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Here’s How I Do Technical Solution Cost Planning at a High Level.
A methodical approach and practical guide to Business Architects in digital transformation initiatives
In this article, based on my experience, my aim is to provide high-level architectural guidance for solution cost planning to business architects responsible for the earlier phases of digital transformation initiatives. Business architects are capable of creating fundamental relationships and play critical roles by being a bridge between business and technical stakeholders.
Solution cost planning is one of the highest focus areas of digital transformation programs. Business stakeholders pay tremendous attention to solution cost as an investment hence they want to understand the return on their investment from the very beginning. They also expect the business architects to manage overall solution cost at least in the macro level design stage and provide costing guidance for the micro level designs.
The problem is the technical team members have little awareness and understanding of cost implications in these programs, as cost planning and management are not their forte. Only a few exceptional technical architects or specialists may have some cost awareness and understanding. Therefore, business architects are expected to fill an important solution cost planning and management gap for the feasibility of these complex programs.
Ironically, the traditional position descriptions that I reviewed don’t even mention the cost awareness requirements for business architects however, in reality, there is an expectation once they are assigned to the lead roles in these programs.
Therefore, while redefining the new roles and responsibilities of business architects in one of my recent publications, I created this stakeholder expectation and the actual requirement in the field. I elaborate on the key points in this article.
My experience reveals that as business architects leading and focusing on the successful progress of a digital transformation program, we must follow a proven methodical approach to manage the cost and contribute to the business solution viability and profitability.
Both a top-down and bottom-up approach must be applied depending on the needs. At the top tier, we see the business and IT processes, and at the bottom tier, we see IT infrastructure.
These two critical domains can independently be transformed using parallel activities. However, an integrated approach is essential as there can always be dependencies from multiple angles in both top-down and bottom-up approaches.
As business architects, we are not subject matter experts, and it is not possible to cover all domains. Therefore, we must closely work with multiple domain architects, solution architects, and infrastructure architects across the program.
In addition, we are expected to gather solution details and even specifications from subject matter experts to create an order of magnitude cost for a digital transformation initiative. This initial cost is critical for the senior executives to make a go or no go decision for the initiatives.
How can we deal with solution costs after initial approval?
Once a business organization has an approved transformation strategy, then we can refine the strategy and convert it to clear architectural and technical formats.
The strategy document is a critical artifact in bringing all parties and stakeholders on the same page. Then we can identify the critical dependencies among these domains based on the short-term, midterm, and long-term considerations.
By using the strategy and considering the dependencies, we can develop a high-level roadmap to inform the sponsoring executives. This roadmap can indicate the key outcomes, timelines, and a ballpark cost for the overall modernization and transformation activities. These indications initially can be at a very high level as there may be many factors affecting timelines, resources, and other associated cost items.
After setting the transformation roadmap, we need to make a comprehensive viability assessment considering the current state of the scoped initiatives, their indicative future state, and the strategies to reach the end state.
This viability assessment must include key risks, constraints, and dependencies. The viability assessment can be the most informative tool a lead business architect can provide to the sponsoring executives of the digital transformation program for them to make informed decisions for solution feasibility leading to successful business outcomes.
After review and approval of the viability assessment by the governing stakeholders, we delve into collecting the high-level requirements of the initiative based on the included domains.
These domains can be exhaustive and complex. Some key domains we may need to consider are business IT processes, business data, business applications, IT infrastructure, and IT service delivery. These domains can even be more complicated in global business organizations with the addition of geographical factors, such as adding multiple countries to the equation.
As dealing with the requirements of those domains can be daunting, we can delegate the requirements collection process to the domain, program, and solution architects, technical specialists, and business analysts based on their skill set relevant to the types of requirements. I provided guidance on the critical technical roles in the attached article.
In this phase, the role of the business architect is to coordinate and facilitate the requirements management team, which can consist of multiple solution architects, technical specialists, and business analysts.
After requirements are collected and analyzed at a reasonable amount, the next important activity is to prioritize the requirements based on business impact. We need to develop criteria to prioritize the requirements based on factors depicted in the strategy and business roadmap documents, as well as the financial and business priorities set by the sponsoring executives.
There are many more cost considerations that we need to cover. However, I want to emphasize the service level agreements (SLAs) as one of the fundamental cost factors in these programs. Let me briefly explain.
Service downtime costs can be very high based on agreed rates and cause excessive penalties when accumulated for service-level breaches by service-providing business organizations. Service Level breaches can also have a strategic adverse effect on an organization’s products, services, and overall business performance.
Downtime in business services or defects in products can result in poor client satisfaction. If we also look at from the consumers’ perspectives, they lose business due to service downtime. It is a lose-lose scenario even though the consumer organizations are compensated with SLA penalties paid by the service providers.
As business architects, we need to pay attention to the SLAs from the nascent stages of the solution lifecycle, starting from the business architecture framework phase. More information on the business architecture framework can be obtained from the attached article.
The higher the quality of the architectural guiding principles, the easier it can be for SLAs to meet when the digital transformation solutions are in production and the operational state. The rigor for quality in each phase can positively contribute to deal with SLA risks.
We can take some architectural measures and provide guidance. For example, we can advise the solution architects that some of the key considerations to address SLA issues could be autonomous condition monitoring and remote maintenance for the devices or systems in remote locations.
For example, sending a technician to a remote location may take several hours of travel. However, fixing those units can be done remotely in minutes. One simple yet powerful example in my projects that we applied was rebooting servers remotely. This simple task saved us a considerable amount of time and money. It also helped us prevent SLA penalties associated with the services.
There are specialist solutions regarding these trending techniques. It can be useful to recommend and assign automation and standardization specialists for the design of these unique features in our programs.
Service level costs are crucial for business organizations. Let’s put this into a practical perspective. One of the biggest fears of the business executives is the adverse impact of poor performance and availability problems damaging their client satisfaction and compromising business revenues in their transformed products and services.
To address the business risks associated with this valid business concern, as business architects, we need to pay special attention to SLA strategy, planning, design, and implementation in an integrated way in our overall business architecture framework. Proactive and effective SLA management is one of the key areas where the digital and financial intelligence of business architects make real differences in cost planning and management.
Conclusions
Following a methodical, transparent, and pragmatic approach, we can be on top of risks and issues affecting cost hence we can contribute to the productive control of cost at the architectural level.
Sponsoring executives’ highest expectations from business architects are to help reduce cost and increase the financial viability of the digital transformation initiative.
To achieve this business goal and make our sponsors happy, we need to introduce a new way of thinking in the form of continuous and collaborative innovation. To understand the importance and the leadership approach to innovation, I shared my experience in the following articles.
To learn more about architecting and designing digital transformation solutions, you may check the following comprehensive article.
As business architects, we are crucial leaders in digital transformation programs. For more information on the expected and required characteristics of technical leaders in digital transformation programs, you might review the attached article.
In my next articles, I plan to provide guidance on creating effective and innovative solution cost models with an accompanying bill of materials for digital transformation initiatives.
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