1 On Demand Environment The next era CMSC466/666 Based on IBM On Demand Business

2 Agenda Drivers for e-Business On Demand Drivers for e-Business On Demand Characteristics of On Demand Business Characteristics of On Demand Business On Demand Computing Environment On Demand Computing Environment Evolution of On Demand Financial and Delivery Models Evolution of On Demand Financial and Delivery Models Summary & Action Summary & Action

3 CIO CEO Companies generate innovations, in fat years or lean, by deploying new technology along with improved processes and capabilities. Companies that linked business processes with trading partners show 70% higher profitability than those that do not. 42% of the top 500 IT executives said maintaining and managing excess complexity cost them an average of 29% of their IT budgets. Institutions Face Challenges Across the Organization CIO Insight, 02/2003 Business Advisor Zone, 12/2/2002 McKinsey & Company, Volume CFO

4 on demand business business Pricing Pressures Security Threats Capital and Asset Utilization Constituent Customer Preferences Economy Governance Productivity technology Open MovementCommoditization Clusters Grids Autonomic ComputingWeb Services Blades Virtualization Standards Constantly Changing Environment Requires constant improvement in business design and business process

5 Defining the next computing era — Sam Palmisano, IBM Chairman and CEO “An enterprise whose business processes -- integrated end-to-end across the company and with key partners, suppliers and customers – can respond with speed to any customer demand, market opportunity or external threat”

6 Enterprises everywhere are embracing e-business Network Era Client/Server Era Centralized Era

7 The data on this chart -- from the US Commerce Department -- demonstrates how enterprises have made IT an integral part of business over the past 40 years. The data on this chart -- from the US Commerce Department -- demonstrates how enterprises have made IT an integral part of business over the past 40 years. The history of the IT industry has been defined by three computing eras: the centralized era, the client/server era, and the networked or e-business era. The history of the IT industry has been defined by three computing eras: the centralized era, the client/server era, and the networked or e-business era. Enter IBM’s System/360, which launched the centralized era of information technology in business. In this era, the prevailing business strategy was automation of back office processes, and the computing model was all about centralized computing. In other words, mainframe computing. Enter IBM’s System/360, which launched the centralized era of information technology in business. In this era, the prevailing business strategy was automation of back office processes, and the computing model was all about centralized computing. In other words, mainframe computing. By the mid-80s and early 90s, the PC and client/server revolutions had taken hold--enabling individuals to manage many of their daily tasks more quickly, and accelerating the staffing shift in many companies toward knowledge workers over clerical workers. The computing model supported the stand-alone applications and processes that characterized this era. By the mid-80s and early 90s, the PC and client/server revolutions had taken hold--enabling individuals to manage many of their daily tasks more quickly, and accelerating the staffing shift in many companies toward knowledge workers over clerical workers. The computing model supported the stand-alone applications and processes that characterized this era.

8 Now, we are moving into a new era, the era of a services-led global economy. In this new age, the old needs of businesses haven’t disappeared -- but they are joined by a new set. The main criterion for competitive success now is responsiveness: the ability to adapt and respond rapidly to ever-more-volatile demand, coming from an ever-wider global marketplace. Now, we are moving into a new era, the era of a services-led global economy. In this new age, the old needs of businesses haven’t disappeared -- but they are joined by a new set. The main criterion for competitive success now is responsiveness: the ability to adapt and respond rapidly to ever-more-volatile demand, coming from an ever-wider global marketplace. We are now in the early stages of the network era. Enterprises are focused on integrating diverse processes (legacy and new), transforming the entire enterprise, creating new business models, and realizing business value such as increased profitability. We are now in the early stages of the network era. Enterprises are focused on integrating diverse processes (legacy and new), transforming the entire enterprise, creating new business models, and realizing business value such as increased profitability. In the network era, our customers are continuing to demand e-business and are striving to realize the full value of enterprise integration. In the network era, our customers are continuing to demand e-business and are striving to realize the full value of enterprise integration.

