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Getting There and Enjoying the Trip:
Using Roadmaps to Turn EA into Results
David Baker
Chief Architect
Diamond Management & Technology Consultants
October 24, 2007
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Page 1
EA typically delivers a future state that is impossible to reach in a
single step
Current
State
Future
State?
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Page 2
The trouble is you cannot predict the economic climate that far in
advance
Some organizations immediately start implementing the future state
Usually results in questions being asked 6 to 12 months later
Why are we doing this?
How much longer will it take?
When can I expect to get my new capabilities?
Need to do SOME economic planning
Impossible to take the time to determine the exact number(and type) of resources at the time of the EA plan
But SOME planning is absolutely necessary BEFORE
mobilizing the troops
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Page 3
Your EA plan MUST record your planning assumptions
Business priorities at the time of the plan
High level cost assumptions for the transformation
High level benefit assumptions for the transformation
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Page 4
What goes into a roadmap?
Business Capabilities
I need the ability to.
Business Operations
by doing.
BusinessCapabilitiesRequiring IT
Support
When eachcapability is
delivered
1H06 2H06 1H07 2H07Theme1
Capability 01
Capability 12
Capability 04Theme2
Capability 07Capability 09
Capability 02Theme3
Capability 03
Capability 05
Capability 08
Technical Solution
...with
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Page 5
Resulting in clear answers to questions held by key stakeholders
Have we done this before?
How do we get it done?
How do I make sure its done
correctly?
Whats possible?
Businesswants to know
ITManagers
want to know
Whats possible?
When do I get it?
How much does it cost / save?
What are the business risks?
TechnicalStaff
wants to know
What do I build?
What do I build it with?
When do I build it?
EA Roadmap
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Your EA Roadmap is NOT a project plan!
A Roadmap is a time phased set of activities but at the
Program/Initiative level NOT a project level
You are planning the necessary transitions for a multi-year effort
NOT planning the implementation The Roadmap defines key objectives, and a high-level, prioritized
approach to reach those objectives
Roadmaps have enough detail to test the business justification but
NOT detailed sourcing or budgeting detail
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EA Roadmaps are created as part of the Strategy and Planning
cycle
BusinessStrategicPlanning
IT StrategicPlanning
ReleasePlanning(PortfolioMgmt)
ProjectExecution(SDLC)
BusinessOperations
Use enterprise and business unitdirection and goals to drive IT plans
Develop projects that
support businessesannual and strategic
plans
Prioritize the allocation of
IT resources to achieve
business strategy, in
alignment with enterprise
architecture
Run thebusiness
Portfolio 1Blueprints
Portfolio 2Blueprints
Portfolio 3Blueprints
EnterpriseBlueprints
Filter
Project
Project
Project
Project
Project
Multi-Year Plans(Roadmaps)
Budget Cycle(Project Plans)
Project Cycle Continuous
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The Roadmapping process
CurrentState
(strategy, process,technology)
FutureState
(strategy, process,technology)
Identify Gaps
IdentifyThemes &Initiatives
BusinessPrioritization
Mitigate Risk
SequenceInitiatives
BusinessJustification
Lay OutRoadmap
Input
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Identify the gaps between the current and future states
Identify the new and modified business capabilities
Consider changes to organization, processes, information and the
underlying technology
Rationalize your portfolio of applications
Retire some applications
Rehabilitate some applications
Replace some applications
Eliminate some applications
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Bundle the changes into business themes and initiatives
Initiative Description Capabilities Addressed
Support
Service Model
Analytics
Enhance program through
improved strategies and data
analytics
Ability to leverage any external data to perform member
identification and predictive modeling
Ability to leverage utilization and outcome metrics at the
provider level to improve network management and
help shape the networkAbility to access treatment utilization and efficacy and
deliver feedback to providers
Improve Financial
Reporting and
Analytics
Improve financial tracking and
analytics for products and
enable ROI calculations
Ability to provide aggregate and individual information
regarding utilization and ROI
Ability to track and predict medical costs and to
properly allocate the contribution margin of products
Support New
Products /
Segments
Create and support new
products to serve individual
and newly identified markets
Ability to meet currently identified market opportunities
through new product offerings
Ability to market to and service members with no plan
sponsors
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Use the prioritized capabilities to determine priority order ofthe initiatives
There are many ways to prioritize the list of capabilities
Prioritize them directly in a business workshop (hard)
Map them to the prioritized business goals (easy)
Use weights, Harvey balls, Assign each initiative the average priority of its associated
capabilities (or weight them, or . . . )
Initiative Priority Capability Priority
Support Service Model Analytics M Capability 1 HCapability 2 M
Capability 3 L
Improve Financial Reporting and Analytics H Capability 4 H
Capability 5 H
Support New Products / Segments M Capability 6 H
Capability 7 L
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Create business justifications for each initiative
Element Description ExampleProblem statement Defines the reason for the project idea
to exist in the first place
Cannot provide customers withreal-time information
Project Goals What is the project trying to accomplish;
must address the problem
Enhance operating costs by real-time handling of claims information
Market opportunity What is the total size (people,revenues) of the potential market for
this project?
