© 2004 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice

Managing the Adaptive Enterprise Business and IT Synchronized to Capitalize on Change

Matt AnticevichITSM Solution Architect240-744-8109

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Quote slide

“I’m all for progress. It’s change I don’t like.”

Mark Twain

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“ It’s not the strongest of the species that survives, nor the most intelligent; but the one most responsive to change.”Charles Darwin

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Change is the only constant

Change is constant• Everyday events that send ripples throughout the

organization, and the IT that supports it

Change is unexpected• A merger, a new partner, a sudden shift in the

competitive landscape, a new market opportunity

Change is disruptive• The goal is to minimize the impact of disruptions with an IT

environment that is synchronized with the business

Change presents opportunities• The ability to adapt to change is a key advantage in business• To survive, compete and win, enterprises must adapt

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Government IT Trends• Transformation of organizations & agencies• Changing role of government/military

personnel to fulfill oversight function• Increasing number of mandates, regulations,

contracting requirements• Requiring contractors to adopt process

standards – i.e. ITIL®, ISO9000, CMM/CMMI, Six Sigma, etc.

• Modernization of tool suites• Migration of contract types from T&M to

PBSC

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Situation facing our customers • Multiple systems that are not

interoperable• Interagency requirements for

shared knowledge, systems, and networks

• Separate networks for DOD, IC, DHS, and State & Local law enforcement

• Systems and users that have varying security requirements

• Cumbersome systems because of lack of common standards

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The Real Problem:Demand Outpacing IT Capability

Key Drivers

Time

IT Productivity | Service Delivery Quality | Agility

(@ current staffing, workflow & tool leverage)

Demands

& Dependenc

e on ITGap is Widening

Increased IT Accountability

Branch Security

Internet & Email Security

Web ServicesConstituent

Portals

Purchased Application

Implementations

Old Culture & Processes

Personnel Shortages

Budget Deficits

NewMissions

New Tactics

E-govInitiative

s

New Technologies

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The Adaptive Enterprise

Business and IT synchronized to capitalize on change

Business

Information Technology

Business benefits: simplicity, agility, value

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1. Architect and integrate heterogeneous IT environments for stability and control

Business

Information technology

It’s the ultimate state of fitness in a world where every agency business decision triggers an IT event.

2. Establish and maintain a dynamic link between the agency and IT for business efficiency

3. Optimize resource utilization so supply flows to meet demand for maximum agency agility

HP’s adaptive enterprise strategy

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Integration

Simplification

Standardization

Modularity

+

+

+

Applied consistently across:• Business

processes

• Applications

• Infrastructure

Adaptive Enterprise design principles

• Reduce number of elements• Eliminate customization• Automate change

• Use standard technologies and interfaces

• Adopt common architectures• Implement standard processes

• Break down monolithic structures

• Create reusable components • Implement logical

architectures

• Link business and IT • Connect applications and business

processes within & outside the agency

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Darwin Architecture for theAdaptive Enterprise• Apply key design

principles consistently across business, application, infrastructure

− Simplification

− Standardization

− Modularity

− Integration• Build around “service” as

the unit of modularity• Separate functional and

management perspectives

• Leverage three design rules:

− service-oriented architecture (SOA)

− virtualization

− model-driven automation

Enterprise

Business objectives & strategy

Service delivery

management

Business services

Application services

Infrastructure services

Service delivery

IT Business managemen

t

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Business and IT synchronized to capitalize on change

Adaptive Enterprise benefits

Simplicity Agility Value

• Reduce IT cost and complexity

• Reduce agency operations costs

• Make it easier to implement change

• Ensure resources work together

• Adapt in real time

to agency needs• Drive change

(time, range, ease)

• Improve business processes

• Accelerate time to market

• Unlock the value of assets

• Free up resources for innovation

• Increase revenues and profitability

• Create competitive advantage

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• Migration to Adaptive Enterprise is a journey – not a “big bang”

