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Eduardo Miranda
Carnegie Mellon University
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FINFLEX: FRAMEWORK ADDRESSING TO COST-BENEFIT ANALYSIS OF SOLUTION ARCHITECTURES CONSIDERING UNCERTAINTY AND FLEXIBILITY View project
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1 Motivation
Defining and modeling Enterprise Architecture (EA) in a company is one of
the major challenges for enterprise architects because an EA determines the ap-
proach to achieving a company’s objectives, identifies the alignment between
business and technology [26], responds to a company’s concerns [29], allows
business goals to be translated into processes and systems [15], supports new
technology tendencies, and manages the company’s transformation through the
definition of its principles, tactics and transformation plans [1].
An EA exercise is supported by EA frameworks such as TOGAF [29]. TO-
GAF provides standard processes, methods, tools and guidelines for designing
and managing EA [27], [18]. It is conducted in phases (Figure 1) that allow iden-
tifying the company’s current situation, known as AS-IS [29], [1], as well as its
future situation, known as TO-BE [29], [28], [1]. TO-BE implies the identification
of company capabilities and employee abilities required to realize a company’s
strategies and goals [29], and to add to the business value [32]. Each capability
contains a set of activities that could impact the business and technology com-
ponents, such as defining a new business process, proposing an IT governance
framework, and developing a software application.
II
ArtefactsT
ofTTO4BE
1NTCurrentTsituationTyAS4ISW
BusinessT
ArtefactsT
TTT4NTRoadmapTanalysisT
objectives
2NTFutureTsituationTyTO4BEW
ofTAS4IS
PrinciplesdT
3NTGapTAnalysis
politics WorkT
BusinessT Packages
strategies
SelectedT
Capabilities roadmap
Current
Concerns RoadmapTorT
problems
transformationT
plan
Architecture
Initiatives
Notation
These phases are modelled through modeling languages like Archimate [30]
and UML2, which account for the four key architecture domains of business,
data, applications and infrastructure [29]. These domains include components
such as business processes, application designs and prototypes, among others. As
a result, the architects obtain models that they can use in the analysis of future
changes, new concerns, and impacts of decisions. These models also maintain
the standardization and understanding between company stakeholders. For these
reasons, it is possible to recognize modeling as one of the most valuable supports
for defining, designing and analyzing enterprise architectures.
Based on the results of AS-IS and TO-BE analyses, a gap is identified by
the architects, which must be analyzed and resolved to achieve the future archi-
tecture. To close the gap between AS-IS and TO-BE, a transformation plan is
defined (known as a roadmap), which groups the activities identified for each ca-
pability. A roadmap can have different attributes like costs, benefits, length (the
number of activities), and duration (time to execute a roadmap). Considering
these attributes, the architects should analyze the roadmap from different per-
spectives such as technological, marketing, risks, impacts on the company, reuse,
economic, and financial (cost-benefit analysis), among others. These analyses
require diverse data sources, stakeholders, technological and business experts,
tools, methodologies and models.
The modeling of the last phases (Gap Analysis and Roadmap Analysis) could
be more critical than the AS-IS and TO-BE modeling because a roadmap al-
lows the company to determine the most profitable investments, their execution
order over the time and offers the direction to achieve company strategies and
objectives.
However, current modeling approximations related to roadmap analysis, specif-
ically in the cost-benefit analysis, are limited. As a result, analysis execution is
difficult, concepts and definitions are not well standardized, interpretation of
III
RQ: How can the enterprise architecture process be improved through use of
the roadmap modeling and indicators calculated by FINFLEX?
Taking into account the complexity of our main objective, we divide it into
the following sub-objectives:
– Proposing and defining a conceptual model that includes the concepts re-
lated to the EA roadmap’s financial analysis and relationships among them.
This model supports all FINFLEX’s components (methodology, methods,
algorithms).
– Investigating and establishing the structures that support the classification
and characterization of cost-benefit analysis data.
– Investigating, selecting and implementing methods and algorithms to calcu-
late the cost-benefit analysis for an EA roadmap, considering the uncertainty.
– Developing an algorithm to analyze the flexibility of EA roadmaps regarding
their ability to adapt to changes.
– Designing a methodology to guide use of FINFLEX and to allow the inter-
pretation of its results, maintaining alignment with its conceptual model.
Thus, the answer to the research question and the success of the main objec-
tive depend on the achieving of the five sub-objectives.
