Paving a Path to Business Growth with an Agile ...€¦ · 2 | Paving a Path to Business Growth with an Agile Infrastructure and Cloud Services New competition, new markets and a

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Paving a Path to Business Growth with an Agile Infrastructure and Cloud Services

2 | Paving a Path to Business Growth with an Agile Infrastructure and Cloud Services

New competition, new markets and a 24x7 global economy all require the CIO to leverage IT as a tool to drive incremental business value by increasing flexibility, speed and agility.

Key decisions must be made across the entire IT infrastructure. How will our data centers evolve? What model do we adopt for the workplace—thin client, fat client, or hybrid? Is our network capable of supporting IT convergence and mobility? Which security model is best for securing business data and intellectual property in this new environment?

Despite these intense pressures, some high-performing IT organizations are using the challenges as a catalyst to improve how IT enables business growth. These companies are embracing a transformation to agile infrastructure by driving IT convergence across data centers, network and workplace environments, operating them securely, and exploiting innovative ways to improve productivity and increase business agility.

Introduction: CIOs Remain at a Crossroads—or is There a New Norm?

Adding to this dilemma, existing IT models are outdated and unsustainable in today’s business world. New competition, new markets and a 24x7 global economy all require the CIO to leverage IT as a tool to drive incremental business value by increasing flexibility, speed and agility.

These challenges are forcing IT and business leaders to explore new and diverse sourcing models as a means to reduce legacy equipment, consolidate suppliers, globalize catalogs and eliminate applications. IT change and adoption cycles are constricting in a distinct attempt to absorb IT services outside of the corporate firewall. This constriction is driven in part by the convergence of corporate and personal communication devices.

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Transformations can be tricky, however. How can the CIO remake the IT infrastructure in a way that enables, not disables, the business? There are several critical decisions that the CIO must make along the way. This paper will examine the key decision points required to fund, design, build, source and run a next-generation IT infrastructure in a way that drives business growth.

For the last decade, CIOs have heard a common refrain: IT is at a crossroads. They may finally believe it. By any measure, 2010 was the IT industry’s annus horribilis, with many companies’ investment levels either at a standstill or worse. Furthermore, the discretionary and non-discretionary cost management pressures that businesses placed on IT are not a stopgap, but the new norm.


What can CIOs learn from the mistakes of the past to successfully manage this transformation? Let’s begin by looking at the characteristics that define an agile IT infrastructure.

• Always on: As business revenue transitions from traditional channels to online transactions, brand recognition is defined by the user experience online.

• Not IT: Infrastructure is no longer simply about servers, PCs and packaged applications. It encompasses a broader context of services involving collaboration, anytime, anywhere computing, dynamic provisioning of storage, IT analytics, business applications and more. End users are in general more concerned with the services they receive than the technology providing the services.

What Does Tomorrow Look Like? The Agile Infrastructure

Over the past several years, virtualization has enabled IT to regain some of that control, largely through consolidation and transformation. In many respects, virtualization emulates the mainframe environment of the 1970s and early ’80s.

At the same time, however, the emergence of cloud computing is promising—some would say forcing— yet another move away from a centralized computing capability. Deploying IT in a distributed fashion through cloud services promises more flexibility, speed and agility—but it also raises the very real possibility of IT once again losing control of its infrastructure as end users could by-pass the IT organization and purchase cloud services directly.

• Flexibility: Is the iPad the new laptop? Is the iPhone the new videoconferencing hub? An agile IT leadership team actively researches which “personal user” technologies will drive corporate behavior in the years ahead. Employees expect IT to support and integrate personal devices; it is IT’s job to do so in a way that makes sense for the business.

• Optimized and transparent cost profile: The ability to maximize the value of every investment (or to do more with less) is a requirement in today’s infrastructure. Variable cost models are emerging to increase the efficiency and transparency of IT spending. This new model gets CIOs closer to running IT as a business.

• Optimized deployment: An agile IT infrastructure can help to get new business applications and processes into the market quickly to support the business.

History can provide a good window into the future, particularly in the IT industry. Over the last 30 years, for example, we have seen the highly centralized, hierarchical mainframe environment give way to client/server model, which gave end users much more power in developing and managing their own applications. But as the infrastructure became more localized, IT started to lose control.