• Journey involves people and process – not just technology

• Addresses existing pain points and areas for longer term transformation

• Embraces heterogeneity – leverages investments, not “rip and replace”

• Requires a collaborative approach – customer and partners + HP

Business & IT

strategy

Architecture &

governance

Services, processes

& measures

People & change

management

Technologyplatform

Programmanageme

nt

The Adaptive Enterprise experience

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Adaptive

+ Business process

+ Time to value

+ Dynamic & synchronized

+ Flexible

Efficient

+ Applications

+ Quality of service

+ Virtual & managed

+ Optimized

Enabling the CIO’s journey

CIO focus areas

Busi

ness

valu

e o

f IT

Operational Transformational

Stable

IT infrastructure

Keep it running

Simplified & standardized

Predictable

Architecture

Economics

Focus

Objective

HP helps CIOs manage critical transitions, while architecting and innovating for the future

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Adaptive

• Manage end-to-end mission/business interactions across multiple services

• Adopt a service management culture

• Optimize utilization and performance of business processes and applications

• Create a completely virtualized IT utility

Efficient• Virtualize key

infrastructure elements

• Formalize and automate IT processes

• Link IT with the mission/ business – communicate, measure and deliver services

• Align infrastructure andIT processes

• Establish work flows and process owners with right skills, roles, metrics

Stable• Build firm

foundation for IT infrastructure

• Manage asset lifecycles

• Ensure healthy resource management: servers, storage, network, PCs, printers, software

Where are you on the Journey to the Adaptive Enterprise?

Agility

IT s

erv

ices

Infr

ast

ruct

ure

A

pplic

ati

ons

Busi

ness

Operational Transformational

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Asset Based ChargingAsset Based Charging

IT as a Cost CenterIT as a Cost Center

Technology OutcomesTechnology Outcomes

What does this mean? ….Transform from Silos to Services

Service Based Charging

Shared Service Centers& IT for Profit

Business Outcomes

IT Focused SLAsIT Focused SLAs Business Focused SLAs

Weak link between business & IT

processes

Weak link between business & IT

processes

Business-IT process integration

“Run IT as a Business, For the Business”

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IT Transformation

IT Transformation

IT Transformation

IT Transformation

Where to Start? IT Transformation: Technology-centric Service-centric

Reduce costs & improve operational efficiency

Reduce costs & improve operational efficiency

Increase value of IT to business critical processes

Increase value of IT to business critical processes

Evolve IT’s business model to maximize price/performance ratio

Evolve IT’s business model to maximize price/performance ratio

IT Process-Based

Silos

* Business Process-

based

Internal Service Provider

Shared Services

$

The

IT E

volu

tion

ary

Path

Cost Cente

r

Profit Center

* ITIL-based HP ITSM Reference Model

IT Transformation

IT Transformation

Each stage is an iterative approach starting with a few services and expanding

incrementally

* Tech

nolo

gy

S

erv

ice

C

usto

mer

Bu

sin

ess

Chart based on Gartner’s ISCo modelGartner Spring Symposium Itxpo presentation "Developing the Customer-Centric IS Product Line", B. Kirwin, March 2003* HP additions

1. Key business imperatives

2. Current state on maturity path

3. Desired state

4. Focus on services delivered to the business

5. Standalone projects to achieve vision each with ROI and value

HP August 2004 18

For Public Sector, Health & Education - Adaptive Enterprise Translates into….

• Access on demand to information and services• Collaborate and share information securely• Drive costs down or drive predictable costs• Improve performance (effectiveness/responsiveness)• Real-time intelligence for better decision-making• Streamline operations (efficiency)• Impact and improve overall quality of life (eLearning; Safety;

socio-economic cohesion)• Optimize resource utilization• Increase transparency and build public trust• Support fair and competitive market environment• Improve constituent satisfaction

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Management is more than technology