The rest of the proposal is organized as follows. In the next section, the basic
concepts related to financial analyses for EA roadmaps are presented. The third
section describes the current research in our FINFLEX Framework. The fourth
section illustrates the related work, and finally, the conclusions are presented in
the fifth section.
In this section, we describe our current research. First, we explain the improve-
ments we propose for an EA roadmap’s cost-benefit analysis. Then, we outline
V
the research methodology. Next, our strategy to develop the FINFLEX frame-
work is introduced. Finally, the advances in our research are presented.
3.1 Improvements
Throughout our research, the design science methodology is followed [8]: For
each research sub-objective, an artifact will be created representing our contri-
butions to the research topic. These artifacts will contribute to composing the
FINFLEX Framework and guiding its use. The different design science artifacts
to be developed in this project are:
The development of these artifacts will happen through the execution of our
strategy explained in the next section.
1. We identified the first step of the strategy: Defining the FINFLEX conceptual
model. This step is the core of our framework because it covers concepts
and relationships of all stages. Therefore, the formalization, foundation, and
basic structure of the financial analysis are established. Once the FINFLEX
conceptual model has been identified, it will be used as a standard base to
express FINFLEX’s different activities and results. Concepts that have been
identified in diverse studies during this research and validated with a group
of EA experts.
2. Subsequently, the next step, defining the structures to collect and classify
the data of the financial analysis, was determined. These structures are en-
tirely supported by the conceptual model, and their objective is to permit
the classification and characterization of the data required (costs, benefits
and other economic factors). In addition, the structures include the detailed
information about the uncertainty and flexibility. To do this, current ap-
proaches have been carefully inspected such as Irani [12], Remenyi [25], and
NATO [23]. Moreover, interviews with EA experts are required in order to
VII
identify data employed in diverse industries and real cases. These structures
will be dynamic; that means enterprise architects can adjust the structures
considering the particular cases, allowing different detail levels in the results.
3. The next methodology’s step defines a financial model, which includes the
calculations and formulations to perform a financial analysis [25], [2]. This
model is supported by the FINFLEX conceptual model and the data rec-
ognized through the structures. The financial model aims to identify the
best way to calculate cost-benefit analyses and flexibility analysis for EA
roadmaps. In addition, it seeks to model the financial equations to support
this research.
4. Based on the financial model, financial and flexibility algorithms are ana-
lyzed, designed, developed and performed. These are supported by simulation
models and algorithms that include cost and benefits variables, as well as
their uncertainty. The results of these algorithms are represented by graphics
showing the variables’ behavior over time, and reports with financial indica-
tors and flexibility indicators for all roadmap alternatives.
5. As a final step, a methodology for the use of FINFLEX is defined. This
methodology aims to describe the inputs, outputs, and process for each stage
of FINFLEX, and offer clear guidelines for the interpretationg of FINFLEX’s
results. To define that, the studies by Hubbard [9], McGarry [17] and Wilkin-
son [33] will be considered.
Regarding the motivation and research methodology, the first step aimed to
identify the state of our research topic in the literature. As a result of this
activity, a systematic review was presented, which demonstrates the limitations
in the modeling and financial analysis of EA roadmaps and shows the possible
research directions for the future. This systematic review is now under review
for journal publication.
As a second result, the FINFLEX conceptual model was defined. It is di-
rected to a financial analysis of the EA roadmap, considering uncertainty in the
data and flexibility to respond to strategies and goals of a company. Our model
was supported in the careful revision of concepts identified in the current mod-
els, metamodels, and EA frameworks. Moreover, it was presented through an
example and validated with a group of EA experts. The FINFLEX conceptual
model has been presented in a paper sent to the ER-2015 conference.
4 Related work
Different studies addressing our problem have been developed and presented.
In this section, we summarize a few. First, an interesting framework was intro-
duced by Franke [6], which aims to support cost-benefit analyses for decisions
regarding application consolidations. The methods employed were supported by
cost taxonomies, probabilistic relational models and addressed to the Ministry
VIII
5 Conclusions
This proposal presents a partial view of the challenges to support and improve
the financial analysis of an EA roadmap through our FINFLEX framework.
We have identified key points during this process that impact future research
and contributions to the industry and academia. We have focused on critical
activities and their consequences and we have presented objectives that direct
our contributions and research artifacts (expected results) supported by the key
component of our research, the FINFLEX conceptual model.
Further research will help the decision-making process for investments, and
will contribute to decreasing the possible risks that companies confront today.
We would like to participate in this symposium to validate our approximation
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with the feedback of experts and, if necessary, modify our approach to obtain
successful results and make significant contributions to our research topic.
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