HP Strategic it adviSory ServiceS (SitaS)A transformational path to empowering business

Business white paper

Table of contents

Executive summary ...................................................3 Introduction ............................................................4Getting ready for 2015 ............................................5The CIO inflection point ............................................6 Creating the Instant-On Enterprise ..............................7 The SITAS portfolio of capabilities ..............................8 HP SITAS: business driven, technology based .............10 Summary .............................................................. 11

Executive summaryThere is widespread agreement that, in the future, technology will empower business and transform markets. New technologies—like next-generation mobile devices, enhanced telecommunications networks, cloud computing, and social networks—are creating a culture in which everything and everyone is always connected. As a result, customers are demanding immediate gratification and instant results, and businesses are responding with real-time, immediate services.

Enterprise IT will play a central role in how businesses perform in this environment. These IT departments will need to evolve from supporting business to empowering it. What will the IT-empowered business look like? HP’s vision for the IT-empowered business is the Instant-On Enterprise. The Instant-On Enterprise serves customers, employees, and partners with whatever they want and need, instantly, at any point in time and through any channel. It provides a seamless and flexible environment that allows IT to easily create, deliver, and manage business services in response to ever-changing requirements.

The CIO will play a pivotal role in building the Instant-On Enterprise. Tomorrow’s CIOs will need to align more closely with their business counterparts to develop business strategies that integrate IT services and take advantage of new technology platforms. They will need to quantify the business value of IT solutions and services, and continually improve their performance. Over time, CIOs’ compensation will be more closely tied to business results in recognition of their critical role.

While today’s savviest businesses will want to immediately begin the transition to Instant-On Enterprise, getting started can be challenging. IT departments are already lean and overburdened with day-to-day operations. CIOs may find themselves spending more time on putting out fires than on aligning IT and business strategy. IT budgets are shrinking while business users want more services and better performance.

HP Strategic IT Advisory Services (SITAS) can help accelerate the journey to becoming an Instant-On Enterprise. Our portfolio of services is designed to help meet growing demands for accelerated service delivery, operational efficiency, and enhanced financial flexibility. It also provides multiple paths for managing and capitalizing on rapid business and technology change.

4

IntroductionIf the past few decades have taught us anything, it is that the future of IT will be filled with profound changes arriving at such an accelerated speed they’re likely to overwhelm anyone who’s unprepared. One of the most important of these will be changes in IT’s fundamental role—transforming it from a passive tool that merely supports the business into an active force that empowers nearly every aspect of growth and profitability.

This transformation is already underway. In Gartner’s 2011 CEO and Senior Executive Survey, 19.4% of executives described IT as “a tool through which we define, operate and innovate our business model.” Another 32.6% said IT is “used to build and sustain competitive advantage.”1

The mandate is clear. IT must become an integral part of how business connects with customers, delivers products and services, and plans for the future. It will have to help bring products to market more quickly, promote expansion into new markets, improve the customer experience, and be nimble enough to respond almost instantly to competitive challenges. In addition, the increasingly complex international regulatory environment, including unwieldy financial and privacy rules, will continue to add to IT’s woes.

Too busy to prepare for the futureFor many CIOs, planning for this future is difficult. The day-to-day realities of simply keeping balls in the air, putting out fires, and maintaining their sanity make long-range planning a job they tend to put off until sometime when there is more time. And there never seems to be more time.

But viewed another way, the coming changes provide IT with an unprecedented opportunity to develop strategies that will have far-reaching impact on companies. In the process, these changes will move IT to center-stage, very likely making it the single most important function within the enterprise, the one on which all others depend for success.

To get there, CIOs will have to shift their focus from routine operations to forward-looking strategies. Their goal must be to further align IT with the broader needs of the business. In fact, they will be asked to find ways to use technology to create business value—to empower the business with IT—by not only getting a greater return from their hardware and software investments, but also by using technology as a strategic business lever. Between now and sometime in the near future, IT must:• Become totally embedded in business services• Move aggressively to an external service delivery

model (i.e., the cloud)• Put greater focus on information delivery• Develop a closer relationship with the business side

of its organization

This paper is intended to help CIOs and other C-level executives draw on the experience and expertise of HP Strategic IT Advisory Services (SITAS) in order to lay the groundwork for unprecedented IT transformation. It will provide an overview of different approaches to IT strategy and managing change, and identify multiple paths for transitioning from traditional IT to IT that drives business results.

1 “Executive Advisory: CEO and Senior Executive Survey,” March 25, 2011, ID Number: G00211089.

5

Getting ready for 2015Predicting the future is always risky. But in the world of IT, certain trend-lines are so clear that they cannot be ignored. In late 2010, Gartner took a look at the future of IT and concluded that very soon, dramatic changes would already be in place. By 2015, Gartner predicted:• Most external assessments of an enterprise’s value

and viability will include an explicit analysis of IT assets and capabilities

• The annual compensation of most Global 2000 CIOs will be determined by the new revenue generated each year by IT

• Tools and further automation will eliminate 25% of the labor hours associated with IT services

• 20% of non-IT Global 500 companies will be global IT service providers

• IT spending per employee will increase by 60%2

Recent studies suggest these trends are already well underway. More than half of CEOs and executives participating in Gartner’s 2011 CEO and Senior Executive Survey see rising external interest in IT, and almost half of CEOs will increase IT spending in 2011.3

The obvious bottom line conclusion is this: IT and CIOs will be more accountable for business results.

As the following chart shows, that means the very definition of IT best practices will change as well.

