copyright © the ken orr institute 2008 data architecture for business architects ken orr chief...

copyright © The Ken Orr Institute 2008

Data Architecture for Business Architects

Ken OrrChief Scientist,The Ken Orr Institute

April 16, 2008

2copyright © The Ken Orr Institute 2008

Ken Orr Chief Scientist, The Ken Orr institute

Fellow, Cutter Business Technology Council

Senior Consultant• Enterprise Architecture• Business Technology Trends and Impacts• Business-IT Strategies• Business Intelligence — Database/Data Warehousing/Business • Agile Software Development and Project Management

Ken Orr is a Principal Researcher with the Ken Orr Institute, a business technology research organization. Previously, he was an Affiliate Professor and Director of the Center for the Innovative Application of Technology with the School of Technology and Information Management at Washington University. He is an internationally recognized expert on technology transfer, software engineering, information architecture, and data warehousing.


1. What is Data Architecture?


So you want to be a Data Architect


What is Data Architecture?

An Enterprise View of Data (Information)

A Distinction between Operational and Informational Databases/Systems

An Data (Information) Architecture Based on Business Architecture

A Mechanism (Approach) for Implementation Business and Technology Strategies


An Enterprise View of Data

Data Architecture means looking at all of the information (data) in the enterprise in a structured fashion, even the “unstructured data”

Data Architecture means working to make it easier to bring key information about the same real-world entities and transactions together


A Distinction Between Operational and Informational Databases/Systems

Operational and Informational Databases

Operational Database Strategies

Informational Database Strategies


Operational and Informational Databases

Operational Databases are databases that support the basic operational processes (e.g., order processing, manufacturing, purchasing, etc.)

Informational Databases are databases that support management control, analytical and research functions (e.g., market planning, product planning, R&D, etc.)

InformationalOperational

Left Brain Right Brain


Operational Database Strategies (optimize for update)

Historically, Operational databases have had a variety of implementations:• Network databases• Hierarchical databases• Inverted file databases• Relational databases• Object databases


Informational Database Strategies (optimize for access)

Informational Databases have gone through a number of stages:• Report Generators• 4th Generation Languages• Executive Information Systems • Multi-dimensional Database• Data Warehouses• Master Data Management• Data Virtualization


Data Architecture Based on Business Architecture

The Enterprise Architecture Stack

How the Various Architectures Fit Together

Business-Driven vs. Technology-Driven Architecture

The Role Enterprise Architects Play


Enterprise Architecture Stack

Organization and People

Technology Architecture T

Application Architecture A

Data/Info Architecture D

BusinessArchitecture B

Methods and ToolsSecurity Architecture


Source: T. Petz, GSK

BusinessProcesses, Organizations (People)

InformationData + Context

Drivers

Internal

Business •Objectives, •Goals, •Strategies

External

•IT Technologies•Economic Environment•Regulatory Environment

Drivers

Internal

Business •Objectives •Goals •Strategies

External


ApplicationPortfolio of IT tools (programs)

Technical InfrastructureNetwork, Servers, Workstations, Databases

Enable Decisions

ManageInformation

ExecuteProcesses

EnableApplications

How the Various Architectures Fit Together


BusinessProcesses, Organizations (People)

InformationData + Context

Drivers

Internal

Business •Objectives, •Goals, •Strategies

External


Drivers

Internal

Business •Objectives •Goals •Strategies

External


ApplicationPortfolio of IT tools (programs)

Technical InfrastructureNetwork, Servers, Workstations, Databases

Business C

hange driveschange dow

n into each layer

Technology C

hange at the

low

er levels ena

bles changes a

t the higher levels

Source: T. Petz, GSK

Business-Driven vs. Technology-Driven EA


Another View of the EA Stack

Xerox 2000


The Roles Enterprise Architects Play

County Agent(Mentor, Trainer, Consultant)

Building InspectorMaster Planner


Business Architecture

How do Business and Technology fit together?