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• Optimized sourcing: As more services move outside the firewall, IT’s role changes to become more of a systems and service integrator. An agile IT infrastructure combines thirst (dynamic provisioning) with steady state compute needs.

• Optimized governance: High-performing IT organizations closely align the demand and procurement of cloud and other external services—and the service providers themselves—to ensure they conform to security and performance expectations of IT and the business.

These characteristics demonstrate that we’ve entered another era of choice. As with client/server, IT in the current environment is being distributed out to end users, allowing them to choose the way they procure and use their applications. The cloud enables us to look at ways to procure IT differently, with specialist providers offering business process or business application capabilities, all the way down the stack to raw IT compute capabilities on a pay-per-use model.


exploring cloud solutions should be seen as a priority over investing in in-house replacement systems.

2. Which parts of the business should we move to the cloud? The cloud provides much more choice for IT services. But with choice comes complexity, and complexity often drives up costs—despite the conventional wisdom that cloud services reduce IT costs. If you simply take your current data center and move it out to external cloud providers, you’re likely to end up spending more, not less, as you “pay by the drink” for capacity that you may not be fully utilizing—or may not need at all. The cloud services from these vendors can, however, be used more cost effectively for key projects or seasonal changes in compute volume— adding capacity as needed but reducing consumption when not.

Infrastructure Transformation: Key Decision Points

There are five key decision points CIOs should address to build a more agile IT infrastructure.

1. Do we continue to build out our data center environment? Legacy systems are prohibitive in terms of the re-platforming costs required to move legacy infrastructure and applications over to the cloud. Invariably there will be legacy applications that do not lend themselves to a cloud strategy but remain core to the enter-prise—for example, core transactional systems for the financial industry. Instead of developing a distinct cloud migration strategy, most organizations are using major lifecycle events within the existing data center—new platforms or business requirements, for example —as trigger points to begin moving to cloud services. In other words, if a system is nearing the end of its lifecycle,

IT organizations should also consider the cloud for new applications or business processes, as business needs evolve. The cloud can reduce time to market significantly when rolling out new software or processes. Consider a new CRM system, for example. A typical in-house CRM application deployment would require 4-6 weeks in user requirements analysis, another 4-5 weeks in vendor selection, then another 12-18 months in customization, development and implementation. By comparison, an organization can be fully operational with a cloud-based solution in a little over two months. When you have this type of best-in-class functionality that can be deployed quickly, it rarely makes sense to build a new system from scratch.

The decisions CIOs make today must not inhibit the way the enterprise adopts technologies in the future. Enabling this vision requires a strategy to make sure we understand today’s business needs as well as expected future needs. We developed this reference architecture to help CIOs and senior leadership teams make key decisions on the best ways to move forward. Our reference architecture (see figure 1) provides a holistic view of the overall agile IT goal —allowing for the development of a strategy and roadmap on how to drive transformational change.

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3. What type of cloud deployment do we use? Cloud deployments come in three main flavors: public, private, and hybrid.

Public cloud: Scalable bandwidth, shared with multiple tenants. The notion of the multi-tenanted public cloud environment is daunting to many organizations primarily because of issues around security, compliance, and quality of service. But public cloud services—such as those offered by Google and Amazon—are maturing and will continue to address privacy and other concerns.

The majority of public cloud capability that we have seen to date involves Infrastructure as a Service (IaaS)—a base-level service in which raw compute power is delivered through a variable model. Other public cloud categories include Platform as a Service (PaaS), a value-added capability of development and utilities provided on top of the basic infrastructure and delivered as a service; Software as a Service (SaaS), in which applications such as ERP are scaled to business functional and user capacity requirements and delivered as a variable service; and Business Process as a Service (BPaaS), in which a full functional process (such as logistics) is delivered to the end user as a service and charged by consumption or transaction. BPaaS is considered the second generation of business process outsourcing (BPO).

Private cloud: Applications and services deployed through the cloud but within the confines of the enterprise data center. Companies in financial services and similar industries where compliance and data security are paramount are deploying more private clouds, which allow for strict security measures and compliance requirements.

There are two flavors of private cloud environments: On premise, in which virtualization, orchestration and provisioning services are deployed, with a portal front end that serves as a service catalog—all housed in the enterprise data center; and off-premise, an emerging service offering from telecommunications companies that are building private clouds dedicated to specific customers.

