SD08

Report
Gartner’s Pace-Layered
Application Strategy
Michael Guay
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other
authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Gartner delivers the technology-related
insight necessary for our clients to make
the right decisions every day.
Pace Layering: A New Beginning
• Business strategy and market conditions change
faster than IT systems can adapt.
• In 2010, Gartner introduced the pace-layered
application strategy framework
• This presentation will review the concept and
provide guidance on adoption, governance and
change management.
Pace Layering: Key Issues
1. What are the key aspects of a pace-layered
application strategy?
2. How should application leaders implement a
pace-layered application strategy without
creating chaos?
3. How can you use a pace-layered strategy to
help your organization drive sustainable
differentiation and increased innovation?
Why Is a New Application Strategy Needed?
The Conversation Between Business and IT
Leaders Is Not Working!
Alternative
Business
Models
New
Ideas
Improved
Processes
Better
Ideas
Common
Ideas
Business
Leader
One Size
Fits All
Apps/IT
Leader
The Pace-Layered Application Concept
• Most organizations have a heterogeneous
portfolio of business applications.
• The applications range from mainframe to iPad,
data center to cloud, and critical to casual.
• The business processes they support may
change every few years or every few days.
• No single strategy or governance model can be
appropriate for all applications.
• The problem is only getting worse…
A Pace-Layered View of Applications
New
Ideas
Better
Ideas
Competitive
Threats
Systems of Innovation
Systems of Differentiation
Systems of Record
Greater
Efficiency
Common
Ideas
Unique
Processes
A Public Sector
Pace Layered View of Systems
Pace Layered Application Strategy™
“I don’t know
exactly what I
want. I need to
experiment.”
Systems of Innovation
Systems of Differentiation*
Systems of Record
“I know what I
want, but my
needs are unique
and there are no
packages.”
© 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
“I know what I want
and it doesn’t have
to be unique.”
*Also referred to as “Uniqueness”
Characteristics of Layers
Characteristic
Process
Characteristics
Data/Information
Content
Change Control /
Governance
Business
Engagement
Planning Horizon
Record
Differentiation
Innovation
Structured,
repeatable
Configurable,
autonomous
Dynamic, ad hoc
Highly structured,
well managed,
mainly internal,
audited
Internal and external,
some unstructured;
more dynamic
Structured and
unstructured data;
heavy reliance on
external data
Static/Stable
Both
Dynamic
Strict Control and
Testing
More Streamlined
Ad Hoc
Formal Governance
Process
Part of the Team
Doing the Work
7+ years
1-2 years
2-3 months
Systems of Record:
Core "Records" and Common Processes
• Employee Records
• Benefits
• Payroll
Human
Resources
• Accounts Payable
• General Ledger
• Budget
• Tax, Treasury
Financial
• Vendors
• Requisition to Order
• Inventory
Procurement
Stabilized and Lower TCO: Invest in Differentiation and Innovation
• Processes: Common processes — incremental improvement
• Information: Core records — very high quality/audit, reporting
• Systems: Core ERP/SCM/CRM suites or legacy systems
• Change Drivers: Long-term shifts, regulatory change, trickle down
Unstable Foundations Lead to Failure
Systems of Differentiation:
Unique Processes and Information
Key Question: What are the real business differentiators
for your enterprise?
Human Resources
Finance
Procurement
Processes & Info.
Processes & Info.
Processes & Info.
•
Recruit to Retire
•
Transactional (AP/AR)
•
Req to Check
•
Benefits / Payroll
•
General Ledger
•
eCommerce (SCM)
•
Self - Service
•
Budgeting
•
Inventory
• Processes: Unique/differentiating processes, rigorous/detailed,
medium pace of change
• Information: Analytics and forecasting — often combining system of
record data and other data
• Systems: Best-of-breed, SaaS, sometimes modules of a suite
• Change Drivers: Successful innovations, commoditization,
competitive pressures
Systems of Innovation:
New Processes and Information
Web
Social
Mobile
Multichannel
• Processes: Emerging processes, experiments/proofs of concept, often
fairly manual/basic processes, process "lite"
• Information: Increasingly external, advanced analytics/models,
scenario planning
• Systems: Experimentation "sandbox":
- Portals, content management & collaboration
- "Lite" Application Development — mashups, Web, social, mobile
- QR codes
• Change Drivers: New ideas, innovation
Pace Layering: Key Issues
1. What are the key aspects of a pace-layered
application strategy?
