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 Strategic Information Systems Plan

THE COMPANY

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Contents


Introduction

This report documents planning activity for the KEMI Integrated Management Information Systems (KIMIS) project at Kwangju Bank (KJB) in the city of Kwangju, South Korea. The report documents the Strategic Information Systems Plan (SISP) for the KJB Strategic Data Model.

Participating in the development of the SISP were staff from KEMI (Kwangjubank Economics & Management Institute - a subsidiary of KJB). Facilitating the development was Clive Finkelstein (Chief Scientist of Visible Systems Corporation in USA and also Managing Director of Visible Systems Australia Pty Ltd in Melbourne, Australia - formerly Information Engineering Services Pty Ltd, IES). Consultants from MBS Corporation in Seoul provided data modelling and project management support to the project. MBS Corporation (Micro Banking Systems Corporation) is a Korean Distributor of Visible.

KEMI staff defined the strategic data model in a facilitated session with Clive Finkelstein, at Kwangju Bank on August 19, 1997. The Strategic Model was reviewed and refined where necessary by KJB managers and business experts in a Review Session on August 21 - 22, 1997. The Strategic Model identifies information needed by KJB managers to achieve the strategic goals and objectives in the KJB Strategic Plan as well as strategies and key performance indicators (KPIs).

Like many large organisations, KJB has massive amounts of operational data. While this data provides detail at specific points in time, much of the information that managers need for decision-making must be summarised from this operational data as aggregates: analyzed from many dimensions; and also as change trends examined over time. KJB databases and systems are designed to deliver this information to management.

A town plan is the plan for construction of a city. So also a Strategic Model is the "town plan" needed for construction of KJB databases and systems. For suburbs that are needed first, the major roads in the town plan are designed in detail and are constructed first so that initial buildings and houses can be built. Similarly for information that managers need, first, the data from which that information is derived must be defined in detail at the tactical or middle management levels. As the layout of streets in a suburb is documented using a street map and a street directory, so also data definitions are documented using a data map and a data directory, called a data model.

When streets are in place, construction can begin (using available raw materials) of buildings that will be occupied first. So also, once detail data has been documented in data models for priority tactical areas, the source of that data must be determined. This data is raw material for derivation of the information needed by management.

Some data is presently stored in the existing KJB operational databases. Other data may only exist in databases outside KJB. Once located, that data must be processed: so transforming the raw data into the information needed by management - analogous to constructing a building. As data changes over time, this processing is carried out at regular intervals. The information that is derived from this regular processing can be stored on a historical basis in a KJB Information Warehouse. This is discussed briefly below and in more detail later in this SISP.

An Information Warehouse enables operational data to be examined and analyzed historically from many different perspectives. This is called "multi-dimensional analysis". For example, an Information Warehouse enables factors contributing to the profitability of a Branch to be analyzed using software packages that carry out OnLine Analytical Processing (OLAP). Operational data, summarized in an Information Warehouse, can also be analyzed historically using Executive Information Systems (EIS), Decision Support Systems (DSS) and Decision Early Warning Systems (DEWS). An Information Warehouse can be developed from the KJB Strategic Model. This warehouse can be used to analyze KJB operational databases so that time-dependent trends can be determined from different perspectives such as region, product, type of customer.

As a street directory enables people to find their way about the city, so a "Repository" is a directory of information in the KJB databases and systems. It contains "meta-data" (data about data) that helps managers find information they need. The Strategic Model documented in this SISP report, together with more detailed data models still to be developed at the tactical level, provide the meta-data for the KJB Repository.

Benefits of KJB Databases and Systems

Databases and systems developed from the KJB Strategic Model have the following purpose and benefits for Kwangju Bank:

    For Business Efficiency

  • A framework for provision of timely and accurate information: accessed, manipulated and presented in many different ways to support the changing requirements of business.
  • A directory of information defining the meaning of data, its current and historical context, and the relationship of that data to other data.
  • Data integration to remove data inconsistencies: reducing situations where regions and branches maintain different versions of the same data or depend on data distribution from head office. Data distribution can fail, or locations can update data at different times.
  • An Information Warehouse that offers ease of use in obtaining information from operational data bases, where that is currently very difficult to obtain.

