysis is usually offered with a current state assessment or in combination with other e-strategy services. It is rarely offered as a standalone service. The scope of the gap analysis ranges from one component to all components in an enterprise. A common focus is the technology, processes and people associated with one e-business solution. For example, before starting the development of an e-commerce application, an analysis of the current technology infrastructure, application development tools, technology support processes and the skills of the application development staff can help an enterprise adequately plan the design, development and implementation of the solution. Activities

A complete gap analysis includes the following activities. However, individual clients may require additional or fewer activities. Identify Improvement Opportunities Develop Future Technology Model Perform Gap Analysis Define E-Business Next State

Deliverables

This activity produces three deliverables. The Future Technology Model defines a conceptual component architecture and the information technology processes and organization to support it. The Gap Analysis identifies the gaps, analyzes their impact and provides alternatives to fill the gaps. The Project Portfolio describes the projects that resolve the gaps. Tools and Templates

Future Technology Model Template (E-I GAAP Future Technology Model_xx.dot) Gap Analysis Template (E-I GAAP Gap Analysis_xx.dot) Project Portfolio Template (E-I GAAP Project Portfolio_xx.dot)

Examples

TBD

Identify Improvement Opportunities During this activity, the team identifies improvement opportunities from external sources and the current state assessment completed in an earlier activity. The improvement opportunities range from the simple elimination of tasks to the wide-scale redeployment of people, processes and technology. The improvement opportunities should provide tangible and intangible benefits. 33


Tangible benefits include: Operating cost reduction Flexibility in satisfying demand Efficient response to fluctuating demand Improved customer satisfaction

Intangible benefits include: Improved staff morale Improved company image Better information on which to base decisions

This activity provides the first tangible analysis of the improvement opportunities that can help achieve the organization's desired performance and expectations. The team should document all opportunities to ensure that none are overlooked and that all receive equal consideration. In addition, the team should identify and document any known constraints to reduce the risk of failure during implementation. The following tables provide the details for identifying gaps from external sources and the current technology model (current state assessment).

Identify Opportunities from External Sources

Description Opportunities from external sources include market, industry, competitor and partner trends. Market trend opportunities influence the marketing, selling and distribution of a product or service. For example, a marketing trend for home, auto and life insurance is “self-service” insurance via the Internet. Industry trends reshape or reposition industries to improve customer service and increase profits. The combination of two industry segments like banking and insurance is an example of a financial services industry trend. Competitor trend opportunities require action to meet or exceed the products or services offered by industry competitors. For example, if a competitor creates a business-to-consumer e-commerce web site, a potential for losing new, and some old, customers exists until you match the challenge. Partner trends can change the interaction between trading partners. Business-to-business e-commerce is an excellent example since it changes the technology, processes and sometimes the people involved in a business-to-business transaction.

Guidelines Some external opportunities are obvious because someone else has already designed, developed and implemented a solution for the opportunity. However, the opportunities that provide the most competitive advantage require “out-of-the-box” thinking. Consider the following when identifying opportunities from external sources. Is the client currently a leader or a follower? Does the client want to lead or

follow in the future? Who are the client’s current competitors? Who are the future competitors?

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Identify Opportunities from External Sources How can the client improve efficiency and lower costs while maintaining

excellent customer service? What new products or services could the client offer to excel beyond its

competitors?

Identify Opportunities from Current Technology Model

Description The current state assessment profiled and reviewed the current technology model. If the team conducted a complete assessment, it included business and productivity applications, the application development environment, information repositories, workstations and servers, networks and communications, system and network management, security management, disaster recovery and external services. However, in many cases the assessment does not include all components. Opportunities include inconsistent or inadequate architecture components that can delay future enhancements and limit scalability, flexibility and maintainability. Other opportunities include organization and process changes that remove impediments to implementing new technology.

Guidelines Consider the following when identifying the opportunities from the current state assessment. Do the current technologies meet the business needs? Is the current technology used effectively? Do business leaders have timely information to make informative decisions? What improvements could expedite information capture? Can a new user easily learn the current applications? How can the client improve efficiency and lower costs while maintaining

excellent customer service? What new products or services could the client offer to excel beyond its

competitors?

Develop Future Technology Model During this activity, the team develops a future technology model that defines a conceptual component architecture and the information technology processes and organization to support it. Although the team is cognizant of the possible limitations identified during the current state assessment, these limitations should not restrict the team. The conceptual component architecture defines the architecture components and their interfaces at a functional level. The architecture component definitions and operational characteristics provide the requirements for

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the component selection in the detailed component architecture. A complete future technology model includes the following components: Business Requirements Technology Implications of Business Requirements Architecture Framework Conceptual Information Architecture Conceptual Application Architecture Conceptual Technical Architecture Information Technology Organization and Processes


Confirm Business Requirements

Description The team identifies and consolidates any available profiles of business requirements obtained from earlier reviews of the business environment at the enterprise and/or business unit level. In addition, they review available business plans and management presentations to gain an understanding of the business direction of the organization. If necessary, the team interviews business leaders to understand additional business requirements. The team then summarizes the business requirements and confirms them with business leaders. These requirements drive the technology requirements.

Guidelines The purpose of this task is to identify the requirements of the business. The purpose is not to do business requirements analysis. For example, a business requirement is providing e-commerce capabilities to enhance customer service. Business requirements analysis would define the information required by the e-commerce application. The following illustrations demonstrate the level of detail for the business requirements. Our customers require convenient order placement methods including telephone,

fax and on-line via the Internet. Our customers expect 24-hour customer service. Our customers want multiple shipping options including regular mail, express

shipping and low-cost shipping. Our products are commodities. Therefore, price changes must occur quickly. As a software developer, our application must run on multiple platforms to meet

the needs of our customers. The following illustrations demonstrate an incorrect level of detail: The order entry screen requires a name, address, telephone number, etc. Our interactive voice response (IVR) system requires fewer prompts. The order entry system must add additional charges for express shipping.

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Confirm Business Requirements Our application requires the Microsoft Visual C++ compiler.

Identify Technology Implications of Business Requirements

Description Business requirements drive information technology. Using the business requirements confirmed in the previous task, the team identifies the technology implications. A business requirement may have one or multiple technology implications. The team considers “industry standard” technology components that enable flexible, open environments and technology components that easily integrate with other technology components. The enabling technologies used by the client’s industry peers may also influence the selected technology components.