2. How should application leaders implement a
pace-layered application strategy without
creating chaos?
3. What should public sector organizations be
aware of when implementing a pace-layered
application strategy?
Use FACT to Determine
Optimal Deployment Choices
Finance
•
•
•
Assess TCO for the option: calculations and assumptions should be transparent
Source of cost data and assumptions should be documented
COA should be developed to show and continually account for cost components
Agility
•
•
•
Agility characteristics for deployment options need to be compared to the requiremenst
for the software system
May be difficult to ascertain unless you have been measuring over time
The ability to adapt the application easily over time must be a crucial design constraint
Control
•
•
Software needs to be managed at many levels (data, security, change (code) control),
requires management time
More dynamic and involved governance to deliver appropriate control
Technology
•
•
•
Need to assess the operational load impact of a specific deployment option (Ex: SaaS
solution may create significant additional loading on external network connectivity, on
premise may place more burden on existing servers)
Determine “connective tissue” products and architecture
Identify the impact of a specific deployment decision on current and planned enterprise
architectures.
Interaction Between the Layers Requires
"Connective Tissue"
Common Elements of
Connective Tissue
System of Innovation
• Master Data Management
• Process and Data Integration
System of Differentiation
VS.
• Business Service Repository
• Integrated Composition
Technology
• Common Security Architecture
System of Record
• Integrated Monitoring and
Management
• External Connectivity
Governance Differences Between
the Layers
System of
Record
Process
Change
Architecture
System of
Differentiation
Strict Change Control
Traditional
System of
Innovation
Experimentation
Alternate Platforms
Investment Pool
Funding
Development
Practices
Business
Engagement
Planning
Horizon
Capital Process
Agile Practices
Waterfall
Doing the Work
Formal Process
7+ years
1-2 years
2-3 months
Establish Realistic Process and
Data Integrity Requirements
Ambiguous,
and Highly
Flexible
Process Integrity
Facebook
Campaign
Sales
Interaction
Shipping
WellUnderstood,
Tightly
Controlled
Prospect
Web Visit
Quotation
Invoicing
Order
Entry
Cash
Receipt
Data Integrity
Modest
Expectations
System of
Innovation
Scenario
Models
Social
Database
System of
Differentiation
Budgeting,
Planning,
Forecasting
Direct
Marketing
Database
System of
Record
Audit and
Compliance
Reporting,
Reconciliation
High
Integrity
Recommendations for Layers
Characteristic
Strategic Focus
Record
Differentiation
Innovation
Improve execution
Better design
New idea
10 to 20 years
3 to 5 years
6 months to 3 years
Infrequent
More frequent;
configurability is key
Very frequent; "throwaway"
customization
Understood and
stable
Understood and
dynamic
Ambiguous and
dynamic
Data Integrity
High
Moderate
Limited
Support
Requirements
75% technical
25% business
50% technical
50% business
25% technical
75% business
Life Span
Pace of Change
Process Viability
Sourcing
Technical
Deployment
Investment
Integrated packaged Best of breed
application suite
Custom, orchestrated,
open innovation
On-premises cloud
emerging
On-premises or SaaS
Any, but typically onpremises
Capital asset
Capital or expense
Expense
Example: Pace Layered Applications
Large Enterprise in 2012
CLM
Supply Base
Management
MDM of Supplier Data
Supplier E-invoicing
Spend Analysis
Systems of Innovation
E-Catalog
Contingent Workforce
Management
Strategic Sourcing
Procurement Network
— North America
E-Procurement —
ERP #1
Procurement Network
— South America
Procurement Network
— Western Europe
AP Invoice Automation
Systems of Differentiation
E-Procurement — ERP #1
Purchasing — ERP
#2
Purchasing — ERP
#3
Purchasing — ERP
#X
Systems of Record
X
Example: Pace Layered Applications
Large Enterprise in 2016
Service
Procurement
MDM of Purchased
Part Data
Global P2P Network
Systems of Innovation
Supply Base
Management
Strategic Sourcing
Regional Procurement
Network(s)