    With an Information Warehouse

  • Reduction of inflexible, hardcopy reports that are not responsive to business needs.
  • A saving in ad-hoc programming costs and time: desktop tools enable managers and their staff to obtain information without having to wait for IT resources to perform the work.
  • Instant access to data to satisfy immediate information needs of management, so removing the delays caused by multiple interactions between managers and IT staff - with intrinsic possibilities for misunderstanding.
  • Timeliness: delays in access to information incur considerable costs for the Bank - due to an inability to respond promptly, and wasted resources, both human and material.
  • EIS, DSS, OLAP and DEWS Capabilities: sophisticated end user tools for user friendly access - with a capability to "drill down" through different levels of data summarization and aggregation in an Information Warehouse, from the big picture to fine detail. A manager can examine the result of an information request and decide to seek additional information, which can then be provided immediately.
  • Trend analysis: the opportunity to examine trends over time and respond where needed to achieve outcomes.
  • "What if" scenarios: the ability to create hypothetical situations and assess their affect on the Bank. For example, "if manpower in an area was to change in a defined way, how would this affect costs and product delivery?"

KJB Strategic Plan

The KJB Strategic Plan was used as a catalyst to identify information needed by management to achieve goals, objectives and key performance indicators detailed in those plans. KEMI staff initially examined this plan in the facilitated session on August 19, 1997. The session focused first on the Mission, Vision, Direction, Strengths, Weaknesses, Opportunities and Threats (SWOTs), Goals and Objectives in the Strategic Plan. These are listed in Figure 1 and are discussed in the following pages.

Kwangju Bank Strategic Plan
All Statements in The Entire Model
Tue Aug 26 12:43:23 1997

Planning Statement Report

Page 1

div.gif (3429 bytes)

Statement: A - MISSION : HARMONY OF LIFE AND FINANCE
Category: Mission
Text:
  • Contribute to the development of regional economy and to the affluent life of customers and employees with progressive banking activities.
Statement: B - VISION
Category: Vision
Text:
  • KJB group - Integrated finance group leading the information culture
  • KJB - A regional financial nucleus expanding worldwide
  • An integrated financial institution leading the banking culture of daily life
  • A human-first bank realizing the dreams of all Kwang Eun group
Statement: C - KJB STRENGTH
Category: Strength
Text:
  • Relatively young people and quick decisions
  • Excellent information Infrastructure and technologies
  • Good community customers with the loyalty to KJB and strong branch networks in the community
  • Many experiences pursuing various innovations
  • Employees with the same identity
  • Relatively flexible organization
Statement: D - KJB WEAKNESS
Category: Weakness
Text:
  • Weak Economy in the main business regions
  • => not good debt structure and not good asset structure
  • Relatively small size bank
  • Short of business experts with knowledge and skills => In every business area which demands special knowledge such as funds management, international banking, marketing, product development, risk management, etc
  • Short of managers with good leaderships and knowledge
  • Not enough endeavours to utilize IT strategically
  • Not good image in service quality
  • Difficulties in hiring talented persons
  • Weak capability of consolidating various innovations
Statement: E - OPPORTUNITIES
Category: Opportunity
Text:
  • Deregulation enables KJB to advance into new market, introducing new products and new business
  • Speeding up information around the world allows KJB to do business with no boundary limit
    Internationalization and openness bring new overseas business opportunities
  • Potential possibility of the development of the regional economy
  • => Opportunities of SOC construction.
  • Competitors aggressively advancing into KJB's main business regions
Statement: F - THREATS
Category: Threat
Text:
  • Rate liberalisation causes KJB to endure pain if the spread margin between loan rate and deposit rate falls precipitously
  • Deregulation makes new competitors equipped with new products and high technologies emerge in the market
  • New competitors through Internet

       

