Successful Solvency II programs have opened the doors to enterprise architecture

Posted on 16/01/2012 by admin

Solvency II regulatory initiative aims to normalize the way Insurance companies will measure risks, will manage their portfolio in accordance and will report on their record to control authority.
Such a big change may lead companies to reorganize their steering processes : some driven by internal momentum willing to get market differentiators, some others driven mainly by regulatory constraint. Whatever the vision, this will end up with major business transformations and, for some companies, with industry recombination due to portfolios optimization.

Hopefully, most of companies have launched transformation programs and, as Deloitte reports in its 2011 survey, more than 52% of UK companies had reached implementation phase by 2011 with 75% among big companies. Moreover the same report shows that budgets are expected to be contained between 1,2m and 12m euros, larger amounts being intended only for biggest organizations.

But, if boards seem to be aware of Solvency II new responsibilities and opportunities, projects and programs still undergo uncertainties and questions :

on capital calculation methods which still have to be tuned and for some of them fullly specified
on data which have to be collected, processed, checked and validated for each calculation method
on organization which have to get responsibilities of subprocesses and define how they intend to performe them
on management which have to prepare people and to request investment for resources

Finally, companies undergo 2 opposing forces : strong dependancies between Solvency II aspects and fragmentation forces coming from solving approach which have been selected to deal with complexities : technical (actuary, computing, business,…) and social (actors, governance, influence,…). Technical fragmentation comes from necessity to adopt partial analytical approach. Social fragmentation comes from business mindset, culture, influence competition.

[…]

That’s why my friends CIOs need the best whishes for 2012.

Posted on 03/01/2012 by admin

CIOs don’t need to read any comprehensive Chaos Manor report to know that project deliveries come always in late and are never or rarely in advance. It is like flights or train travels, things always happen in such way. They undergo asymmetric events. If we try to get measures of it, we could find that when projects portfolio undergo 2 months delay in average on delivery planned time, there is no or few chance any project will be above 10 months delay, but real chance to have 30 above 2 months for hundred projects portfolio.

IT budgets always increase year after year. It is their fate since new projects increase IS functions and, consequently, yearly maintenance. To cope with this situation, CIOs have settled portfolio management process:they assess projects from several points of view -technical, business, risks, strategy…- and make priorities. It results in postponing low prority projects…

After a while, postponed projects pile up like sand and become high priority. So, IT budgets contain also low priority projects which have become high prority for budget year.

Finally, projects portfolio is viewed by Business units as postponing facility on behalf of IT Division. No matter Business units are main projects issuers who make IT budget growing. Moreover they use to complain for additional IT costs though they are not accountable for expected gains which projects business cases have set under their responsibility.

When a project is delayed, costs usually increase in proportion of the time. So current IT capital expenditure budget is also made of slipped projects pieces as current IT operations expenditure budget still contains projects slipped since they have already rolled out platforms.

As current IT budget is flood of slipped past projects, less and less room remains for new ones. Negotiations are hard. Pure IT projects are scrutinized and often postponed if they have not a strong costs saving business case. So are pieces around Business projects that not seem to be required to Business even though IT has stated they are highly desirable.

[…]

It is time that Enterprise Architecture becomes a true art of Architecture…

Posted on 01/05/2011 by admin

Most of enterprises expect from their IT Division to develop and maintain information and communications infrastructure which includes networking and telecommunications, desktop computing, business management information systems, systems for technical information and computer security. This is not the less classical in governance landscape. Then, IT Divisions have gathered excellent engineers, among them architects, who continuously arrange technology for the best of Business people. When business is looking after better machines to manufacture quickly engine parts or better systems to conduct more effectively business cases, it is supported by an IT Division able to deal with all technical questions. All seem to be fine for the best… except that during the pas ten years we crossed the road little by little.

Though business is now looking after whole plants which would be able to manufacture several type of products or whole systems which may be used for different types of business cases, investment choice is conducted the same way it was when we were on the other side of the road. Business people relying on its business background try to figure out how a whole plant should work and forward technical issues to engineers and IT Divisions. Would you entrust the design of a business building to business people ? You have the risk to get a warehouse with a row of tables and not much heating nor air conditioning except for exectives. I am not kidding, I really saw it in a high tech company.

By now, for such a design, it is usual to hire architects for this job, since everybody knows that people are more effective in an environment build for them, not only considering the job, but considering that they spend a fair part of their life doing the job. Even plants are arranged specifically around people doing their job, which contribute to high productivity and high quality. This is the result of a mix of comprehensive manufacturing knowledge, social psychology, building knowledge, business understanding, security all things which don’t fit in one head only. Architecure is the field of knowledge which gather input of all these fields to find effective solutions for buildings.

[…]

Would you like to increase your organisation competences on Enterprise Architecture ?

Posted on 05/10/2010 by admin

Most of CIOs and managers see as an achievement to increase the competences of their organisation. They have better chance to outperform their goals and are stronger to withstanding the setbacks. Moreover, the collaborators who crossed a gap, improve their loyalty to them and to the company. They lower they attrition rate.

Yet, with architecture and enterprise architecture, you may be surprised. Although you have trained all your architects, you may not quicken the pace of changes in your information system architecture. This is because architects are doing only a small part of the architecture, main design and decisions are done by Project managers. Some companies have even coined the name “Technical Project managers” to promote architects to management position. This means that if you have invested to roll-out a framework like TOGAF among your architects, you may likely miss your ROI.

[…]