A Practical Framework for an Adaptive Enterprise

1. Jitendra Puri E-mail: Jitendra.puri@hp.com A Practical Framework for an Adaptive Enterprise

2. Darwin … • “It is not the strongest who survive but those that can quickly adapt to the changing environment conditions”

3. This session is not for anyone who believes: • That in the business everything will go back to normal if we just wait and see • That success of IT projects is responsibility of technical staff • The customers will stay with you if give them bad service • The shareholders think that red ink is real cool colour

4. Agenda • Business context • A new adaptive mindset • Risks and mitigation strategies • Conclusions

5. A snapshot of North American Fixed line business…. Source: RHK Telecom Economics Program

6. Both external and internal pressures are continuously pressing price dowwards Over capacity Competition Price Government & Regulation New Technologies

7. Operating cost as % of revenue In simple economic terms… • But relatively the operating costs are still very high • Average communication industry operating costs range between 60 – 70%. • The rate of reduction in price in much steeper than the rate of reduction in the operating cost. Source: RHK Telecom Economics Program

8. We need a attack several dimensions at the same time…. Reduce Cost Grow Revenue Improve Business Flexibility Improve Customer Service

9. This implies… • Highly flexible infrastructure • Rapid introduction o new services and features • Fast time-2-revenue • Easy and flexible response to business changes • Fast reactions to competitive moves

10. and…. • Ultra low cost operations: • High level of process automation • Very low manpower levels • High level of system integration • High quality and excellent customer service • Right first time data integrity • Customer self management • Low cost of change • Use standardized commercially available, off the shelf, software

11. Delivery process An enterprise delivers services to customers Darwin Architecture for the Adaptive Enterprise: Service delivery supply chain view Business objectives and strategy Suppliers Customers Consumed business services Offered business services People Process Technology

12. Management process Business process model The business process model is key to aligning delivery with strategy Darwin Architecture for the Adaptive Enterprise: Service delivery supply chain view Business objectives and strategy Suppliers Customers Consumed business services Offered business services Delivery process People Process Technology

13. So…what would you do in a CIO’s role? • Maximize return: • Improve business results;grow revenue and earnings, cash flow, and reduced cost of operations • Increase agility: • Enable the business organization and operations to adapt to changing business needs • Minimize risk: • Ensure security and continuity of internal business operations, while minimizing exposure to external risk factors • Improve performance: • Improve business operations performance end-to-end across the enterprise • Increase customer and employee satisfaction

14. But what about business & IT alignment challenges? • Not sufficient business influence to guide technical projects • Not integrating technical projects with business change programmes • Not realising the value of information and process-centric elements • Legacy applications and platforms, outsourced services and supplier management issues • Management interconnection between Business & IT.

15. Assess, design and maintain a dynamic link between business and IT. Architect and integrate heterogeneous IT environments. Extend and link business processes across suppliers and customers. Manage and control the whole IT environment to deliver business services. Adaptive Enterprise Business objectives and strategy IT business management Business services Application services Infrastructure services Service delivery management Servicedelivery A new adaptive mindset is needed

16. An IT strategy that is in synchronization with the enterprise’s business strategy. An enterprise architecture to execute the IT strategy that can rapidly adapt the IT environment to meet the demands created by changes in the business environment. Business strategy Corp. Gov. IT strategy IT governance Enterprise architecture IT environment An Adaptive Enterprise is enabled through… • IT governance that will drive the development and implementation of the strategy and the architecture. • An IT environment which realizes the strategy and architecture to deliver business services to meet today’s needs and ready to meet tomorrow’s.

17. Enterprise Architecture challenges • How to manage a highly connected environment – with multiple, overlapping dependencies? • How to balance the benefits of centralised versus decentralised control? • How to increase local autonomy and innovation without increasing inefficiency, lowering quality and increasing risk? • How to insure compliance with standards and policies across a complex organization? • How to manage the new relationship between business and IT as IT becomes a key element in the success or failure of many major projects?

18. Enterprise architecture facilitates alignment between business and IT The world of the business Hot zone of complexity Business Strategy Common language for business & IT Information & Knowledge Models Process Models Aligned service delivery Information Management Architecture Application Architecture The world of IT organization Technical Architecture Access infrastructure Process infrastructure Service infrastructure

19. Architecture Design Principles Simplification • Reduce number of elements • Eliminate customization • Automate change + • Applied consistently across these services: • Business • Applications • Infrastructure Standardization • Use standard technologies and interfaces • Adopt common architectures • Implement standard processes + Modularity • Break down monolithic structures • Create reusable components • Implement logical architectures + Integration • Link business and IT • Connect applications and business processes within & outside the enterprise

20. Service-oriented architecture (SOA) and virtualization deliver IT flexibility and choice Protects legacy investments Allows heterogeneity, doesn’t force homogeneity and monolithic rules Leverages industry investment Enables parallel innovation, fast response to change Provides multi-sourcing, flexibility of outsourcing/in-sourcing Model driven automation simplifies execution of IT practices Cost of change is low & predictable Automates service lifecycle delivery and management Benefits of Architecture design rules