Statement: G - BROAD PRESENCE
Category: Goal
Text:
  • (Phase I) : Build up strong business basis and sound health
  • => Building up strong business networks in the South West region and infrastructure for electronic banking(internet)
  • (Phase II) : Do business with no boundary limit through electronic banking
Statement: H - INFORMATION BUSINESS
Category: Goal
Text:
  • (Phase I) : Place KJB's information structure on a firm base to share Enterprise wide knowledge
  • (Phase II) : Lead information industry specially in banking areas
Statement: I - GLOBAL BANKING
Category: Goal
Text:
  • (Phase I) : Establish a basis for Global banking
  • => Strengthen the capability of international banking business
  • (Expand overseas branches and increase foreign currency deposits and funds)
  • (Phase II) : Expand international banking services inside and outside the bank
Statement: J - SCOPE DIVERSIFICATION
Category: Goal
Text:
  • (Phase I) : Build up sound and healthy management for diversification
  • => Select conservatively approaching way to diversification responding to the change of customers needs as considering KJB's weak capability
  • (Phase II) : Realise Retail Universal Banking
Statement: K - STRATEGIC MANAGEMENT
Category: Goal
Text:
  • (Phase I) : Build up systems for strategic management
  • => Acquire excellent quality human power, Proper Organization, Risk Management System
  • (Phase II) : Realise effective Strategic Management

Figure 1: KJB Major Strategic Planning Statements

The major planning statements in Figure 1, and others from the KJB Strategic Plan, were all entered into Visible Advantage, an Integrated Computer Aided Software Engineering (I-CASE) software package that provides automated support for business-driven Information Engineering (IE) - the methodology used to develop the Strategic Model and this SISP. The resulting planning report is documented in Appendix 3 - Planning Statement Report. The Goals and Objectives Matrices later in this document include matrices showing areas of the Bank responsible for each planning statement (see Figure 4 and Figure 5).

Understanding Business-Driven Enterprise Engineering

The Need for Feedback to Management

Strategic Plans, to be effective, must be implemented at all management levels throughout an organisation. Some clarification may be needed so that staff responsible for implementing plans at a lower level clearly understands what management requires of them. Alternatives, which arise during this implementation, may also be of interest to management at a higher level. Figure 2 shows that feedback should be provided for management review and refinement where appropriate.

Figure 2 also shows that business-planning methods help staff develop detailed plans at lower levels. Business-driven data modelling methods then help them to identify their information needs, based on those developed plans. This provides immediate feedback that can suggest refinements to developed plans that management feel are needed. Identified information will later be included in the Information Warehouse and data from which it is derived will be included in the KJB databases and systems.

Figure 2 : Strategic Planning Feedback from Implementation

This feedback, the refinement of plans and identification of information needs is carried out in tactical-level projects discussed later. This approach will:

  • Result in databases and systems that will deliver management information at all levels of KJB, to help managers carry out their responsibilities and achieve their defined plans.
  • Identify information that managers will need from the KJB databases and systems, and the data to be stored in the Information Warehouse where it will be used to derive that information.
  • Provide invaluable feedback to management to clarify the wording of planning statements where needed, so those statements are correctly interpreted and implemented.

The Mission in Figure 1 is a foundation for all KJB activities. Its focus is: "Contribute to the development of regional economy and to the affluent life of our customers and employees with progressive banking activities". We will use statements in Figure 1 to illustrate a high-level representation of the Strategic Model, as shown in Figure 3.

Data and Information for Decision-Making

The CASE tool Visible Advantage (previously called IE: Advantage) was used to capture details of the information needed by managers for decision-making and the data from which it is derived, as shown in Figure 3. This information and data are represented in data models that will later be used to build KJB databases and systems and the Information Warehouse that will provide the required information to management. For example, Figure 3 is a graphical Strategic Data Map for Marketing within the Strategic Model. It shows marketing data needed based on the KJB Strategic Plans. It also contains additional data defined from other strategic statements in Figure 1. This will be discussed later, in Representing Strategic Plans in a Strategic Data Model.

Figure 3 : Strategic Data Map for Marketing within the KJB Strategic Model

Goals and Objectives Matrices

The Strategic Plan documents the KJB Mission, Goals and Objectives for Kwangju Bank. The assignment of Goals to Functions in the CASE tool is displayed in a Statement - Model View Matrix, partly illustrated in Figure 4.

Figure 4 : Achievement of Goals Involves Many Areas of the Bank

The Statement - Model View Matrix in Figure 4 lists each statement on a separate row, showing functions responsible for those statements by ticks in the relevant Model View columns. Figure 4 shows that the Goal: G - Broad Presence applies to many functions, as illustrated by ticks in relevant Function columns.

