If you receive errors when attempting to view this white paper, please install the latest version of
Adobe Reader.
"As the world's leading provider of business software*, SAP delivers products and services that help accelerate business innovation for our customers. SAP provides software and services that enable you to build an integrated business of IT solution in incremental steps with short payback periods."
Source : SAP
Running and Optimizing the Business of IT : The SAP Best Practices Approach
Information Technology (IT) is also known as :
Information Technology Resources,
Information Management ,
Information Technology Management,
Information Systems Development,
Technology Management,
Knowledge Management ,
Information Technology Governance ,
Enterprise Information Management,
Management Information System,
MIS Basics,
Information Technology Operations,
IT Interaction Model,
Operational System,
Information Model,
Information Repository.
INTRODUCTION
IT as a Business Partner, Not Just a Technology Provider
It should come as no surprise that companies across all industry sectors are facing a
wide range of challenges that directly impact their abilities to meet stakeholder
demands for increased competitiveness, improved operational efficiencies, and
greater return on investment. In large part, these challenges are intricately linked to
today's globalized business environment - one that intensifies competitive
pressures, drives down margins, increases business complexity, accelerates the pace
of business itself, and requires companies to do more with less simply to maintain
market share.
IT has long been seen as one of the best ways to address these challenges. Yet
significant obstacles at the level of IT infrastructure stand in the way. Complexity, not
surprisingly, is the chief culprit. Many organizations operate within the context of
heterogeneous, distributed IT landscapes comprising loosely integrated point
solutions. This condition encourages siloed IT operations and rigid IT management
processes that impede business agility.
In the end, the complexity and the rigidity of IT infrastructure keep IT departments
focused almost exclusively on managing technology rather than serving the business.
True, IT must retain a focus on low-level operations. But today, business seeks more
and wants IT to act less as a technology provider and more as a service provider -
one that partners with the business to help it achieve its objectives efficiently and
cost-effectively.
This fact is borne out in Figure 1, which shows the results of a recent IDC survey
asking CIOs, managers, and IT professionals to rank the importance of key IT
priorities for 2008.
The results of this survey show that the highest priorities are focused not on
technology but on the ability of IT to deliver services that provide value for customers
and end users. Ultimately, the business cares most about whether or not IT can help
serve its customers better and reduce business costs. This requires improved
alignment and communications between the business and IT. IDC believes that this
synergy is possible but that it fundamentally requires a secure, reliable, and
cost-efficient infrastructure and operations base on which business services and
applications can be deployed. The business must be able to rely on IT as a rock-solid
provider of services that enable and deliver innovative, competitive applications that
support business processes. For the vast majority of IT organizations, however,
infrastructure complexity, with its related IT process silos, still stands in the way. This
forces most IT organizations to spend the majority of their budgets on day-to-day
operations, leaving precious few resources that can be dedicated to innovation and
helping the business achieve its strategic goals.
IT Service Management :The Need for IT
Process Standardization
By adopting formal practices and standards for managing infrastructure and
operations, IT organizations can better work with the business to understand
business requirements, implement solutions to help execute on business strategy,
and simplify IT operations to reduce costs and free up resources to focus on higherlevel
activities. This is the idea behind IT service management (ITSM). While many IT
organizations have yet to move forward in this regard, interest in and awareness of
the potential benefits are growing. A recent IDC survey asked CIOs, IT managers,
and IT professional staff to rank the importance of key drivers for adopting IT process
standards or best practices. As Figure 2 shows, drivers include improving security,
lowering IT operational costs, improving availability and performance, reducing errors,
solving problems faster, and satisfying regulatory compliance requirements.
The ITIL Framework :Best Practices for ITSM
For organizations seeking to progress along the IT process maturity path, the ITIL
framework offers a set of recommendations and best practices that have gained wide
acceptance across multiple industries. As demonstrated in Figure 3, ITIL is the most
widely implemented IT process standard currently in use by IT organizations,
according to attendees of a recent ITIL conference - and it is fast becoming the de
facto IT process and best practices standard for some. Now in its third version, ITIL
has been widely adopted in EMEA and the rest of the world. Overall adoption of IT
process best practices - including ITIL - is growing rapidly in North America, with
another recent survey showing that over 40% of large IT organizations were using
one or more process standards or best practices in 2007.
Throughout its various iterations over the course of more than two decades, the ITIL
framework has sought to address the prevailing challenges facing IT and business.
Early practitioners of ITIL focused primarily on infrastructure operations. While
optimizing operations remains the entry point for any IT organization seeking to
modernize IT, the latest version of the framework - ITIL v3 - emphasizes the need
for a more overarching service strategy that responds to the new challenges facing
business today. As articulated earlier, to maintain competitive advantage, business
now looks to IT as a business enabler rather than a limited provider of technology.
ITIL v3, in effect, recognizes that there is no longer any such thing as an IT project -
only business projects with IT components. This requires strengthening the
fundamental relationship between IT and the business - a need to better integrate
the activities of IT into the requirements and objectives of the larger organization it
serves.