Guidelines The following illustrations demonstrate the technology implications of business requirements: Business Requirement – Provide order entry via the Internet. Technology Enablers – The required technology enablers include web

application development tools, web servers, firewalls, access to an Internet Service Provider (ISP) and middleware to interface to the legacy mainframe application. In addition, access to credit card companies for approvals, and shipping companies for product shipment, is required.

Business Requirement – Improve sales effectiveness by initiating comprehensive market research to identify new sales opportunities from current and prospective customers.

Technology Enablers – A data warehouse that derives data from multiple databases, and access to the Internet, will help provide market researchers with the necessary information.

Business Requirement - Ensure that all customer representatives use a uniform process to provide quality customer service.

Technology Enablers – A workflow-enabled customer management application will facilitate quality customer service by ensuring consistency in the customer service approach and the availability of the information requested by the customer.

Define Architecture Framework

Description The architecture framework defines the architecture design principles that will guide the team as they develop the conceptual component architecture and the architecture blueprints in the

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Define Architecture Framework detailed component architecture. The framework includes principles for the components in the information, application and technical architectures. Since the architecture design principles provide the foundation upon which the team will build the architecture and maintain it in the future, they require careful crafting to ensure their durability. The design principles define the characteristics of the required architecture components. They are not product specific.

Guidelines Develop an architecture framework that supports the business requirements and adopts industry standards that facilitate easy integration between architecture components. The framework should also consider the current architecture although it should not be limited by it. The following statements illustrate acceptable design principles for an architecture framework. The architecture must support the goals and objectives defined by the business

strategy and the operational model defined by the business architecture. Use third-party enterprise applications for accounting, finance, payroll and

human resources. Evaluate third-party applications for business applications. Only develop

custom applications if the third party applications meet less than 80% of the business requirements for those applications, or can not be customized to meet 95% of the requirements.

Customization of third-party applications must easily transfer from the current release to the following releases. Re-customizing for an additional release is not acceptable.

Use relational databases to help minimize data redundancy and to enable the sharing of information across multiple applications and among multiple departments.

Information repositories must store data, voice, digital images, video and spatial data.

Information repositories must support ODBC and ANSI SQL. Enterprise application integration (middleware) components must support either

a Common Object Request Broker Architecture (CORBA) or Message-Oriented Middleware (MOM) architecture.

Chose established market leaders for hardware, operating systems and application software.

Local area network components must support TCP/IP and IPX/SPX. Local area network components must support 100MB-switched Ethernet. Network management components must support the SNMP and RMON

protocols.

Adopt industry standard communication protocols that promote interoperability with both internal and external systems.

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Develop Conceptual Information Architecture

Description The conceptual information architecture identifies the information users and defines the information types, repositories and access methods necessitated by the users and the business requirements. It may also define the content stored in the information repositories and the information flows surrounding the repositories. When designing the conceptual information architecture, the team considers information technology strategy directives, such as "evolution toward open, scaleable, distributed systems", the strengths and weakness of current information architecture, and industry standards. However, the team focuses on exploring new and emerging technologies that support the business requirements and could affect business performance or competitive positioning. Developing the conceptual information architecture requires the following tasks. Develop functional definitions for the conceptual architecture components. Define the interfaces between the conceptual components. Identify the appropriate technology enablers to meet the business requirements. Create and document a conceptual information architecture model to illustrate

the architecture components.

Guidelines Remember that the conceptual information architecture defines the architecture components at a functional level. Therefore, it rarely identifies products. A complete conceptual information architecture includes the following components: Information Profiles – descriptions of the information repository users and the

information types that they require. Information Repositories – relational database management systems

(RDBMS), object database management systems (ODBMS), sequential access files, document management systems and document imaging systems. The repositories include operational data as well as data warehouses and data marts.

Information Access Methods – protocols and formats for accessing the information repositories.

Information Repository Tools – tools associated with the repositories that help administrators design, build, modify, backup and restore the repositories.

Information Flows – models that trace the information entered or retrieved by a user by illustrating the information users, information types, information repositories and information access methods required to move the information from its source to its destination. In addition, the information flows show any information type changes.

Information Content Flows – outlines that define the navigational hierarchy for a web site.

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Develop Conceptual Information Architecture However, the components included depend upon the scope of the project. For example, a project defining an e-business strategy may only include the information profiles, repositories, access methods and information content required to implement an e-business solution.

Develop Conceptual Application Architecture

Description The conceptual application architecture defines the functional characteristics for business and productivity applications, application design, development and testing tools, enterprise application integration software, process modeling and workflow tools, industry reference models, configuration management software, software distribution software and application development methodologies. When designing the conceptual application architecture, the team considers information technology strategy directives, such as "use enterprise application integration software (middleware) to integrate new applications with existing applications", the strengths and weakness of current application architecture, and industry standards. However, the team focuses on exploring new and emerging technologies that support the business requirements and could affect business performance or competitive positioning. Developing the conceptual application architecture requires the following tasks. Develop functional definitions for the conceptual architecture components. Define the interfaces between the conceptual components. Identify the appropriate technology enablers to meet the business requirements. Create and document a conceptual application architecture model to illustrate

the architecture components.

Guidelines Remember that the conceptual application architecture defines the architecture components at a functional level. Therefore, it rarely identifies products. In addition, an important objective of the conceptual application architecture is to develop a consistent approach to integrate new applications with existing applications. The goal is to limit the complexity and diversity of interfaces by using enterprise application integration software and encapsulation strategies to extend the functionality while minimizing modifications to existing applications. A compete conceptual application architecture includes the functional definitions for the following components. Business Applications - enterprise applications (finance, human resources, etc.)

and industry-specific applications. For example, manufacturing applications include manufacturing resource planning, procurement and distribution.

Productivity Applications – office suites (word-processor, spreadsheet, personal database, presentation tool, etc.), groupware, e-mail and fax services.

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Develop Conceptual Application Architecture Application Design, Development and Testing Tools – object modeling tools,

application development suites, application testing suites, and integrated development environments.

Enterprise Application Integration Software – message-oriented middleware (MOM), common object request broker architecture (CORBA), distributed common object model (DCOM) and enterprise Java beans (EJB).

Process Modeling and Workflow Tools – model and technology enable business processes.

Configuration Management Software – version control, “check-in”, “check-out” and release management software.

Software Distribution Software – automated tools to remotely distribute software to multiple user workstations.

Industry Reference Models – predefined object and data models for industry-specific applications.

Application Development Methodologies – usually linked to application design, development and testing tools.

However, the components included depend upon the scope of the project. For example, a project defining an e-business strategy may only include the application design, development and testing tools, and the enterprise application integration software required to implement an e-business solution.

