Maximise Software Investment In Uncertain Times

®

IBM Software Group

Managing Applications with Rational

Pat Flisher
FSS Business Value Lead
UKI
IBM Rational

© 2007 IBM Corporation

IBM Software Group | Rational software

IT & Business Executive Pressures

Bottom line: IT flexibility enables business flexibility
Enterprise Modernization 2

Developing an IT Strategy in
Uncertain Times

Andy Kyte
Vice President & Research Fellow

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The Real IT Strategy Challenge
Return on Investment Return on Assets
• To identify to business • To have a detailed
stakeholders the potential understanding of exactly
for current and future where you are
technology innovations
to deliver transformational • And a current plan for the
value future life cycle management
• To provide business of every asset
change sponsors with • Based on the best available
accurate cost/ understanding of an optimum
risk/timescale estimates direction
for IT-dependent business
change initiatives • And a process in place to
continuously review and
optimize direction and plans

Balance Budget Planning
and Strategic Planning
Budget Planning Strategic Planning

• 18-month horizon • Asset half-life or seven-year
horizon (whichever is longer)
• Objective — • Objective — quot;maximize
quot;have a budgetquot; return on assetsquot;
• Project-focused • Value-focused
• Administrative overhead • Core discipline of IT
management
• Once per year • Continuous
• Horse-trading • Portfolio management

Developing Persistent Commitment
N.B. quot;Engagementquot; with maximizing value delivery
High Business Engagement
IT Engagement
Engagement

quot;They shoot
The beginning horses, don't
Of quot;legacyquot; they?quot;

Low

Live 5 Years 10 Years 15 Years 20 Years

Asset Persistence


The world continues to get a whole lot smarter

INSTRUMENTED INTERCONNECTED INTELLIGENT
We now have the ability People, systems and We can respond to changes
to measure, sense and objects can communicate quickly and accurately, and get
see the exact condition and interact with each better results by predicting and
of everything. other in entirely new ways. optimizing for future events.

Today, there are 1 billion The internet of people is 1 Every day, 15 petabytes of new
transistors for each person billion strong. Almost one third information are being generated.
on the planet. of the world’s population will be This is 8x more than the information
By 2010, 30 billion RFID tags on the web by 2011. in all U.S. libraries.
will be embedded into our There will be nearly 4 billion An average company with 1,000
world and across entire mobile phone subscribers employees spends $5.3 million a
ecosystems. worldwide by the end of 2008. year to find information stored
on its servers.



Fleet Management
Daimler FleetBoard
What’s Smart?
Smart end-to-end system optimizing
vehicle usage and routing
Innovative technology for advanced
telematic solutions

Smarter Business Outcomes
5-10% reduction in fuel consumption due
to optimized vehicle management
10% reduction in telecommunications
costs due to increased automation
“Focal Point helps us discover the
optimal set of customer features How Rational Software Enables
and balance those against the Smarter Products
needs of our business, allowing us Improved collaboration in the product
to deliver continual enhancements portfolio planning process
to our telematic solution.” Automated release planning balancing
cost, risk and reward


Mobile Access to Medical Images
Merge Healthcare
What’s Smart?
Provides medical professionals access to
complex medical images on mobile devices
Helps ensure prompt emergency diagnosis
– anytime or anywhere

Smarter Business Outcomes
Reduced hospital operations costs
Reliable, secure, scalable delivery of
medical images and reports

“We rely on Synergy and Change to How Rational Software Enables
manage the complexity of the
Smarter Products
software and to ensure that our
global development teams operate
Collaboration across globally distributed
as one, for the best result to our development teams
customers. This software from IBM is Change management across the end-
part of our livelihood; it's our DNA.” to-end software lifecycle


Challenges to the effective delivery of software
A history of cost overruns, schedule slips and quality issues

“62% of projects failed “50% of outsourced projects
to meet their schedules ” are expected to under perform”

“49% of projects suffered “Only 42% of users are
budget overruns” satisfied with project quality”

“Only 37% are satisfied with the
“41% of projects fail speed of software development”
to deliver the expected
business value and ROI”

“Only 34% of software projects
are deemed successful
costing over $300B annually”



The software challenge in systems is even greater
Software failures can be dramatic for complex systems

Aerospace Microsoft Ford Super
Agency Zune Duty Pickup
$1B prototype rocket 1 million owners of the Sales interrupted until
self-destructed just 30-gigabyte device woke engine control software
40 seconds after takeoff up one morning to find could be updated to
due to a software bug their devices inoperable recognize improper
in the on-board due to poor leap year levels of heat in the
guidance system handling exhaust system