Objectives for functions are shown in Figure 5. This Statement - Model View Matrix lists each objective on separate rows with ticks in the relevant Function columns. Figure 5 shows that the goal: G- Broad Presence has four objectives, numbered G1 - G4. Objective: G3 - Build up Total Marketing System applies to Marketing and Planning & Resource. Additional ticks show statements that require coordination with other functions in each relevant Function column.

This linking of objectives to functions clearly shows, for each row, all of the functions involved in achieving that objective. And by reading down each Function column all of the goals and objectives that each function supports are apparent. The full Statement - Model View Matrix of Goals and Objectives is included in Appendix 4 - Goals and Objectives by Function.

Figure 5 : Achievement of Objectives Requires Much Coordination

Representing Strategic Plans in a Strategic Data Model

Figure 3 showed that strategic planning statements are represented by a high-level strategic data map of the data and information needed by management in support of those plans. This has been repeated as Figure 6 for easy reference in the following discussion; it is part of the Strategic Data Model developed in the facilitated session.

Data Map Notation

Figure 6 shows a highlighted box: MARKET NEED. This represents Market Needs data and is called a "data entity" that may later be implemented as a database table in the KJB databases and systems. The lines joining this data entity to other entities show a relationship exists between each pair of joined entities. This relationship line is called an "association".

Business rules that have been defined for the effective and efficient operation of KJB are shown schematically as symbols on association lines in the data map. The meanings of these symbols are discussed next. Narrative statements that clarify the correct application of each rule should also be used to define business rules. These rules will later be incorporated into KJB databases and systems so managers can readily identify the information they need to assess achievement of goals and objectives.

figure6.gif (19263 bytes)

Figure 6 : Strategic Data Map for Marketing in the Strategic Model

The symbols on each end of an association line in Figure 6 provide information about the association. An association with a "crows foot" (---<) indicates many, while the absence of a crows foot indicates one. These are called the association degree or cardinality. A zero on the line (--0-) indicates optional and is interpreted as "may"; a vertical bar on the line (--|-) indicates mandatory and is interpreted as "must". These are called the association nature. A third association nature uses a zero and a vertical bar (--0|-) together to represent optional becoming mandatory. This indicates time-dependency and is interpreted as "will".

When the KJB Mission was discussed in the facilitated session, it was agreed that a market must have at least one (or many) needs for products from KJB, while many markets may have a need. This is shown diagrammatically in a data map as follows:

wpe1.gif (1388 bytes)

This is called a many to many association between MARKET and NEED. It is difficult from this to determine which markets have what needs. An intermediate entity (an "intersecting" entity) is used to identify specific needs for each market, as shown next.

wpe2.gif (1598 bytes)

The line between MARKET and MARKET NEED shows an association of mandatory one to mandatory many. This represents the business rule that a market must have a need for at least one (or many) of the products that are provided by KJB, to be a market of interest to KJB. However the association between NEED and MARKET NEED is mandatory one to optional many. This indicates that zero, one or many markets may have a need.

Furthermore, an intersecting entity (derived by decomposing a many to many association) is a high-level representation of a business activity or business process. MARKET NEED thus represents the business activity: Market Needs Analysis. A strategic map developed in this way therefore can be used to identify not only fundamental data used by KJB, but also indicates major KJB business activities.

Figure 7 : Market Needs are related to the Customer Satisfaction Index (CSI)

For example, to understand Market Needs, KJB must have information about its markets and their needs - shown as lines joining MARKET NEED to MARKET and also to NEED in the data map. These related entities are shown highlighted in Figure 7. Market Needs are also related to time and customer satisfaction - shown by association lines to PERIOD and to CSI (Customer Satisfaction Index) - which are also highlighted in Figure 7. At a strategic level an association represents: reporting paths, communication paths, management controls, audit controls or coordination required to manage the operation of areas of the business that refer to data in the entities joined by the association.

Data Supporting Planning Statements

The planning statements in the KJB Strategic Plan were used to identify major data entities and associations in the strategic data map as discussed above. Appendix 3: Planning Statement Report shows the data entities relevant to each planning statement listed under the statements as "Data Links". This clearly indicates to management the data relevant to each planning statement from which information is derived; it provides design input to develop the KJB databases and systems. These Data Links are shown (in part) in Figure 8, for the KJB Mission.

