Multi-Tenant Services – Lessons Learned

© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1

Multi-Tenant Services – Lessons LearnedJanuary 13, 2011

© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2

Agenda

IntroductionsPurpose and Objective

Multi-Tenancy OverviewMulti-Tenant Service Considerations

ConclusionQuestions


Robert Roffey and Sid Kapila

Introductions


The value path for the Service Oriented EnterpriseExternally created value through more efficient

market interaction

• Mobility• Event Driven• Real

Innovation

Internal value createdthrough process

redesignInternal cost

reduction by shared resourcesLicense cost

savings

• Linux• Platform

Rationalisation• Storage Area

Networks• Server Virtualisation• Grid Computing

• Security• Web Services• Business Intelligence• Management tools• Development Tools• Service Orientated

Architecture

b

Mobility

Processbased

Services OrientedInfrastructure

Services OrientedArchitecture

Services OrientedEnterprise

To drive incremental value, organizations are adopting Multi–Tenancy as part of Service Orientation


Agenda Purpose and Objectives


Purpose and Objectives

• Use the CSG IT Credit Card payment processing service as a case study to assess what worked and what didn’t

• Define leading practices and apply lessons learned from the case study to enhance the Service Management playbook for building multi-tenant services

Project Approach

Develop lessons learned from the experience of building application-oriented multi-tenant services and apply those learning's to enhance the Service

Management playbook to improve the service creation process going forward

Objectives Approach

ExternalResearch

LessonsLearned &

Enhancing the Playbook

Cisco SvcMgmt

Playbook

CapgeminiPoints of

View

StakeholderInterviews


AgendaMulti-Tenancy


Why Multi-Tenant Services are Critical to IT’s Success

A Multi-Tenant (MT) IT service delivers common services (e.g. Billing, HR, Decision Support) to multiple customers, sharing the same application with a

common underlying infrastructure

Accelerates enablement of new market adjacencies

• Services are configured instead of new services being developed

Exploits the foundation of cloud-based services

• Single tenant services cannot provide the full benefit of cloud

Amplifies improvement in Total Cost of Ownership

• Service Total Cost of Ownership is more effectively distributed

Multi-Tenancy reflects greater reuse of services


When to use a Multi-Tenant Service

Similar/ Overlap Function

ality

Multiple Custome

rs

Customization via Configur

ation

Shared Infrastru

cture

In deciding whether a service can support multi-tenancy, a set of key attributes should be considered during the Strategize stage of the Service

Management Lifecycle

A major driver to invest in multi-tenancy is to replicate certain capabilities cheaply as organizations enter into new business models or optimize current operations


AgendaMulti-Tenant Service Consideration


Multi-Tenancy Requires Additional Considerations

Strategize Plan Implement Operate Optimize

Solution

Financial

Technology

Governance

People

Processes

Anticipation of future needs and balancing of standardization with flexibility for each tenant

Commitment to higher upfront investment, longer cost recovery, and internal billing strategy

Structure and processes to align multiple stakeholders with varied needs

Enhanced operating processes and management of adoption across tenants

Design of a flexible and scalable architecture built on the concept of configuration and integration vs. standalone stability

Lifecycle Phases

Extensive domain expertise, cross-functional resource assignment, and augment service delivery organization

Throughout an end-to-end service lifecycle, Multi-Tenancy calls for MT specific considerations:

Dom

ains

These considerations have a series of implications that should be contemplated in the design of multi-tenant services


Solution MT ConsiderationsSolution considerations for Multi-Tenancy require anticipation of future needs and balancing standardization with flexibility for each tenant


Solution

Financial

Technology

Governance

People

Processes




Enhanced operating processes and management ofadoption across tenants

Design of a loosely coupled architecture that is scalable, configurable, and modular


Consideration MitigationChallenge

Solution for more than one customer (current and future)

Not all customers are going to be known upfront

Define, prioritize, and phase requirements with stakeholders who can speak for the business process current and future needs

Build for high scalability

Trade-off between standard functionality and customization

Business needs are dynamic and will continue to change

Deliver standardized multi-tenant services for commoditized, non-critical capabilities while providing flexibility via ability to configure application settings

Security for tenant’s dataData security remains a key concern for Multi-Tenant buyers

Adopt the right data security procedures


Multi-Tenancy’s requirement for Demand/Supply Capacity Forecasting

Demand Profile

Aggregate

Individual Demands

Large/ DisruptiveJump in Demand

LargeDemandPeak

ContinualDemand

SmallPeaks

“Project”One offPeaks

Capacity Planning

Assess

Types of Business Workloads

Understand the types of Demand profiles that the workload needs over time

Day

Wor

kloa

d Ty

pe

Wee

k

Mon

th

Qua

rter

Year

Rat

e of

Cha

nge

Time scale Demands

In determining Supply, determine where the services lies among the realm of ‘Consistent Availability’ and Rapid Availability’


Financial MT ConsiderationsFinancial considerations for Multi-Tenancy require higher upfront investment, longer cost recovery, and internal billing strategy