21. Architecture Design rules • Service-oriented architecture (SOA) and virtualization • Service is the unit of modularity • Layer services types: infrastructure, applicationand business • Separate service perspectives: functional from management • Model-driven automation (MDA) • Service defined by model • Models encapsulated within layers • Models express dependencies between layers • Models provide continuity throughout the service lifecycle • SOA, virtualization, and MDA combine to realize the Adaptive Enterprise

22. Service delivery management Business services Security Security Security Config. Config. Config. Quality Quality Quality Financial Financial Financial Virtualization Application services Virtualization Management Modularization: services and virtualization Service delivery Service is the unit of modularityLayer services by type: infrastructure, applicationand business Business services control Application services control Separate service perspectives: functional from management Management modularity and layering parallels delivery Infrastructure services control Infrastructure services Management comprises multiple perspectives Virtualization of both delivery and management capabilities Functional

23. Service delivery management Business model Financial Financial Financial Quality Quality Quality Security Security Security Config. Config. Config. Application model Infrastructure model Management Simplification: model-driven automation Service delivery Business services control Business services Service defined by model Models encapsulated within layers Models express dependencies between layers Models capture best practices for all perspectives Application services control Application services Infrastructure services control Infrastructure services Functional

24. Financial Business model Financial Financial Financial Quality Quality Quality Security Security Security Config. Config. Config. Financial Application model Financial Infrastructure model Integrated financial perspective Integration: service-oriented architecture (SOA) Service delivery management Service delivery Service-oriented architecture Business services control Business services SOA service management integration Application services control Application services Services perspectives can be managed across layers Infrastructure services control Infrastructure services Management Functional

25. WSDM WSDM WSDM ,WBEM, CIM Standardization: drive adoption of industry standards Service delivery management Service delivery SOA, virtualization and MDA standards enable customers to leverage industry innovation and provides investment security Utility computing models – OGSA and DMTF ITIL, ITSM SCOR, AQPC, VMI RosettaNet, UCCnet, OAG, ebXML Business services control Business services Grid (WS-RF) Web services (WS-*) Application services control Application services WSDM, Grid (WS-RF) Virtual servers, storage, networks Infrastructure services control Infrastructure services Management Functional

26. Business model Application model Infrastructure model Use of models across the service lifecycle New service trigger Change Service lifecycle: Design Source Deploy Operate Business services control Business services Application services control Application services Change Infrastructure services control Infrastructure services Service delivery Service delivery management Change

27. Customers Employees Suppliers Management Auditors Multi-channel access Business model Financial management Application model Relationship management Management integration Lifecycle/project management Infrastructure model IT business management Automating and managingdelivery of business services Darwin Architecture for the Adaptive Enterprise: Service delivery detail view Business services control Business services Application services control Application services Infrastructure services control Infrastructure services Service delivery Service delivery management

28. Services andIT processes Program management office Organizational change management to realize the Adaptive Enterprise • Align IT team and organization • Define policies, processes and environment • Map IT functions to business priorities • Enable a step-wise journey Aligning people, process and technology for superior execution Architecture

29. The three stages of the Adaptive Enterprise journey Adaptive Efficient Stable IT relationship with the business Trusted supporter Respected peer Strategic partner Keep it running Quality of service Time to value Objective Available and secure Managed and integrated Dynamic & synchronized Architecture Predictable Optimized Flexible Economics Operational Transformational

30. EA risks and mitigation strategies Risks The Architecture will not meet business needs Mitigation Approach Define and maintain architecture with needs clearly defined, including near term business plans, infrastructure and development skill sets, budget issues and commercial off the shelf support

31. EA risks and mitigation strategies Risks Standard architecture elements will not interoperate as expected Mitigation Approach Avoid selecting best-of-breed technology for each element without considering interoperability, research case studies with specific configurations. If doubt persists…pilot!!

32. EA risks and mitigation strategies Risks An architecture element, or its vendor will become significantly less viable Mitigation Approach Keep abreast of the market via research functions, maintain part-list of applications, architecture design for separation of functionality when feasible

33. EA risks and mitigation strategies Risks Architecture governance will be ineffective Mitigation Approach Obtain management support, create explicit governance processes and link critical related processes.

34. Conclusion • Migration to Adaptive Enterprise is a journey – not a “big bang” • Journey involves people and process – not just technology • Focus on existing pain points and areas for long-term transformation • We have to learn to embraces heterogeneity and leverage investments, not “rip and replace” • Business must lead IT and not the other way round…

35. Main references • Driving business value from IT – Eric Woods, Laurent Lachal, Chris Harris Jones, Gary Barnet • Adaptive Enterprise vision of Hewlett Packard • Lean Operator, an economic and business view point – Keith J. Willetts • Enterprise Architecture evaluation scorecard, - Gene Lenganza • Best Practices, Standards of Enterprise Architecture • Structures and Processes for effective Enterprise architecture • Managing the people side of enterprise architecture- Gene Lenganza • Risk and mitigation of Enterprise Architecture efforts