Business Modeling

Business Architecture in the Enterprise

BPM, UML and Model-Driven Architecture


Business and Technology Strategies Michael Porter

• Competitive Forces• Competitive Strategies

Benson and Parker’s Square Wheel• Alignment• Innovation

Technology Roadmapping

Problems and Opportunities

New Ways of Looking at Business• Disruptive Technologies• The Long Tail• Delayed Differentiation• Extreme Differentiation

Product Architecture


Porter’s Competitive Forces (1985)

Michael Porter, Competitive Strategy, 1985

Determinants of Substitution Power

Determinants of Supplier Power

Determinants of Buyer Power

Rivalry Determinants

Barriers to Entry


Competitive Strategies

Cost Leadership Differentiation

Cost Focus Differentiation Focus

CompetitiveScope

BroadTarget

NarrowTarget

Lower Cost Differentiation

Competitive Advantage

Michael Porter, Competitive Strategy, 1985


Benson and Parker’s Square Wheel

AligningBusiness with Technologyopportunities

AligningTechnologywith BusinessStrategy

The role of IT Architects and Planners is not just to “align” IT to the business, but to help business managers and planners use technology to “innovate” new business solutions!


Benson and Parker’s Square Wheel

Enablers:Internet,Wireless,Google,iPod,Podcasting,

Drivers:SOX,Globalization,Downsizing,Aging Workforce


Roadmapping Planning Approach

Markets/Outcomes

Products/Services

Systems

Research

design

execution

Market P

ull

Technology P

ush

Resources$ $ $ $


Problems and Opportunities: Should and Could

Actual

Should

Cou

ld

ProblemOpp

ortu

nity

time

value,cost

“A problem is the difference between the ‘should’ and the ‘actual’ “ Kepner and Tregoe

“An opportunity is a difference between the ‘could’ and the ‘actual’ “Ken Orr


New Ways of Looking at Business

Disruptive Technologies (Christensen)

The Long Tail• Making money from the other 80%

Extreme Differentiation

Delayed Differentiation• Product Architecture• Late Binding

Network Warfare


Per

form

ance

Per

form

ance

TimeTime

5 ¼" Disks5 ¼" Disks

3 ½" Disks3 ½" Disks

Disruptive Technologies


Disruptive Technologies (Christensen) In 1995 Christensen and Bower published a paper based on Christensen’s PhD thesis,

which was based on the study of why none of the major manufacturers of 5¼” disks became big players in the 3½” market.

What intrigued Christensen was the fact that none of the companies who failed to “catch the next big wave” were unaware of the technology or badly managed. Indeed, the 3½” disks were pioneered by folks in the labs of the 5¼” disk manufacturers.

As Christensen explored the problem, he found more and more instances of this phenomenon• Discount stores• Steel Mini-mills• Hydraulic Shovels• Japanese autos

This led to the concept of “disruptive technologies”• Introduced at the bottom of the product chain• Introduced a product that was “just good enough”• Competition as seen initially for a small, unprofitable market, so the dominant players

go upscale (e.g., U.S. Automakers opting for SUVs and BIG TRUCKS and ceding sedans and economy vehicles)

• This provides the new (disruptive) entrant the opportunity to get a foothold to expand into larger and larger market segments

• Finally, the sustaining vendor is unable to adapt


Per

form

ance

Per

form

ance

TimeTime

Current TechnologyCurrent Technology

TechnologyTechnologyOptionsOptions

Current UsersCurrent UsersCurrent UsesCurrent UsesCurrent MarginsCurrent MarginsCurrent % GrowthCurrent % Growth

New UsersNew UsersNew UsesNew UsesNew MarginsNew MarginsNew % GrowthNew % Growth

Disruptive Technologies


The Long Tail

Most people are familiar with Pareto’s Law which says that 80% of the effects of a large number of phenomena are the result of only 20% of the causes. In business, this is usually reduced to the fact that 80% of revenue comes from only 20% of the products or 20% of the customers.