CLM
Contingent Workforce
Management
Spend Analysis
MDM of Supplier Data
Systems of Differentiation
Purchasing — ERP #1
Purchasing — ERP #3
E-Procurement With
E-Catalog
Purchasing — Shared Service
Systems of Record
How to Build a Pace-Layered Strategy
1. Create a panel of business users and IT application experts.
2. Decompose existing suites into individual applications.
3. Associate each application with the business process it supports.
4. Analyze the characteristics of each application and process.
5. Use the pace-layered application characteristics as a starting
point to assign the application to a layer.
6. Adapt your application governance model to fit the objectives and
needs of the three layers.
7. Establish a set of connective technologies to facilitate the
interoperability of the application within and between layers.
8. Build awareness of pace layers throughout the organization.
9. Encourage users to think about applications and processes based
on their probable rate of change.
Pace Layering: Key Issues
1. What are the key aspects of a pace-layered
application strategy?
2. How should application leaders implement a
pace-layered application strategy without
creating chaos?
3. How can you use a pace-layered strategy to
help your organization drive sustainable
differentiation and increased innovation?
How Can Pace Layers Enable Differentiation?
• Provide a process to consider individual business
activities rather than application categories.
• Create a framework to support the coexistence of
integrated suites and “best-of-class” apps.
• Establish a governance process that allows departments
to specify, justify and even purchase their own
applications.
• Encourage a dialogue between business and IT leaders
about which activities are (or should be) truly
differentiating.
• Introduce the idea that differentiating applications change
at a faster pace.
How Can Pace Layers Encourage Innovation?
• Create a category of "Innovation Applications" with a
budget and governance process.
• Establish a development environment with tools and
resources to make innovative apps. faster and easier to
develop.
• Use the pace layers model to shift some funding from
systems of record apps. to Innovation apps.
• Develop "connective tissue" that allows innovation apps.
to access master data and call Web services without
compromising data integrity or security.
Pace Layer Recommendations
 Move away from a monolithic application strategy, and categorize current
and planned applications by layer.
 Develop a differentiated strategy for each layer:
• Budgeting
• Selection criteria
• Architectural standards
●
Maintenance and support
●
Data management
●
Deployment model
 Establish standards for connective tissue across the layers: governance,
integration and integrity.
 Conduct regular pace layer reviews with the business to consider
recategorizing applications.
 Overhaul — rationalize, standardize, simplify, modernize — applications
from the bottom layer up.
 Drive "new idea"-style innovations from the top layer down by providing a
system of innovation.
Pace Layer Recommendations
 Use service-oriented architecture (SOA) concepts as the connective
tissue between layers.
 Deploy systems of record at the lowest total cost of ownership (TCO)
to the business.
 Do not intrusively customize purchased applications.
 Deploy built or composite applications for systems of differentiation.
Top Public Sector Risk Issues
•
Organization and Project Leadership Turnover
•
Organizational Autonomy
•
Funding Process
•
Governance (ownership, change control)
•
Treating Integration As a Separate Issue
•
Excessive Customization...
- Trying to replicate old systems and processes
- Trying to add unique capabilities needed by agency
Public Sector Specific Recommendations
• Secure Political Support for Transformation First
• Figure out how to keep it for life of project
• Make sure political appointees and civil service have
been convinced it is important
• Agree on standard processes
• Segregate COTS and unique capabilities
• Build benefits realization process tied to incentives
Related Gartner Research
 Application Deployment Options Through the Pace Layer Lens
Matthew Hotle, Andy Kyte (G00235531)
 Gartner's Application Pace Layer Model: Governance and Change
Management
Bill Swanton (G00211809)
 Connecting Technology for a Pace-Layered Application Strategy
Dennis Gaughan (G00211492)
 What Can Gartner's Pace Layered Application Strategy Do for an
Enterprise's Business?
Alex Drobik Jim Shepherd (G00215750)
 ERP Strategy: Why You Need One, and Key Considerations for
Defining One
Nigel Rayner, Jeff Woods (G00210356)
For more information, stop by Gartner Solution Central or email us at solutioncentral@gartner.com.

similar documents