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Solvency II regulatory initiative aims to normalize the way Insurance companies will measure risks, will manage their portfolio in accordance and will report on their record to control authority.
Such a big change may lead companies to reorganize their steering processes : some driven by internal momentum willing to get market differentiators, some others driven mainly by regulatory constraint. Whatever the vision, this will end up with major business transformations and, for some companies, with industry recombination due to portfolios optimization.

Hopefully, most of companies have launched transformation programs and, as Deloitte reports in its 2011 survey, more than 52% of UK companies had reached implementation phase by 2011 with 75% among big companies. Moreover the same report shows that budgets are expected to be contained between 1,2m and 12m euros, larger amounts being intended only for biggest organizations.

But, if boards seem to be aware of Solvency II new responsibilities and opportunities, projects and programs still undergo uncertainties and questions :

• on capital calculation methods which still have to be tuned and for some of them fullly specified
• on data which have to be collected, processed, checked and validated for each calculation method
• on organization which have to get responsibilities of subprocesses and define how they intend to performe them
• on management which have to prepare people and to request investment for resources

Finally, companies undergo 2 opposing forces : strong dependancies between Solvency II aspects and fragmentation forces coming from solving approach which have been selected to deal with complexities : technical (actuary, computing, business,…) and social (actors, governance, influence,…). Technical fragmentation comes from necessity to adopt partial analytical approach. Social fragmentation comes from business mindset, culture, influence competition.

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CIOs don’t need to read any comprehensive Chaos Manor report to know that project deliveries come always in late and are never or rarely in advance. It is like flights or train travels, things always happen in such way.  They undergo asymmetric events. If we try to get measures of it, we could find that when projects portfolio undergo 2 months delay in average on delivery planned time, there is no or few chance any project will be above 10 months delay, but real chance to have 30 above 2 months for hundred projects portfolio.

IT budgets always increase year after year. It is their fate since new projects increase IS functions and, consequently, yearly maintenance. To cope with this situation, CIOs have settled portfolio management process:they assess projects from several points of view -technical, business, risks, strategy…- and make priorities. It results in postponing low prority projects…

After a while, postponed projects pile up like sand and become high priority. So, IT budgets contain also low priority projects which have become high prority for budget year.

Finally, projects portfolio is viewed by Business units as postponing facility on behalf of IT Division. No matter Business units are main projects issuers who make IT budget growing. Moreover they use to complain for additional IT costs though they are not accountable for expected gains which projects business cases have set under their responsibility.

When a project is delayed, costs usually increase in proportion of the time. So current IT capital expenditure budget is also made of slipped projects pieces as current IT operations expenditure budget still contains projects slipped since they have already rolled out platforms.

As current IT budget is flood of slipped past projects, less and less room remains for new ones. Negotiations are hard. Pure IT projects are scrutinized and often postponed if they have not a strong costs saving business case. So are pieces around Business projects that not seem to be required to Business even though IT has stated they are highly desirable.

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Most of enterprises expect from their IT Division to develop and maintain information and communications infrastructure which includes networking and telecommunications, desktop computing, business management information systems, systems for technical information and computer security. This is not the less classical in governance landscape. Then, IT Divisions have gathered excellent engineers, among them architects, who continuously arrange technology for the best of Business people. When business is looking after better machines to manufacture quickly engine parts or better systems to conduct more effectively business cases, it is supported by an IT Division able to deal with all technical questions. All seem to be fine for the best… except that during the pas ten years we crossed the road little by little.

Though business is now looking after whole plants which would be able to manufacture several type of products or whole systems which may be used for different types of business cases, investment choice is conducted the same way it was when we were on the other side of the road. Business people relying on its business background try to figure out how a whole plant should work and forward technical issues to engineers and IT Divisions. Would you entrust the design of a business building to business people ? You have the risk to get a warehouse with a row of tables and not much heating nor air conditioning except for exectives. I am not kidding, I really saw it in a high tech company.

By now, for such a design, it is usual to hire architects for this job, since everybody knows that people are more effective in an environment build for them, not only considering the job, but considering that they spend a fair part of their life doing the job. Even plants are arranged specifically around people doing their job, which contribute to high productivity and high quality. This is the result of a mix of comprehensive manufacturing knowledge, social psychology, building knowledge, business understanding, security all things which don’t fit in one head only. Architecure is the field of knowledge which gather input of all these fields to find effective solutions for buildings.

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• Most of big french companies front-office are machines : internet services, interactive vocal responders. And when it is not automated, call center operators are difficult to reach, they have not the good level of knowledge to answer customers questions, and customers have still to pay through call  taxation. In other cases, delivery is done  by employees or subcontractors who are not deemed nor able to endorse company point of view.
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• Trade off is on one hand rising the number of services offered to customers and on the other mitigating front end costs. Then, all operations are executed processes unless a grain of sand requires a human actor to fix a little unattended situtaion which may become pain in the neck for a customer. (cf comte bougainville conference)
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• This situation is often encountered with telecom operators, railway operators and in some respect flight companies.
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Most of CIOs and managers see as an achievement to increase the competences of their organisation. They have better chance to outperform their goals and are stronger to withstanding the setbacks. Moreover, the collaborators who crossed a gap, improve their loyalty to them and to the company. They lower they attrition rate.