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Develop Conceptual Technical Architecture

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Description The conceptual technical architecture identifies the technology infrastructure components required to support the conceptual information architecture and the conceptual application architecture, which support the business requirements. The conceptual technical architecture includes workstations, servers, networks, communications, system and network management, security management and disaster recovery. When designing the conceptual technical architecture, the team considers information technology strategy directives, such as "use industry standard network and communication protocols", the strengths and weakness of current technical architecture, and industry standards. However, the team focuses on exploring new and emerging technologies that support the business requirements and could affect business performance or competitive positioning. Developing the conceptual technical architecture requires the following tasks. Develop functional definitions for the conceptual architecture components. Define the interfaces between the conceptual components. Identify the appropriate technology enablers to meet the business requirements. Create and document a conceptual technical architecture model to illustrate the

architecture components.

Guidelines Remember that the conceptual technical architecture defines the architecture components at a functional level. Therefore, it rarely identifies products. A compete conceptual information architecture includes the following components. Workstations and Servers – platforms defined by widely recognized industry

standards including Microsoft Windows/Intel (Wintel), UNIX and Java. Networks and Communications – topologies, protocols and bandwidth

definitions for the wide area network, local area networks, remote access, wireless communications, Internet connectivity and multimedia communications.

System and Network Management – overall strategy for application management, network and system administration, automated storage management, network fault detection and performance monitoring.

Security Management – the overall strategy to prevent unauthorized access to any aspect of the information systems environment including applications, information repositories, networks (wide area, local area, remote access, wireless communications, the Internet, etc.), and facilities.

Disaster Recovery – overall strategy to enable information technology resource continuity by providing alternatives to the primary resources when they become unavailable due to an equipment failure, fire, flood, natural disaster or other event.

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Develop Conceptual Technical Architecture However, the components included depend upon the scope of the project. For example, a project defining an e-business strategy may only include the workstations, servers, networks and security management required to implement an e-business solution.

Define Information Technology Organization and Processes

Description The current state assessment profiled and reviewed the current information technology processes and organization. If the team conducted a complete assessment, it included organization functions, structure and skills, the information technology sourcing model, and information technology processes and procedures. However, in many cases the assessment does not include all areas. The team reviews the improvement opportunities and the future technology model to identify changes to the information technology organization and processes that will enable the cost-effective and efficient use of information technology resources to meet the business requirements.

Guidelines Successfully achieving the business vision and the conceptual component architecture that supports it requires an information technology organization and processes that can cultivate innovative technologies. This requires using a “Service Provider” service model. The “Best Efforts” service model typically does not work. Defining the information technology organization requires the following tasks. Identify the functions performed by information technology organization. Develop skill profiles that define areas of knowledge and level of experience. Determine the sourcing approach for each function. Create organization charts showing internal, external and extended teams. Write organization charters defining functions, roles and responsibilities. Define approach for managing external sourcing organizations.

However, the tasks included depend upon the scope of the project. For example, a project defining an e-business strategy may only include the functions, skills and sourcing required to implement an e-business solution. Achieving success may also require enhancing the current information technology processes to enable a quick response to changing business requirements. In many cases, a complete process redesign is not required. However, the areas in each process with the biggest impact may require enhancements. They include interactions with other organizations or processes, management and control activities, and decision points within the processes.

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Deliver and Validate Future Technology Model

Description The Future Technology Model defines an architecture framework, a conceptual component architecture and the information technology processes and organization to support it. The conceptual architecture component definitions and operational characteristics provide the requirements for the component selection in the detailed component architecture.

Guidelines Deliver the final draft of the report to the client for review and validation. After the client has the opportunity to comment on the report, produce the final copy and deliver it to the client.

Analyze Gaps between New Model Requirements and Current State During this activity, the team identifies the gaps between the new organization, process and technology models and the current state. The team also includes the previously identified improvement opportunities in the gap analysis. The team then analyzes the impact of the gaps and identifies the alternatives. The following tables provide the details.

Identify Technology Model Gaps

Description The future technology model includes the conceptual component architecture, the information technology organization and the information technology processes required to achieve the business vision defined by the business requirements. By comparing the future technology model to the current technology model, the team identifies the gaps that require resolution. The team should also include the previously identified improvement opportunities even if they are not included in the future technology model since these opportunities may include “quick wins”.

Guidelines Use a structured approach such as a spreadsheet or a word-processor table to document the following information for each gap. Classification (architecture, organization or process) Component affected Description of the gap

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Analyze Impact and Alternatives

Description The impact resulting from a gap ranges from a minor inconvenience to the inability to meet customer needs and expectations. Likewise, the alternatives can range from short-term, inexpensive fixes to long-term, expensive projects. The client may “accept” some gaps because the available alternatives are cost prohibitive.

Guidelines An effective gap analysis requires a clear understanding of the impact of the gaps and the solution alternatives. Team with the client to discuss and document the following additional information for each gap. Impact on business users Solution alternatives Proposed action

The team and the client then decide whether to accept the gap or to pursue one of the solution alternatives. The analysis continues until the team makes decisions on all the gaps.

Deliver and Validate Gap Analysis

Description The Gap Analysis identifies the gaps between the new organization, process and technology models and the current state, analyzes the impact of the gaps, and identifies the alternatives. The gap analysis also includes the previously identified improvement opportunities even if they are not included in the future models since these opportunities may include “quick wins”.


Define E-Business Next State During this activity, the team defines the e-business next state by breaking the e-business vision (business requirements) and the improvement opportunities into workable components based on the client's current capabilities. The team defines the overall strategies, objectives and direction for e-business initiatives in 3-4 month segments over a 12-18 month implementation period. This approach builds momentum for e-business initiatives by demonstrating evidence of success through "quick wins".

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Prioritize Project Portfolio

Description The team, including client representatives, uses a project prioritization matrix to plot the projects identified during the gap analysis. The projects include e-business initiatives, as well as, improvement opportunities. By locating the projects on the matrix, it becomes evident which projects deserve first consideration based on both business impact and ease of execution. After plotting the projects, the team creates a prioritized project portfolio.

Guidelines Ruthless execution is an essential driver of e-business transformation success and a competency that most organizations have yet to perfect. Since most clients need to drive toward more granular implementation, the team should break down the e-business initiatives into projects that offer the most benefit. These projects are the e-business functions that will be delivered to the client. To assist in driving rapid execution, project prioritization is necessary. Completing the prioritization process may take multiple iterations. Sometimes it is helpful to grossly categorize the projects as high, medium and low priority. The team can then prioritize the projects in each category.

