Enterprise arkitektur – Innovation fra teori til praksis

1. Enterprise arkitektur – Innovation fra teori til praksis Nytænkningsprocessen Case 1: Udvikling af forretnings arkitektur i en service organisation Case 2: Top-down: Udvikling af applikations arkitektur med udgangspunkt i forretnings strategien Case 3: Bottom-up: Process optimering på tværs af en stor kompleks organisation 1

2. Nytænkningsprocessen Nytænkning – tre forskellige tilgange: Top-down: Design med udgangspunkt i strategiske analyser, fx. Porters generiske strategier / Five forces. Bottom-up: Inkrementelle forbedringer med udgangspunkt i evaluering af eksisterende processer, fx. Via lean / Forbedrede handoffs Outside-in: Inspiration til kreative løsninger fra lignende organisationer

3. Case 1 Udvikling af forretningsarkitektur i en service organisation 3

4. Background • GSS was a division in the “Group Operations” organisation with about 300 employees in the following units: • PPM – Premises and Property (physical workspace, desks, chairs, building maintenance, etc) • ISaS – Internal services and support (canteen, cleaning, meeting rooms, switchboard, travel, etc) • Sourcing – supporting outsourcing and procurement throughout the organisation • COS – Office tools (mail, communicator, MS-office, etc) • GSS services were fragmented and didn’t have a “customer” perspective • GSS Target Picture 2013 was initiated in 2010 to set direction for the development of the services provided • Focus was on efficiency and effectiveness of the users, more than efficiency of GSS 4

5. Target Picture - Definition GSS Target Picture 2013: • A description of a target state for 2013 expressing the GSS vision as a set of service concepts - including objectives, KPI’s and measures - enabling creation of an implementation roadmap for reaching the defined target state A service conceptis a shared understanding of the service provided and received, which encapsulates information about the customer experience and the service outcome. A service concept summaryis a high level description (3-10 lines) of a service concept, indicating customer experience and outcome. 5

6. An example service concept – filled template 6

7. Input to target service concept definition Approach to ensure innovation: • Top-down from GSS unit guiding service principles and vision • Bottom-up from AS-IS services • Taking input from users and internal partners • Taking input from best practices and benchmarks 7

8. The Top-down approach Overall vision: “Great European bank, acknowledged for its people, creating superior value for customers and shareholders” Group Operations vision: “Becoming customer centric through innovation and productivity improvement” GSS vision: “We make it possible for our partners to concentrate on their core business” GSS Guiding principles: One GSS – no silos Demand driven Competent and service minded Time to market 8

9. The Bottom-up approach • All GSS employees participated via team-meetings to: • Describe As-Is situation • Set team targets • Suggest improvement • Templates and facilitation was provided from project team 9

10. Input from Users/internal partners • Team leaders and managers were encouraged to collect input from their “customers” • This was not coordinated/supported further by the project team 10

11. Benchmarks/best practices • Team leaders and managers were encouraged to investigate benchmarks and best practices from the industry • Project team provided inspiration, e.g. value disciplines: • Operational excellence • Streamlined processes • Cheapest price for specific quality • Example: Ikea • Product leadership • Product development • Bleeding edge products, little pricesensitivity • Example: Apple computer, Pixar • Customer intimacy • Customer interaction • Tailor made solutions • Example: Consultancy 11

12. The Result • About 20 service concepts • About 50 projects organised in 10 initiatives • Example service concept and resulting project: Employee Lifecycle Management: • Previously, a manager needed to contact 20+ units to get a new employee started (access cards, mobile, desk, PC, welcome flowers, …) • Service concept goal: one interface 12

13. Case 2Top-down: Udvikling af applikations arkitektur med udgangspunkt i forretnings strategien 13

14. The IT-strategy pitfall Each unit may have thought through their IT requirements. But an apparently well-aligned Business- and IT-strategy may in reality be a collection of individual functional strategies with no coordinated prioritisation 14 Source: CSC Perspectives – Business and I/T fusion

15. GSS business strategies and priorities The GSS IT strategy is driven by the GSS business strategy as defined by the GSS Target Picture 2013 and its derived business development initiatives Thus, from the business side the GSS IT strategy takes input from: • GSS vision and Guiding Principles • GSS Target Picture 2013 Service Concepts • GSS Target Picture Initiatives (business development projects) 15

16. Application Quality Good Fair Poor Missing IT-Strategy tools - Fusion Tree (strategic view partly filled in) Required BusinessCapabilities Required ITCapabilities Service concepts Guiding service principles Applications Technology/Architecture Meeting facill & hospitality Organisation One GSS – no silos Travel Physical deliveries Vison Demand driven We help our partners concentrate on their core business Switchboard Buy and payment Competent & service mnd Catering Archive GSS SPOC Time to market … As-Is IT View Right-to-Left Strategic View Left-to-Right 16

17. IT-Strategy tools - Application portfolio assessment matrix 4R Model High Reassess Can we increase business value? Renew How to maintain this condition? Technical Condition Retire Don’t Bother Redevelop What is the most cost-effective approach ? Low LOW Low High Business Value LOW 17 Source: CSC Perspectives – Business and I/T fusion

18. IT-Strategy tools- Value disciplines impact on IT Alignment of the IT operating model with the enterprise’s value discipline is key to effectively exploiting the power of information technology 18