Data links in upper case in Figure 8 (such as MARKET and MARKET NEED) represent the data entities that provide information to support the KJB Mission. These entities will later be implemented either as KJB databases and systems or a KJB Information Warehouse to provide required information.

Figure 8 : Planning Dictionary shows Data Links supporting Mission. MARKET NEED in Data Dictionary has Statement Links to Mission and other Statements

Figure 8 also shows the data entity MARKET NEED with corresponding Statement Links including that for A - KJB Mission. It shows those planning statements that can be examined to determine performance or other data that may be held in the data entity to provide required management information.

Measurement of Objectives and Performance Indicators

The Objectives in the Strategic Plan (see G1-G4 in Figure 5) enable high-level assessment by KJB (and others) of its effectiveness in achieving the Mission. However these Objectives are expressed qualitatively at present: they are not yet directly measurable in this form. Any such measurement would be indirect, by aggregating achievement of quantitative key performance indicators (KPIs) at lower business levels. This Objective assessment should be clearly stated in the Strategic Plan and also at lower business levels. Clear statements in the Strategic Plan that indicate how Objective achievements and KPIs are measured were not apparent.

Objective statements in the Strategic Plan should ideally be expressed in terms that can be quantified. Further refinement of the Strategic Plans would allow direct assessment of Objectives from key performance indicators in different Functions of the Bank.

Any data links listed in Figure 8 in lower case are data attributes; later to be implemented as columns in the data tables that implement those data entities. Attributes provide the detailed information that is required by management from the KJB databases and systems. Objectives or KPIs are expressed quantitatively (rather than qualitatively). They must be measurable and so are represented as attributes - used to measure the achievement of the Objectives or KPIs.

To give an example, an attribute "percent market profit this period" can be included in MARKET NEED to measure the achievement of a "Market Profitability" KPI.

Using Objectives and KPIs, attributes that measure performance or that provide additional information to management can be defined in the Strategic Model. They require refinement through data modelling at the Tactical level by business managers and staff who have expert knowledge of the Bank and its different functions. This tactical data modelling will identify data attributes that provide specific performance information that managers require.

Current Functions, Databases and Systems

Current KJB Functions

The KJB Strategic Plan sets directions for the future of the Bank. Data and information needed to support achievement of the Strategic Plan were identified in the Strategic Data Model, as discussed above. We will shortly see that the Strategic Model can be used to identify business activities that are also needed to support the Strategic Plan. But first, existing Business Functions in the Bank were identified as documented in Appendix 7. The activities in the Strategic Model will later be related to these functions in a Business Activity - Business Function Matrix.

Current KJB Databases and Systems

The Strategic Model, documented in detail in Appendix 1 - 6, will later be used to define more detailed data at the tactical and operational levels of the Bank. These tactical and operational data models will indicate the data and information needed for implementation of databases and systems that support the Strategic Plan at those levels. These data models will need to be compared with the data and information provided by current databases and systems that are used by the Bank. Much of the data required for the future would also be the same as data used today. However additional data and information may be needed to support Global Banking and other goals of the Bank, which are not required by current databases and systems.

Additionally, information that managers need to support achievement of the Strategic Plan is proposed to be provided by an Information Warehouse (IW), which would be implemented by the Bank as discussed later in this SISP Report. This Information Warehouse would be populated periodically by data from normal operations of the Bank, extracted from current databases and summarized for analysis by management.

To assist comparison against the tactical and operational data models as described above - and to identify source data that would need to be extracted and loaded into a KJB Information Warehouse - the current databases and systems will need to be documented in detail, and will later be described in Appendix 8 - 17.

Data models of the current databases will need to be developed by the Bank, using the technique of Reverse Engineering in conjunction with the Visible Advantage CASE tool. This is discussed further in the section documenting the KJB Information Warehouse.