Define Next State Objectives

Description The e-business next state outlines the pathway required to make the vision a reality. Through its emphasis on the "how to", it highlights the essential actions that are required across all dimensions of the organization. The team segments the next state into 3-4 month planning periods to enable “ruthless execution”, provide clear focus and direction, and facilitate more efficient allocation and deployment of scarce resources. Based on the prioritization of the projects in the portfolio, the team identifies the projects for each planning period. In addition, the team documents the objectives and the associated requirements for each state.

Guidelines Be careful about selecting early target opportunities that require significant up-front technology investments that are costly and can delay both tangible change and measurable benefits. Look to quick wins or other easily achieved initiatives as initial targets. This will create a foundation of success before undergoing radical and expensive technology changes. Be aware that unexpected, "hot" organizational issues may cause the executive team to shift its focus from high-priority opportunities to opportunities without a significant business impact. In these cases, it may be useful to remind executives of the benefits resulting from high-priority opportunities and the ramifications to the organization if implementation does not occur. This may increase the willingness of executives to deal with the required organizational issues.

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Deliver and Validate Project Portfolio

Description The Project Portfolio describes the projects that address the gaps between the new organization, process and technology models and the current state. The project portfolio also includes the previously identified improvement opportunities even if they are not included in the future models since these opportunities may include “quick wins”.


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Business Case Development The business case presents the financial justification for the recommended next state projects, which enables senior management to make informed decisions about mobilizing for detailed design and implementation. Developing the business case requires prudent estimates of expected costs, new revenues, paybacks, and organizational impacts for implementing the next state projects. The typical accuracy is +/-30 percent. The business case provides a clear understanding to the executives and organization of the scope and objectives associated with the next state projects, as well as their benefits and business performance expectations. It sets goals for individuals and the organization as a whole, which will serve to measure future performance. The business case conveys the value of the e-business vision to the client and builds support for their commitment to change. The scope of the business case depends on the client and the potential solution. Activities

Business case development includes the following activities. However, individual clients may require additional or fewer activities. Establish Business Case Scope Collect Business Case Information Develop Business Case Validate Business Case

Deliverable

The Business Case includes cost profiles, benefit profiles and a cost/benefit analysis for projects prioritized during the gap analysis. It may include all projects or only the selected projects defined by the business case scope. Tools and Templates

TBD Examples

TBD

Establish Business Case Scope The business case should present the financial information in a manner familiar to the organization, such as a profit and loss impact statement, or a graphical representation of cumulative costs and benefits. The unified client and consulting team establishes the business case scope to create a clear direction and purpose for developing the business case. Use the following descriptions when establishing the scope. A business case is:

− A management tool which provides order of magnitudes quantification

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− A quantification of the major opportunities involved

− A tool to identify high priority areas (80/20 rule)

− An estimate based on most conservative assumptions A business case is not:

− An accounting document with precise numbers

− An exhaustive quantification of each opportunity involved

− A business plan with fixed targets to reach

− A set of ambitious financial objectives Establishing the business case scope requires the following components. Business Case Expectations Roles and Responsibilities Business Case Framework Sponsor and Stakeholder Buy-In


Determine Business Case Expectations

Description Developing a successful business case requires understanding the client's expectations to properly define and scope the business case. The joint client and consulting team identifies the audience for the business case and the expected information. The team then envisions the final product that will provide the business case for the project portfolio.

Guidelines Business case development is usually one of many components in a project. It is usually not a standalone project. Therefore, the issue is not how long the business case development will take, but what sort of resources will be required to complete a quality business case within the defined project time frame.

Confirm Roles and Responsibilities

Description The team, including client representatives, determines the participants required to develop the business case and clarifies their responsibilities. Significant client involvement and ownership of the business case is critical, especially the benefit estimates. After stating a clear vision of the output, the team allocates the research and workload appropriately among the team members. The team leader should communicate all decisions so that each team member understands his/her role and the roles of the other team members.

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Confirm Roles and Responsibilities

Guidelines Developing a business case is a team effort. All team members are responsible for identifying and quantifying specific opportunities. Simply put, the development of a business case requires that analysts ask at least one additional question related to any identified change or implementation: "What will this deliver to a client's financial performance?" Although developing a business case is a team effort, the team requires at least one financial analyst who understands financial analysis and fundamental financial practices and policies. The financial analyst can interpret and understand how performance improvements can translate into benefits and can identify resources requirements that translate into costs. The financial analyst is typically a consulting team member who thoroughly understands the client's financial, historical business performance, and required financial justification criteria. The analyst helps project team members understand "where the money is" from a potential benefits perspective. The analyst supports other team members who are performing analytical tasks that translate operational and technical opportunities into quantitative financial benefits. While the consulting team typically owns the business case process, it is ultimately a client owned product. The client needs to understand and agree on all benefits, because ultimately they will be accountable for delivery of the identified benefit. This is a critical success factor. Projects approved because of expected financial results are expected to deliver results. The business case is a powerful mobilizing process for any change initiative. It ensures not only identification and agreement to improvement, but that specific individuals "sign up" for the delivery of the benefits associated with the change.

Develop Business Case Framework

Description The combined client and consulting team develops the framework for the business case by ascertaining the required precision level, depth of financial analysis, and governing financial assumptions. The framework should clarify costs and revenues that are non-recurring, recurring or incrementally changing by step or period.

Guidelines The audience for the business case influences the presentation format. Clearly understand the client's rationale for approval when designing the framework to achieve that approval. Some examples include: Distribute and justify technology costs across many component projects that

receive benefits, instead of counting it as a one-time cost without specifically assigning benefits to justify it.

Accept "soft" benefits, such as potential for revenue generation, for justifying large investments versus using "hard" benefits only.

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Develop Business Case Framework Expectations that the program will be largely self-funding versus funding it

through a one-time impact on the profit and loss statement.

Obtain Sponsor and Stakeholder Buy-In

Description Obtaining sponsor and stakeholder buy-in builds critical client support for the business case, which is necessary to attain approval to proceed with the projects in the project portfolio. The primary audience for validating the business case is the project sponsor and members of his/her management team. Seek confirmation from them and the project stakeholders that the business case scope and framework are appropriate.

Guidelines Client involvement is essential to building the business case and the subsequent approval of the projects included in the business case. Therefore, involve the client from the beginning and include client representatives in all decisions to create commitment for the business case.

