Lecture 14 Case Study Postgirot Bank and Provment AB

2 Announcements 3-4pm today for those who gave me draft of business plan

3 Quiz

4 Case Issues Industrial Engineering approach to managing corporate server capacity Software measurement systems used to keep track of how various components of mainframe configuration are being used –Systems try to manage risk of over or under capacity Case describes new methodology for applying this approach to servers rather than software

5 Postgirot Swedish-based company providing large, cashless settlement system –Technology is core Potentially for sale and has strong need to be seen as efficient to reduce job turnover post-merger IT strategic in handling 1 million transactions per day –Should be at leading edge of development and operating practice Leading-edge developer of IT with a massive effort to webify entire company Located in very IT-friendly country Must be available 24/7 Leading edge measurement tools is good move

6 Postgirot IT unit 400 people $74m budget Unevenness in workflow –Peak hourly volumes four times average hour Deeply dependent on reliability Built on underground information-processing center to hold central computer and server farm 158 staff focused primarily on development of capabilities to support organization Cost of services historically of secondary concern to getting capabilities installed –Culture of speed and effectiveness instead Stage 2 contagion company on Nolan scale Substantial excess capacity discovered on servers with ability to cut costs around 5% without harming productivity

7 Provment A-B Staff has had significant experience developing software for measuring mainframe performance in OS/390 environments Recently expanded tool to UNIX systems servers –New twist on old theme, relying on industrial engineering tools in operations environment –Driving excess costs out of network without degrading server is key Recently developed new software package to measure the utilization of server capacity –Complex CPU performance measurement system, internal memory utilization, I/O capacity and disk storage use –Measures for each server how many devices are being utilized –Unobtrusive, takes up less than 0.5% of CPU capacity –Package hasn’t been validated in this form yet

8 Key aspects of new package Intensely secure Tightly controlled user system access Designed to keep servers running if disabled (even though this is not anticipated to happen) All staff for installment provided by Provment as a service –Eliminating training for Postgirot staff –Lowering barrier for first trial Maximum time to install on all servers 60 days to ensure rapid access by management to results All installation costs added together not more than cost of 4 UNIX servers

9 End results for UNIX servers Discovered average workload of first 48 servers less than 10% during prime shift –Up to 40 servers could be eliminated –Not unexpected Machine consolidations expect to save 500k in one time, eliminating capital investment and $1.4m per year (5% of IT budget) Each server on full-cost basis about 3 times more expensive than anticipated –Management didn’t realize cost of what they were running –Can they generate these savings? System showed high potential for UNIX servers being combined –NT/WIN servers suggested as next step

10 Issues Quality of analysis in establishing cost coefficients – new area/idea Potential misuse of Postgirot data by Provment How sensitive will system be to peaks? Betting important measurement function on new company? No mention of applications, which are sensitive to down time and should be on reliable mainframes Concern that these issues are addressed piecemeal rather than holistic