Realizing a healthy SOA system to deliver business value quickly Marie Wieck Vice President, IBM Middleware and SOA Services IBM Global Technology Services

HUNGRY FOR CHANGE INNOVATIVE BEYOND CUSTOMER IMAGINATION GLOBALLY INTEGRATED DISRUPTIVE BY NATURE GENUINE, NOT JUST GENEROUS IBM’s 2008 CEO Study - The Enterprise of the Future Is: In-depth study taking the pulse of over 1100 CEOs

Global CEO Study 2008 | April The CIO Implications of the CEO Study … Role of CIO as Change Leader  Success in a global economy requires diversification and integration –Mature versus emerging markets –Existing versus new clients  Organizations are recognizing the need to manage differently and invest in new techniques for communications and collaboration –Aging workforce, availability of skilled resources –Explosion of mobile employees –Increased use of global resourcing –Regulatory compliance requirements  Market demand for corporate social responsibility is forcing a hard look at ‘green’ IT –Global energy crisis –Exponential growth in data volume, network sprawl and mobile devices –Aging data centers ….the compounding effect is forcing change

SOA is a Core Enabler of the Enterprise of the Future 1. Hungry for change 2. Innovative beyond customer imagination 3. Globally integrated 4. Disruptive by nature 5. Genuine, not just generous Core Traits How SOA Can Help? Source: IBM Global CEO Study 2008 SOA improves business agility and increases IT infrastructure flexibility Customer Interaction and self-service are among the top SOA projects with rapid ROI SOA is a best practice for horizontal business integration within the enterprise & externally with customers and partners BPM is a key SOA technique for business process/model assessment and redesign SOA services for dynamic IT management enable NEDC/Green tracking

Three common business goals and related SOA benefits Providing new services to customers and/or partners  Benefit: increased revenue from new channels and services Attaining a single view of the customer  Benefit: –Higher customer satisfaction –Higher revenue through better cross-sell/up-sell activities and customer loyalty/value/buying habits analysis Integrating and automating processes  Benefit: –Faster process cycle times –Alleviation of manual intervention and its associated errors –Lower costs for maintaining redundant systems supporting redundant processes –Faster time to market with newly acquired services HUNGRY FOR CHANGE GENUINE, NOT JUST GENEROUS INNOVATIVE BEYOND CUSTOMER IMAGINATION GLOBALLY INTEGRATED DISRUPTIVE BY NATURE

Foundational Extend End-to-End Transform Adapt Dynamically Experience based on 6550 customers across Smart SOA* *# of Customers using our SOA offerings  750 Lessons Learned  650 Best Practices IBM Academy of Technology deep dive analysis of 100 case studies selected from over 250 submissions: Valuable regardless of Where You Are in the SOA Continuum SOA Best Practices White Paper Now Available Smart SOA TM leverages IBM’s client experiences Driving the transformation of SOA Services

Follow Proven Best Practices Linking business and IT from the beginning Develop an architecture with a vision for the future Maintain end-to- end operational visibility Built on skills within culture and governance Scalability and process integrity are key

Aberdeen Group Study: Organizations not adopting SOA - Can’t justify the investment or don’t have the skills Source: How SOA Is Changing IT – What CIOs Should Know Aberdeen Group

How can IT provide business impact? Which types of initiatives do you believe will have the most impact on your organization’s IT management strategies over the next 24 months? Source: Enterprise Strategies Group, 2008 IT Management Survey, % respondents selecting, multiple responses accepted (602 overall) Business: Efforts to improve business agility and business process flexibility Demand for better business intelligence and improved decision making Programs to control internal costs of doing business IT: Rollout major upgrade of mission critical apps Overall improvement of IT service management level(s) and IT’s credibility with business decision makers 50% 30% 10%

A Smart SOA TM deployment delivers business agility AGILITY: ability to quickly and effectively respond to changes, opportunities and threats

IBM can help build a business case to establish and measure the ROI and value gained A step-by-step approach that is:  Demonstrable  Quantitative  Focused on Metrics  Flexible

How to build a case for improvement? 1.Determine the area for greatest impact -Benchmark against others in your region or industry -Align to business initiatives -Determine Savings others have seen 2.Determine your state of maturity 3.Determine the savings metrics for your organization -Risk Adjusted Return on Investment (RA ROI) -Return on Investment (ROI) -Net Present Value (NPV) savings -Internal Rate of Return (IRR) -Payback period 4.Create your own business case based on your data