ITIL v3 addresses this need with a holistic approach to IT optimization - an approach
that enables IT to integrate with the business more effectively to meet the twin
objectives of increasing internal efficiencies and collaborating with external partners
to improve business agility and focus on core competencies. On the one hand,
organizations need a single, holistic standard that is consistent across the entire
enterprise and allows IT to consolidate operations and communicate with the
business to meet business needs. On the other hand, organizations need a better
way to collaborate across what ITIL calls value networks - the extended network of
partners that organizations work with to deliver their goods and services.
Both parts of the equation are critical for success in a globalized business economy.
From the internal perspective, IT needs enterprisewide visibility into the entire
portfolio of projects, applications, and infrastructure components under management
- along with a thorough understanding of resource availability and constraints. IT
also needs a way to capture business needs, translate the business needs into
technical requirements, and build and implement solutions that help the business
execute on strategy. These solutions, running on a day-to-day basis, need to be
monitored, maintained, and supported in a cost-effective manner throughout the
application life cycle. Finally, to ensure the highest levels of quality on an ongoing
basis, IT needs to monitor performance in the context of changing conditions and
shifting priorities to continuously improve IT service delivery. These areas of focus
correspond to the five stages of the service life cycle articulated in ITIL v3: service
strategy, design, transition, operations, and continual service improvement.
From the external perspective, where the business is focused on value network
collaboration, IT must focus on these same five stages - but with the added
complexity of coordinating with a constantly evolving group of partners spread out
across the globe. This is no small concern in an age of increased outsourcing where
organizations are attempting to focus more on core competencies by passing off
noncore tasks to low-cost specialists. In this context, the controls introduced by
effective ITSM become even more critical to business success because IT
optimization must extend beyond enterprise boundaries. With the pace of business
change accelerating, the room for mistakes becomes more and more constrained. In
many cases, businesses have a single opportunity to make a given IT project work.
Failed projects mean missed opportunities. This makes end-to-end management of IT
processes a critical factor for success.
Take, for example, a proposed plan to squeeze costs out of the manufacturing
process by modifying elements of the current supply chain. By its very nature, today's
supply chain is a multienterprise undertaking. Changes in one place require changes
in another. To make the right decisions, organizations will want end-to-end portfolio
planning capabilities that give them visibility into the dependencies of the current
supply chain and a way to think through how proposed changes will impact business.
Testing, deployment, operations, and support of the final solution must also be
coordinated across partners - all of which requires IT process management
capabilities that extend beyond the walls of the enterprise.
An obvious issue that arises in the context of integration - whether internal or
external - is the rising use of service-oriented architecture (SOA) and SOA-based
development. As a software and systems methodology that supports
componentization and dynamic sharing of valuable IT assets, SOA can be seen as an
enabler and consumer of the ITIL v3 service strategy. SOA enables organizations to
develop, deploy, and manage business services plus supporting technologies and IT
processes in a flexible manner that aligns closely with changing business
requirements.
If not managed properly, however, SOA can be a double-edged sword. SOA presents
IT with an essential paradox: The more agile an organization wants to become, the
more governance it must introduce into its service engineering and management
processes. Without more formality, services can proliferate throughout the
organization, resulting in inconsistency and a potential glut of components to manage.
Without sound oversight, an unruly array of relationships between services and other
system artifacts can change dynamically and thus increase complexity exponentially.
Thus, process standards that formalize IT engineering - such as those
recommended by ITIL - are critical for SOA success.
A Solution - Based Approach to Realizing ITSM Objectives
The objectives of ITSM are laudable, and the best practices articulated in the ITIL
framework represent significant value for organizations that can implement them. But
in the end, ITIL remains a set of guidelines that focus more on what organizations
should do than on how they should go about doing it.
In theory, the best practices suggested by ITIL could be implemented as manual,
paper-based processes. In practice, however, most organizations will require
automated solution-based approaches to effectively implement ITIL.
Equally true is the fact that no single solution can address all ITIL requirements. Part
of the reason for this can be attributed to the comprehensiveness of the
recommendations - especially true for ITIL v3. In attempting to bring the business
and IT closer together, ITIL v3 best practices touch a wider range of enterprise roles
than ever before. These roles include business managers, project managers,
business partners, technical experts, and day-to-day IT operations staff such as help
desk agents.
Given the varying needs of the user base, companies attempting to implement ITIL
best practices may be tempted to implement a wide range of best-of-breed solutions
that will prove difficult to integrate. Ultimately, this approach can simply replace one
problem with another - creating ITIL-based silos of operations that impede visibility
across processes and make it difficult to execute ITIL processes in an end-to-end
manner across the extended enterprise.
An alternative approach is to think about integration as a fundamental aspect of the
overall ITIL initiative. Vendors that take a platform approach to IT process
management can provide built-in integrations that support ITIL best practices
implementation.
