Applying Enterprise Architecture model to Digitalize Telco IT


Applying Enterprise Architecture model to Digitalize Telco IT

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Harry Zhang

Carrier Software Integration Service Solution

This article describes what Enterprise Architecture (EA) is, how EA works, why we use EA and what benefits EA can bring to an enterprise. Based on The Open Group Architecture Framework (TOGAF), it introduces Huawei's EA management offering with its VICTOR values: Vision – charting the course to the future by knowing as-is capability; IT cost efficiency – removing and isolating non-business aligned costs for better prioritization and cost saving; Customer centricity and quick TTM; Transformation across business life cycles; Operational excellence; Receptivity to partners and external cooperation, to support digital transformation for Telco IT.

Today, the telecoms industry is facing unprecedented opportunities with 6.5 billion users, 8.5 billion smartphones, 100 billion connections and a $15 trillion digital transformation market by 2024. However, the challenges are also unprecedented. As a leading ICT supplier, how can we help customers support their strategies based on their missions, visions and values to reach their business goals across enterprises?

Too many IT organizations and too much IT spending are not contributing directly to business growth, according to Gartner, Inc. In fact, eight out of ten dollars that companies spend on IT is "dead money". Some enterprises have better traceability of IT costs, lower IT costs, faster design and development, less complexity and IT risk, but most of them don't. How can we provide a roadmap to align and improve the infrastructure, help avoid the 'Winchester Syndrome' - due to a lack of planning, leading to constantly building houses, but the houses continue to collapse [from the IBM worldwide Enterprise Architecture Community Leadership Team]? In other words, how can we Lead to Cash (LTC) and maximize their returns on investment in IT resources for the short and long term?

 Obviously an enterprise needs to do something to manage its IT resources in a structured way. For example, IT portfolio management is the integration of an enterprise's three disciplines: strategy, architecture and project management office [in Gartner's view]. EA answers the previous questions in a systematic and holistic way, while TMF (eTOM/SID/TAM), ITIL, and COBIT only partially address solutions and methodologies on this topic.

 EA is a well-defined practice of conducting enterprise analysis, design, planning, and implementation, using a holistic approach. It helps define the structure and operation of an organization as part of its ongoing strategy.

The purpose of EA is to determine how an organization can most effectively achieve its current and future objectives [from]. It is the organizing logic for business processes and IT infrastructure reflecting the integration and standardization requirements of the firm's operating model [from TOGAF].

By applying architecture principles and practices to guide organizations through the business, information, process, and technology changes, Telcos can be better prepared, ready and capable of engaging digitalization, if it is a part of their strategy.

 There are several EA frameworks on the market today with TOGAF as the industry leader. It provides EA methodology through Application Development Management (ADM) phases. TOGAF divides the whole EA life cycle into four main periods. The first period is Architecture Context (AC), consisting of the preliminary, architecture vision and architecture requirement phases. The second is Business Architecture, which addresses enterprise Motivation, Organization and Functions (MOF). IT architecture that includes Data, Applications (aka information system architecture) and Technology Architecture (DATA) is the third period. The fourth is Architecture Realization, which has Opportunity and solution, Migration Planning, Implementation governance, and Architecture change management (OMIA) phases. EA Maturity Model (EAMM) is the reflection of how an enterprise grows maturely in EA Management (EAM).

By addressing EAM as a program, Telcos can benefit from tight coupling of business-technology with aggregated capability and alignment to one overarching strategy. Eventually, it will bring greater usability (capacity alignment), more focus (cross-directional visibility) across the entire Telco organization, more consistency of output (effective efficiency), and common language (Open standards, open interfaces, open architecture etc). In addition, it will expedite (TTM) the program of business evolution (innovation, business process readiness, cross functional information sharing and use, for example, decision support, industry aligned business processes, and IT security and reliability).

 Huawei's consistent adoption and use of EA and its methodology for EAM can be outlined across six key dimensions to ensure success in the course of the journey from Telcos to digital service providers.

Vision – Charting the course to the Future by knowing As-Is Capability

Every journey begins with a first step. Without knowing where you are, a map will not help you. Before embarking upon a detailed EAM, it is valuable to understand the baseline or as-is capability of an enterprise. This capability assessment can be performed by evaluating the current level of Telco architecture and how it can evolve or be transformed to enable digitization. This will include how to find problems, disadvantages, development directions and plans. Huawei will offer EAM capability assessment for Telcos from performance and business importance dimensions to align with Telco business and technology stakeholders, in addition to relating them to capabilities that support the business direction.

IT Cost Efficiency – Removing and Isolating Non-business Aligned Costs for Better Prioritization and Cost saving

IBM EAM says, a math calculation can simply indicate that an IT cost saving is achieved to implement EAM.

