IT Infrastructure for the
Agile Enterprise:Grid, SOA, and Virtualization
Michael Hugos
CIO at Large
Center for Systems Innovation
www.MichaelHugos.com
© 2007 Michael Hugos
www.MichaelHugos.com
© 2007 Michael Hugos
www.MichaelHugos.com
Overview of Briefing
• PART 1 – Business Realities
• PART 2 – IT Infrastructure for Agility
• PART 3 – Business Case Study
PART 1
Business Realities
© 2007 Michael Hugos
www.MichaelHugos.com
Global Economy – New Reality
• Formerly separate national and regional markets now electronically connected into single global market
• Global market does what free markets do so well; it’s called “efficient price discovery”
• In many businesses gross margins average 10-15%; under constant pressure; heading lower
• Global economy is like global stock market!• Profit in hyper competitive real-time world comes from
many small adjustments & some big wins as companies respond to constantly changing environments
© 2007 Michael Hugos
www.MichaelHugos.com
Competing in Global Economy
• In high change world responsiveness trumps efficiency!• Agile Enterprise is to global economy as assembly line
was to industrial economy – source of wealth• Respond to changing customer needs by wrapping
products in blanket of tailored, value-added services • Earn additional 2 – 4% (and sometimes more)• All value-added services are information based• Use responsiveness to differentiate yourself or participate
in “grim race to the bottom”
Efficiency Responsiveness
© 2007 Michael Hugos
www.MichaelHugos.com
Responsiveness Requires Agility
Agility is a Process
Create New Business Processes
Market Data & Customer Demands
Deliver Business Success
Analyze Non-Standard
Input !!!
Standardize Business Processes
Detect New Threats & Opportunities
Eliminate Root Causes
LOOP 2 LOOP 3
LOOP 1
LOOP 1 – monitoring and deciding
LOOP 2 – improving existing processes
LOOP 3 – creating new processes
• Three feedback loops illustrate how responsive, agile organization works
• New business processes that deliver success become part of standard business processes
• Agility is continuous, incremental change!
© 2007 Michael Hugos
www.MichaelHugos.com
PART 2
IT Infrastructure for Agility
© 2007 Michael Hugos
www.MichaelHugos.com
Moving Toward Agility• IT infrastructure for agile operations is built on top of
existing transaction processing systems (ERP, CRM, SCM, etc.) – leverage legacy systems
• Agility calls for adding new systems such as:– Data Warehouses and Business Intelligence– Business Process Management or Business Activity
Monitoring– Simulation and Predictive Analytics
• Combine new systems with existing systems using SOA, host them using Server Virtualization and Grid Computing
© 2007 Michael Hugos
www.MichaelHugos.com
Definition: SOA
Services Oriented Architecture – “systems architecture that uses loosely coupled services to support requirements of business processes and users” Wikipedia April 2007
Need to Manage:
- Service Directory- Connections- Performance
Services on network available in SOA environment combined as needed in support of evolving business processes
B
C
E
GD
FH
A
© 2007 Michael Hugos
www.MichaelHugos.com
Definition: Virtualization
Server Virtualization – “partitioning one [or many] physical server computer[s] into multiple servers that each has the appearance and capabilities of running on its own dedicated machine.” Wikipedia April 2007
• Optimize use of server resources
• Centralize server administration
• Common practice on mainframes now available for other architectures
© 2007 Michael Hugos
www.MichaelHugos.com
Definition: Grid ComputingGrid Computing – “distributes processing across a
parallel infrastructure. Throughput is increased by networking many heterogeneous resources across administrative boundaries” Wikipedia April 2007
• Optimize use of all computing resources
• Centralize resource administration
• Support different virtual computer architecturesComputing
Utility
Grid Computing
© 2007 Michael Hugos
www.MichaelHugos.com
Disruption of IT Paradigm - Again
• Remember how technologies like Client/Server, Internet and World Wide Web once created havoc with conventional IT paradigm?
• It’s happening again… ready or not!• SOA, Virtualization, Grid Computing offer new
opportunities for IT infrastructure that is fast, flexible, and cost effective
• Those that master the use of these technologies will once again set the pace for everyone else
© 2007 Michael Hugos
www.MichaelHugos.com
PART 3
Business Case Study
© 2007 Michael Hugos
www.MichaelHugos.com
Is IT a Profession or a Utility?
• Does IT matter; is it a competitive advantage?• Efficient 24/7 operation of existing systems is no
longer a competitive advantage – it’s a given!• Companies need to outsource operation of existing
systems and provisioning of new infrastructure• Large vendors of hardware and software become
computing utility vendors offering greater efficiency• Company IT groups focus on development of new
systems and continuous adjustment of infrastructure• Agile IT enables companies to earn additional 2-4%
© 2007 Michael Hugos
www.MichaelHugos.com
Company and Alliance Partners
Company focuses on core functions that produce unique value-add for its customers
Company out sources support functions to alliance partners
Alliance Partner
‘B’
Alliance Partner
‘A’
Alliance Partner
‘C’
Support Support
Core
Customer
Customer
CustomerAlliance partners provide tailored offering of products & services
CoreCore
Support
Company
© 2007 Michael Hugos
www.MichaelHugos.com
Case StudyOffice Productivity
App Servers
ERP System
Data Warehouse
Production Scheduling
Inventory Control
Doing Business in Real Time
• Old-line candy company selling through traditional retail channels
• Relentless pressure on profit margins
• People see opportunity to sell “designer chocolate” and related items in cozy storefront setting
• Company decides to quickly market test idea by opening a few stores
• Need systems support in 90 days!
• Consider TCO of solution; lease/buy; sunk costs; scalability; flexibility
• You are the CIO...
© 2007 Michael Hugos
www.MichaelHugos.com
Case StudyOffice Productivity
App Servers
ERP System
Data Warehouse
Production Scheduling
Inventory Control
Store POS System
Store Support Ver 1.0
Doing Business in Real Time
• Concept is a success
• Accelerate rollout of new stores… what next?
Supply Chain DW
SOA
SOA
Server Virtualization
SOA
© 2007 Michael Hugos
www.MichaelHugos.com
Case StudyOffice Productivity
App Servers
Data Warehouse
Supply Chain DW
Inventory System
Production Scheduling
Analytics & Simulation ERP
Store POS System
CRM
Store Support Ver 2.x
SOA
SOA
Grid Computing
Server Virtualization
Retire the Mainframe? BPM
© 2007 Michael Hugos
www.MichaelHugos.com
Lessons Learned
1. Web portals provide unified user interface by replacing different system screens with common GUI front-end
2. SOA - build new systems using legacy system components and new server/grid components
3. Split systems processing between server/grid platforms and legacy hardware - host new system features and databases on server/grid platforms
4. Centralize and consolidate servers through virtualization
5. Retire legacy systems as it becomes cost effective to replace them with server/grid based systems
6. Continuous incremental change (no big bang projects!)
© 2007 Michael Hugos
www.MichaelHugos.com
Learn More…
Presentation excerpted from:- Building the Real-Time Enterprise, author, 2005- CIO Best Practices, co-author, 2007
Read my IT Insights column at Computerworld.com
Read my blog “Doing Business in Real Time” at CIO.com
© 2007 Michael Hugos
www.MichaelHugos.com