IBM can help you establish target KPI benchmarks for the project with the IBM Benchmark Wizard  Based on real client experiences  Allows for industry specific views  Provides real average results and target benchmarks  Covers multiple project domains  Cost, time, efficiency, quality and agility metrics

SOA deployments are delivering measurable returns Companies globally are realizing... An electronics company reduces IT Costs by 7% by deploying a flexible SOA infrastructure A major Bank estimates avoidance of US$1 billion in IT costs due to SOA approach Retailer of home improvement products Has 286% ROI on SOA project Municipal government improves citizen services via SOA integration of 27 departments’ application platforms Automotive company expect 20% cost reduction of IT Operations during next 5 years due to new SOA Infrastructure University increase collaboration, responsiveness and student moral from Portal and SOA integration Insurance company reduces application integration cost by leveraging SOA integration A chemical and petroleum company 5 percent increase in oil and gas production 30 percent reduction in costs

Leveraging SOA to deploy multi-play solutions Connect 10M customers in 910 cities and extend reach to rural areas  Extend multiple services across new, connected broadband network  single touch activation capability from time of ordering to activation of subscriber services :  customer satisfaction  call center load  Scalable network to handle 50% growth  Leveraged IBM SOA Integration services MOST IMPORTANTLY - BSNL GIVES BACK TO THE COMMUNITY  At affordable price high speed connectivity to the most rural parts of the country  Provides opportunity to consumers to collaborate and learn  Methods to deliver remote education over secure VPN

Design Projects with the SOA Reference Architecture Business Services Development Services Service Management Infrastructure Services Enterprise Service Bus Partner Services Business App Services Access Services Interaction Services Process Services Information Services Infrastructure

Establish and Maintain your SOA Health Service Use and Governance Application Reuse Security Flexible Infrastructure Middleware Service Management Applications and Services Healthchecks for SOA Infrastructure Healthcheck for SOA  Workshops  Assessments  Specialized Diagnostics Infrastructure Architecture Healthcheck for SOA

SOA architecture decision accelerator Faster time to value, less risk through proven recommendations  Repository of Architectural Decisions –Decision Tree based –Navigation/search by role, project phase, scope, etc. –Decision identification and making based on prefilled alternatives  Patented web 2.0 approach –Governance on accepted architecture decisions  IBM Global Services architecture decision accelerator for SOA -100 practitioners involved -Over 320 decisions captured  Architectural Decision Knowledge Wiki for Clients –Web 2.0 tool & model for capturing decision available on alphaWorks with 20 sample decisions: –Can address any IT domain including SOA

Infrastructure in support of a Smart TM SOA implementation  Is a physical service instantiation of IBM’s SOA foundation product set that: ─Allows a client to protect existing applications ─Creates an infrastructure that can accommodate future business needs  The Smart SOA solution is based on IBM best practices: ─Scalable ─Manageable within your environment & SLAs ─Adaptable – ready to respond as business needs change ─Responsive – engineered for the performance expected by your service consumers ─Transaction oriented - secured process integrity in a robust transaction environment  Maintaining integrity across the business processes – Process integrity

Process Integrity for the Stresses of Volume and Time WebSphere Virtual Enterprise WebSphere eXtreme Scale SOA Integration Services for Process Integrity White Paper: “Realizing business value from an integrated service-oriented architecture system in a multivendor world

 IBM SOA Integration Services - –Connectivity and Reuse Create a robust, scalable runtime SOA infrastructure that can effectively enable and support SOA applications and Web services –Portal Infrastructure Services Design and implementation services to engineer an integrated, flexible and reusable portal infrastructure to support Web, SOA, and Java applications –Web Application Server Engineer an integrated, flexible and reusable application infrastructure that supports Web, Java or SOA applications –Web Optimization and Virtualization Optimize and virtualize a client’s IBM WebSphere Application Server and non-IBM application server IBM Global Technology Services announces: IBM SOA Integration Services for Process Integrity

Process Integrity In Action: Order Management 14,000 Service- Calls/Min 100,000 completed orders / Day Through WebSphere Process Server Services from Customer Management, Provisioning, & Billing Systems Major European Telecom Company