Application Life - Cycle Management Platform
Managing the application life cycle in a rationalized manner according to standardized
processes is fundamental to smooth, orderly IT management. In the broadest of
terms, the application life cycle can be seen as a series of interrelated steps. These
steps include phases for IT project portfolio management, requirements, application
design, software change and configuration management and version control, build
and test, and deployment. Also included are application operation and optimization -
where optimization feeds back into the requirements phase for ongoing
improvements. The goal is to manage change in the context of these steps in a
seamless fashion from start to finish.
Many IT organizations manage application change in a haphazard manner, either
manually or by using a wide range of specialized tools for the various steps of the
overall process. Integrating these tools can be critical to successful application lifecycle
management (ALM) - but few organizations expend the resources required for
the inevitable point-to-point integration effort. Where integration exists, its fragility can
lead to failures that impede development productivity and create additional costs
IDC advocates the implementation of a unified ALM platform that can provide the
visibility required for business and application teams to orchestrate key ALM activities
in a collaborative fashion. Such a platform should allow IT to collaborate effectively
with the business to capture requirements and implement them in the form of new
applications or changes to existing applications. Changes should be traceable and
governed according to automated approval workflows that help the organization exert
control over the change process. Where possible, an ALM platform should also
support the orderly deployment of changes with functionality that allows teams to test
and release components involved in an application change in a coordinated manner
even where the changes may be based on different technologies. Reporting
functionality is also critical, especially when it comes to the continual service
improvement stage of the ITIL service life cycle. A powerful ALM platform that
monitors change and provides in-depth reports at both the management level and the
technical level can help organizations determine the effectiveness of the change
processes and make modifications for improvements over time.
Enterprise Architecture
Many companies have accumulated systems and applications over time, without
particular oversight. This can be referred to as an accidental architecture and is a key
reason why many companies struggle with environments characterized by selfcontained,
highly segregated silos of business and IT knowledge and functionality.
A more proactive approach to developing an enterprise architecture is critical to
advancing in IT maturity. With a clearly communicated blueprint for accepted
architectural practices, organizations can implement solutions and IT service
management processes that support them in a more holistic manner.
The Open Group Architecture Framework (TOGAF) is an example of an enterprise
architectural blueprint that is gaining in popularity. ITIL and TOGAF are
complementary standards. Where ITIL is a guideline for improved IT service delivery,
TOGAF is defined by the Open Group as "a methodology and set of tools for
developing an enterprise architecture."
The intricacies of enterprise architecture remain beyond the scope of this paper.
Nevertheless, the topic should be linked to ITSM. Where solutions are being
implemented, organizations are encouraged to incorporate issues of architecture into
the IT management processes - considering factors such as how the proposed
designs fit in with the reference architecture and defined standards and if it will be
supported by existing ITSM systems.
Project and Portfolio Management
One of the greatest and most pressing challenges is coordinating business and IT
effectively. Everybody talks about it; few know how to make it a reality. For this
reason, it is often considered one of the "soft" issues in the area of ITSM - an issue
that organizations too often believe they can ignore while they focus on more
"concrete" measures for optimizing IT. Organizations that adopt such an attitude do
so at their own peril. In a challenging financial climate, the costs of poor project
portfolio choices can be prohibitive. And the need to integrate IT with the business is
in many respects at the root of the new iteration of the ITIL framework. If business is
to wield IT as a competitive differentiator and if IT is to assist the larger organization
as a service-providing business partner, then IT needs to find a way to better
understand the objectives of the business and move forward with IT projects that
support them. This becomes all the more critical during an economic downturn, when
resources are scarce and prioritization of the IT project portfolio can mean the
difference between overall corporate success or failure.
Here again, a solutions-based approach, combined with effective organizational and
process change, can drive successful business and IT collaboration. In other words, it
can help to actualize the recommendations put forth in ITIL v3. The crux of the issue
comes down to more effective project portfolio management - an end-to-end
process that extends from the initial ideas for business and IT projects to their
ultimate implementation. To manage this otherwise unwieldy process in an orderly
fashion, organizations first must capture ideas, requirements, and requests from
appropriate entities throughout the extended enterprise. This can be accomplished
through a range of integrated tools that collect feedback and store it in a centralized
repository, accompanied by effective processes and organizational frameworks.
With such a repository in place, decision makers who straddle business and IT can
generate a list of prioritized requirements and the potential projects to fulfill them.
Critical to this prioritization process would be an ongoing cost-benefit analysis
process based on solid information regarding the resources available to support the
project, the trade-offs involved in moving forward, and the potential business
outcome. Solid integration into back-end resource planning applications can facilitate
evaluation of human capital, financing, and budgeting. As business conditions change
rapidly, moreover, organizations should conduct this analysis on an iterative basis to
make difficult but more effective project decisions that align with business strategy.
A company, for example, might consider killing a year-long project only three months
in, if the organization's business model suddenly changes. But before doing this,
estimators will want a clear understanding of how such a decision will impact the
business and the customers it serves.
