®
IBM Software Group
© 2007 IBM Corporation
Managing Applications with Rational
Pat FlisherFSS Business Value LeadUKIIBM Rational
IBM Software Group | Rational software
Enterprise Modernization 2
IT & Business Executive Pressures
Bottom line: IT flexibility enables business flexibility
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Developing an IT Strategy in Uncertain Times
Andy Kyte
Vice President & Research Fellow
The Real IT Strategy Challenge
• To have a detailed understanding of exactly where you are
• And a current plan for the future life cycle management of every asset
• Based on the best available understanding of an optimum direction
• And a process in place to continuously review and optimize direction and plans
• To identify to business stakeholders the potential for current and future technology innovationsto deliver transformational value
• To provide business change sponsors with accurate cost/ risk/timescale estimates for IT-dependent business change initiatives
Return on AssetsReturn on Investment
Balance Budget Planningand Strategic Planning
• 18-month horizon
• Objective —"have a budget"
• Project-focused
• Administrative overhead
• Once per year
• Horse-trading
• Asset half-life or seven-year horizon (whichever is longer)
• Objective — "maximize return on assets"
• Value-focused
• Core discipline of IT management
• Continuous
• Portfolio management
Budget Planning Strategic Planning
Developing Persistent Commitment
Asset Persistence
5 Years 10 Years 15 Years 20 Years
En
ga
ge
me
nt
Low
High
Live
Business Engagement
IT Engagement
The beginningOf "legacy"
"They shoot horses, don't
they?"
N.B. "Engagement" with maximizing value delivery
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Enterprise Modernization 7
The world continues to get a whole lot smarter
INSTRUMENTED
We now have the ability
to measure, sense and see the exact condition
of everything.
� Today, there are 1 billion transistors for each person on the planet.
� By 2010, 30 billion RFID tags will be embedded into our world and across entire ecosystems.
INTERCONNECTED
People, systems and
objects can communicate and interact with each
other in entirely new ways.
� The internet of people is 1 billion strong. Almost one third of the world’s population will be on the web by 2011.
� There will be nearly 4 billion mobile phone subscribers worldwide by the end of 2008.
INTELLIGENT
We can respond to changes
quickly and accurately, and get better results by predicting and
optimizing for future events.
� Every day, 15 petabytes of new information are being generated. This is 8x more than the information in all U.S. libraries.
� An average company with 1,000 employees spends $5.3 million a year to find information stored on its servers.
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Enterprise Modernization 8
Fleet ManagementDaimler FleetBoard
What’s Smart?� Smart end-to-end system optimizing
vehicle usage and routing� Innovative technology for advanced
telematic solutions
Smarter Business Outcomes� 5-10% reduction in fuel consumption due
to optimized vehicle management� 10% reduction in telecommunications
costs due to increased automation
How Rational Software Enables Smarter Products� Improved collaboration in the product
portfolio planning process� Automated release planning balancing
cost, risk and reward
“Focal Point helps us discover the
optimal set of customer features
and balance those against the
needs of our business, allowing us
to deliver continual enhancements
to our telematic solution.”
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Enterprise Modernization 9
“We rely on Synergy and Change to
manage the complexity of the
software and to ensure that our
global development teams operate
as one, for the best result to our
customers. This software from IBM is
part of our livelihood; it's our DNA.”
Mobile Access to Medical Images Merge Healthcare
What’s Smart?� Provides medical professionals access to
complex medical images on mobile devices� Helps ensure prompt emergency diagnosis
– anytime or anywhere
Smarter Business Outcomes� Reduced hospital operations costs� Reliable, secure, scalable delivery of
medical images and reports
How Rational Software Enables Smarter Products� Collaboration across globally distributed
development teams� Change management across the end-
to-end software lifecycle
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Enterprise Modernization 10
Challenges to the effective delivery of softwareA history of cost overruns, schedule slips and quality issues
“Only 34% of software projects are deemed successful
costing over $300B annually”
“Only 42% of users are satisfied with project quality”
“Only 37% are satisfied with the speed of software development”
“62% of projects failed to meet their schedules ”
“50% of outsourced projects are expected to under perform”
“49% of projects suffered budget overruns”
“41% of projects failto deliver the expected
business value and ROI”
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Enterprise Modernization 11
$1B prototype rocket self-destructed just
40 seconds after takeoff due to a software bug
in the on-board guidance system
1 million owners of the 30-gigabyte device woke up one morning to find
their devices inoperable due to poor leap year
handling
The software challenge in systems is even greater Software failures can be dramatic for complex systems
AerospaceAgency
MicrosoftZune
Ford Super Duty Pickup
Sales interrupted until engine control software
could be updated to recognize improper levels of heat in the
exhaust system
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Enterprise Modernization 12
Old methods of measuring software engineering are inadequate and incomplete considering today’s complexity and scale
RepeatableAd-hocProcess
CollocatedSoftware skills
CollocatedOn the job training
Teams
1960s-1970s 1980s-1990s
Complexity 100% Custom 30% Reused Assets70% Custom
Tools ProprietaryNot integrated
Mix of Proprietary & CommercialNot integrated
Project Performance
PredictableOver budget, over schedule
UnpredictableInfrequently on budget, on schedule
Success Rate 10% 25%-33%
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Enterprise Modernization 13
Challenges to effective software delivery today
Complexity Challenges Team Challenges
How do I control this new world to gain advantage?
