Wednesday, October 26, 2011

Sustainable Success Starts with Agile: Best Practices to Create Agility in Your Organization.

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             While it might frustrate us when we can’t control it, change really should be seen as opportunity in disguise. Enterprises everywhere recognize that to turn opportunity into advantage, business and IT agility is more important than ever. Fifty-six percent of IT executives in a recent survey1 put agility as the top factor in creating sustainable competitive advantage—ahead of innovation.

But creating true agility is hard. In the same survey, just one in four respondents said their enterprise’s IT was successful at improving and sustaining high levels of agility. Of the more crucial IT goals—optimization, risk management, agility and innovation—agility had the lowest rate of realization among enterprises.

True agility in today’s Instant-On Enterprise involves reducing complexity on an application and infrastructure level, aggressively pursuing standardization and automation, and getting control of IT data to create a performance-driven culture. While the challenges are great, getting it right enables enterprises to capitalize on change by reducing time to market and lowering costs.

Four drivers for agility

At its simplest, agility refers to an organization’s ability to manage change. But there isn’t always agreement on what agility means to the enterprise. Keith Macbeath, senior principal consultant in HP Software Professional Services, meets frequently with customers seeking to increase IT performance. Typically, he says, drivers for agility include the following:

IT financial management:
Understanding the levers that affect cost allow your enterprise to be more nimble. For instance, if your business is cyclical, moving to a variable-cost model in IT can help sustain profitability even through a down cycle.

Improved time to market:
This gets to the heart of agility: delivering products and services faster.

Ensuring availability:
"Availability isn't a problem ... until it is. Then it's at the top of the CIO's agenda," says Macbeath. Being able to rapidly triage, troubleshoot and restore service is as important to agility as the ability to get the service deployed in the first place.

Responding to a significant business event:
In the merger of HP customer United Airlines with Continental Airlines, the faster the IT integration, the more significant the savings.


Important factors for creating sustainable competitive advantage

The importance of measurement and benchmarking

Business agility starts with a holistic view of IT data, says Myles Suer, senior manager in HP Software’s Planning and Governance product team. "Getting timely access to data that allows you to drive to performance goals and then make adjustments when you don't meet those goals represents the biggest transformation possibility for IT," he says.

For CIOs focused on transforming their business, the key is gaining access to accurate, up-to-date metrics that are based on best-practice KPIs. Trustworthy metrics let CIOs control IT through exception-based management and understand what it will take to improve performance.
  
What to monitor and measure

To achieve greater agility, look to three broad areas of improvement and put in place monitoring programs to track against performance goals.

Standardization:

"That's the first step," Suer says. Ask yourself: What percentage of your applications run on standard infrastructure? How many sets of standard infrastructure do you have? "You want a standard technology foundation to meet 80 percent of your business requirements," says Macbeath. It may seem counterintuitive, but standardization makes a company more efficient and more agile than competitors. Standardization is also a prerequisite for automation. Public cloud providers aggressively pursue both. Taking the same approach for enterprise services means you can begin to realize cloud efficiency gains.

Simplicity:

"Agility is the inverse of complexity," says Macbeath. Your goal is to measure and reduce the number of integration points and interfaces in your architecture. The key is decreasing the number of platforms managed. Application rationalization and infrastructure standardization programs reach for low-hanging fruit, such as retiring little-used and duplicative applications and unusual, hard-to-support infrastructure. Longer term, your enterprise needs to tackle the more difficult task of reducing the number of interfaces between applications. Macbeath recommends driving to a common data model between applications. This reduces support costs and makes it faster and cheaper to integrate new functionality into an existing environment.

Service responsiveness:
This can be as simple as tracking help-desk response time, mean time to repair, escalations and so on. "Once you're systematically tracking responsiveness, you can move to a more sophisticated level of cost-to-quality tradeoffs," Macbeath says.

Translating agility into business success

In working with HP customers, Macbeath sees numerous examples of organizations that are successfully increasing their agility.

For example, a European bank working with HP has established an online system to show internal customers exactly how much it costs for one "unit" of Linux computing to run an application at multiple service levels: silver or gold. "Retail banking is a very cost-competitive business," Macbeath says. "Allowing internal customers to see the cost-performance tradeoffs for themselves and have the numbers right there makes it possible for business and IT to work together to make decisions to benefit the business."

Pursuing agility by way of automation let another HP customer, a global telecom company, reach new sources of revenue. Instantly deploying wireless hotspots provides a key capability for the company; by automating this process, IT was able to push out more than 40,000 new hotspots. The company turned on a new source of revenue almost immediately.

Other organizations are finding the same path to greater agility:

Standardization and automation combined with measuring results to drive performance. Through this process, their IT departments are demonstrating greater value for the business while delivering greater speed and transparency.

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