Once a project gets the go-ahead, IT organizations need a clear process for moving
it into and managing the execution stage. This will include integrated project
management tools for breaking the project into discrete steps, building schedules,
creating milestones, establishing review and quality gates, defining budgets, and
assigning resources. All of these steps need to be understood in the context of the
overall portfolio of existing and planned projects so that upper-level managers can
continue to make informed strategic-level decisions throughout the course of
the project. Coordinating between project portfolio management and application life
cycle management tools (such as requirements, change management, quality) can
facilitate effective software creation and metrics for assessment. After the project is
implemented, IT also needs a smooth process for transitioning the implementation
into operations where knowledge acquired during the project thus far can
be transferred and managed to facilitate software deployment and ongoing
maintenance phases.
Effective Solution Operations with SAP Solution Manager
As part of its efforts to support the application life cycle as defined by ITIL v3, SAP
offers the Run SAP methodology, which provides best practices, content, services,
training, and tools that enable organizations to optimize the implementation and
ongoing management of a broad range of solutions. Many in the IT field may already
be familiar with the ASAP methodology for solution implementation from SAP.
SAP positions Run SAP as "ASAP for operations."
Run SAP starts with ITIL-aligned standards that define a wide range of operational
tasks critical for smooth day-to-day IT operations. They focus on areas such as:
- End-user support
- Change management
- Application management
- Business process operations
- Custom development management
- Technical operations
- Infrastructure management
For the implementation of what SAP calls End-to-End Solution Operations, Run SAP
provides a set of tools and resources that are depicted in Figure 5. SAP also
offers training and certification to transfer knowledge to IT staff as well as
additional services to help organizations establish Run SAP and implement the
processes that support the application management life cycle. Run SAP is a robust
framework that addresses methodologies for key initiatives, such as assessing and
creating a "governance model for operations" or addressing a "solution transition to
enterprise SOA."
While Run SAP facilitates the implementation of what SAP calls End-to End Solution
Operations, SAP Solution Manager provides a tool to help achieve it. Seeking to
address the recommendation for an ALM platform, SAP Solution Manager delivers
some key functionality to manage daily tasks for IT operations such as root cause
analysis, change request management, business process and system monitoring,
and service desk. These tasks are supported with approval workflows, key
performance indicators (KPIs), and service-level agreements (SLAs), as well as
customizable reports.
Organizations can also extend SAP Solution Manager ALM with tools offered by SAP
in conjunction with its partners to support ALM areas not offered directly by SAP, or
where users seek to augment limited functionality provided by SAP. These tools
include the SAP Quality Center application by HP and the SAP LoadRunner
application by HP for testing and the SAP Central Process Scheduling application by
Redwood for management of batch jobs across heterogeneous systems. In addition,
Wily Introscope and BMC AppSight are both tightly integrated with SAP Solution
Manager to support root cause analysis.
To facilitate usability across multiple use cases, SAP Solution Manager includes rolebased
work centers that provide a consistent representation of covered ALM
functionality and information needed to complete tasks. As Figure 6 shows, these
work centers span activities from initial solution implementation to delivery of IT
services and upgrade management.
As discussed earlier, SAP understands that IT operations represents the area of
highest IT spend for the typical organization. For this reason, SAP has focused its
work center development efforts in this area so that organizations can maximize their
ROI. Additional new work centers are scheduled for future release. SAP also plans to
develop a work center that can serve as a personalized dashboard for the content of
other task-oriented work centers. This dashboard will show users pending tasks and
help them prioritize their activities according to established business criteria. The
goal, according to SAP, is to help coordinate, simplify, and automate activities
associated with the business of IT to support managing the application management
life cycle.
SAP's Approach to Enterprise Architecture
To help organizations move from their current enterprise architecture to one that can
support today's demands, SAP offers the SAP Enterprise Architecture Framework
methodology, which supports SOA. Patterned on the TOGAF standard, this
framework describes an architecture based on the four domains of business,
information, application, and technology. To speed architecture development, the
SAP Enterprise Architecture Framework methodology can be loaded - via an XML
data exchange - into third-party architecture tools. To avoid the semiautomatic load
process, SAP provides SAP enterprise modeling applications by IDS Scheer, which
offer the advantage of being preloaded with SAP Enterprise Architecture Framework.
SAP sees this framework as fundamental to the goals of IT optimization and ITSM.
For example, the enterprise architecture framework, once in place, can play a critical
role in influencing and guiding project selection in the strategy phase of the IT service
life cycle (discussed in the following section in the context of the SAP Product
Definition application). Organizations, in other words, will want to make project
decisions based on the best ways to leverage their enterprise architecture. At the
same time, the enterprise architecture is a technical representation of the enterprise
and can be seen as an extension of the ALM platform (SAP Solution Manager
discussed earlier). Thus, an organization's enterprise architecture - as approached
by SAP - seeks to span both the business side of ITSM, where projects decisions
are made, and the technical side of ITSM, where the technology that supports
business initiatives is managed.
Managing IT Projects from Concept to
Implementation
SAP offers two integrated applications to address the earlier stages of the IT service
life cycle where organizations collect ideas, prioritize requirements, develop strategyaligned
projects, and implement solutions. These two offerings are the SAP Product
Definition (SAP PD) and the SAP Resource and Portfolio Management (SAP RPM)
applications.