In recent years, the Internet has caused people to reexamine Pareto’s law. The Internet makes it possible in many of businesses to make money out of what is called “the Long Tail”.

Proponents of the Long Tail point out that a number of vendors have emerged on the Internet that make a significant amount of their revenue from products that traditional vendors in a given space (e.g., book stores, record stores, etc.) don’t even stock.

Chris Anderson’s Long Tail Blog: longtail.typepad.com/the_long_tail/


Wired MagazineOct, 2004


Extreme Differentiation: What can we learn from Steve Jobs?

How you can leverage technology to create new class of product• iPod

• iPhone

How you can create new markets• iTunes

How you can exploit style

Steve Jobs is not interested in following. He is a master in differentiation based on available technology, appearance and slick user interfaces

Apple iPhone


Delayed Differentiation — Product Architecture

In recent years, because of increased fluctuation in product demand, more and more organizations have focused on creating a product architecture that will allow them to respond more rapidly to changes in product demand:• Benetton (clothing/sweaters) found that the most important variable in

fashion sweater demand was color. As a result, Benetton fabricates a large portion of its sweaters out of “grey goods” (i.e., without color) and then, based on demand, dyes the sweaters and ships the finished product

• Black and Decker has created a product architecture that allows it to create a wide variety of drills (and other products) out of recombinable components

• Dell computers has perfected a system for “just-in-time” manufacturing that allows it to build products based on customer demand


Product Architecture

Product Architecture involves thinking about classes of products for the future

Product Architecture involves thinking about designing flexible product architectures so that the enterprise can produce different products to meet predictable market trends with minimal change

Product Architecture involves Thinking about where our products and our manufacturing organizations are on the product lifecycle curve

Data Architecture is analogous to Product Architecture for IT. How can we design our data so that we can produce more and more data products faster and cheaper? Think Data Warehouses and Data Marts


Product Architecture and the S-Curve


Product Architecture — How Dell Does It

Product is highly modular

Suppliers own inventory until assembly starts

Order takers know what is in stock

Order takers know what modules are mutually compatible

Customers are lured to what is in stock that meets their needs using short delivery time

There are runners and expediters scouring the earth for parts

Inventory turns were only 6 only 4 years ago vs. 20 now

“Why can’t Detroit be like DELL?”

— Daniel E. Whitney, 2004


The Key Elements of Semantic Based Business Architecture

Business Context (which leads to Business Semantics and Information (Data) Architecture)

Business Value and Value Streams (which lead to Business Processes)

Business Process Identify Activities (which lead to Data Requirements)


Architectural Implications

Common processes

Lifecycles


Common Processes

Across Application Areas (within a Business Unit)

Across Business Units (within Enterprise)

Across Customer Chain (Enterprise + Customers)

Across Supply Chain (Enterprise + Suppliers)

Across Industry


2. Business Architecture and Data Architecture


Applications, Business Process, Data

BusinessProcess(Workflow)

Applications(Services)

Information(Data)


4-tier Architecture


Business Architecture Modeling

Business Conceptual Modeling Approaches

Business Systems Models

Business Context Definition

Business Value Chain Definition

Business Value Stream Definition

Business Process Modeling


Business Conceptual Modeling Approaches

Porter’s Business Value Model

Jackson’s Lifecycle Model

Rummler and Brache’s Systems Model


Porter’s Business Value Model

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Ma

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HR Management

R & D

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SupportingActivities

PrimaryActivities

Customers


Inter-enterprise Value ChainIn

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EnterpriseValue Chain

SupplierValue Chain

ChannelValue Chain

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und

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stic

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Porter’s model was one of the foundations for the explosionof interest in business processes and led to thewhole area of chains (e.g., “supply chains”, etc.)