ProcessSimplify + standardize processes that maintain service delivery

Integrate business and IT processes and align metrics

PeopleDefine the right structure, roles, rewards, governance

Develop a service-oriented culture and critical skill sets,

TechnologyInstrument business processes into IT, and increase automation

Optimize utilization and availability to match supply + demand

HP August 2004 20

What is the Information Technology Infrastructure Library (ITIL®)?• Open, best practice for IT Service management• Created through sponsorship by the UK Government• Written by consultants, vendors and users• Accredited Education and Examination scheme• ISO9000 compliant• WWW.CCTA.GOV.UK• Independently managed by the IT Service Management

Forum - a global organization consisting of more than 12,000 corporate and government members (25,000 individual members) responsible for advancing IT best practices through the utilization of the IT Infrastructure Library (ITIL®).

Used by over 10,000 major corporations and governments, including Albertson's, British Airways, Barclays Bank, Proctor and Gamble, ABN AMRO, Shell, Chevron, Capital One, Philips, Eaton Corporation, Hewlett-Packard, US State Department, Internal Revenue Service, ITA-Pentagon, Census Bureau, USDA, various IC agencies

HP August 2004 21

ITIL® StructureService Support Library contains:

Service Desk/Incident ManagementProblem ManagementChange Management

Configuration ManagementRelease Management

Service Delivery Library contains:

Availability ManagementCapacity Management

IT Service Continuity ManagementFinancial Management for IT Services

Service Level Management

Other Volumes in the LibrarySecurity Management Customer Liaison

IT Services Organization Managing Facilities ManagementPlanning and Control for IT Services Quality Management for IT Services

The Business Perspective ICT Infrastructure Management Application Management Planning to Implement ITIL

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The Foundation of an Adaptive Enterprise is IT Service Management (ITSM)

An approach to transform

IT organizations to being• business and mission-

driven• focusing on continuous

business-IT alignment,• delivering IT services

at agreed-upon service levels, quality, agility, and cost targets,

• and to support the business (agency) in becoming an Adaptive Enterprise.

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What is an IT Service? An IT SERVICE can be defined as a set of related

functions provided by IT systems in support of one or more business areas (bureaus, agencies, departments, etc). It can be made up of software, hardware, and communication facilities, but the customer (end-user) perceives it as being a self contained, coherent entity.

End-User

Customer Support

Mgt

Server Mgt

ApplMgt

Storage Mgt

Network Mgt

Desktop Mgt

E-mail Service

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• Standardization & Breadth: The best of ITIL and COBIT in one model

• Proven: Applied by thousands of IT organizations

• Modular: Allows a step-by-step implementation

• Depth: Includes work instructions and procedures for each process

• Adaptive: requires cultural change but not necessarily a big reorganization

• IT Governance linked to IT processes

HP ITSM reference modelBest-practice process model

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HP ITSM reference model

IT business assessment

Service planning

IT strategy and architecture

Customer management

Service build and test

Release to production

Availability management

Continuity management

Security management

Capacity management

Financial management

Service-level management

Change management

Configurationmanagement

Operations management

Problem management

Incident and servicerequest management

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Solution packages for your IT transformation

busi

ness

valu

e

Sta

bili

tyA

gili

tyEffi

cien

cy

IT maturity

Business processesIT resources IT services

Infrastructure management

Centrally monitorheterogeneousenvironments

Application management

Manage business- criticalapplications

Service-driven operations

- Business service views- Service health monitoring- Root-cause analysis- Impact analysis

Business process management

- Business process modeling- Visibility into business process execution- Financial impact analysis

IT processes core“Consolidated service desk”

- SLM- Configuration- Problem- Incident & request- Change

IT processes advanced

- Continuity, availability, capacity- Financial management, security- Build, test, release

IT governance

- Advanced IT/business alignment- Manage investments- Regulatory compliance

HP August 2004 27

Adaptive Enterprise starting points

• Utility Computing 10–40%

• Real-time Solutions 10-40%

• Business process outsourcing 10-50%

• IT Consolidation 10–25%

• IT Service Management 20–40%

• Enterprise Integration 10-40%

• Security 20-50%

• Enterprise Portal Solutions 10–50%

• IT Virtualization 10-40%

• Storage Consolidation 20-50%

Adaptive (Business Processes)

Efficient (Applications)

Stable (Infrastructure)

Agili

ty A

ssess

ment

Resu

lts

Increased savings (%)0 – 12 mos. 12 – 18 mos. 18 – 36 mos.