$3M claims processed per year
Value proposition For each target group, what is the
value?
Provide Call Reps with real timeinformation
Capital costs Upfront investment $10M in systemsOperating Costs Ongoing investment $1.5M annually in labor, data
analysis, maintenance
Benefits Increased revenues, decreased costs Reduce customer turnover
Risks / Mitigants Will conditions change to fundamentally
change the need for this project?
Data in other projects will be
negatively impacted
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Use scorecards to show traceability amongst EA elements
INITIATIVE DESCRIPTION
Enhance medical management programs through improvedstrategies and data analytics
CAPABILITIES ADDRESSED Ability to leverage all client and any available external
experience information to perform member identification andpredictive modeling
Ability to leverage utilization, outcome, and satisfaction metricsat the provider level to improve network management and helpshape the network
Ability to analyze the results of integration and CareManagement programs to validate medical offsets, help directprogram improvements, and develop new programs
Ability to assess treatment utilization and efficacy and deliverfeedback to providers
BENEFITS DESCRIPTION
Sales: Client has been rejected for bids in the past because ofan inability to leverage data from external carriers and on allservices available to a member
Medical Costs: Improved ability to identify members andapproach them with treatment options tailored to their needs andeligibility will increase the use of highly effective, low costservices and will increase medical offset. Incorporating data, inparticular, can have benefits from being be the first experience inthe benefit path and may become aware of high risk membersbefore they are known elsewhere in the company (e.g.,substance abuse pregnant woman). The benefits might notaccrue, but they will accrue to the company as a whole in termsof medical cost reductions
AFFECTED IT COMPONENTS Enterprise Data Warehouse Financial Books of Record
Compliance Systems Provider Portal
DEPENDENCIES/CONSTRAINTS Project XYZ for integration of member data and enhanced
individualization (2Q06)
BUSINESS PRIORITY High
Duration
1-3 months
3-6 months
6-9 months
9-12 months
12 months +
Cost Range
$0 - $250,000
$250,000 - $499,000
$500,000 - $999,000
$1,000,000 - $4,999,000
$5,000,000 - $10,000,000
RANGE FOR BENEFIT, DURATION & COST
Benefit Range
$0 - $499,000
$500,000 - $1,999,000
$2,000,000 - $4,999,000
$5,000,000 - $7,999,000
$8,000,000 +
1
4
5
7
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A word about costs and benefits
There is no need to do a rigorous cost/benefit analysis at this point in
the lifecycle
A roadmap is NOT a budget
The subsequent portfolio management phase will drive thedetail to a budget level (mobilize resources and costs)
The costs and benefits estimated during the roadmap phase are an
additional tool for determining the overall multi-year sequence
Do just enough estimation Have business subject matter experts estimate the benefit
ranges
Have architects use engineering estimation techniques to
develop cost ranges
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Consult your architecture models to understand and mitigaterisks
Consult your EA plan to understand the type of architecture risks
involved
New technology - risky
System replacements complex and costly Lack of skilled resources risky
Foundational technologies - impact the schedule
Compliance requirements schedule pressure
Sequence the architecture changes into slices
Account for technology dependencies
Account for architecture risks
Eat the elephant one bite at a time!
