Information Systems for Managers
Session 12 – Architecture and Infrastructure
Architecture and Infrastructure
Agenda
Architecture as DNA
IT Architecture – apps, infrastructure, data
Enterprise IT Architecture
How Non-IT Managers Adds Values
Illustrations I
• Facebook versus Skype
– A new user costs Facebook 100 times ($5; 100k servers), for
Skype it is (5 cents)
– The difference keeps rising
• Obamacare’s debut crash
– $2 billion system for 320 million Americans unable to handle
1100
• How Netflix streams to 260 million viewers without a
hiccup
– 190 countries
– Consumes 1/3rd of all Internet data
Illustrations II
• IRCTC website slow during Tatkal (Seems to be relatively
better now)
• Why Google’s million servers need to keep growing
– and consume the power of 250,000 homes
– 15.4 terawatt-hours
– Higher than Sri Lanka and Zambia, rank among top 90 countries
Explanation is
Enterprise IT Architecture
Architecture as a Universal Translator
Homeowner’s intent Strategic aspiration
Envisioned home Operational strategy
Homeowner Line functions
Prioritized Prioritized
needs business
needs
Architecture IT architecture Matches
Costs Costs
constraints Builder constraints IT unit
possibilities possibilities
Constructed home IT project
Reconciles desirable vs achievable
IT Architecture
• IT architecture = technological DNA: Irreversible
– IT not designed to evolve = handcuffs strategy
• Consequences: Operational and strategic
• IT architecture choices today sow seeds of tomorrow’s
strategy
– Shortcutsdebtpaid in maintenance costs and
business agility
Architecture as DNA
Immediately
visible
Strategic Now Operational
•Scalability •Fitness of purpose
•Evolvability - Fast, reliable
Visible •Security
later •Maintainability
Costs ~ 700%
Bakes in
inflexibility
Business units 75% tweaking
should define 25% bug-fixing
Consequence of Architecture
Good Architecture
• Balances economical performance today and economical
changeability later
• Fulfils today’s requirements but plans for tomorrow’s
expectations
• Non-IT managers can help preserve enough of both
Corporate IT Architecture: The Big Picture
• Describes how they fit together
• Firm wide organizing logic of the three classes of IT assets
3 Apps
Shapes
Enterprise
2 IT
Data architecture
Constrains
1 IT Infrastructure
How IT Complexity Paralyzes Agility
• Business processes increasingly embedded in IT
• Patchwork over decades, generations of technologies
– Connected in distinctive, poorly documented ways
– Unpredictability of ripple effects impedes change
• Inflexible IT inflexible business processes Try
tweaking
• If not a catalyst for business agility, it is an impediment this!
App 1 App 2 App 3 App 1 App 2 App 3
?
Later ?
Earlier
Ripple effect
Consequences?
Digital Backbone
A coherent set of
standardized Business
processes along with
supporting infrastructure,
applications and data
intended to ensure the
quality and predictability of
core business operations
Rethinking IT Architecture – Delta Airlines
Simplicity is the Ultimate Sophistication
Antidote to complexity = simplicity
Good enterprise architecture makes complexity manageable by
1. Increasing the autonomy of IT assets
2. Easing integration
Needs
rapid
Apps change
(faster)
Needs
cheap
Infrastructure reliability
(slower)
Thinking like Lego Box
Business processes are hardwired into apps
• Lego-like “modular” approach simplicity and adaptability
– Conforming to Lego studs allows freely changing any brick and attach to others to
create more complex structures
– Apps relatively independent, interoperate via explicit interfaces
… ~ Electric outlet: Interoperates with a toaster, coffee maker, or vacuum
Two advantages
1. Enables tweakability and guarantees interoperability
– One app can be tweaked in blissful ignorance of others
– Enables value-stream connectivity without disclosing IP
– Simplicity and adaptability, app as black box: Driving
– Makes complexity more manageable
2. Contains a glitch in one app from destabilizing others
Lego does not eliminate firm’s complexity, it makes it more manageable
Lessons from Paris’ Architecture
Common challenge: Preserve viable old assets while adding new ones
Attribute Paris Corporate IT Portfolio
Variety of… Buildings Apps
Infrastructure Reliable roads, water, and electricity Reliable firmwide IT infrastructure
Zoning Residential vs. commercial areas Operational vs. strategic apps
Local character Neighborhoods with unique character Line functions with distinctive IT needs
Mix of Preserved old & new buildings Legacy and new apps
Governance Free citizens bound by city laws Autonomous apps bound by firmwide
standards
Evolution Gentrification of neighborhoods Once-strategic apps become operational
Preservation Renovation of historic buildings Evolution of existing apps
Assimilate… New immigrants New technologies
Laartz, J., Sonderegger, E., & Vinckier, J. (2000). The Paris guide to IT architecture. The McKinsey Quarterly, (3), 118.