� More granular service functionality in composite business applications
� Large number of projects and assets including custom, outsourced and packaged
� Geographically dispersed teams that often include business partners
� Effective cross-organizational visibility and synchronization, sharing becomes an imperative
Process Challenges Tools Challenges
� Need for market experimentation
� Blind adherence to process insensitive to potential business trade-offs
� Need for agility at scale
� Lack of standards impacts ability to collaborate, automate and report across teams and assumptions
� Frequent asset updates and changing interdependencies
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Enterprise Modernization 14
Software engineering metrics that measure absolutes can provide the wrong incentives to your team
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Enterprise Modernization 15
Software engineering metrics must align with desired business outcomes
� Address development as a value creation center
� Foster innovation and reuse across organizational and geographical boundaries
� Enterprise application modernization
� Speed merger and acquisition absorption
� Reduce traditional development in favor of smart package software integration and SOA
� Address the risks of development
� Perceived quality
� Scope uncertainty
� Security failure
� Failing an audit
� Address development as a cost center
� Productivity
� Software engineering base quality
� Process agility
� Global collaboration platform
Efficiency
Control
Value
11
22
33
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Enterprise Modernization 16
Control
Value
Efficiency
Bre
ad
th o
f I
mp
ac
t
Effective software delivery enabled by measurement
TEAMINDIVIDUAL BUSINESSORGANIZATION
Measures ofincreasing
value
Global teameffectiveness and
collaboration
Project/ProgramGovernance
Softwareinvestment
managementaligned with
business priorities
Value
� Reduction in scrap/rework and associated labor costs
� Improvement in release quality
� Reduction in development labor cost worldwide
� Reduction in custom assets, training, tooling and process variants
� Increase in project predictability
� Increase in quality
� Improved market reputation
� Increase in architectural reuse and earlier time to value
� Increase in organizational productivity, profitability and market reputation
Individual quality and efficiency improvements
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Enterprise Modernization 17
How can I get to more effective software delivery from where I am today?
“How do I further automate software delivery within my organization?”
“How can I unobtrusively gather measurements to ensure progress towards desired business outcomes?”
“How can I enable collaboration throughout the software delivery process?”
“How do I make incremental, iterative progress towards more effective software delivery?”
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Enterprise Modernization 18
Software delivery is a business process that must be continuously improved
Requirements
Design
Implementation/Assembly
Verification
Deployment
CIO’s top priority on behalf of the CEOover last three years:
“Improving Business Processes”Source: Gartner, “Making the Difference: The 2008 CIO Agenda,” Jan. 2008
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Enterprise Modernization 19
To improve coordination and visibility, look for ways to collaborate across the software delivery process
� Leverage social networking capabilities to enable broader and richer participation in software projects
� Virtualize "team memory" to overcome geographic and temporal gaps in the software lifecycle
� Enable flexible, global resourcing and energy-saving workplace models
Drive organizational consensus on priorities and improve workforce
productivity
Collaborate
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Enterprise Modernization 20
In Context collaboration
Project Manager
Developer / Build Engineer
Tester
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Enterprise Modernization 21
To increase efficiency, look for ways to automatethe business process of software delivery
� Improve productivity and reduce headcount
� Standardize processes and automate repetitive tasks to improve team efficiency while reducing time to value
� Enhance regulatory compliance through self documenting data and workflows
Lower costs and improve quality by automating
workflow based on real-time information
Automate
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Enterprise Modernization 22
Process Awareness
Project Manager
Developer / Build Engineer
Tester
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Enterprise Modernization 23
To ensure progress towards business outcomes, look at how to report on the software delivery process
� Make better informed decisions by leveraging the real-time instrumentation of the software delivery process
� Leverage metrics for continuous individual and team capability improvement
� Gain insight into a projects which span organizational and geographic boundaries with minimal disruption
Continuously improve by measuring progress
against desired business outcomes
Report
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Application Management and Modernisation Solutions
� Aimed at Customers with:
� Escalating or Permanently High Costs – Most spend too much time and resource on maintaining old applications (up to 80% of IT budget is maintenance)
� Desire to Innovate and Gain a Competitive Edge –In the current economic conditions IT needs to enable the business to differentiate and react speedily as those conditions change – yet resource available to do so is tied up in the existing applications.