Yet, with architecture and enterprise architecture, you may be surprised. Although you have trained all your architects, you may not quicken the pace of changes in your information system architecture. This is because architects are doing only a small part of the architecture, main design and decisions are done by Project managers. Some companies have even coined the name “Technical Project managers” to promote architects to management position. This means that if you have invested to roll-out a framework like TOGAF among your architects, you may likely miss your ROI.

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Don’t we all want to implement straight and rapid solutions to Business problems ? Not only because of the products time to market, but also, because it improves our own visibility on value we bring internally to our companies. We spent a lot reading, taping tweets, looking social medias, talking with suppliers, attending conferences as we expect to find good ideas for us. If we feel to have caught one, we try to set it next to an old one to see how they fit just like a lego game. Often it does not fit. Then we store the idea for a later stage when we will find a new one which will realise the fitting.

As soon as it fits, we make a business case and start to enlist a sponsor to what it promise to be a breakthrough project for our company. Starting from now, no doubt that we are enough experienced to lead the project to a successful achievement, otherwise it would be another story.

Reaching the point where a set of ideas makes up a breakthrough business solution, is indeed very hard for plenty of reasons studied by management researchers. According to the project promise, some may accept an imperfect fit in comparison with benefits, all things which will require people to make the bridge.
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Since IEEE was interested by requirements engineering and publish the following definition in its IEEE Std 610.12.-1990 : “A requirement is: (1) A condition or capability needed by a user to solve a problem or achieve an objective (2) A condition or capability that must be met or possessed by a system or system component to satisfy a contract, standard, or other formally imposed documents. (3) A documented representation of a condition or capability as in (1) or (2).

RUP and other software development approach use this definition.

IIBA in its BABOK 2.0 take a short circuit and make the following definition : a requirement (1) A condition or capability needed by a stakeholder to solve a problem or achieve an objective.
(2) A condition or capability that must be met or possessed by a system or system component to satisfy a contract, standard, specification, or other formally imposed documents.
(3) A documented representation of a condition or capability as in (1) or (2).

(1) is Business and organisational requirements while (2) is solution requirement.

For BABOK 2.0 (1) is splitted in Business requirements which categorize project goals within an organisation and stakeholder requirements  which categorize particular stakeholder needs. (2) are splitted in functional and non functional requirements.

It is astonishing how IIBA has ignored Enterprise Architecture initiative which aims at renewing how to manage requirements lifecycle in an enterprise transformation.

But, otherwise, requirements remains collected by all models we know since time immemorial : IDEF0, SADT, UML, BPMN,… with some refinements on non functional requirements.

Then what have we got on the play mat ?
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In the current economic context, although the IMF announces that recovery have started, the companies should not weaken and continue the effort of adaptation. As I had shown in the posts “Is it time to revise his strategic planning?” and (currently in French) “Qui croit qu’après la crise, il y aura un retour à la normale ?”,  giving the objective to belong to the group of survivors is not enough, it is necessary that the companies are prepared with the resumption of their activity and being able to provide the capacity in accordance.  That still required and requires, with each one of them, a great effort of transformation, more especially as the recovery will be done in a context of business renovated, because customers and suppliers are changing their behavior. A new place will have to be found, an example is the automotive industry which evolves with forced march to electric vehicles, for being poised to answer the challenges of the international regulation and customers requests of respectful industrial products for environment.
In this context, it is astonishing of reading, in the analyzes of Gartner on Architecture Enterprise (AE), that the quality of the work of the architects was not sufficient to show and articulate the value of the AE with other levers of change. It is even worrying because the value of AE is precisely to  successful in changing. How did it happen ?

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Even if bureaucracy brings values of rationality, good organisation and high control, some famous managers like Jack Welch declare themselves as foes of bureaucracy. Because, in most of cases, this system does not fit with modern business. In spite of that, a lot of companies stick on bureaucracy illusion, especially in France where business culture is very compatible with it.
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In this times, transparency is expected to fix a lot of ill behaviour which led to crisis. Better transparency brings the hope  to have trustworthy financial information and to improve market efficiency. Better transparency helps direct democracy and makes easier social and politics. However, a lot of our business is based on information asymmetry which is transparency contrary.

Accessing information is often matter of power. Less people know about your intentions, less they have control on you. Indeed, if you release all your strategic plans to the Market, it is easier to your competitors to counter you. On the other hand, if you say nothing about your plans, your intentions, how will you find people to follow you ? Finally transparency may be the right balance between information you need to keep for being able to succeed in your business and the one you should release to gather enough trust from your stakeholders to succeed.
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