HP August 2004 28

The ITSM effect

InitiativesInitiativesSoftwareSoftware

New initiatives

People &

process

People &

process

Infra-structure

Infra-structure

People &process

Infra-structure

Software

Time

AgilityService Quality

$

Revenue

Cost

• IT optimized to meet thechanging business needs and accelerate company strategy

• Assure quality of critical business services

• Achieve breakthrough reductions in cost structures

• Demonstrate and extend the value IT delivers to the enterprise

• Achieve regulatory compliance and validation

HP August 2004 29

Results: Sustained business model operating at reduced costs and increased business value

10%

40%

Operation

Consolidation

Innovation30%

60%

Today3 years

from now

20-25%

35-40%

Source: HP IT department

HP August 2004 30

• Improve the efficiency of the organization, IT staff and IT customers

• Improve the effectiveness of the processes

• Improve the ability of the technology to automate the processes

• Enable better measurement and control of the IT environment - key to meeting contractual agreements

ITIL® / ITSM Value Proposition

HP August 2004 31

So how did HP approach IT Service Management?

HP August 2004 32

HP’s Results So Far

• Downtime reduced 49%

• Turn Around time for change requests went from 14 days average to 1.5 days average

• Time to resolution dropped 90%

• Customer satisfaction score increased from 2.5 to 4.2 (on 5 point scale)

• First NO INCIDENT DAY on Feb 5, 2003

• ITSM process IT savings: 20%

• Incremental instrumentation savings: 18%

HP August 2004 33

The HP IT merger journey

Pre-merger Today7,000+ applications 4,000 applications

25,000 servers 19,000 servers

300 Data Centers 85 Data Centers

IT cost = 4.6% of revenue IT cost = 3.5% of revenue

Innovation = 28% of IT spend

Innovation = 34% of IT spend

Phase 1 Phase 2

Products Supply Chain Demand ChainPlanning

Customer and Sales Ops

Marketing

OrderManagement

Finance

Sourcing

MakingDelivering

Indirect Procurement

Target1,500 applications

10,000 servers

11 Data Centers

IT cost = <3.0% of revenue

Innovation = 50% of IT spendAdaptive (Business

Processes)Efficient (Applications)Stable (Infrastructure)

HP August 2004 34

… and it has become the key to success in a fast-changing world

Today management is about managing technology at the pace of change

Management• Dynamic

environment• No time to react• Increasing

complexity• Device

proliferation

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Leadership in management software for Managing the Adaptive Enterprise

• All Fortune 100 companies are using HP OpenView management software

• 1000’s of ITIL certified IT Service Management experts

• End to end management spanning business process, IT services and heterogeneous environments

• Integrate people, process & technology to run IT as a service delivery business

Enables shift of IT investment from maintenance to innovation

page 36

HP August 2004

Real-time business agilityOpenView• Web Services

management engine• Dynamic NetValue

Analyzer

Utility Data Center• Utility Controller

Business efficiencyOpenView• Storage Accountant• Service Desk• Service Information Portal• Service Navigator• Service Activator• Service Quality Manager• Reporter • Internet Services• Transaction Analyzer• Smart application plug-ins• Internet Usage Manager

Virtual Server Environment

Business stabilityOpenView

• Operations• Network Node Manager• Performance Insight• Data Protector• TeMIP• Storage Area Manager• Self-healing solutions

ProLiant EssentialsInsight Manager

HP Software Offerings Today

utilization

man

ag

em

en

t &

co

ntr

ol

discrete partitioned integrated clustered virtualized federated

reso

urc

es

serv

ices

bu

sin

ess

pro

cess

es

37

HP ITSM reference modelEnabled by OpenView (OV)

