Business Technology Optimization: The New CIO Agenda Kenneth R Klein Chief Operating Officer Mercury Interactive

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 2 The New Strategic IT Agenda Business Technology Optimization Optimize Business Process Quality Align IT & Business Objectives Control IT Costs

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 3 BTO Aligns IT Strategy and Execution With The Business Govern priorities, processes and people required to run IT as a business Deliver and Manage the output of IT business processes consistently and cost effectively Manage the dynamic relationship between IT strategy and execution DELIVERDEVELOPDESIGNMANAGESUPPORT APPLICATION LIFECYCLE IT GOVERNANCE

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 4 Maximum BTO Impact IT Governance & Application Delivery and Management Capital and operating expenses Operational efficiency Performance and quality Strategic Impact DELIVERDEVELOPDESIGNMANAGESUPPORT APPLICATION LIFECYCLE IT GOVERNANCE

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 5 The BTO Reality “Business Technology Optimization (BTO) is an emerging industry category that optimizes technology and business processes in the enterprise. IT governance and application delivery and management create synergy between two BTO markets. CIO's bridging the gap in these two areas further enable the competitive position of their enterprise.” “BTO has now reached a maturity that will make it a serious contender in infrastructure management. The architecture is sound, the capabilities complete and the deployment easy. A solution to consider...”

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 6 BTO Industry Partners SAP Siebel Oracle PeopleSoft BEA IBM Sun Microsoft Sybase INFRASTRUCTURE AND APPLICATION VENDORS Accenture Cap Gemini E&Y BearingPoint Computer Sciences Deloitte EDS IBM Spherion SYSTEM INTEGRATORS

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 7 Manage Business Processes Maximizing performance & availability of embedded business processes is key WEB SERVER NETWORKAPP SERVER DATABASE SECURITY J2EE/.NET WEB SERVER NETWORKAPP SERVER DATABASE SECURITY WEB SERVER NETWORKAPP SERVER DATABASE SECURITY CUSTOMERP/CRMLEGACY BUSINESS PROCESS

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 8 BUSINESS VALUE IT Governance Accelerates BTO DELIVERDEVELOPDESIGNMANAGESUPPORT IT GOVERNANCE PERFORMANCE COST COMPLIANCE BUSINESS PROCESS PRODUCTS SERVICES

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 9 IT Governance Managing the Business of IT

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 10 Technology Focus of BTO REAL-TIME IT DASHBOARD CIO KPIs Scorecard CFO Portfolio NPV, Costs LOB GM Availability Priorities VP Dev Status Quality VP Ops SLAs Capacity Engineers & Analysis Tasks/Status INTEGRATED IT PROCESS WORKFLOW DELIVERYIT GOVERNANCEAPPLICATION MGMT TestingDeployment Change and Config Demand Mgmt Portfolio Mgmt and PMO Resource and Cost Mgmt Business Availability Service Level Application Support Govern, Deliver, Manage

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 11 Start Small Realize Value E X P A N D Iterative Approach BTO METHODOLOGY Resolve Immediate Issues Optimize Quality Throughout Projects Standardize BTO Processes No More Big Bang Projects

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 12 Business Measurement Very well 25% Somewhat well 55% Not well at all 20% How Well Is It Executed? “For automated business processes, how well do you define and measure IT performance against service levels that matter to business?”

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 13 What Can We Do Better? Percent of firms describing their company as very successful at the following activities: 39% Optimizing the use of infrastructure that supports these apps and processes Ensuring that apps and the business processes they support meet service level and business goals Optimizing the performance of apps while they are being used Testing the quality of apps before deploying them 30% 16% 15%

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 14 GMAC - Major Residential Lender Effective portfolio and project management CEO, CFO Dashboards support IT Improved quality and performance Savings (on track for $5+ million annually) Efficiency (required effort cut up to 90%) Integration of Test Director and Demand Manager REAL-TIME IT DASHBOARD Demand Mgmt Testing Portfolio Mgmt and PMO

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 15 Fidelity - Large Financial Institution Reduce costs for implementation, maintenance, support, and operation of enterprise applications Breakthrough levels of efficiency and savings (value) through process automation Closed-loop defect and incident resolution processes for development, deployment, and production Integration of Testing, Tuning, and Management tools with Demand Manager and Change Manager REAL-TIME IT DASHBOARD Demand Mgmt TestingDeployment Change and Config Resource and Cost Mgmt Portfolio Mgmt and PMO Business Availability Service Level Application Support

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 16 BTO Essentials BTO Leadership Customer Success Financial Excellence Proven Technology

©2003 Mercury Interactive Corporationwww.mercuryinteractive.com 17 Get Started 3. MANAGE 1. MEASURE 2. MAXIMISE Measure critical business process against SLA Identify opportunities for quality improvement Leverage and re-deploy technology investments Improve process results Define optimization indicators Manage performance Alert proactively