Consult your EA plan to understand the type of architecture risks
involved
New technology - risky
System replacements complex and costly Lack of skilled resources risky
Foundational technologies - impact the schedule
Compliance requirements schedule pressure
Sequence the architecture changes into slices
Account for technology dependencies
Account for architecture risks
Eat the elephant one bite at a time!
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Use your work to sequence the initiatives
SequencedInitiatives
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You can also use any number of cash based indicators to adjust
the sequence (or to rule out individual initiatives)
NPV
IRR
Payback /Breakeven
PeakFunding
ROI
Definition Pros Cons Net Present Value Discounted sum of all cash flows
for the project Invest where NPV > 0
Measure of valuecreation should lead to
good (best) investmentdecisions
Difficulty / uncertainty inchoosing discount rate
Does not account foramount of investmentrequired
Internal Rate of Return Discount rate that produces an
NPV of zero
Invest where IRR is greater thanan established hurdle rate
Easily scaleable byinvestment size
Can lead to badinvestment decisions
use with care!
Point in time where cumulative netcash flow = 0
Amount of time required to recoupthe original investment from aproject
Under uncertain flight toquality stock marketconditions, Payback canbecome the indicator
Can often lead to badinvestment decisions
The maximum negative cumulativenet cash flow over the lifetime ofthe project
Represents the total amount ofmoney required to be put into theproject
Appropriate to itsobjective
the nature of thefunding is a whole otherissue...
Return on Investment
The total returns of the projectdivided by the total cash outflow
Allows for easy
comparison acrossprojects
Does not take into
account the amount ofcapital needed
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Initiatives can also be sequenced into stages based on business
need and dependency to deliver incremental capability
Costs of achieving capabilities
CostIllustrative
Stage 2
Stage 3
Stage 4
Portfolio Management Strategy
1Stay in
business
Non-optional level of investment Address regulatory
environment, align with currentprojects, keep current onsoftware releases, etc.
2Build
foundation
Enable initial capabilities Establish foundation for
realizing additional capabilitiesin stages 3 and 4
3 Improveeffectiveness
Delivers additional capabilitiesin response to pain points
Dependent on stage 2
4Improve
efficiency
Delivers efficiency focusing onmigrating capabilities to newstrategic platforms
Dependent on stage 2
Capability
Stage 1
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Lay out the roadmap
Interim Solution
Reporting Tool Re-architecture
Core View
End-to-End Workflow
Electronic Receipt/ Submission and Data Validation
End-to-End Solution
Analytics Tools Re-architecture1
2
3
4
5
6
7
8 Training Tools Re-architecture
9 External Constituent Integration
System Foundation & InformationManagement
High Quality Data Capture & InformationExchange
Dynamic Processing & Workflow
Advanced Analysis & Reporting
Multi-Channel Access
IT Portfolio Management & StrategicEnterprise Architecture
Integrated Organization & Communication
2006 2007 2008 2009
Theme 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
1
2
4
5
3 6
7
8
9
Milestones
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Another example
SF&IM
HQDC&
InfoEx.
