This presentation describes a step-by-step process for creating a core diagram that is applicable to companies that exist within the collaboration operating model, as described by Ross and Weill in their book "Enterprise Architecture As Strategy." The method produces a core diagram that preserves business agility by forcing the enterprise architect to consider the costs and benefits of reuse of processes, information, services, and systems. The resulting model supports "Capability at the Core, and Agility at the Edge."

1. A. Nicklas Malik
Senior Enterprise Architect
Microsoft Enterprise Architecture
Developing a Core Diagram of an
Agile Enterprise using MSBI
(Minimum Sufficient Business Integration)

2. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
This is a How-To presentation.
You can use this tomorrow --
Aligning around a Core Diagram
Step by Step development process
Useful primarily for Collaboration and
Replication Model companies, but may be
applicable for others as well.
Please hold questions until the end of the talk, so that I can cover
the method. I will leave time for questions. I’m happy to follow-up
in person as well.

3. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Business Agility – the ability
of a business to respond
more quickly and effectively
than its competition to the
changing demands of the
marketplace.

4. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Coordination
-Shared customers, products or suppliers
-Impact on other business unit transaction
-Operationally unique Business Units (BU)
-Autonomous Business Management
-BU control over business process design
-Shared customer / product / supplier data
-Consensus processes for designing IT
infrastructure services; IT application decisions
made in the business units
Unification
-Globally integrated business processes often
with support of enterprise systems
-Centralized Management applying functional
/ process / business unit matrices
-Central IT decision making
-BUs with similar or overlapping operations
-High level process owners design
standardized processes
-Centrally mandated Databases
Diversification
-Few shared customers or suppliers
-Few data standards across business units
-Operationally unique Business Units (BU)
-Most IT decisions made within business units
-Autonomous Business Management
-Independent transactions
-BU control over business process design
Replication
-Centralized (or federal) control over business
process design
-Few, if any, shared customers
-Operationally similar business units
-Autonomous BU leaders with limited
discretion over business processes
-Centrally mandated IT services
-Standardized data definitions with data
locally owned (some aggregation at corp).
-Independent transactions (aggregated)
Business Process Standardization
Business
Process
Integration
Low High
Low
High
Source: Enterprise Architecture As Strategy, Ross, Weill, Robertson, HBS Press

5. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
MSBI method
applies
primarily to
these two
operating
models
MSBI method
applies
primarily to
these two
operating
models

6. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Minimum Sufficient
Business Integration
means
Integrate ONLY the minimum capabilities
needed to meet shared goals.
Distribute the rest.
Problem:
Each time you reuse a business service,
process, or system, that element becomes
more brittle, and slower to change.
How do we create an Enterprise Architecture
that avoids reusing too much?
Solution:
Build a Core Diagram that Illustrates
Agility at the Edge,
Consistency at the Core

7. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
ING Direct Core Diagram
(adapted from Enterprise Architecture As Strategy)
Disney Company Core Diagram
(circa 1957)
A core diagram is a simple one-page
view of the processes, data, and
technologies constituting the desired
foundation for execution. [It]
provides the rallying point for
managers responsible for building out
and exploiting the enterprise
architecture.
For most companies, I think some kind of
picture is essential for understanding the
expectations for a business transformation.
-- Jeanne Ross, Director, MIT CISR
(e-mail to Nick Malik, 5-26-2011)

8. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Socialize &
Extend
Socialize &
Extend
• Onboard
individual
segments to the
core diagram
• Demonstrate
value
• Report progress
to build
pressure to
adopt
• Onboard
individual
segments to the
core diagram
• Demonstrate
value
• Report progress
to build
pressure to
adopt
Test
Test
• Tangible over
abstract
• Clear over
Comprehensive
• Pilot - Test -
Revise
• Tangible over
abstract
• Clear over
Comprehensive
• Pilot - Test -
Revise
Prepare
Prepare Develop
Develop
• Segregate
capabilities by
differentiation
• Address Data
Mastering and
Privacy
• Develop Core
Diagram
adoption plan
• Segregate
capabilities by
differentiation
• Address Data
Mastering and
Privacy
• Develop Core
Diagram
adoption plan
• Socialize value
and get buy-in
• Create list of
business models
and key
capabilities
• Focus on the
key challenge /
strategy
• Decide what
decisions you
want to support
• Socialize value
and get buy-in
• Create list of
business models
and key
capabilities
• Focus on the
key challenge /
strategy
• Decide what
decisions you
want to support

9. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Turn by Turn
directions

10. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Business
Model
Canvas
Key Partners Key Activities Value
Proposition
Customer
Relationship
Customer
Segments
Key
Resources
Channels
Cost Structure Revenue Streams
Business Model
An organized approach
to describe one way in
which an enterprise
delivers value and meets
its goals
Required
Competency
Partner Type
Value Proposition Customer Demands
and Relationships
Products and
Services
Distribution
Channels
Geographies and
Locales
Finance and
Revenue Models
Customer Type
Resource / Asset
input to
delivered
through
affect and
demand
targets drives
demands
supports
affect
affect
drives
may
include
has
targeted
to
targets
Required
Competency
Partner Type
Value Proposition Customer Demands
and Relationships
Products and
Services
Distribution
Channels
Geographies and
Locales
Finance and
Revenue Models
Customer Type
Resource / Asset
input to
delivered
through
affect and
demand
targets drives
demands
supports
affect
affect
drives
may
include
has
targeted
to
targets
Source: Enterprise Business Motivation Model 3.5
http://motivationmodel.com

11. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
OEM Installed Software Sales Business Model
XBox
Game
Licensing
Our initial effort at a core diagram started with the collection of 23 business
models (only 8 are named here). Example: OEM Installed Software Sales
OEM
Installed
Software
Sales
Online
Advertising
Platform
as a
Service
Negotiated
Volume
Licensing
Strategic
Consulting
Services
Online
Business
App
Services
Bricks and
Mortar
Retail
COA systems,
Digital
Distribution
Systems
Individual License
Tracking &
Invoicing
Improve Sales of
OEM hardware by
including licensed
operating
software
License Fee on a
Per-item basis
Collaborative
development of
software to
amplify the value
of innovative
hardware
OEM and
Hardware
Component
Manufacturer
Software
+
Software Keys
Secure Electronic
Distribution
Authorized Replicator +
Secure Print Vendor
EMEA, LATAM, APAC,
NorthAm
Value
proposition
Required
Competencies
Required
Assets
Revenue
Model
Customer
Expectations
Customer
Type
Partner
Type Products / Svcs
Channels
Locales

12. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Porter’s
Value
Chain
Ideation
To
Availability
Awareness
to
Lead
Lead
To
Order
Order
To
Fulfillment
Fulfillment
To
Customer
Value
Plan to Earnings Release
Hire to Retire
Info Strategy to Service Response
Counsel to Resolve
Supporting
Processes
Core Processes
Microsoft
Enterprise
Value
Chain

13. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Accounts Receivable
Product Data Management
Business Intelligence
Lic to Customer Activation WF
Some capabilities create
DIFFERENTIATION
in the marketplace. These capabilities will
change frequently.
Rapid change is essential for
BUSINESS AGILITY
Business Model Key Differentiators Key Non-Differentiators
OEM
Installed
Software
Sales
Track + Invoice each license
Secure OEM Collaboration
Agreement-Specific Pricing *
Secure Online Licensing

14. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
biz
biz
biz
Digital
R&D
Core
Agile “Edge” R&D
Business Capabilities
Consistent “Core”
Capabilities
Ideation
to
Availability
biz
biz
biz
biz
biz
biz
Content
R&D
Physical
R&D

15. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
biz
biz
biz
biz
biz
biz
biz
biz
biz
biz
biz
biz
Customer
Type #1
Customer
Type #3
Customer
Type #2
Agile “Edge”
Lines of Business
Consistent “Core”
Capabilities
Order
To
Fulfillment
Core

16. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Core
Consistent “Core”
Capabilities
HR IT Legal Finance
Agile “Edge”
Support Functions

17. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Sys #1 Sys #2 Sys #3
Customers
Transactions
Service Req
Contacts
Accounts
Budgets
Earnings
Royalties
Products
Digital Origin
Collateral
Catalogs
R+D#1 R+D#2
Division. A Division. B Division. C Division. D
Ideation To Availability
Awareness to Lead
Lead To Order
Order To
Fulfillment
Fulfillment To
Customer Value
Supporting
Functions
Common
123
ABC
DEF
GHI
AB2
DE2
GH2
Dept
Alpha
Dept
Beta
Dept
Gamma
Dept
Delta
Segment
Z
Segment
X
Region
E
Region
N
Web Chat Call Ctr
Mktg
#1
Mktg
#2
Sales
#1
Sales
#2
CRM IVR
HR/Ben CMDB Fin Rpt

18. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Name of
Business
Process
Name of
Business
Process
Names of
Business
Units
Names of
Business
Units
Centralized
Data Facets
Centralized
Data Facets
Specific
System
Names
Specific
System
Names
Groups of
Systems
Groups of
Systems

19. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Test the diagram with stakeholders
Simplify if necessary
Does it work during rationalization?
Pilot with one area of the business / segment
Onboard business areas / segments
Indicate which systems are “approved” and
which are “de-facto”
Explain it to business stakeholders

20. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
For collaboration-model companies –
Focus on information to be integrated
Integrate to the minimum sufficient level
for agility
Use your company’s process model if
possible
Be simple, clear, and specific
Gain buy-in through adoption
Test and Iterate

21. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
Your Presenter
A. Nicklas Malik
Senior Enterprise Architect
Microsoft IT Enterprise Architecture
nick.malik@microsoft.com
Inside Architecture blog: http://blogs.msdn.com/nickmalik
LinkedIn: http://linkedin.com/in/nickmalik

22. Presentation to the Open Group Conference, San Francisco, 2012 Presentation ©Copyright 2012, Microsoft Corp. All rights reserved.
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23. © 2009 Microsoft Corporation. All rights reserved. This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.