SAP PD supports a rationalized approach to capturing ideas from multiple sources,
including internal business and IT stakeholders or external stakeholders such as
customers or vendors. Ideas and requirements are stored in a centrally accessible
repository and made intelligible using classification schemas. Integrated project
development features help incorporate cross-functional perspectives, while feasibility
assessment tools employ a phase-decision point to help make sure ideas are
thoroughly vetted. SAP PD also enables a broad view of the project portfolio and
specific assessment tools to help prioritize requirements and continuously evaluate
project ideas.
Once an idea is approved, it moves into the project development phase. SAP RPM
helps organizations manage this phase with integration into SAP Business Suite
applications, PeopleSoft HR, and third-party project management tools such as
Microsoft Project and Primavera as required. This helps give planners visibility into
skill and resource availability as well as capacity constraints to support more accurate
baseline budgets and highlight business trade-offs required to complete the proposed
project. Throughout the project, SAP RPM provides access to project cost actuals
and other KPIs that can help keep the project on track. The application also provides
dashboards and analytics drawn from various systems to help upper-level managers
monitor the full range of running projects from a portfolio perspective. Finally,
integration with SAP Solution Manager helps smooth the transition from design and
implementation to operations.
Accompanying this class of automated tools with effective process and organizational
change is key, since the greatest barriers to adoption tend to be cultural. The process
of prioritizing business criteria across disparate groups is challenging and demands
executive management buy-in as well as grassroots support. The evolution of
process content and organizational strategies to help companies make this transition
is an important area of opportunity for SAP and its service partners, just as SAP has
created strong process methodology in other areas.
SAP Technology Plateform
SAP positions its overall technology platform - SAP NetWeaver - in four value
scenarios:
- Run and Optimize the Business of IT by aligning IT execution with business
strategy and optimizing IT infrastructure, operations, and application life-cycle
processes
-
- Integrate and Adapt Processes with preintegrated core processes and the
ability to quickly compose applications from existing resources using SOA-based
development
-
- Empower and Connect People with business processes based on proven
best practices that are delivered in the right user context across more than 25
industry solution portfolios
-
- Manage and Deliver Information by consolidating information across
business processes and leveraging built-in analytics for performance and
governance
-
While a full discussion of the SAP NetWeaver technology platform lies beyond our
current scope, certain areas are of particular interest. One such area involves the role
of SAP NetWeaver as an integration platform that supports Web services and SOAbased
constructs. This is especially important as organizations seek to overcome the
partner integration issues that impede the development of business models based on
value networks. With the SAP NetWeaver Process Integration (SAP NetWeaver PI)
offering, for instance, organizations can integrate services and applications to
address processes that span and cross enterprise boundaries (see Sharp Electronics
case study). Another component of SAP NetWeaver is the Enterprise Services
Repository, where business services can be stored and registered.
As indicated earlier in Figure 2, issues of security remain a top-of-mind issue for CIOs
everywhere. A critical control for ensuring security is identity management - an issue
addressed by the SAP NetWeaver Identity Management component. In the context of
internal IT management activities alone, proper identity management can help
streamline day-to-day operations by reducing the number of password-reset calls
coming into an organization's help desk. In the context of sprawling value networks,
however, the value added by SAP NetWeaver Identity Management can be particularly
significant. According to SAP, this component can greatly improve security and increase
customer satisfaction through the application of complex policies that ensure that only
the right people have access to the appropriate resources.
SAP also touts the ability of SAP NetWeaver to integrate with the hardware
components of its partners. This is of keen interest at a time when virtualization
technology is making it possible for organizations to maximize the usage of server
capacity to meet resource demand on the fly. According to SAP, its Adaptive
Computing Controller tool provides a central point of control for flexibly assigning
computing resources to run any service on any server at any time. In the context of
an SAP environment, this controller can be used as an easy-to-use virtualization
management tool to manage and operate a virtualized SAP landscape on an
enterprise solution level (see T-Systems case study). For mixed environments typical
to value networks, it can tie low-level virtualization technology, such as the
hypervisor, into value-added IT management tasks to enable business process-
driven resource/landscape optimization. This, ultimately, is targeted to allow
organizations to decouple applications from specific physical or virtual servers and
dynamically reassign available resources to meet real-time business and operational
requirements.
A Broad Solution
All of the SAP software, technology, and best practices methodologies discussed earlier
work together to provide a broad solution that helps support organizations as they seek
to progress along the ITSM maturity path (see Figure 7). Run SAP provides standards
and a road map for moving forward with ITSM initiatives. Adhering to these standards,
SAP PD and SAP RPM sit at the front end of the ITSM process life cycle - and can
help IT to integrate with the business by making it easier to capture business
requirements and address them with solutions. These solutions are then managed with
SAP Solution Manager, which can enable IT to execute day-to-day application and
infrastructure management tasks to help streamline operations and drive down IT costs.
All solutions should run within the context of a clearly defined enterprise architecture
designed to facilitate integration flexibility and leverage benefits of enterprise SOA.
At the ground level, all of this is supported by SAP NetWeaver technologies.