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EnterpriseSupplierSupplier-1 Customer Customer+1

Disintermediation: The Search for the Consumer and the Producer


Entity Lifecycles

In the 70s, Michael Jackson (the software guru) developed the concept of “entity lifecycles” as a way of thinking about major concepts

Lifecycles describe a birth (origination) to death (termination) cycle of an given actor, object, subject, message or event

Most Business Value Chains are based on one of the following:• The Lifecycle of a Product (e.g., an Auto Loan)• The Lifecycle of a Client (e.g., a Trust Client)


Supporting (Financial, HR, IT, …) Assets

Customer quality

Process Management

Product quality

Customer / Product Data

HR Management

Financial Management

IT Management

Administration Management

Capital Markets

Sales Origination Servicing

Compliance Evaluation

SupportingActivities

PrimaryActivities

CoreBusinessProcesses

ProcessManagement

QualityManagement

Product/ServiceInformation

Support AssetInformation

SupportingProcesses

loans

marketable securities

Value Chain


Business Value Chain

Business Value Chains reinforce the notion of “primary business process”

Business Value Chains + Systems Model provide a framework for discussions of product and customer quality

Business Value Chains have proven valuable in providing a “base map” for the entire Enterprise Architecture


The Extended Enterprise Systems Model

EnterpriseSources(business partners) Market (customers)

products/services(outputs)

product (output) feedback

customer (outcome) feedback

product usage (outcomes)

resource(inputs)


3. Business Semantics and Data Architecture


Upper Ontologies: Music

There are only 12 notes in Western Music, but you can go from Bach to 9” Nails


Upper Ontologies: Colors

There are only 3 primary colors but you can derive a infinite palletSimilarly, there are also only a handful of Business Semantic Categories but with those categories you can build important Enterprise Data Architectures


Upper Ontologies: Letters and Words

a, b, c, d, e, f, g, h, …, w, x, y and z

There are only 26 letters in English, but you can go from Shakespeare to Matt Drudge,

Including George Carlin’s 7 words you can’t say on the air!


Upper Ontologies: Journalism

Journalism 101: The Six Basic Questions• Who?• What?• When?• Where?• How? • Why?


Upper Ontologies: Business Semantics

The AMO (pronounced “ammo”) Model

Actors/Roles

Messages/Transactions

Objects/Subjects

Events/Time

Locations

Outcomes

Who?

How?

What?

When?

Where?

Why?


Business Context Modeling

Object/Subjects

Taxpayers and Bus PartnersBusiness Partners Johnson County

Deed Transfer Request

Deed Transfer Approval

Approved Deed Transfer

tax bill

tax payment

mill levy

real estate value

real estate tax unit

tax entity budget

boundary informationdistributed funds

certified values

lien

plat changes

pla

t p

rop

osa

l

ow

ne

r in

fo

pla

t p

rop

osa

lapp

roved

plat

pro

po

sal

fees

tax unit info

tax bill changes

dee

d o

r c

han

ges

sales questionaire (aka Cert of Value)notice of assessed value (NOAV)

tax appeal

tax appeal decision

tax notice

state abstract 1

state abstract 2

permit application

inspectionchecklist

per

mit

insp

ect

ion

building permitpermits

values from other counties

values to other counties

initial state assessed values

tax valuations by tax entity

deed or changes

deed or changes

tax warrants

tax judgements

delivered

warran

t

tax

pa

ymen

t

no

tice of lien

lien

fe

es

tax bills

req tax bill

tax bill

tax payment

tax payments

tax bills to beprinted

personal property judgements

tax payments

financial transactions

land record queries

land record infor (GIS)plat info

value info

tax roll in

fo

AIMS updates

GIS

dat

a

GIS data

Owner/Taxpayer

TreasurerCounty Clerk

Register of DeedsAppraiser

Title / MortgageCompany

Developer

Division of MotorVehicles (DMV)