Collect Business Case Information The combined client and consulting team identifies the business case focus areas, the required information, and the best source for the information. The team prepares for collecting the information by defining the necessary collection tools including questionnaires and surveys. The team gathers sufficient information to understand the solution and to clarify costs and benefits by seeking information from the following sources of information: KPMG Consulting resources and client information, to identify typical savings and

cost information related to similar solutions and project information to date that will support the business case

Public information from vendors and industries on market costs and typical savings

Client proprietary information on cost and income line items impacted by the solution

Collecting business case information requires the following components. Business Case Research KPMG Consulting Analytical Tools and Experience Vendor Costs and Proposed Benefits Client Financial Strategies and Information


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Conduct Business Case Research

Description The team clarifies the business case focus areas, the required information, and the best source for the information. The team prepares for the research by defining the necessary collection tools including questionnaires and surveys. The team puts the accumulated information and findings into an accessible storage area, so that both the project team and client sponsors can use them appropriately. The team also separates public information from confidential information to protect confidential materials.

Guidelines Consider the following questions when researching the business case: What are the benefits (e.g. names, quantities)? In which profit and loss accounts will they appear? What is the base measurement? How will tracking of the benefits occur? What formula will be used to value the improvement in monetary terms? When will benefits begin appearing? When will realization of the full annual impact occur? How much impact will occur per month or per quarter? Will benefits appear on the bottom line? Will benefits appear in cash-flow reports? Will reinvestment of benefits occur immediately as either increased capacity or

more revenue? How will monitoring of benefits occur, by whom and how frequently? How will benefit tracking tie into company performance management? Who will drive the benefits? How does the client know these are achievable gains? Who will set the expectations so that the employees will drive the benefits? What will drive the benefits? Who is accountable for the results? Who will measure and analyze performance? What is the process to measure and analyze performance? How will we know, whether performance is improving (especially over time)?

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Leverage KPMG Consulting Resources

Description The team reviews business case materials created in previous projects to provide consistent information to the client. The team also determines if they can leverage previous business cases written for similar clients.

Guidelines Consider the following to leverage KPMG Consulting resources: Research past client business cases for insight into effective and ineffective

techniques to use within the document. Source contacts that can give a broad range of costs or benefits. Consult internally with practitioners who sell and/or deliver these solutions,

since subsequent proposals may be bound by cost ranges set forth in the business case.

Verify Vendor Costs and Proposed Benefits

Description The team verifies vendor costs and proposed benefits by documenting publicly available information including the following sources: Gartner, Meta, Forrester and other analyst reports Vendor web sites, marketing literature and case studies User group web sites Technology magazine web sites

In addition, the team accesses the KPMG Consulting knowledge bases for white papers, case studies and client deliverables with appropriate information.

Guidelines Use the following guidelines to verify vendor costs and proposed benefits: If possible, research benefit savings and costs typically recognized for the

solution proposed. Make estimates on equipment, software or other tangible materials readily

available in the market place. Limit this research to information readily available or specifically desired by the

client. Leverage vendor sales representatives for typical benefits and savings realized

with their products.

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Leverage Client Financial Strategies and Information

Description The team works with the client to evaluate specific income and expense line items affected by the proposed solution and the impact level. The team also considers the affect on financial ratios, sales, and other performance indicators such as inventory turns.

Guidelines Consider the following to leverage client financial strategies and information: Seek feedback from the client on what benefits they are anticipating or seeking. Identify and discuss areas to reduce waste and inefficiencies. Research the previous business cases prepared for or developed by the client to

identify strategies to use or avoid.

Develop Business Case During this activity, the combined client and consulting team develops the business case. The business case includes a cost/benefit analysis that compares the implementation costs of the project portfolio to the potential financial benefits. The business case presents the cost/benefit information in the format that the organization typically uses, such as a profit and loss impact statement, or a graphical representation of cumulative costs and benefits. Completing the cost/benefit analysis usually requires a consultant who is a financial analyst and a client representative who is a financial analyst, well versed in the organization's financial techniques and information. In addition, developing a business case requires many extended teams to determine detailed costs and benefits. The information systems department can assist in estimating hardware, software development and support costs. The human resources department should have information on training development and delivery costs both from inside providers and contractors. Similarly, human resources department involvement is crucial in assessing the financial impact of job changes, recruiting, hiring, layoffs, etc. Other departments, such as purchasing, maintenance, quality assurance, and various operational units may also provide needed information. Developing the business case requires the following components. Cost Profiles Benefit Profiles Cost / Benefit Analysis Funding Model


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Develop Cost Profiles

Description The team develops a cost profile for each project in the project portfolio that accounts for the critical costs to implement the solution including technology, personnel and facility costs. The cost profile includes sufficient data to produce a credible estimate, although the estimate is often refined during the detailed design. The cost profile aligns cost estimates with the typical proposal to avoid significant deviations with future business cases or proposals. The cost profile also includes the assumptions made to derive the costs.

Guidelines In some cases, precise cost estimates are not possible. For example, information technology managers will resist estimating costs of system changes based on high-level process design documents. The sponsor will need to reassure individuals that they will not be criticized if the assumptions and estimates change in the future. Remind client personnel that the objective at this point is simply to obtain a high level estimate of the overall feasibility of a particular solution. Identify all costs associated with the project. Even if they are not obvious, such as maintenance costs when purchasing new equipment, and training costs when hiring new employees. Carefully document the estimate of each cost including any assumptions. Some resources may be important to recognize, but may not be included as costs. These typically include internal staff time to participate in implementation activities, although many organizations elect to cost out this time, and use of equipment or facilities that may be in demand. Recognizing and documenting these resources may be important to ensure that they are available, when implementation starts. Use extended team members for these activities. Recognize the distinction between costs that are relevant (i.e. directly tied) to any change decision versus non-relevant costs that will remain regardless of the decision (allocations of overhead costs). Understand the distinction between cost "elimination" and cost "avoidance". Cost elimination results in a reduction of cash expenditures from an organization, while cost avoidance refers to anticipated future expenditures that will not incur.

Develop Benefit Profiles

Description The team develops a benefit profile for each project in the project portfolio that creatively identifies benefits and realistically assigns costs. Tangible benefits generally come from either reductions in cost or increases in revenue. When developing the benefit profiles, the team examines each element of the proposed solution for financial and non-financial tangible contributions, such as increased market penetration or improved customer loyalty.