19. Case 3Bottom-up: NNCR - Process optimering på tværs af en stor kompleks organisation 19

20. New Normal Cost Reduction (NNCR) 2013 initiative - Objectives • Identify significant Group-wide cost reductions with full impact in 2013, by end of March 2012. • Cost reductions must be on top of reductions included in Q4.2011 RFF, and each Business Area & Group Function (BA/GF) includes the additional cost reductions in their RFF as part of the Q1.2012 RFF process. 20

21. A non-compensation cost baseline constituted a fact-based guide for discussions Total 2010 Other expenses1 1,906EURm C A B D E F Facility services Premises Personnel services & ben. IT Marketing & Information Professional services 131EURm 763EURm 193EURm 308EURm 233EURm 278EURm Postal services Rent Production, NP (IBM) Information systems Business & Project cons. Travel B1 D1 E1 F1 C1 A1 Office material & expenses Repair & Maintenance Production, Other Advertising & Marketing Transportation of cash Training & Conferences E2 C2 D2 F2 B2 A2 Cleaning Meetings & Events Utilities IT consultants Temporary employees Leased cars A3 E3 D3 F3 C3 B3 Catering Other3 Software Sponsorship Financial supervision7 Other5 D4 B4 E4 F4 C4 A4 Communication Membership fees Insurance Security D5 E5 F5 A5 Other4 Gifts & Donations Auditing & accounting Newspapers & Literature D6 E6 F6 A6 Market research Collection & Collateral Waste handling2 E7 F7 A7 Other6 Legal advice E8 F8 Other admin8 F9 Other admin, Hypotek Sweden F10 21

22. Scope and structure of NNCR discussions • All non-FTE costs are in scope: • BA costs that are managed by GO • Direct BA costs 1 2 GO managed costs Direct BA costs A Premises 1 B 2 Facility Services C Personnel Services & Benefits Discussion structured around a number of defined cost categories D IT E Marketing & Information F Professional Services 22

23. Assessment framework based on 7 parameters Attractiveness score for each parameter If possible, actual savings potential range – if not then; If possible,, investments required – if not then; If possible, actual time at which project is complete 1. Savings potential defined as 2013 actual earning impact 23

24. Detailed idea-to-business-case process for each ideaOverview of key objectives, activities and deliverables January 17 (Latest) • End of February • (Latest) March 10 Consoli-dation Solution development Mobilise 2 weeks 3 weeks 1 week Each idea A B C Transparency and fact base (as-is) Proposal generation Substantiate and prioritise Decide and Approve Teaming and Planning • To identify and prioritize ideas for which to completea high level business plan • Set team for chosen projects • Ensure team alignment on idea scope, ambition and key activities • To establish a detailed overview of spend and cost drivers • Substantiate preliminary savings estimates • To analyze possible solutions and estimate savings potential of those solutions • Prioritize list of opportunities/scenarios • Draft High level Business Case • To ensure buy-in fromall relevant stakeholdersand formal approval from sponsors • Consolidate all approved initiatives and prepare GEM presentation Objectives • Outlining cost structure through spend cube • Idea generation workshops to identify potential ideas • Preliminary deep dives in relevant cost categories • Evaluate Nordea performance via external BCG benchmarks • Workshop with key stakeholders to evaluate gross list of ideas • Confirm required resources have been allocated to team • Prepare and conductkick-off workshop with project team • Detailed planning of key activities for solution development phase • Establish data requirements to create transparency and send data request • Analyze relevant cost categories to identify • Cost receivers/users • Primary cost drivers • Meeting to understand base line and relevant drivers • When relevant • Conduct supply market • analysis • Collect and review • contracts • Conduct internal benchmarks • Collect user requirements and suggestions (interviews) • Develop gross list of potential savings scenarios • Assess saving scenarios on • Impact • Investment • Timing • Further substantiate the quantification of savings potential by BA • Conduct prioritisation workshop and decide on most feasible solution • Determine RFF implications for relevant BAs • Write High-Level Business Case • Conduct approval meeting with all decision making stakeholders • Implement final iterations • to business case • Task Force to consolidate portfolio of business cases into final proposal for GEM • Task Force to drive preparation of GEM update materials • Alignment process with BAs and within Task Force • Receive sign-off of GEM update materials by Torsten H. Jorgensen A1 A4 B1 B4 C1 A2 B2 A5 C2 B5 B3 A3 B6 A6 Activities B7 5 6 1 2 3 4 • Idea assessment • Team structure and governance • Description • Idea attractiveness • Activity plan for solution development phase • Detailed fact base incl. types, receivers, and drivers of costs. • Validated idea assessment including target cost savings split per impacted BA • Gross list of savings scenarios assessed on impact, investment and timing • Draft High Level Business Case • GEM presentation of recommended savings initiatives • Final High-level Business Case Key Deliverables (Latest) (Latest) (Latest) (Latest) (Latest) (Latest) February 15 January 17 January 24 January 31 February 8 February29 Deadline Key deliverable (see next page) x Deliverable to be sent to Task Force mailbox (costideas@nordea.com) at noon on delivery date – Signed off by Sponsor 24

25. The result About 10 initiatives yielding significant yearly savings across the organisation 25