KJB Model Views

Structure of Model View Hierarchy

An organisation as large as the Bank is very complex. The data models representing the Bank are also complex. To assist in managing these data models, the Strategic Model has been structured into a number of model views with a hierarchy structure which represents subsets of data and information of interest to the Bank. These model views are described as follows:

  • Marketing: Marketing-related information and an aggregate of its marketing-related business activities. Marketing comprises the following more detailed model views.
  • Market Management: Market segmentation, analysis of the needs of customers by each market, analysis of competitors by regions, marketing campaign and promotion activities, customer credit analysis, investigation and analysis of CSI.
  • Customer Management: Customer Management should be able to provide KJB with aggregate information needed for segmentation of customers and management of target customers (to help build marketing strategies). In addition and more importantly it should provide basic customer information needed for business activities such as sales, advisory service and promotion in the field.
  • Product Management: Information related to products, such as product development and management, and an aggregate of product-related business activities.
  • Branch Management: Information related to branch operation, such as branch planning and marketing and an aggregate of branch-related business activities.
  • Risk and Finance: Information related to risks, funds management, treasury, finance and cost and an aggregate of activities in these areas. Risk and Finance comprises the following more detailed model views.
  • Risk Management: Information required for risk analysis and management, and an aggregate of risk-related business activities.
  • Portfolio and Treasury Management: Activities managing funds, assessing performance of funds management and decision-making in funds and assets management.
  • Financial Management: Finance-related information such as budget, finance and accounts and an aggregate of financial activities.
  • Cost Management: Cost-related information such as product-cost, customer-cost, direct cost, indirect cost, standard cost, cost drivers and an aggregate of cost-related activities.
  • Planning and Resource: Information related to planning and performance, external factors and resources, and an aggregate of activities related to these areas.
  • Planning and Performance Management: Mid- and long-term management planning on a business sector basis according to performance measures, including information related to business planning such as strategic planning, market planning and performance measures, and an aggregate of business activities related to them.
  • External Factors Management: Activities analyzing external factor information that affect KJB strategies such as the economic index, money trends, interest rate, exchange rates, and providing external factor information.
  • Resource Management: Resource-related information addressing human, material and other resources and an aggregate of resource-related business activities.

This model view structure is shown in a Model View Hierarchy diagram, in Appendix 1.

What Model Views Imply

Each model view represents a subset of data of interest to the Bank. At this strategic level of definition, only major databases and activities have been identified. For example, the model view for Marketing Management includes data for Markets and Needs: represented by the data entities MARKET and NEED. It also includes data representing the Market Need Activity: as MARKET NEED. These are discussed further in Business Activities Identified from the Strategic Data Model.

Data and information representing markets, and needs of those markets, would also be included in a Marketing Data Mart in the Information Warehouse. A Marketing Data Mart is a focused subset of data, for analysis by Marketing Managers and staff within KJB. Executive Information Systems (EIS), Decision Support Systems (DSS) or Decision Early Warning Systems (DEWS) are used to carry out this analysis. Further analysis based on the techniques of Data Mining also use OnLine Analytical Processing (OLAP) systems.

At the tactical and operational levels, the MARKET and NEED entities will expand into more detail; they will eventually represent detailed Marketing and Needs Assessment databases. The MARKET NEED entity (for the Market Needs Activity) will also expand into more tactical and operational detail; it will represent tactical Market Needs Analysis Processes and operational Market Needs Analysis Systems.

Entity Contents of Each Model View

An entity may appear in one more than one model view, where the data in that view is of interest to many parts of the Bank. Each model view with an interest in an entity is listed under that entity in the Entity Report, included as Appendix 6. The Entity Report can be printed for The Entire Model (as shown in Appendix 6), or may be printed for one or a group of model views. For example, the Marketing Management model view can print an Entity Report that specifically includes only those entities within that model view. This enables managers and staff interested in the Marketing Management model view to focus only on data relevant to them, without needing to be aware of data used in other model views but of no interest to Marketing.

Over 200 entities were identified in the Strategic Model and documented in the Appendices. Each entity typically would later be implemented as a database table. The number of entities at this strategic level will expand to around 1,000 entities when the tactical and operational data models are fully defined. Managing this number of entities is very complex. Model views help to manage this complexity; they enable priority subsets of the Strategic Model to be extracted for more detailed tactical and operational data modelling, as priority projects. This is discussed next, in Projects Identified from the Strategic Model.


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