DynPr
oc
&WF
AA&R
MCA
ITPM&
SEA
IntOrg&
Comm
2006 2007 2008 2009
THEME / INITITIVE 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Define High-Level Process Flows Define Data Architecture Strategy Create Book of Record Implement Interim Solution Select Vendor Package Implement Enhanced Tool Retire Acquisition and Data Collection Apps
Develop Business Information Model Define Process Flows Define Integration Strategy Implement Electronic Receipt & Submission Provide Automated Data Validation
Optimized Business Process (OBP) Select Technology Tools Implement WF & BR Process Improvements
Define Process Flows Define DW/DM Architecture Strategy Implement DW/DM Structures & Feeds Develop New Reports Select Data Analytics Tool Implement Data Analytics Tool Retire and Re-architect Reporting/Analytics
Define Process Flows Select Technology Tool Design & Implement Core Safety View Define Integration Strategy Integrate External Systems Retire Doc Mgmt Systems & Integrated Sys
Define & Deploy Communication Strategy Establish Process Improvement Governance Create Acquisition Assessment Framework Institute Regulations Pipeline Management Select & Implement Training Tools
Program Management Office Institute IT Investment Management Enhance SEA Competency Develop Arch. GPs, Governance, & Processes
Develop Strategic Architecture Blueprints
Retire: System 5, System 7
Retire: System 9, System 10,System 11
Re-architect: System 12,System 13
Re-architect: System 14,System 15, 16
Retire: System 18, 19, 20, 21
Retire: System 22, 23
Maintain: SRM Portal
Re-architect / Retire: System 8
Re-architect: Training systems
Retire: System 4
Retire: Fsystem 1, System 2,System 3
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One more example
Support Service Model Analytics Leverage all Aetna and external experience data
Leverage utilization, outcome, and satisfaction metrics
Analyze the results of Behavioral Health integration
Assess treatment utilization and efficacy
Support Enhanced Service Model Identify high risk, highly actionable Members
Monitor progress and track the adherence
Provide constituent-targeted service experience
Financial Reporting & Analytics Provide aggregate and individual information
Track and predict Behavioral Health medical costs
Enhance Provider Web Experience Provide constituent-targeted service experience
Enhance Member Web Experience Provide constituent-targeted service experience
Enhance Plan Sponsor Experience Provide constituent-targeted service experience Provide a single bill (i.e. including all products)
Operational Improvements Deliver flexible and customized products and services
Provide constituent-targeted service experience Administer BH products in a cost effective manner
Perform cost effective pricing for targeted business
New Products / Segments Meet currently identified market opportunities
Market to and service Individuals
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2006 2007 2008
A1457
B23
10
C69
D10
E10
F1012
G8
101415
H1113
ID Theme / Initiative
$3,856 $3,214 $3,983 $4,129 $2,864 $2,349 $1,696 $1,121 $880 $389 $0 $0$24,518TOTAL COSTS ($000)
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Remember, the level of detail is commensurate with the lifecycle
stage
Portfolio 1Blueprints
Portfolio 2Blueprints
Portfolio 3Blueprints
EnterpriseBlueprints
BusinessStrategicPlanning
IT StrategicPlanning
Roadmap createdhere
Sequenced list ofinitiatives
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Remember, the level of detail is commensurate with the lifecycle
stage
Portfolio 1Blueprints
Portfolio 2Blueprints
Portfolio 3Blueprints
EnterpriseBlueprints
Filter
Project
Project
Project
Project
Project
BusinessStrategicPlanning
IT StrategicPlanning
ReleasePlanning(PortfolioMgmt)
Roadmap createdhere
Sequenced list ofinitiatives
Filter and refine intoProjects
Apply resource andfinancial constraints
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Page 24
Remember, the level of detail is commensurate with the lifecycle
stage
Portfolio 1Blueprints
Portfolio 2Blueprints
Portfolio 3Blueprints
EnterpriseBlueprints
Filter
Project
Project
Project
Project
Project
BusinessStrategicPlanning
IT StrategicPlanning
ReleasePlanning(PortfolioMgmt)
ProjectExecution(SDLC)
BusinessOperations
Roadmap createdhere
Sequenced list ofinitiatives
Filter and refine intoProjects
Apply resource andfinancial constraints
Use prioritizedinitiatives andcapabilities togovern project
execution
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Page 25
A few considerations for service orientation
The move to services means that the business capabilities will be
mapped to services, not systems or applications
Services will be retired, rehabilitated, rearchitected or removed
Roadmaps may have to become more granularto address theimpact to services
Service-level roadmaps will be especially important during
governance of implementation projects
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Page 26
Recap: What is a roadmap?
Prioritized business capabilities
Prioritized initiatives
Initiative scorecards
Cost and benefit estimates, estimated duration
Risk mitigation strategies
Sequence architecture time slices
Sequenced initiatives
Input to portfolio management
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Thank You
Questions?