New economics Rapid service delivery Aligned with business goals The New Enterprise Data Center – built on an SOA infrastructure

IT energy use doubling every 9 – 24 months By 2011, clients will spend $1 on power & cooling for every $1 on hardware 100 units of energy production 3 units for productive IT IT accounts for 2% of anthropogenic CO2 emissions IT energy crisis has data centers at a tipping point

Stages of Adoption Drives IT efficiency Rapid deployment of new infrastructure and services Highly responsive and business goal driven

This transformation spans across people, process, information... and technology  Skills shift from operations (break / fix) to IT Business Analysts  Break down silos and organize around IT service delivery  Paradigm shift toward shared environment  Standardization  Disciplined  Repeatable and documented processes –Change and configuration management –Process automation  Leverage information for business optimization –Deliver trusted information real time and in context –Reduce risk and improve visibility into business operations  Open standards –Open management across server, storage, and networking –Open networking standards  Role of systems & networking in recentralization  Automation

Our experience points out 5 key “focus areas” Focus Area / Pain Points  Infrastructure Health Check for SOA  Infrastructure Readiness Assessment for SOA Simplify & save money Virtualization / Consolidate Relieve constraints Green Business compliance Business Resiliency / Security Deliver quality service Service Management Priority: Getting Started:  IT Optimization Strategy & Planning  Virt./ Consolidation Assessments  Data Center Energy Efficiency Assessment  Data Center Rationalization Services  Security Assessment  Resiliency Assessment & Planning  Service Mgmt Strategy & Planning  Business of IT Exec. Dashboard Decouple application logic from infrastructure Flexible Infrastructure for SOA

IBM Data Center Evolution  Dramatic reduction in operational costs thru consolidation, virtualization, optimization Project Big Green  2X capacity, no increase in consumption or impact  $1 saved on energy $6-$8 operational savings The New Enterprise Data Center  Increased quality of service delivery  ROI of less than 2 years  A service oriented approach to data center design IBM’s own data center transformation 1997 Today CIO’s Host data centers Web hosting centers 80 5 Networks 31 1 Applications15,0004,700

Provision new services in minutes Triple asset utilization System outages down 58% Reduce floor space by 80% Reduce power usage by 40% Up to 60% heat reduction Results customers have realized *

IBM Service Management for SOA Monitor SOA Services, Events and Dependencies Visibility ControlAutomation Provide Secure and Compliant Quality SOA Service Delivery Support Dynamic Runtimes and Service Lifecycles

IBM’s Service Management Capabilities Combined expertise in service management and SOA  Strategy and planning creates an approach that’s aligned with business objectives  Design and implementation is based on a proven approach and framework  Proven reference architectures and leading practices accelerate the design process Driving results (on average) 58% reduction in System Failures Downtime reduction of 80% DesignImplementRun Managed services  IT Asset Management  Help Desk  Self-enablement portal Business of IT executive workshop Service management design Service management strategy and planning Service management implementation – accelerators for service and asset management Business of IT dashboard Service management implementation services Strategize and plan

Clients describe the key benefits they derive from leveraging IBM implementation services Productivity Improvements 28% Quality Benefits 39% Labor Savings 33% Quicker Time to Benefit Labor Savings Quality Improvement Process Savings Performance Enhancement

“Thanks to this new information, never before available, we were able to dramatically demonstrate the importance of improved monitoring and management of the airline’s IT systems to the business side of the enterprise.” Masayuki Kurosawa, Vice President, IT Service and Planning Major airlines reduces IT outages to improve operations Combined expertise in service management and SOA  Dramatically improved overall quality of service - reducing system failures 58 percent, IT interruptions 39 percent, and downtime 80 percent  Improved overall quality of service by reducing outage-related operational delays  Provided JAL management with greater understanding of how IT affects its business through unprecedented visibility into the current state of its IT systems

Summary Companies in every industry are exploiting advanced technology to gain competitive advantage Infrastructure and information complexity are driving a change to Service Oriented Architecture and leveraging Agility to drive Innovation for the business IBM has the experience and knowledge to help you realize more quickly the full value of your SOA deployments

Today's Business Landscape is Undergoing Rapid and Transformative Change Are you prepared?

Thank you