BakerRoadmapping-12269811883-phpapp03

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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

[email protected]

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



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







Roadmap createdhere

Sequenced list ofinitiatives


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stage





Filter

Project

Project

Project

Project

Project




Roadmap createdhere


Filter and refine intoProjects

Apply resource andfinancial constraints


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Page 24


stage





Filter

Project

Project

Project

Project

Project




ProjectExecution(SDLC)

BusinessOperations

Roadmap createdhere


Filter and refine intoProjects

Apply resource andfinancial constraints

Use prioritizedinitiatives andcapabilities togovern project

execution


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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?

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