Old methods of measuring software engineering are
inadequate and incomplete considering today’s complexity
and scale
1960s-1970s 1980s-1990s

Complexity 100% Custom 30% Reused Assets
70% Custom

Process Ad-hoc Repeatable

Teams Collocated Collocated
On the job training Software skills

Tools Proprietary Mix of Proprietary & Commercial
Not integrated Not integrated

Project Predictable Unpredictable
Performance Over budget, over schedule Infrequently on budget, on schedule

Success Rate 10% 25%-33%



Challenges to effective software delivery today
Complexity Challenges Team Challenges
More granular service functionality Geographically dispersed teams
in composite business applications that often include business partners
Large number of projects and Effective cross-organizational
assets including custom, outsourced visibility and synchronization,
and packaged sharing becomes an imperative

Process Challenges Tools Challenges
Need for market experimentation Lack of standards impacts ability
to collaborate, automate and report
Blind adherence to process insensitive across teams and assumptions
to potential business trade-offs
Frequent asset updates and
Need for agility at scale changing interdependencies

How do I control this new world to gain advantage?



Software engineering metrics that measure absolutes
can provide the wrong incentives to your team



Software engineering metrics must align
with desired business outcomes 3
Value

2 Address development
as a value creation center

1 Efficiency
Foster innovation
and reuse across
organizational and
geographical boundaries
Address development
Control as a cost center
Enterprise application
modernization
Address the risks Productivity
Speed merger and
of development Software engineering acquisition absorption
Perceived quality base quality
Reduce traditional
Scope uncertainty Process agility development in favor of
smart package software
Security failure Global collaboration integration and SOA
platform
Failing an audit



Effective software delivery enabled by measurement
Software
Value investment
management
Project/Program aligned with
Governance business priorities
Global team
Efficiency effectiveness and
Individual quality collaboration
and efficiency
improvements
Breadth of Impact

Control

Value
INDIVIDUAL TEAM ORGANIZATION BUSINESS
Measures of Reduction in Reduction in Increase in project Increase in architectural
increasing scrap/rework and development labor predictability reuse and earlier time to
associated labor cost worldwide Increase in quality value
value costs Reduction in Improved market Increase in organizational
Improvement in custom assets, reputation productivity, profitability
release quality training, tooling and and market reputation
process variants



How can I get to more effective software delivery
from where I am today?

“How do I further automate software
delivery within my organization?”

“How can I enable collaboration
throughout the software
delivery process?”

“How can I unobtrusively gather
measurements to ensure progress
towards desired business outcomes?”

“How do I make incremental,
iterative progress towards more
effective software delivery?”



Software delivery is a business process
that must be continuously improved
Implementation
Requirements Deployment
/Assembly

Design Verification

CIO’s top priority on behalf of the CEO
over last three years:
“Improving Business Processes”
Source: Gartner, “Making the Difference: The 2008 CIO Agenda,” Jan. 2008



To improve coordination and visibility, look for ways to
collaborate across the software delivery process

Leverage social networking
capabilities to enable broader and
richer participation in software
projects

Collaborate Virtualize quot;team memoryquot; to
Drive organizational overcome geographic and temporal
consensus on priorities gaps in the software lifecycle
and improve workforce
productivity

Enable flexible, global resourcing
and energy-saving workplace
models


In Context collaboration

Project
Manager

Developer /
Build Engineer

Tester



To increase efficiency, look for ways to automate
the business process of software delivery

Improve productivity and reduce
headcount

Standardize processes and
automate repetitive tasks to
Automate improve team efficiency while
Lower costs and improve reducing time to value
quality by automating
workflow based on
real-time information
Enhance regulatory compliance
through self documenting data and
workflows



Process Awareness

Project
Manager

Developer /
Build Engineer

Tester



To ensure progress towards business outcomes,
look at how to report on the software delivery process
Make better informed decisions
by leveraging the real-time
instrumentation of the software
delivery process

Leverage metrics for continuous
individual and team capability
Report improvement
Continuously improve by
measuring progress
against desired business
outcomes Gain insight into a projects which
span organizational and
geographic boundaries with
minimal disruption