Figure 1. Agile infrastructure framework

Incentive compensation consulting, technology and outsourcing

Flexible and Agile IT Service Orchestration & Provisioning

Business Process Business Process as a Service

IT Infrastructure Infrastructure and Platform as a Service

Communications IP Networking on Demand

End User Devices

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Hybrid: Mixing public and private cloud services. We believe that for the next 3-5 years, a hybrid capability will emerge as the preferred model for most enterprises (see figure 2). Hybrid models provide the best balance of flexibility and risk management. In such an environment, IT focuses on orchestrating the busi-ness process while treating everything else as a service. This approach will force service providers to compete less on price and more on how well they can differentiate their offerings based on factors such as quality of service and robust application catalogs.

4. How must our governance models evolve to drive this agility?When enterprise IT moved from mainframe environments to distributed, client/server computing in the 1980s and early ‘90s, governance models did not keep pace. Ever since, many business organizations have had trouble measuring the true cost of IT.

Is history repeating itself? We’ve all heard about (or dealt with first hand) examples of business units procuring cloud services with a credit card and deploying their own applications. IT knows nothing about the new service until it gets a help desk call about an application that’s not in IT’s inventory.

There is a way to avoid this scenario, but it requires airtight governance around procuring cloud services. One scenario that could take hold is a broker model, in which IT provides a menu of cloud services that business users can commission through a portal. IT retains control over which services are offered and how they are managed and business units have a voice in getting the technology they need.

Governance over the service providers themselves will have to evolve as well. The IT ecosystem is becoming increasingly complex; a large enterprise is likely to have a half-dozen (or more) cloud vendors providing various services. The IT organization needs to manage those services, playing the role of service integrator, in which IT provides the end-to-end service management wrapper across the whole ecosystem.

Figure 2. Integrating private/public cloud with core enterprise infrastructure

Predictive Operations

Orchestration & Provisioning

Metering & Billing

Workload Requests and Provisioning

Enterprise Shared Technical Infrastructure

Operations Management

Business Service Management (BSM)

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Technical OperationsIT must reposition its operations to control compute capabilities from an end-to-end service perspective. This perspective involves managing, monitoring and reporting on technology and services and the business services they impact. It will enable operations to manage and observe the health of IT services as well as ensure that business service levels are always in a state of compliance and made visible to stake-holders, along with IT spend levels.

SecurityAll of these elements must be under-pinned by a secure and regulatory compliant enterprise. The ability to create a secure and compliant environment is a prerequisite for driving a cloud strategy. Security policies must be clearly described and executable to allow for secure integration and interoperability of compute services and aligned to service business process needs. Identity and access management policies must be refined to ensure that a user is defined in terms of access rights and the ability to secure the extended cloud enterprise. Compliance policies also must be established to ensure that secure data protection is being maintained and auditable for regulatory requirements.

Five Key Elements of an Agile Infrastructure To achieve successful business outcomes, an agile IT infrastructure must address the entire IT ecosystem.

WorkplaceThe workplace is undergoing a revolution driven by technologies that will enable a completely mobile and much greener workplace. IT organizations will need to standardize and facilitate more effective collaboration and communications between employees, suppliers, and co-workers for improved productivity. Unified communications and collaboration, enabled by technologies such as thin clients, SaaS and social computing, will be the fuel for business innovations that will extend technologies such as thin clients, SaaS and social computing.

NetworkConvergence is king in this segment, from VOIP to unorthodox user-generated “mashups”. IT teams will need to identify the business benefits and mitigate the risks of transforming the existing network infrastructure into a more cost-effective, scalable, flexible, secure, and reliable environment.

Data CenterThe ongoing orientation toward infrastructure and operations as services will continue to drive technology trends over the next 5 years. IT organizations will focus on standardizing, consolidating and virtualizing their data centers, leveraging advanced technologies such as cloud computing to reduce infrastructure complexities, increase the span of control over enterprise data centers, and decrease maintenance and utility costs.

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Software as a Service replacements; others must remain behind the firewall to protect highly sensitive data.

As a result, any transformation strategy must address the integration of cloud services with the legacy systems that, for the short term at least, must remain. The key: minimize the pain by operating legacy technology in the most efficient manner, while scoping out a plan to transition core legacy elements over time.

