On Demand Environment The next era

1. On Demand Environment The next era CMSC466/666 Based on IBM On Demand Business

2. Agenda • Drivers for e-Business On Demand • Characteristics of On Demand Business • On Demand Computing Environment • Evolution of On Demand Financial and Delivery Models • Summary & Action

3. Institutions Face Challenges Across the Organization Companies generate innovations, in fat years or lean, by deploying new technology along with improved processes and capabilities. CEO McKinsey & Company, Volume 2 - 2003 Companies that linked business processes with trading partners show 70% higher profitability than those that do not. CFO Business Advisor Zone, 12/2/2002 42% of the top 500 IT executives said maintaining and managing excess complexity cost them an average of 29% of their IT budgets. CIO CIO Insight, 02/2003

4. Productivity Governance Economy Capital and Asset Utilization Security Threats Pricing Pressures Constituent Customer Preferences business technology Open Movement Commoditization Autonomic Computing Web Services Grids Standards Blades Virtualization Clusters Constantly Changing Environment Requires constant improvement in business design and business process on demandbusiness

5. Defining the next computing era “An enterprise whose business processes -- integrated end-to-end across the company and with key partners, suppliers and customers – can respond with speed to any customer demand, market opportunity or external threat” — Sam Palmisano, IBM Chairman and CEO

6. Enterprises everywhere are embracing e-business Network Era Client/Server Era Centralized Era

7. The data on this chart -- from the US Commerce Department -- demonstrates how enterprises have made IT an integral part of business over the past 40 years. • The history of the IT industry has been defined by three computing eras: the centralized era, the client/server era, and the networked or e-business era. • Enter IBM’s System/360, which launched the centralized era of information technology in business. In this era, the prevailing business strategy was automation of back office processes, and the computing model was all about centralized computing. In other words, mainframe computing. • By the mid-80s and early 90s, the PC and client/server revolutions had taken hold--enabling individuals to manage many of their daily tasks more quickly, and accelerating the staffing shift in many companies toward knowledge workers over clerical workers. The computing model supported the stand-alone applications and processes that characterized this era.

8. Now, we are moving into a new era, the era of a services-led global economy. In this new age, the old needs of businesses haven’t disappeared -- but they are joined by a new set. The main criterion for competitive success now is responsiveness: the ability to adapt and respond rapidly to ever-more-volatile demand, coming from an ever-wider global marketplace. • We are now in the early stages of the network era. Enterprises are focused on integrating diverse processes (legacy and new), transforming the entire enterprise, creating new business models, and realizing business value such as increased profitability. • In the network era, our customers are continuing to demand e-business and are striving to realize the full value of enterprise integration.

9. Evolution of e-business Enterprise Integration Access On Demand Optimize operations Dynamically respond to the needs of customers, employees, partners, and suppliers Buying not browsing Working not surfing Get on the Net Access | Publish | Transact | Integrate Internally | Integrate Externally | Adapt Dynamically

10. Phase 1... access to digital information. • This was all about publishing content, most of it of the static “look-up” variety. • Simple database queries allowed us to do things like check a bank account, look at airline flight information. Pretty easy to get in here. All an enterprise needed was a home page. All an individual needed was a browser. • Phase 2... real transactions... real e-business. • Don’t just check a flight departure time... book your seat. • Don’t just look at your bank account... move some money This requires more than a Website. This takes behind-the-scenes integration of technologies and business processes.

11. Phase 3: On Demand Business • IBM called it the “Advanced” phase and now defined it as “on demand.” • This was where everything was headed; and that not that many people had gotten there yet. • Most importantly, this is about end-to-end integration -- of the processes within the enterprise, as well as all the relationships and transactions that anchor that enterprise in markets and industries.

12. Financial & Delivery Models BusinessDesign ComputingEnvironment On Demand Business

13. Three things in mind • -- The design of the business models and processes. • -- The implications for the supporting technology environment. • -- And how they’re going to acquire and manage its processes and technology.

14. On demand business Responsive Variable Focused Resilient Financial & Delivery Models BusinessDesign On Demand Business ComputingEnvironment

15. 4 characteristics to on demand organizations • Responsive to the changes • Variable cost and hence a good part of the cost become related to the output of the organization • Focused on the core competency • Resilient to changes in the environment and adaptive without comprising the objective

16. On Demand Business Requires an On Demand Operating Environment Financial & Delivery Models BusinessDesign ComputingEnvironment On Demand Operating Environment Open Integrated Virtualized Autonomic

17. The on demand operating environment Open Integrated Autonomic Virtualized

18. Increased Responsiveness Business Resiliency Adapt to dynamically changing environments Discover, diagnose, and act to preventdisruptions Operational Efficiency Secure Information and Resources Tune resources and balance workloads to maximize use of IT resources Anticipate, detect, identify, and protect against attacks Autonomic Computing Attributes Self-managing systems that deliver.. Self- Configuring Self- Healing Self- Optimizing Self- Protecting

19. Sample Open Standards Linux WSDL SOAP Globus XML Web Services

20. IBM in Linux • UNIX-like Scalable operating system • Reduces cost of Computing • Increases freedom of choice • Fosters innovation • Promotes a culture of open standards • Open Distribution & Open Source Code. • Supported by a global community • Rich solutions offering

21. Virtualization Technologies Today CPU Upgrade on demand Virtual Servers (Linux VMware) Virtual Database(DB2 Federated) Virtual Storage(StorageTank) Virtual File Systems(General Parallel File System and Network File System) Virtual Mainframe(Global Distributed Parallel Sysplex)

22. Integration The efficient and flexible combination of resources to optimize operations across and beyond the enterprise + + People Processes Information & Infrastructure

23. On Demand Business Redefines Financial and Delivery Models New ways to pay for and manage IT Flexible Variable Managed Optimized Financial & Delivery Models BusinessDesign ComputingEnvironment

24. Flexible Financial and Delivery Models Customers choose where and how they access IT Managed Operations Off Premises Shared Utility Services Off Premises Dedicated Delivery Models On Premises Utility Capacity On Demand Traditional IT On Premises Fixed Mixed Variable Financial Models

25. Financial & Delivery Models BusinessDesign ComputingEnvironment On Demand Business

26. Summary & Recommendations • Business Design integrating all stakeholders is essential for value delivery • Increased IT infrastructure Investment as % of capital assets • Align infrastructure Investment to On Demand computing environment • Increase awareness & IT literacy to overcome the Digital Gap • We are all stakeholders and KOM is ideal forum for thoughts leadership.

27. ... Thank you http://www-306.ibm.com/e-business/index.html