  • Reduces duplicate product implementations. For example, analysis of building blocks indicates that approximately 131 current or potential products can be reduced to 32 at an estimated $5,000 annual cost per product over three years.
  • Reduces risks that new applications will not meet requirements and be terminated. For example, 53 new application systems must be developed or purchased during the next three years. Assume that 10% are false starts and each project costs $1.8 million.
  • Shortens TTM for new applications needed to grow the business. For example, assume that not having applications available when needed reduces growth by 5% and potential income growth is 100% per year for three years.

Then the estimated savings and/or cost avoidance is 46 million. Assume that:

  • EAM is $1.3 million.
  • Staff and Operate Architecture Office and Architectural Review Board (seven staff FTE for first nine months and six staff FTE for remaining three years at $100 per hour) costs 3.7 million
  • Purchase tool and train staff in its use takes 0.6 million

The estimated cost to implement EAM is 6 million. So the net savings are 40 million over three years.

In this regard, Huawei’s vision is to bring and offer EAM methodology, EA resources and tools to engage with Telcos to help in digital architecture definition, IT visioning and strategy development, IT planning and IT governance.

Customer Centricity and Quick TTM

IT Visioning and Planning is critical to facilitate execution of Telco digitalization strategy. Using EAM, a consistent and integrated approach to slicing and dicing can be achieved. Through BSS reconstruction, Huawei is offering capabilities to evolve customer care into Customer Engagement suites that help Telcos plan and build Omni-Channels in order to gain from the ROADS experience.

Huawei's Business Enabling System (BES) includes not only traditional BSS blocks and consumer portals, but also the functionality and capability required in digitalized operations, such as a digital CRM, 360 degree partner portals, and cloud-based XaaS capability with foremost focus on the customers and their experience throughout their buy and use journey. With an extensive experience delivering and assuring Telco engagement objectives, Huawei applies EA to the process of building solutions that deliver deeper intimacy with Telco customers and through this deliver such solutions, capabilities and new services quickly to fulfill TTM requirement.

Huawei offers consulting services and architecture solutions focused on Customer Engagement Management (CEM), Business Enabling Management (BEM) and Big Data for innovation and business agility.

Transformation across business lifecycle

Our PSI/SI (Prime System Integrator/System Integrator) offerings are aimed at compliance assessment, architecture contract with business users/development partners, implementation governance models, and solution building blocks, once a customer's as-is and to-be systems and RFP are given. Although our Managed Service Application Development Management (MS ADM) offering has been extended to handle post-PSI/SI change request and requirement IA, all together they are still in MIA (migration planning, implementation governance, and architecture change management) phases, which can be interpreted as the abbreviation for Missing in Action. We are indeed missing AC, MOF and DATA from an EA perspective, because we do not know where the as-is system came from, how to-be picture should be drawn in a roadmap, or how the proposal requirement should be written. In this case, EAM provides a pre-PSI/SI solution to help customers' architecture definition, it vision, planning, and governance based on an enterprise's business and IT strategy. This is particularly important and a great opportunity when we recognize ourselves as the long-term players to create a win-win ecosystem with customers. Huawei will be pleased to be proactively involved in the whole business and IT portfolio governance life cycle for a customer, not only for PSI/SI delivery, but also PSI/SI pre-sales and delivery aftercare.

Operational Excellence

From strategy to IT operations, EAM brings benefits from a fully integrated, performance orientated solution to IT planning, operation and management in a customer's organization. By simplifying existing business, and digitalizing operations, EAM protects the existing assets, integrates existing processes and methodologies, and completes functionalities by adding control capabilities. The organization will have a better return on investment and reduce risks for further investment while increasing operational efficiency. Huawei will assist a customer's business operation in terms of its E2E business process, enterprise application integration, business drivers and KPIs, and target operational model.

Receptivity to partners and external cooperation

With collaborative innovation as a guide and customer satisfaction as the goal, EAM suggests alliances with partners to establish cooperation and a win-win green ecosphere, including but not limited to new media partners, agents, suppliers, service providers, and financial partners. EAM provides a more effective integration of resources, multi-dimensional big data analysis, clear reconciliation, and more business intelligence to improve efficiency. Huawei provides BES partner management platforms to support customer's B2B and B2B2C business models.  

There are more cases and scenarios to list. However, VICTOR should be sufficient to demonstrate the winning value that EAM can bring to us and customers. EAM with its tools can help customers to create, query, update, review and track the enterprise architecture definition, IT planning and governance at granular levels to help enterprises make the right investment decisions and achieve their business goals. It is also a great opportunity for Huawei to have EAM capability and extend its service to the market.