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Guidelines The consultant should be aggressive in looking for tangible benefits, but ensure that the team understands and is confident about the result. Since team members may be inclined to be conservative, the consultant often becomes the driving force behind identifying benefits and assessing their potential contribution. During the course of brainstorming and evaluating benefits, be aware that the team is likely to identify benefits that are quantitative, but do not translate into a dollar payback. These may include improving response time to customer inquiries, reducing the number of contacts required to complete a transaction, and improving the timeliness and accuracy of information. If the impact of the improvement is significant for customers or the organization, use these quantitative benefits to augment tangible benefits. Benefits can be expressed in reduced replacement cost, or reduced capital and maintenance requirements. In other cases, estimates of tangible benefits in some areas are not possible. If these are critical to building the business case for the project, get the sponsor involved in helping the team to decide what benefits to investigate. The sponsor can frequently make assumptions about customer retention rates and revenue increases that the team is uncomfortable making. This is an excellent reason to keep the sponsor involved in this effort on an ongoing basis. Remember that intangible benefits that are immeasurable, such as improved employee morale, may also be a factor to consider. Document and describe these benefits. Be aware that the team should not seek an exhaustive list of such benefits, but rather should identify those that most closely address the organization's vision and business objectives. If multiple scenarios are under consideration, calculate benefits for each scenario. Discuss all potential benefits with the project sponsor, and possibly with other executives. They can provide guidance as to what is realistic or valuable to the organization. The tangible dollar benefits will be key though some organizations place great weight on non-financial and intangible benefits as well. Benefits may include the following: Reduced rework, and associated material and people costs. Faster billing and collections, and improved cash flow - Take this as a one-time

benefit or as an ongoing reduction in interest expense. Improved customer retention - Studies have shown that the cost to attract new

customers (advertising, sales, etc.) is high. Therefore, retaining current customers can be a significant benefit.

Reduced forms and materials - These savings should be relatively easy to substantiate.

Reduced staffing - These savings are typically the most controversial, and will require the most extensive analysis. Severance costs may be significant.

Improved utilization of equipment or other assets - In some industries, improved utilization of fixed and movable equipment and facilities due to improved scheduling or other changes may have a significant impact.

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Develop Benefit Profiles Gain agreement from the target population on the benefit potential. By this time, the employees will be well aware of what is coming, what the general expectations are, and why the change is occurring. They will need to grasp what is expected of them in the changing environment. Only then can they agree to the logic behind the results and benefits. If possible, hold workshops with affected individuals, facilitated by their direct supervisors, with active participation from sponsoring management. Ensure that, in this workshop, employees learn and "experience" the new order. Confirm and restate qualitative and intangible benefits, as well as those that are tangible and quantitative. Quantifying the benefits requires creativity, as not all benefits are cost focused. When possible, intangible or non-financial benefits need translating into profit and loss terms. Quantifying costs to implement and sustain change will not be exact, since full details remain unknown until later in the project. Enable the client and project team to evaluate if the proposed solution is feasible and justified.

Complete Cost / Benefit Analysis

Description Using the cost and benefit profiles developed for the projects in the project portfolio, the team conducts a cost/benefit analysis to determine the overall financial implications of the projects. Assumptions, risks, constraints and timing considerations influence the analysis. The client's standard payback period and return-on-investment typically provide the financial measures for evaluating the results of the cost/benefit analysis.

Guidelines Present the cost/benefit information in a format that the organization typically uses, such as a profit-and-loss impact statement, or a graphical representation of cumulative costs and benefits. Get agreement on the practices for calculating various inflation rates. Inflation or growth factors can affect payroll costs, benefits, materials and product/service prices. Find out the organization's standard payback period and return-on-investment for assessing investments. If a project cannot meet those standards, the team and sponsor may need to work together and with the relevant executives to package the project to economically justify it. If necessary, use outside research to complete the cost/benefit analysis. For example, outside assistance may be necessary to determine current market share and overall market growth, which may become the basis for estimating growth in share and resulting revenues. When completing a cost/benefit analysis, specify the cost components of process, organization, technology, and other changes. For example, the $200,000 cost for a new system to manage customer orders might be broken into its cost components, such as personal computers, networking software, licenses, and communication lines. Also consider outside developer costs, in-house development costs and ongoing maintenance and support costs.

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Apply Funding Model

Description The funding model analyzes the structure and the sources of funding for each project. Inputs to the model include the following: An analysis of the stakeholders for each project The benefits that a stakeholder should receive from the success of a project The risks that a stakeholder is willing to accept on the outcome of a project The minimum acceptable return required before a stakeholder can commit funds

to a project The model that results from the analysis identifies the source of funds for each project and the criteria for receiving the funds.

Guidelines The funding model varies greatly from client to client. Some clients will fund each project on an individual basis, while other clients will fund multiple projects from the same financial pool. It is important to determine how the funding model works by discussing the model with the sponsor for the overall project.

Deliver and Validate Business Case During this activity, the team delivers and validates the business case with the client sponsor and stakeholders. A review of the business case and cost/benefit analysis provides the client with an opportunity to give feedback. If necessary, the team modifies the business case and confirms acceptance. The business case enables the client to define a direction for change based on benefit rationale and an understanding of the costs. The team also prepares a document to present the next state objectives and the business case that supports them to the executive management team for approval to proceed. This is an important checkpoint to confirm that the solution direction is appropriate and has the support of management. Failure to achieve this commitment at this point can lead to further efforts that do not meet the client's needs or expectations. The decisions made during this activity will be communicated to all stakeholders and may be communicated to the client community.

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Obtain and Address Client Feedback

Description After completing the cost/benefit analysis, the team drafts the business case for review and distribution. The business case should create a compelling case for designing and implementing the proposed solution(s) from both an intuitive benefit and an economic justification perspective. Before distributing the business case, the team re-examines the assumptions to ensure they are defensible when presented to the stakeholders.

Guidelines Deliver the final draft of the business case to the client for review and validation. After the client has the opportunity to comment on the business case, produce the final copy and deliver it to the client.

Obtain Agreement to Proceed

Description Obtaining the client’s approval to proceed usually requires a presentation to the project sponsor and the project stakeholders. In many cases, a presentation to the executive management team is also required. The presentation should include the e-business vision, the next state objectives and the business case. The business case component includes a summary-level cost/benefit analysis and a funding model outline. This presentation provides the context for obtaining an actionable consensus to move forward in real time and within the time constraints demanded for e-business. It is only by virtue of forming foundational agreements among leaders - that are open, shared, and owned - that building the required consensus is achievable. KPMG Consulting's distinctive change approach points out, that to develop actionable agreements, a hierarchy of foundational agreements needs to be built among the critical stakeholders. These agreements include: Agreement to devote the necessary resources and time to work together Agreement to the business challenges they want to resolve Agreement as to why the challenges exist Agreement on the value to the business in moving forward on e-business issues Agreement that the possible future opportunities have been surfaced,

appropriately reviewed, and evaluated Agreement to the relative value of various options for opportunities in the ROI

matrix Agreement about which opportunities are worth pursuing, which can be

supported by the major stakeholders, and which can be realistically delivered in the future

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Obtain Agreement to Proceed

Guidelines The presentation document is usually in a graphics format and serves as a supplement to the stand up presentation. However, the team may distribute supplementary documents including the future process, organization and technology models, the gap analysis, the project portfolio and the business case. The audience should include those individuals whose support is required to move to the next phase in the project. In addition, the team should review the communication plan to verify that all stakeholders receive appropriate communication about the next steps.