9 Evolution of e-business Access Enterprise Integration On Demand Access | Publish | Transact | Integrate Internally | Integrate Externally | Adapt Dynamically Optimize operations Dynamically respond to the needs of customers, employees, partners, and suppliers Buying not browsing Working not surfing Get on the Net

10 Phase 1... access to digital information. Phase 1... access to digital information. This was all about publishing content, most of it of the This was all about publishing content, most of it of the static “look-up” variety. static “look-up” variety.  Simple database queries allowed us to do things like check a bank account, look at airline flight information. bank account, look at airline flight information. Pretty easy to get in here. All an enterprise needed was a home page. All an individual needed was a browser. Ÿ Phase 2... real transactions... real e-business.  Don’t just check a flight departure time... book your seat.  Don’t just look at your bank account... move some money This requires more than a Website. This takes behind-the- scenes integration of technologies and business processes. This requires more than a Website. This takes behind-the- scenes integration of technologies and business processes.

11 Phase 3: On Demand Business IBM called it the “Advanced” phase and now defined it as “on demand.” IBM called it the “Advanced” phase and now defined it as “on demand.” This was where everything was headed; and that not that many people had gotten there yet. This was where everything was headed; and that not that many people had gotten there yet. Most importantly, this is about end-to-end integration -- of the processes within the enterprise, as well as all the relationships and transactions that anchor that enterprise in markets and industries. Most importantly, this is about end-to-end integration -- of the processes within the enterprise, as well as all the relationships and transactions that anchor that enterprise in markets and industries.

12 Business Design Financial & Delivery Models Computing Environment On Demand Business

13 Three things in mind -- The design of the business models and processes. -- The design of the business models and processes. -- The implications for the supporting technology environment. -- The implications for the supporting technology environment. -- And how they’re going to acquire and manage its processes and technology. -- And how they’re going to acquire and manage its processes and technology.

14 Business Design On demand business Responsive Variable Focused Resilient Computing Environment On Demand Business Financial & Delivery Models

15 4 characteristics to on demand organizations Responsive to the changes Responsive to the changes Variable cost and hence a good part of the cost become related to the output of the organization Variable cost and hence a good part of the cost become related to the output of the organization Focused on the core competency Focused on the core competency Resilient to changes in the environment and adaptive without comprising the objective Resilient to changes in the environment and adaptive without comprising the objective

16 Business Design Financial & Delivery Models Computing Environment On Demand Operating Environment Open Integrated Virtualized Autonomic Requires an On Demand Operating Environment On Demand Business

17 The on demand operating environment Integrated Autonomic Virtualized Open

18 Self- Protecting Self- Healing Self- Optimizing Self- Configuring Autonomic Computing Attributes Self-managing systems that deliver.. Secure Information and Resources Anticipate, detect, identify, and protect against attacks Increased Responsiveness Adapt to dynamically changing environments Business Resiliency Discover, diagnose, and act to prevent disruptions Operational Efficiency Tune resources and balance workloads to maximize use of IT resources

19 WSDL Web Services Globus Linux SOAP XML Sample Open Standards

20 IBM in Linux  UNIX-like Scalable operating system  Reduces cost of Computing  Increases freedom of choice  Fosters innovation  Promotes a culture of open standards  Open Distribution & Open Source Code.  Supported by a global community  Rich solutions offering

21 Virtualization Technologies Today Virtual Servers (Linux VMware) CPU Upgrade on demand Virtual Database (DB2 Federated) Virtual Storage (StorageTank) Virtual File Systems (General Parallel File System and Network File System) Virtual Mainframe (Global Distributed Parallel Sysplex)

22 The efficient and flexible combination of resources to optimize operations across and beyond the enterprise PeopleProcesses Information & Infrastructure + + Integration

23 Business Design Financial & Delivery Models Computing Environment On Demand Business New ways to pay for and manage IT Flexible Variable Managed Optimized Redefines Financial and Delivery Models

24 Flexible Financial and Delivery Models Fixed Traditional IT Managed Operations Utility Services Capacity On Demand Financial Models Delivery Models Off Premises Shared Variable Off Premises Dedicated On Premises Utility Mixed On Premises Customers choose where and how they access IT

25 Business Design Financial & Delivery Models Computing Environment On Demand Business

26 Summary & Recommendations Summary & Recommendations 1.Business Design integrating all stakeholders is essential for value delivery 2.Increased IT infrastructure Investment as % of capital assets 3.Align infrastructure Investment to On Demand computing environment 4.Increase awareness & IT literacy to overcome the Digital Gap 5.We are all stakeholders and KOM is ideal forum for thoughts leadership.

27... Thank you business/index.html