The SAP Vision for Moving Forward
Because the optimization of IT operations represents the greatest ROI opportunity for
most IT organizations, SAP has focused much of its development energies to date on
this area. The vision that SAP has moving forward is to work toward providing broad
traceability and visibility from strategic portfolio planning to the implemented code
level. Full traceability should encompass elements from portfolio planning to stages in
the application life cycle, including requirements, design, development, change and
configuration management and version control, test, and deployment in production,
with feedback on operations by mining system management data and relating it back
to business service objectives. Built-in reports and statistics that can be used to
assess factors such as productivity, incidents, and problems to provide visibility and
accountability to the delivery and operation of software applications will be crucial.
As SAP moves closer to a fuller realization of these objectives, it is focusing its energies
more aggressively on the next phase of the vision of what the company calls "dynamic
resource allocation" (see Figure 8). Here, the goal is to make SOA-based business
agility a reality by connecting productive business processes and their respective
business service requests to physical compute resources in a dynamic, real-time,
virtualized environment. According to this vision, computing resources act as machines
in a factory - with business processes dynamically requesting these resources based
on policies that determine which process represents the highest priority to the business
at any given moment in time. This can help organizations adjust the allocation of
resources to applications to meet business service-level objectives.
A key objective for achieving this vision is real-time optimization between the process
and the hardware layer based on algorithms that evaluate monitoring data and make
adaptive adjustments to the operational environment. This requires collaboration
between SAP and its hardware partners. In March 2008 SAP took the first step
toward formalizing this collaboration by launching the Enterprise Virtualization
Community, which brings together major software and hardware vendors working in
the virtualization space. SAP sees this community - an extension of its vibrant and
open ecosystem of partners - as a critical step toward making its vision for IT
optimization and improved ITSM a reality.
CUSTOMER CASE STUDIES
Sharp Electronics:Optimizing Processes with SAP Neteaver Process Integration
Sharp Electronics Corporation leveraged SOA to optimize many disjointed credit card
processing systems and workflows into a unified service across all its U.S. divisions.
Utilizing Web services and SAP NetWeaver Process Integration (PI)as its enterprise
service bus, Sharp consolidated its third-party providers, created standardized Web
services, and adopted a more flexible infrastructure for integration and message
processing. According to Sharp, the company streamlined its credit card payment
operations, resulting in a sales increase for its business-to-business channel. Most
importantly, customer satisfaction and new revenue opportunities have increased
significantly.
Sharp Electronics Corporation, the U.S. sales and marketing subsidiary of Japan's
Sharp Corporation, markets a wide range of consumer and business electronics,
appliances, imaging solutions, and solar products. The company's central IT
operations coordinate a number of offices across the Americas. Sharp interacts with a
variety of customers and partners through multiple channels, including ecommerce,
EDI systems, and customer care centers. Until recently, the firm addressed
integration needs in a point-to-point fashion or via plain HTTP with a volume of nearly
redundant processes. But Sharp had to become much more agile to address an
increasing volume and variety of stakeholders.
In early 2007, while undergoing an upgrade to SAP ERP 2004, the Sharp IT team
focused on a new approach for its many B2B transactions. It adopted a Web services
and SOA-based computing model, standardizing and consolidating interfaces across
many systems and processing scenarios. This was done for greater efficiency and
flexibility to support new and expanding business demands in a standards-based
manner. While the overall upgrade targeted new application functionality, how the
company would transform its integration methods would have a large impact on the
project's and system's overall success. Addressing these IT initiatives concurrently
also helped optimize efforts such as project planning, systems testing, and change
management.
Sharp Electronics Corporation had investigated moving to Web services a few years
earlier, but the technologies available at that time were not able to meet its specific
needs. As products matured and market pressures increased, the company
undertook a rigorous tool selection process and proof of concept approach. It was
critical for Sharp to support different interface types and protocols and ensure
compatibility for its various back-office systems, including SAP. The IT team selected
SAP NetWeaver PI to move in this direction.
The initial project addressed the consolidation and standardization of credit card
processing services across the subsidiary's many product lines and systems.
Vin Mohite is senior manager of IT at Sharp Electronics Corporation and manages all
the Web-based systems for the company, including centralized integration services.
According to Mohite, the credit card project effort entailed working through the
service and integration interface dimensions and reviewing all associated business
transactions. This effort took only about four months to complete. The project also
required companywide consensus on which third-party processing services to engage
and agreement on the common processes and Web services to be developed and
consumed. Sharp selected its key vendors of choice and streamlined activities with
PayPal and First Data Corp.
Mohite highlights that the credit card project had been truly driven by business need and
value. There were so many different custom and manual processes that consolidating
all of these activities into one enterprise solution was a huge win for all involved. Once
the primary processes were automated and services-enabled, they were able to be
consumed within the SAP portal, by its customer care center, and in direct B2B
transactions. This not only has led to a much greater level of customer satisfaction and
positive user experience, but it also has significantly cut down the time it takes to
process orders. By eliminating many manual steps, the company has also improved the
accuracy and compliance of its orders and all the processes involved. Another key
benefit can be traced to improved revenue streams. By offering an easy and direct
payment option for customers, the company encounters significantly fewer obstacles in
working with its many dealers, distributors, and partners and can attract new types of
companies and transactions with which to do business.