• OV Service Navigator

• OV Performance Management

• OV Web Management• Software Distribution• Storage Management

• OV Web Management• OV Operations Management• OV Performance

Management• OV Service DeskConfigurationChangeProjectOrganizationService Level Management

•OV Service DeskOrganizationService Level Management

• OV Service DeskConfigurationChange

• OV Network Management •OV Web Management• OV Service Navigator• OV Performance Insight• OV Operations Management•OV Performance Management• OV Service Reporter

• OV Service DeskService Calls IncidentsProblem Management

HP August 2004 38

Pioneer in IT Service Management 10+ years experience in IT Service Management plus 20+

years in best practice operations data centre management itSMF board members and Corporate member Developer, reviewer and user of ITIL Industry-broadest partnership & community for hp OpenView

Industry-leading Solution 135,000 hp OpenView installations including all Fortune 500

enterprises Have end-to-end value proposition across HP Present and future roadmap (including Web Service

Management)

Complete Service Offering 35 support centers; 120 education centers 3000+ dedicated service management consultants across HP

Services– Most ITIL Foundation certified; >10% ITIL Service Manager

500+ dedicated hp OpenView support engineers 2500+ students trained on ITIL annually with HP Education

Proof Points – HP’s Commitment to ITSM

HP August 2004 39

HP – in the business of IT service management since 1994• 1994: HP began working with ITIL• 1996: Created the HP ITSM Reference Model v1.0• 1997: HP ITSM Reference Model launched to the public• 1997: HP acquired Prolin, leading ITSM tool vendor• 1997: HP leading founder of itSMF USA• 1999: HP leading founder of itSMF Canada• 2001: HP/Compaq: developers of Microsoft's ITIL-based framework (MOF)• 2002: HP collaborated on the book “ICT Infrastructure Management”• 2000-present: HP representative on itSMF USA board of directors• 2003: HP released HP ITSM Reference Model v3.0• 2003: HP leading founder of itSMF Japan• 2003: Ministry of Transportation, Canada publicly acknowledged HP as a

major contributor to its award-winning ITSM program• 2004: HP Services Global Delivery India Center – one of the first organizations

to receive BS15000 certification• 2004: HP Services acquired two industry-leading ITIL/ITSM education and

consulting companies with key stakeholders who were involved in the original writings of ITIL and start-up of itSMF

HP August 2004 40

InfrastructureEfficiency hunt: drive out cost, simplify, standardize, consolidate, for improved ability to change. Security, ITSM, IT Consolidation and Mobility.

IntegrationWeb Services & Portals; Application Architecture; Enterprise Integration; Rich Media; Data/Voice Interoperability; …Oracle, Microsoft, BEA, etc.

Business SolutionsCustomer focus: Student Information Systems; First Responder Planning & Response; Emergency Notification; Military & Intelligence; HIS; PACS; Treasury/Finance/Taxation; Case Management for Social Services, Secure ID Cards; Drivers Licenses. Horizontals: BPDM, Supply Chain (RFID); F&A/HR BPO; Network & Service Providers.Regulatory focus: Basel II, Patriot Act, HIPAA, etc.ManagementUse HP management services, solutions and capabilities to provide better instrumentation of IT and the business.

Our Adaptive Enterprise strategy positions HP to deliver more agility, transparency, accountability, and return on IT through industry solutions.

HP’s value proposition to Public Sector

Infrastructure

HP’s Darwin Reference Architecture for AE

Business strategy

Management

Business processes

ApplicationsApplications

Extend and Link

Architect & Integrate

HP August 2004 41

HP ITSM Federal Customers

• Office of Naval Intelligence

• National Security Agency

• National Security Coucncil

• Langley

• SOCOM• PACAF• Army War

College• TVA• Census• US AF• US Army• US Navy• USDA• Senate

Other agencies where HP has provided services on a variety of scales, either directly or via partnerships:

Questions?