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Implementation Planning Implementation Planning provides a 12-18 month timeline of milestones for the realization of the e-business vision. This timeline supports the e-business concept of 'ruthless execution' by allowing for the continual web migration, customer entanglement and revenue growth, associated with e-business transformation initiatives. Project plans break down the 12-18 month timeline into 2-4 month initiatives and identify granular level activity and task information for implementation of the e-business vision. These project plans also support e-business 'ruthless execution', migration, entanglement and growth concepts. The performance metrics provide ongoing proof of the value received from e-business initiatives as implementations complete. Activities

Implementation planning includes the following activities. However, individual clients may require additional or fewer activities. Define Performance Measures Establish Timeline Develop Next State Project Plan

Deliverable

The Implementation Plan includes performance measures, a project timeline and a project plan. Tools and Templates

Implementation Plan Template (E-I IP Implementation Plan_xx.dot) Examples

TBD

Define Performance Measures The team identifies performance measures or indicators to monitor the value of the e-business vision. These indicators, when implemented during e-integration activities, will flag significant variances from expected results. Many organizations choose to take a balanced view in establishing performance measurement mechanisms by including indicators that measure organizational health from the perspective of finance, internal processes, customers, and organizational learning and growth. The balanced business scorecard is a prevalent mechanism to measure a solution’s effectiveness. However, measures do not necessarily have to include, or be limited to, these perspectives. Identification of performance measures is a proactive approach that supports senior management in making informed decisions. It helps management quickly identify possible areas of weakness in the health of the organization both in terms of its daily operation, and in its progress towards achieving the e-business vision. It also promotes an orientation towards continuous e-business evolution.

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Without the right set of performance measurement indicators, an organization will encounter difficulty in assessing its progress towards meeting e-business objectives, and in identifying sources and accountability for problems that occur. Furthermore, unless a balanced measurement approach is used, a focus on one or two favorable short-term trends (e.g. revenue or price per share) can often mask underlying trends that pose a threat to the organization's long term viability. In short, process measurement builds understanding and improvement across the organization. Building on the guidelines for developing measures, the organization should define and implement the mechanisms required to facilitate the use of the measurement system. The level of measurement sophistication is generally proportional to the criticality and magnitude of the process in terms of total organizational resource usage. A sound set of performance measures allows the client to gauge the progress and impact on performance, understand where enhancements are needed to enable e-business solutions, and take appropriate actions where compliance and results are not being realized. Performance Measures include but are not limited to: Time related measures - Usually seen as cycle times or tact times. Maintain

clarity for these measures to help ensure that everyone understands when the timed measurement starts, when it ends, and why. Take caution when measuring portions of cycles, as people will respond to the measure by forcing as much activity as possible outside the measurement zone. (For example, widgets finished per hour, widgets shipped per day, minutes per production unit, etc.).

Volume related measures - Number of material units processed. Take care with an absolute measure such as this because it can be taken out of context. It generally makes more sense to use a percentage, ratio or time unit. One may also express these as volume of resources consumed by the process. Again, take care to always relate volume measures to another unit. (such as, consumption per finished part).

Percentage measures - Ratio of measured unit as compared to total units. (example: retention percentage, percentage of value added time vs. total time).

Quality measures - Rates of quality (example: error rates, rejection rates, return rates and rework rates).

Trend data measures - Variations in process data. (example: seasonal data, business cycles and consumer buying patterns).

Cost data measures - Costs can be monitored many different ways including: cost per part, cost per time unit, cost by function, profits, revenues, contribution, etc.

Process related measures - Number of interfaces per cycle, number of hand-offs, total distance traveled, number of reissues, etc.

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Identify Functional Measurement Points

Description Functional measurement points should capture the performance of the entire area and be understandable to those people within the function. Sub-measurements within functions can also be value-added. Identification of the functional measurement points involves using the Internet Value Matrix to determine the most appropriate performance indicators that relate to each cell of the matrix and linking them to the projects in that cell. In addition, the stakeholder analysis for the projects identifies the primary stakeholders for the project. Finally, the performance indicators are linked to each group of stakeholders as a means of establishing accountability for the success of the project. The Business Drivers Issue Tree developed in the e-business diagnostic activity is a source for identifying metrics.

Guidelines Keep in mind to minimize the number of measures. Support defined functional performance measures using a set of performance measures for each level of the organization. Use the organizational charts and define performance measures that are meaningful at each level and support the overall goals.

Identify Process Level Measurement Points

Description Process level measurement points should define performance measures for each critical e-business process within the impacted business function. The performance measures are on the critical path of the process. At least one measure should be downstream of the process bottleneck. Measurement of non-critical path processes may be required for regulatory, policy, or monitoring reasons. However, these measures will not improve the overall process.

Guidelines Limit the number of performance indicators or otherwise risk diminishing their impact and value.

Validate Measures to Critical Success Factors

Description Having selected the primary stakeholders for the projects and assigned the performance indicators, it is necessary to validate the defined performance measures against the Critical Success Factors. These critical success factors are established using the e-business and customer relationship evolution path created earlier in the engagement.

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Validate Measures to Critical Success Factors

Guidelines A key question: Will the measures promote the type of behavior that will support the factors essential to the success of the e-business vision and next state e-business strategy and objectives?