Part of the initiative involved creating a centralized integration team and forming
policies regarding integration activities. Having a dedicated team familiar with the
technology and with honed expertise in how to create services is extremely beneficial
to Sharp. This team tends to the complexities of versioning services, ensuring
interoperability with external systems, instituting service governance practices, and
helping proliferate services reuse across the enterprise. The company wanted to
create and retain these capabilities internally to expand upon and maintain what was
necessary. More importantly, having this central team allows the company to analyze
and target where to best optimize integration points and services across all its
systems, from both business and technology dimensions. While Mohite notes the use
of NetWeaver PI has been a big success, learning about Web services standards, as
well as services development and deployment best practices, and becoming
proficient with the technology have also been critical to gaining positive outcomes.
Sharp Electronics Corporation continues to strive for more pervasive adoption and
automation of SOA and propagation of standard integration practices across its
offices. Mohite emphasizes that the major objective of having one platform and
integration methodology in place was successfully achieved, and now the focus is on
companywide education and training, raising awareness, and gaining experience.
Addressing key aspects of governance, roles, and responsibilities for ongoing
maintenance and support of shared services is a common issue most businesses
adopting SOA must face. Thus the company has put into place policies, review
committees, and a change management program to complement its traditional IT
practices. While these and other guidelines have been defined, there are some
instances in which local teams require some flexibility to address specific business
requirements. The firm must also be open to accommodate the varied rates and
styles with which its partners embrace Web services and be nimble enough to
address multiple approaches.
Sharp Electronics Corporation is now expanding the scope of its use of Web services
and SAP NetWeaver PI to address multiple applications. The company is anticipating
SAP's upcoming releases of enabled services to be automatically populated within
SAP's Enterprise Services Repository, so when ready, the firm can start using this
mechanism to help integrate and manage these services. As for a final word of advice,
Mohite stresses the importance of getting the right people on board who not only
understand how services should be developed and how the technology itself works but
also really understand the business processes. Sharp Electronics Corporation sees that
its SOA efforts are firmly founded within the business and its needs.
T-Systems: Optiizing IT Services with Adaptive Coputing from SAP
The Adaptive Computing Controller tool from SAP allows users to allocate
applications and data to servers and storage devices as computing demand and
hardware availability fluctuate. This includes the ability to run multiple instances of
software or databases on the same server, which allows customers to save costs by
increasing server resource utilization. According to T-Systems' experience, support of
a dynamic computing environment with this approach and SAP's tool has delivered up
to 30% savings over the classic hosting environment.
T-Systems is a very large worldwide service provider of integrated information and
communications technology (ICT) solutions, including desktop services, network
services, computing services, applications management, system integration services,
and Dynamic Services, delivered under the "Real ICT" brand. The company is a
major outsourcer and service provider for applications based on SAP software and
has extensive capabilities to provide and operate the ICT infrastructure needed to run
SAP applications. The company employs over 800 SAP administrators and over
6,000 SAP professionals worldwide.
The Dynamic Services offering is a form of utility computing, where customers
purchase virtualized compute, storage, network, and software services directly over
the network. With Dynamic Services, T-Systems is able to offer "any service at any
time on any platform" access for its business customers. Virtualization is the key to
providing T-Systems' shared ICT infrastructure. T-Systems uses Adaptive Computing
from SAP to virtualize SAP instances. According to T-Systems Gregory Smith,
Director Dynamic Services, "Adaptive Computing is the only game in town for directly
managing SAP applications in a virtualized infrastructure. It sits at the top of the
infrastructure layer and is the starting point of a complete dynamic computing
infrastructure for SAP solutions."
Dynamic Services customers can vary the level of infrastructure services in response
to changing business need, and priorities, providing flexibility to meet changing
requirements and helping contain and rationalize operational costs. This addresses
the need for dramatic cost reduction in IT operations by creating a pooled, dynamic,
shared IT infrastructure as well as the need for rapid provisioning and automated
management of SAP landscapes.
Benefits of Using SAP Adaptive Computing Capabilities
Using Adaptive Computing from SAP to virtualize enterprise applications has resulted
in the following major benefits to T-Systems:
- Speed and flexibility. With Adaptive Computing Controller, T-Systems Dynamic
Services can deliver enterprise application facilities based on SAP software to
business customers within 24 hours of a request. Provisioning can be requested
through an online ordering system that includes a services "shopping basket."
This can generate provisioning of a complete dynamic computing infrastructure,
including server, storage, network, operating system, and application software,
providing flexibility and quick response to changing business needs.
- Efficiency and cost savings. Adaptive Computing provides the foundation for
more efficient use of infrastructure and results in substantial cost savings.