Solution

Financial

Technology

Governance

People

Processes







Anticipating future customers will lead to higher upfront development costs thus an increased initial investment requirement

Not recovering investments costs

Analyze the total cost of ownership as well as model the revenue stream(s) to dictate the initial funding requirements and the future chargeback model

Elongated break even with higher ROI potential

Initial funding to cover development

Secure initial and ongoing funding by aligning stakeholders behind the solution; redefine funding models to allow for centralized funding of MT initiatives

Varied charge-back models

Transparent allocation method (for negotiation among multiple stakeholders) based on some level of activity based costing

Conduct initial and ongoing market benchmarking to measure appropriateness of investment and ongoing process performance (KPIs)



Multi-Tenancy’s impact on funding / chargeback models

TRADITIONAL IT SOLUTION

MULTI-TENANT IT SOLUTION

Key FactorsSimplicityFairness

PredictabilityControllability

Diligent Demand / Supply Capacity

Forecasting

DirectCost

MeasuredResource

Usage

Subscription/Pay per Use

Adapted from Gartner

IT DomainCost

Allocation

TieredFlat Rate

BespokeIT

Pricing

IT ServiceCatalogPricing

Market-basedPricing

BlanketAllocation

SupportChargeback

AdhocChargeback(Showback)

NegotiatedFlat Rate

IncentiveGainshare

Usage

BusinessOutcome

Risk/Reward

CrowdSource

Shared IP Full

cost

reco

very

from

the

1st t

enan

t is

not

pla

usib

le


Technology MT ConsiderationsTechnology considerations for Multi-Tenancy requires the design of a flexible and scalable architecture built on the concept of configuration & integration vs. standalone stability


Solution

Financial

Technology

Governance

People

Processes








Solution built as highly scalable (volume changes)

Difficult to manage fluctuations in usage/volumes

Determine application requirements to dynamically scale infrastructure (leveraging cloud, virtualization, etc.)

Architecture supports agility and adaptability

Limited visibility into future integration requirements

Create code set to be data driven (vs. process driven) to isolate configuration changes at the tenant level

Impact of upgrades, enhancements and configuration on tenants (with limited downtime)

Difficult to execute changes while limiting coordination among all tenants

Develop modularized components for implementations and build integration accelerators to support multiple platforms


Governance MT ConsiderationsGovernance considerations for Multi-Tenancy requires structure and processes to align multiple stakeholders with varied needs


Solution

Financial

Technology

Governance

People

Processes








Governance for multiple internal and external stakeholders (e.g. GBPs & ASP)

Service ownership and requirements prioritization is more difficult to do in a MT setting

Increased demand for transparency of operations and costs

Define, communicate and operationalize service governanceAlign stakeholders around common solution (expectations management)Develop metrics and service agreements that realistically drive accountability

Requirements prioritization among multiple customer profiles

Attrition from tenants being shutout of their requirements or standardized release management strategy

Determine requirements prioritization method, sourcing requirements and associated governance model


People MT ConsiderationsPeople considerations for Multi-Tenancy requires extensive domain expertise, cross-functional resource assignment, and augmenting service delivery organization


Solution

Financial

Technology

Governance

People

Processes








Comprehensive solution targeting multiple customer profiles requires breadth and depth of knowledge

Acquisition of resources with a deep domain knowledge and a breath of functional expertise that could reside outside of organization

Develop broad cross functional support and executive sponsorship to acquire the necessary resources

Greater cross-functional coordination

Additional coordination could impact the speed of solution development

Plan for additional lead time to account for involvement of multiple functional groups

Service delivery organization to support the solution end-to-end (not silo’d)

Service delivery organization for MT solution could require different organizational set up to effectively support the solution

Evaluate various service delivery organizational structures for the most effective delivery (Shared Services or a COE)Requires that specific roles and responsibilities be defined at the ‘Service’ level


Process MT ConsiderationsProcesses considerations for Multi-Tenancy requires enhancing operating processes and managing adoption across tenants


Solution

Financial

Technology

Governance

People

Processes








Refinement of existing IT processes (client engagement, service delivery, and service support)

Change management and process adoption to support shift to MT service orientation

Involve functional SME’s early in the process to allow time for review, issue resolution and process change management

Adoption of standard set of processes delivered by solution for each tenant while accounting for process variation

Customer acceptance of standard processes

Compliance requirements for multiple client profiles

Plan for effort for organization and process adoption activitiesDesign end-to-end process flows for each customer profile relying on configuration to drive variationAccount for regulatory compliance (GEOs, customer types)


Agenda Conclusion/Questions


How Should Multi-Tenant Services be Rolled-out

• The “best” service is chosen and enhanced to integrate with other silos

Consolidate overlapping services

• Current services are re-evaluated for enhancements towards multi-tenancy

Enhance existing services

• New services are architected to drive Multitenancy acceptanceBuild new services

In rolling out multi-tenancy, a combination of approaches must be considered in order to properly balance cost vs. benefit as well as likelihood of corporate adoption


Questions?


Thank you.

Multi-Tenant Services – Lessons Learned

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