� Proven, Available Solutions - whichever direction the process takes you, secure risk free and productive support solutions are essential.
� Real Solutions:
� Organisations can do two things outside the scope of this discussion - nothing (and pay for ever increasing costs) and replace everything by buying packages or outsourcing totally
� Once the applications are there are four other options which can to be discussed in detail –each will bring its own set of returns :
• “Update” – Increase the support of the business and the business throughput by improving the user experience (both look and feel and navigation)
• “Optimise” – Make it easier (and cheaper) to maintain the back-end applications. This can also support Application or Package retirement in a managed way (eg full impact known and understood with a mediation process in place for ensuring continuity of service [and services])
• “Convert” – Move the existing applications ‘as is’ to a new platform using automated tooling. Often
• ..and “Re-write” – Start again but making use of the existing assets and extracted designs. Move to a ‘write once, use many times’ environment, increaing quality and lowering costs
� …but first there needs to be a management framework in place.
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Older, Expensive
to Maintain & Inflexible
(legacy) Applications
Update “look & feel”
ModernScreens
Portal
The Four Options…
ExtractDesign
Re-Build orNew
Application
RAD or RBD
Refactoring“Rationalised”
EfficientVersion
of theApplication
ReusableComponents
or Services
SOA
RBDorRAD
UpdatedApplication
(Java)
UpdatedApplication(COBOL)
Transformation/Conversion
UpdatedApplication(Java EJB)
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Enterprise Modernisation in a Managed Framework
Application ModernisationPropositions
-Update-Optimise-Rewrite-Convert
Where are we starting from? Do we have a picture of the current Architecture?All the portfolio? Do we know which Business processes are involved?
How do we decide where we should start? Which first steps will be low risk and high return?
Have we got a suitable Management Process for the Projects in place? Will we have visibility of progress (whoever is doing the work)?
Now we know what we are going to do first and why, which tools are we going to use? What services do we need?
How are we going to document the requirements? ..through to – How are we going to re-test everything?
Next Project
LoopBack
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Enterprise Modernisation – via Systems Architect, Focal Point and Rational Team Concert
Application ModernisationPropositions
-Update-Optimise-Rewrite-Convert
Systems Architect
Focal Point
Rational Team Concert
HATS, RAA, RAM, RAD, RBD, RDi, RDz, Conversion Tools, …..
ReqPro, Doors, RRC, CC, CQ, Synergy, RQM, QM portfolio, …..
Next Project
LoopBack
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Process Improvement
Rational Portfolio in Modernisation Projects
Manage
Test
Requirements
Legacy
UpdateScreens
Re-WriteOptimise
Convert
Assets
RAM
RPT For Portal
SOADesignAnalyse
Architect
Build
Watchfire
RMC
Enterprise Architecture-(Systems Architect)- “As Is” and “To Be”
Rational Transformation
Workbench
Automated Conversion Tools
HATS
RTC
RQM
RRC
Decisions?Focal Point
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Returns….
� Return on Investment or Return on Assets?� Link to Gartner slides (Delivered at the Rational Executive Forum in April 09)
� Implementing and using a product like Systems Architect will produce a Return on Investment in the short term of 20 -30%; Managing your Application Portfolio actively and effectively over a longer period of time will give the business a much larger Return on their Assets – over the lifetimes of the assets
� Returns can be calculated for each product deployed and for supporting a customer’s overall investment but the returns are very much customer specific – we need to know the “As Is” and the “To Be” to calculate the returns, whichever view is to be taken.
� Returns are calculated by a combination of working with the customer, Proofs of Technology and Concept and by comparing with experiences of similar customers.
� The Measured Capability Improvement Framework� MCIF provides a structured approach to helping organisations identify improvement in the
core development practices that most impact business outcomes.
� It is a services engagement involving key customer personnel that looks at the current capabilities, what can be improved, how – and the returns to be expected
� Jazz products.� A new set of benefits are developing for the Jazz products shown below which can be
summed up as “Return on your People as the most important Asset”
� They start with the concept of Collaborate, Automate and Measure
� We expect to measure all activities going forward to see the Returns as the develop using Rational Insight
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