According to Achim Stohr, T-Systems' vice president of SAP Services
Architecture, implementation of a dynamic computing infrastructure with Adaptive
Computing has resulted in "significant cost savings." He estimates that "dynamic
computing with Adaptive Computing delivers up to 30% savings over the classic
hosting environment." This is substantially better than the less-optimized starting
point. Of course, cost savings vary depending on the particular infrastructure
layer and the individual components that are affected.
- SAP support for Adaptive Computing. T-Systems employs many tools to
configure, control, and manage the IT infrastructure. According to Stohr, "Having
an environment with Adaptive Computing saves a lot by having it available from
SAP. We do not have to develop it ourselves; we are system integrators, not
developers." Indeed, T-Systems has experienced ongoing support and
development cooperation from SAP with positive responses to requests for
improvements to the Adaptive Computing Controller.
Overall, T-Systems has found Adaptive Computing "very helpful to deliver ERP
applications to customers." This represents SAP's early adoption and implementation
of virtualization at the application level - "SAP got it early" about the value of
application virtualization. Principal benefits realized by T-Systems include cost
savings and flexibility. Adaptive Computing provides a clear example of the value of
IT optimization as delivered by SAP.
CHALLENGES AND OPPORTUNITIES FOR SAP
From IDC's perspective, SAP has articulated a vision of its approach to IT
optimization and more effective ITSM that is supported by a maturing set of offerings,
partnerships, best practices, and methodologies. Some opportunities for SAP to
address remain, including the following:
- Partnering for the virtualization and ALM payoff. To move from a focus on
business processes to a focus on integrating those business processes with
compute resources, SAP will need to collaborate across several key players who
span the hardware manufacturing and virtualization spaces. With a strong
background in business processes and a solid reputation for managing
partnerships effectively, SAP is in a position to successfully execute on this
vision. In addition, SAP must continue to partner well to augment capabilities in
ALM areas such as requirements, testing, IT project portfolio management and
IT governance. It has begun to do so, as was discussed earlier, with existing
partnerships for testing (e.g., HP Software), for project portfolio management
integration (e.g., Microsoft and Primavera), and for IT governance (e.g., BMC
and CA). A rich third-party market is springing up to support SAP also.
- Getting the word out to IT. Because IT optimization is often driven by IT staff
members who are not necessarily part of the core SAP team within the
corporation, SAP needs to take steps to educate this target audience on its
capabilities and increase awareness of what it has to offer in the IT optimization
space. Look for stronger efforts on the part of SAP in this area in the near future.
- Building a road map for adoption. As the SAP vision for dynamic resource
allocation is predicated on organizations adopting SOA and other standards for
IT optimization, SAP needs to provide a clear road map for adoption.
IDC believes that SAP has established a foundation for greater adoption with the
Run SAP methodology for broader solution operations to evolve.
- Managing the transformation. Whether moving to more automated ITSM or
adopting SOA, organizations will likely embrace these practices in incremental
stages. This adds additional complexity as only parts of the enterprise and its
systems may be capable or integrated into the fold. Many of SAP customers may
require guidance as to how to bridge generations of its solutions and apply these
practices and leverage certain automated capabilities for mixed environments.
- Capturing and managing business services. SAP must take additional steps
to advance its Enterprise Services Repository and the automatic population of all
of its business application services into this component of its NetWeaver
foundation. This will be critical to managing business services, addressing
services governance and pan service life-cycle activities, facilitating IT service
management alignment, and many more facets of its overall SOA and business
value network strategy. It will also help accelerate the adoption of SOA overall
within its application customer base.
CONCLUSION
As shown by recent IDC survey data, IT organizations are challenged to deliver
effective services to constituents and end users who align with business priorities and
who can change quickly to meet evolving requirements. At the same time, pressures
continue for operational efficiency, cost containment, and a secure and reliable
operations base.
ITIL provides a widely adopted best practices approach to ITSM based on business
and IT integration and featuring a comprehensive service management life cycle.
SAP is taking a mainstream approach by basing its IT service optimization solutions
on ITIL principles and by seeking to incorporate ALM and SOA enablement as major
components. SAP's road map for ITSM is comprehensive, and the company well
understands that enabling and tying into the broader IT vendor ecosystem to address
end-to-end services management and operational requirements are necessary
to helping enterprises realize the full potential of dynamic IT service management
and processing.
In the final analysis, success of SAP's initiatives will depend on the ability of end-user
organizations to implement them and the perceived value gained from adoption.
Organizational, cultural, and process barriers to adoption are significant, particularly
because these initiatives demand collaboration across IT, business, and operations
teams. Because ITIL adoption tends to be all-encompassing, IT organizations will
need to evaluate the SAP solutions and decide on an implementation strategy that
meets local needs and that can be deployed in consumable increments, beginning
where pain points are highest. Services offerings in support of adoption can be a
major facilitator.
Copyright Notice
External Publication of IDC Information and Data - Any IDC information that is to be
used in advertising, press releases, or promotional materials requires prior written
approval from the appropriate IDC Vice President or Country Manager. A draft of the
proposed document should accompany any such request. IDC reserves the right to
deny approval of external usage for any reason.
Copyright 2008 IDC. Reproduction without written permission is completely forbidden.