Lienholders

Public Works

Taxing Entities

Division ofProperty Valuation

Planning andDevelopment

Real EstateParcel and

ImprovementsPersonal Property

Other Counties Clerk of the Court

Sheriff

WebBill

Data Prose

Collection Agency

PaymentVendors

AIMS Org AIMS

ASPIRE

Public


Business Semantics

/Objects/Objects

MessagesMessages

CCSubjectsSubjects

EventsEvents

ActorsActors

MessagesMessagesMessagesMessages

CCSubjectsSubjects CCCCSubjectsSubjects

EventsEventsEventsEvents

ActorsActorsActorsActors


Actors/Roles

Actors are entities that can send and receive messages. Examples of actors are:

Individuals (people)

Organizations (business, agencies, organization units, etc.)

Systems

Actors are also referred to in data modeling as “Parties”(see David Hay’s Data Model Patterns)


Messages

Messages are the entities that represent various communications between two actors. Messages may be:

Documents

Packages

Electronic signals

Voice or other kinds of communications

Messages are often referred to as “transactions” in business applications


Objects (Subjects)

A set of common actors and messages define a discussion (communication context). Typically that conversation is about “something”. That “something” we call a “subject” or “object”. Examples of subjects are:

Products (objects)

Services (objects)

Parcels of land (objects)

Jobs (object)

Inmate (subject)


Events/Time

Events are “points in time” that represent either sending or receiving a message. Events are characterized as:

Periodic (daily, weekly, monthly, etc.)

Aperiodic (“ordering”, “receiving”, etc.)


Location


Outcomes (Why?)


A Package as a Business Semantic Metaphor

To: Actor

Jim Jones123 MainToledo, OH

Bill SmithMason HallLawrence, KS

From: Actor

Contents: Subject(s)

Box/Document: Message

Boston, MA2004.05.10

Timestamp: Event


Business Semantics

A Business Transaction (a major business message, e.g., “order”, “shipment”, “invoice”, “payment”, etc.)

A Business Exchange is a series of business transactions that make up a complete interaction between two major actors (e.g., “sales order”, “work order”, etc.)

A Business Relationship is all of the business exchanges between two actors over time (e.g., “customer relationship”, “employee relationship”, etc.)


Customer

SalesManager

OrderEntry

Accounting

Warehouse

CreditManager

orderorder

enteredenteredorderorder

approved approved orderorder

shippingshippingnoticenotice

billingbillingnoticenotice

invoiceinvoice

delivereddeliveredequipmentequipment

paymentpayment

Business Context Business Process

Customer

Order Intake

Credit Manager

Sales Manager

Warehouse

Accounting

SubmitOrder

EnterOrder

CheckCredit

AllocateEquipment

ShipGoods

BillCustomer

PayInvoice

ProcessPayment

order

enteredorder

approvedorder

shippingnotice

billingnotice

shipment

Invoice

Payment

Customer

Order IntakeOrder Intake

Credit ManagerCredit Manager

Sales ManagerSales Manager

WarehouseWarehouse

AccountingAccounting

SubmitOrder

EnterOrder

CheckCredit

AllocateEquipment

ShipGoods

BillCustomer

PayInvoice

ProcessPayment

order

enteredorder

approvedorder

shippingnotice

billingnotice

shipment

Invoice

Payment


Process Modeling (BPML) (UML 2.0)

Customer

Order Intake

Credit Manager

Sales Manager

Warehouse

Accounting

SubmitOrder

EnterOrder

CheckCredit

AllocateEquipment

ShipGoods

BillCustomer

PayInvoice

ProcessPayment

order

enteredorder

approvedorder

shippingnotice

billingnotice

shipment

Invoice

Payment


Customer

SalesManager

OrderEntry

Accounting

Warehouse

CreditManager

orderorder

enteredenteredorderorder

approved approved orderorder

shippingshippingnoticenotice

billingbillingnoticenotice

invoiceinvoice

delivereddeliveredequipmentequipment

paymentpayment

Business Context Data Model

Customer Invoice(Header)

Invoice(Line Item)

Product

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