IBM Software Group | Rational Software

Application Management and Modernisation Solutions
Aimed at Customers with:
Escalating or Permanently High Costs – Most spend too much time and resource on maintaining old
applications (up to 80% of IT budget is maintenance)
Desire to Innovate and Gain a Competitive Edge –In the current economic conditions IT needs to enable the
business to differentiate and react speedily as those conditions change – yet resource available to do so is tied up
in the existing applications.
Proven, Available Solutions - whichever direction the process takes you, secure risk free and productive support
solutions are essential.
Real Solutions:
Organisations can do two things outside the scope of this discussion - nothing (and pay for ever increasing
costs) and replace everything by buying packages or outsourcing totally
Once the applications are there are four other options which can to be discussed in detail –each will bring
its own set of returns :
• “Update” – Increase the support of the business and the business throughput by improving the user
experience (both look and feel and navigation)
• “Optimise” – Make it easier (and cheaper) to maintain the back-end applications. This can also support
Application or Package retirement in a managed way (eg full impact known and understood with a mediation
process in place for ensuring continuity of service [and services])
• “Convert” – Move the existing applications ‘as is’ to a new platform using automated tooling. Often
• ..and “Re-write” – Start again but making use of the existing assets and extracted designs. Move to a ‘write
once, use many times’ environment, increaing quality and lowering costs
…but first there needs to be a management framework in place.

Page 24


The Four Options…

Updated
Modern
Application
Screens R (Java)
Update “look
B
& feel” Transformation/ D
Portal Conversion or Updated
R Application
Older, A (COBOL)
Refactoring Expensive D
“Rationalised” to
Efficient Updated
Version
Maintain &
Application
of the Inflexible (Java EJB)
Application (legacy)
Applications
Reusable
Components
or Re-Build or RAD
Extract or
Services New
Design RBD
Application
SOA
Page 25


Enterprise Modernisation in a Managed Framework

Application How do we decide Now we know what
Modernisation where we should we are going to do
Propositions start? Which first first and why, which
-Update steps will be low risk tools are we going to
and high return? use? What services
-Optimise
do we need?
-Rewrite
-Convert Next
Project
Loop
Back

Where are we starting
from? Do we have a picture Have we got a suitable How are we going to
of the current Architecture? Management Process for document the
All the portfolio? Do we the Projects in place? Will requirements?
know which Business we have visibility of ..through to – How
processes are involved? progress (whoever is are we going to re-
doing the work)? test everything?
Page 26


Enterprise Modernisation – via Systems Architect,
Focal Point and Rational Team Concert
Application HATS, RAA,
Modernisation RAM, RAD,
Propositions Focal RBD, RDi, RDz,
-Update Conversion
-Optimise Point
Tools, …..
-Rewrite
-Convert Next
Project
Loop
Back

Systems ReqPro, Doors,
Architect Rational RRC, CC, CQ,
Team Synergy, RQM,
Concert QM portfolio,
…..
Page 27


Rational Portfolio in Modernisation Projects
Process Improvement
Manage RTC RMC
RPT RQM Test
For Portal
HATS
Requirements Automated
Conversion Tools
Update Convert
Watchfire Screens
Build

RRC Legacy

Enterprise Architecture
RAM -(Systems Architect)
Optimise Re-Write - “As Is” and “To Be”
Assets

Rational Analyse Design
Transformation SOA Architect Decisions?
Workbench
Focal Point

Page 28


Returns….
Return on Investment or Return on Assets?
Link to Gartner slides (Delivered at the Rational Executive Forum in April 09)
Implementing and using a product like Systems Architect will produce a Return on
Investment in the short term of 20 -30%; Managing your Application Portfolio actively and
effectively over a longer period of time will give the business a much larger Return on their
Assets – over the lifetimes of the assets
Returns can be calculated for each product deployed and for supporting a customer’s
overall investment but the returns are very much customer specific – we need to know the
“As Is” and the “To Be” to calculate the returns, whichever view is to be taken.
Returns are calculated by a combination of working with the customer, Proofs of
Technology and Concept and by comparing with experiences of similar customers.
The Measured Capability Improvement Framework
MCIF provides a structured approach to helping organisations identify improvement in the
core development practices that most impact business outcomes.
It is a services engagement involving key customer personnel that looks at the current
capabilities, what can be improved, how – and the returns to be expected
Jazz products.
A new set of benefits are developing for the Jazz products shown below which can be
summed up as “Return on your People as the most important Asset”
They start with the concept of Collaborate, Automate and Measure
We expect to measure all activities going forward to see the Returns as the
develop using Rational Insight

Page 29


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Maximise Software Investment In Uncertain Times

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