Establish Timeline The e-business timeline is a high-level implementation schedule supporting the realization of the e-business vision over a 12-18 month period. This activity develops a plan for effectively managing the transition from the current state to the e-business vision. To comply with the 'ruthless execution' concept associated with e-business initiatives, the timeline reflects multiple 2-4 month project implementations over a 12-18 month period. The e-business timeline defines the sequence of projects and activities that require completion to realize the e-business vision. The e-business timeline provides a roadmap that identifies, integrates and sequences the activities for realizing the e-business vision to encompass all process, technology and organization components. It provides a single, over-arching program management framework that incorporates all relevant project activities in an integrated fashion. It also provides the client with an overview of the anticipated timeframe for implementation. Without the establishment of a common vision of the organization's capabilities at each plateau, important players within the organization may have vastly different expectations of the degree of change that will be required at various milestones. Omission of an e-business timeline significantly increases the risk that essential implementation activities will be either ill timed or inadvertently left out. Project managers for KPMG Consulting and the client team should take the lead in developing implementation strategies and timelines. However, functional specialists will be best skilled to define the sub-projects related to human resources, facilities, policies, etc. The team should focus on cross-project networking to ensure the exchange of critical information and to facilitate the development of cooperative working relationships across the organization.

Define E-Business Implementation Strategy

Description The e-business implementation strategy defines the key milestones or "plateaus" and implementation principles desired for the e-business logical solution and e-business integration solution (design, build and implement) phases of the e-business vision. These milestones consider minimum and maximum elapsed timeframes for full realization of the e-business vision. The minimum is typically driven by the time required to put in place new technology; and the maximum by market imperatives, such as revenues and costs. It should be noted that timeframes are estimated and other factors may influence timeframes when project initiation occurs.

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Define E-Business Implementation Strategy Review how the project initiative should progress, and identify key learning points for incorporation into the way that the initiative needs to be managed during the period of the e-business implementation timeline.

Guidelines

Create E-Business Implementation Timeline

Description The e-business implementation timeline drives the analysis of the dependencies among projects by providing the basis for developing an effective project schedule. This schedule exploits opportunities for compressing the overall schedule by running projects in parallel wherever dependencies and resources constraints allow. By providing a high-level schedule of all related projects, it assists in the establishment of cross-team communications, particularly in relation to interdependencies.

Guidelines Large projects carry a high risk of failure when moving into implementation. Develop the e-business timeline in close partnership with the client. Since sponsorship of the program by senior management becomes increasingly vital at this stage, elevate it and make it more visible. Start developing the e-business timeline early, i.e., as soon as it is possible to identify separable sub-projects. Prioritize sub-projects according to selected and rated criteria. This will enable the project to glide smoothly through the final project phases. The e-business timeline should consider actions required to address procedural, organizational or technical issues that have an impact on the ability to implement new processes including: Improvements to existing technology infrastructure and information systems

delivery capabilities. Provision of learning opportunities to assist people to contribute effectively

during the initiative and to support new organizational learning capabilities.

Develop Next State Project Plan To support implementation of the next state e-business strategy, the team develops project plans based on the prioritized project portfolio. These project plans reflect activities for the realization of the e-business vision over a 2-4 month period. The outcome of this activity will be project work plans supporting realization of the e-business vision. These will serve as the plans for performing 'Must Have' or 'Quick Hit' projects identified in the prioritized project portfolio.

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While the project duration outlined in each project work plan should be between 2 and 4 months, before establishing a detailed approach, it is important to agree with client management on whether to use a comprehensive or focused approach.

Develop WBS and Deliverables List

Description Team leaders identify the tasks required to complete each activity by examining essential deliverables to determine necessary work steps for producing each deliverable. Tasks are action-oriented and descriptive. The comprehensive task list includes appropriate checkpoints, reviews and sign-off.

Guidelines A predefined task list may be available if using a formal lifecycle methodology. The lifecycle methodology provides a good starting point for developing the task list, but ensure that the lifecycle methodology list is comprehensive. In some cases, the lifecycle methodology only provides a list of direct project tasks, and not necessary support tasks, such as walkthroughs. One method of defining task lists focuses on the final deliverable, and then works backwards to define the activities, tasks and steps necessary to produce it. Tasks are "packets of work" that are assigned to individual team members. Therefore, tasks should: Be measurable Have tangible results Have identifiable and readily available inputs Be easily understood Be a finite, manageable unit of work Require a limited number of resources Fit into the natural order of work progression for the phase

Estimate the Work Level of Effort

Description The team estimates the tasks in hours, since hours are the most appropriate time allocation. The estimates are based on work to be accomplished using prescribed processes, tools, techniques and standards. The estimates include administrative effort associated with the task. For example, the estimate for a deliverable produced by a new Computer-Assisted Software Engineering (CASE) tool should reflect the learning effort to use the new tools and procedures. This estimate is distributed to numerous people for a large final deliverable, and should include the time taken to copy and distribute the deliverable.

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Estimate the Work Level of Effort

Guidelines Estimating at task level during a project proposal occurs for a straightforward, brief engagement with a small organization and a limited work scope. Identify the "generic skill set" required to perform a task before determining the estimate for the task. This ensures consideration for skill requirements, and ensures estimates are not developed with specific resources in mind. Estimates are always based on an average skill level, as this approach prevents developing a detailed work plan tied to experienced resources. Too often, the resource is unavailable for the project, thus increasing the probability of a project delay.

Identify Project Roles

Description The team defines the overall project organization necessary to carry out the project and ensure its success. Clearly defining the roles and responsibilities of each member of the project organization ensures each person in the project organization understands his/her responsibilities and has time to carry out those responsibilities.

Guidelines Developing a full-blown organization during the project proposal would normally apply only to a relatively short or small dollar value engagement. The deliverable governance structure/roles would provide the direction for developing a larger, more complex organization. This deliverable would be a component of the project management plan, which would be used for a larger, more complex, longer duration engagement. Set up a coordination mechanism among appropriate groups: Initiate contact with leads, and review the project template and schedule to

determine which regular reviews and interchanges must take place for each group to successfully complete their individual and team activities. Insert tasks, as appropriate, throughout the process to ensure that coordination of plans and activities between groups is scheduled (e.g., hand-off between the development and analysis teams during the analysis iterations).

Ensure support tools (databases, problem tracking systems, word processors, etc.) used by each group are compatible with each other, and with client tools.

Document specific procedures to ensure inter-group coordination and include them in the project organization product. Update the project template and schedule as necessary to provide for additional tasks.

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Identify Training Requirements

Description During project proposal development, it may be possible to identify some or all of the training needs for the upcoming project, depending upon the nature, size and duration of the engagement. For a more complex project, longer in duration and size, this activity normally defers into the next stage where the project management plan is developed and a separate deliverable for project team launch and training is more appropriate.

Guidelines

Complete the Work Plan and Obtain Concurrence

Description The team completes, documents, and benchmarks the initial work plan to measure progress and control the project. They also review the plan with appropriate stakeholders and team members to ensure feasibility and obtain commitment.

Guidelines

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Date post:	23-Sep-2020
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