The ability to integrate, harmonize and manage legacy platforms with internal and external cloud capabilities will be essential to achieving high performance.

The Legacy IssueFor many large enterprises, the biggest barriers to agile IT are the legacy platforms and applications embedded across the organization. Legacy technology—in some cases, layers upon layers of it—can be found in everything from the data center to core business applications.

A common misperception about cloud computing is that it will enable you to easily replace all of your legacy code and systems. The truth is, CIOs will be dealing with legacy infrastructure and applications for years to come. Some legacy systems are prohibitive in terms of the re-engineering or re-platforming costs required to move them to the cloud. Some custom or vertical applications don’t have suitable


This new environment will require CIOs to play a more active role in protecting a business’s most important asset—its customers. As increased regulation and policy enforcement puts the privacy of individuals center stage, organizations will need to demonstrate that they have the capabilities to protect sensitive customer information—and the flexibility to respond quickly and forcefully should a breach occur.

5. How do I securely drive the next generation of business-enabled IT? As noted earlier, data security is a significant concern among businesses considering cloud services. CIOs are tasked with defining new security policies and procedures to absorb IT services inside and outside of the corporate firewall.

In a cloud environment, the “fortress mentality”—locking everything behind a firewall—is outdated and no longer realistic. Therefore, new measures will be required to ensure that while data can be accessed anywhere and anytime, businesses do not run afoul of data protection laws. Additionally, there are other laws and industry regulations that may also affect a business’s ability to use cloud.

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As increased regulation and policy enforcement puts the privacy of individuals center stage, organizations will need to demonstrate that they have the capabilities to protect sensitive customer information—and the flexibility to respond quickly and forcefully should a breach occur.


to one or more companies that already have standard tools and processes. This phase is a very pragmatic one for transitioning to a more cost- efficient environment.

In the fourth phase, IT will integrate and automate the technology and management processes across the ecosystem as well as provide guidance and service commitments to business units detailing how to take advantage of the environment.

Finally, IT will be positioned to create a service orientation that links operations to business services, is virtualized between multiple sources (internal and external), and is provisioned from the cloud.

The first phase involves understanding your current state; this phase requires a detailed assessment of the operations maturity, cloud readiness, sourcing readiness, and risk management capabilities within your infrastructure.

The second phase involves defining a clear 3-to-5-year transformation and sourcing plan, which ensures ongoing decision and governance points to handle the changes that will inevitably occur. This plan will also surface, up front, gaps that need to be filled through outsourcing or other services.

The third phase involves standardizing technology, tools and processes, and consolidating IT infrastructure through pooling and virtualizing resources. Organizations could also consider accomplishing this phase by outsourcing

We have seen this approach in action, and it works. Companies that have taken a more integrated, value-driven approach to transformation have achieved savings as high as 35 percent in non-discretionary infrastructure costs. These savings can free up resources that can be redeployed to enabling business growth through more agile deployment of services, faster response to market shifts, and better alignment of IT investments to business needs.

How Do You Get There? The Transition to an Agile Infrastructure A successful transformation will improve IT’s agility and its ability to execute. Most large organizations will find that a successful transformation will be modular—and very likely a multi-year journey. The journey involves a phased, end-to-end approach.

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Companies that have taken a more integrated, value-driven approach to transformation have achieved savings as high as 35 percent in non-discretionary infrastructure costs.


To learn how Accenture can help your organization create an agile infrastructure, please contact us at:

ATC_Infraconsulting @accenture.com.

In today’s globalized, dynamic environment, IT’s ability to support the business is more crucial than ever. CIOs are at a critical juncture, being asked to continue to build applications and infrastructure effectively and efficiently to enable business value creation.

The decisions CIOs and senior leadership teams make about IT investments today will have an impact on the business for years to come. By introducing rigor and structure to what could otherwise end up as an extremely complex environment, CIOs can position their IT organizations to capture the benefits that lead to sustainable and flexible business growth.

Conclusion

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Copyright © 2011 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

About AccentureAccenture is a global management consulting, technology services and outsourcing company, with more than 215,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com.

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Paving a Path to Business Growth with an Agile ...€¦ · 2 | Paving a Path to Business Growth with an Agile Infrastructure and Cloud Services New competition, new markets and a