Layer #1: IT Infrastructure Architecture
• Firmwide digital plumbing used by all line functions and apps
– Relatively stable, generic commodity, and rarely a competitive differentiator
• Consumes over 50% of corporate IT budgets
Buy before you build
• Must be reliable but economical
Stick to industry standard
• Non-IT contributions
– Define “good enough” operational performance?
•Costlier to build •Cheaper to build
•Cheaper to run •Costlier to run
Centralized Decentralized
Scale economies Increases costs
Firmwide integrations Tailoring to line functions
Concentrates vulnerability Widespread vulnerability
Layer #2: App Architecture
App architecture = choosing where to locate the three pieces
•PCs
•Smartphone
•Thermostats
User devices •IoT devices
“Clients”
Internet
Powerful
Central
“Server”
•Inputs
Three building blocks •Display
Interaction App’s core work
App logic
?
? Data Storage
that app uses Most business
& produces innovation here
Three Arrangements ~ App Architectures
1. Client-server architecture
2. Cloud architecture
3. Peer-to-peer architecture
#1: Client-server Architecture
Centralizes only data; clients do heavy lifting
User devices
“Clients” Central
“Server”
Internet
Interaction Data Storage
App logic
Variants: Service Oriented Architecture and Microservices
Potential for differentiation Costly to maintain
#2: Cloud Architecture
User devices
“Clients” Central
“Server”
Internet Interaction
App logic
Data Storage
Advantage: Centralizes, Economies of scale, Easy upgrade,
Ease of maintenance, Reduce the need of in-house IT, New
features can be constantly rolled out
Disadvantage: Single point of vulnerability, Internet
connectivity
#3: Peer-to-peer Architecture
No central server every client performs all app functions
Interaction User
User
App logic
Internet
User
Data Storage
User User User
User
Highly scalable Firms have no control
Three Arrangements ~ App Architectures
1. Cloud architecture
2. Client-server architecture
3. Peer-to-peer architecture
Centralized Cloud Client-server Peer-to-peer Decentralized
Every App Architecture is a Tradeoff
None optimal because every one of them involves tradeoffs
Speed
None
Reliability inherently
Operational more
secure
Security
Maintainability
None
Scalability inherently
more
Strategic evolvable
Evolvability
Client- Server Cloud Peer-to-Peer
Layer #3: Data Architecture
Where is your firm’s data stored?
• Integrated firmwide data is the foundation for automation and analytics
• Widespread problem: Proliferation of duplicated, inconsistent data
Two causes:
1. Fragmented across apps (app architecture is for individual apps)
2. Geographic dispersion - Two solutions
To pick appropriate data architectures, non-IT managers must decide:
1. What data should be centralized firmwide for core business processes?
2. What data should be centralized firmwide for analytics?
3. What data must be shared across your markets?
Two Solutions to Geographic Dispersion of Data
Replication Partitioning
Copy Copy
Copy
Copy
Copy
Summary
• IT architecture: A blueprint of IT assets in your IT portfolio
describing what they do and how they interact
• Enterprise architecture: How a firm’s corporate IT apps,
infrastructure, and data are organized
• Operational performance: An IT asset’s fitness of purpose, security,
and maintenance costs
• Evolvability: How easily an IT asset can do unplanned things
• DNA analogy: Architecture is irreversible and constrains how it can
be changed over its life.
• Architectural tradeoff: Operational performance now versus
evolvability later
• App architecture: How an app is divvyed between a user’s device
and a more powerful “server” machine
• Data architecture: How your firm’s data assets are organized
Thank You