Unfortunately, less than 25% of business leaders say their IT organization is effective at delivering the capabilities they need.4 Researchers keep hearing calls for “alignment between IT and business” along with demands to “run IT like a business.” Although no company has every problem, these leaders say IT’s problem list is long:• IT is not optimized• IT tries to force the company into methods the

company doesn’t want• When it innovates, IT often does so without

understanding the business implications• Financial management is overly concerned with

cutting costs• Consolidation and virtualization are lagging (or

have not been undertaken at all)• IT also lags in addressing a delivery strategy that

makes full use of the cloud• IT tends to manage technology as if it is isolated

from the rest of the company• Attracting and keeping top-notch personnel is an

ongoing, and often losing, battle

Most of these same business leaders understand that to be truly integral to the business of the future, the IT function must grow in strategic importance.

Table 1. How IT best practices are changing as businesses become IT-empowered businesses

Today’s best practices Tomorrow’s best practicesRun IT like a business Run the business with IT

Regular strategic planning for IT Regular business and management planning integrated with IT

Optimize the IT technology portfolio Optimize the technology-enabled business portfolio

Deliver IT services via the cloud Deliver business services to enable enterprise agility

2 “Gartner’s Top Predictions for IT Organizations and Users, 2011 and Beyond: IT’s Growing Transparency,” November 2010.

3 Executive Advisory: CEO and Senior Executive Survey,” March 25, 2011, ID Number: G00211089.

4 “The Future of Corporate IT, 2010,” The Corporate Executive Board Company.

6

The CIO inflection pointBusiness leaders are already looking to IT to take on a leadership role. In Gartner’s 2011 CEO and Senior Executive Survey, more than half of participating executives believe that IT is used primarily for growth and innovation. They also attribute 21% of their firms’ revenues to IT.5 For CIOs, this will mean transforming IT to take on vast new responsibilities, many of them far outside its traditional purview.

For example, IT will be expected to have a far greater role in reducing time to market for the company’s new products and services. It will be asked to improve the customer experience and satisfaction. It will be key to expansion into new markets through globalization. It will be called upon to improve business process efficiencies through streamlining and integration. And IT will be given the ever-expanding task of managing regulatory and audit requirements, including privacy regulations for both employee and customer data.

At the same time, there will be a clamor for IT to get more out of IT investments in software, hardware maintenance, and support. There will be further demands to reduce the labor costs needed to deploy new, and to maintain existing, functionality. IT will have to improve responsiveness to changing business needs and technologies—i.e., make response time faster and results more reliable. And perhaps most of all, IT will be called upon to improve its own efficiency and performance.

Perhaps this “do more with less” mantra sounds familiar. But there is more to it than that: By 2015, the CIO challenge will be to deliver more business value for every dollar of IT investment.

The strategic role of the CIO in delivering business valueTo accomplish all this and drive business success, CIOs will need to develop effective strategies to transform IT. Most will do it in collaboration with other C-level executives, bringing in outside consultants in order to benefit from their broader experience and more focused expertise. For CIOs everywhere, the strategies will need to:• Increase agility, including the capability to respond

to changing market dynamics and competitive pressures with flexible services

• Deliver quicker business performance with integrated physical and virtual resources blended into one seamless environment

• Reduce risk by assuring data, protecting access, and providing high-quality service

Time and resources spent developing these strategies are likely to pay off handsomely. In most cases, an investment in IT strategy delivers more business value than a similar investment in operations. That is because an operations focus is essentially IT-centric and reactive; it puts more emphasis on technology than on the business technology it is supposed to be driving. This operational focus deals with many urgent issues, involves frequent unplanned change, and often has unintended consequences because fixes and patches are implemented without reference to a longer-term plan. But as undesirable as it may be, many CIOs spend roughly 70% of their time on operations, with only perhaps 30% on strategy and innovation.

By turning that ratio around to develop a proactive, strategic focus, the CIO can develop a business-centric model with greater emphasis on the business value of IT. IT will no longer operate in a break/fix environment, but one that truly enables business success.

5 “Executive Advisory: CEO and Senior Executive Survey,” May 25, 2011, ID Number: G00211089.

Business/Government requirements

IT organizationStrategic service broker

Public

Private

Traditional

Instant-On Enterprise

Servicesportfolio

Servicesdelivered

HP hybrid delivery

Customers, partners,citizens, and employees

7

Creating the Instant-On EnterpriseThe Instant-On Enterprise is the ultimate expression of the business-centric model of IT. In the Instant-On Enterprise, everything and everyone is connected seamlessly. Access to information and application services is instantaneous. Products, services, delivery, and communications are all continuously evolving in response to new opportunities, changing conditions, and competitive onslaughts.

To put it perhaps a bit too lightly, the Instant-On Enterprise is instant gratification: IT responding anywhere, anytime, in any way to just about anyone.

To put it less lightly, the Instant-On Enterprise closes the expectation gap between what management, customers, stockholders, partners, employees, and citizens expect—and what the enterprise can deliver. In a world of continuous connectivity, these constituencies require products, services, and information faster and more reliably than ever before. The Instant-On Enterprise provides that by embedding technology into everything the enterprise does or delivers.

In short, the Instant-On Enterprise produces a differentiated competitive advantage by delivering what people want and need, and delivering it instantly.

Key characteristics of the Instant-On Enterprise include:• Innovation: To accelerate growth and produce

higher-quality products and services, an organization must innovate. Tomorrow’s leaders will do this through the innovative application of technology.

• Agility: To meet changing customer/citizen demand, enterprises must accelerate time to market and time to service. In an age of “instant” expectations, they need to have the ability to respond quickly and effectively to changing business and citizen needs.

• Optimization: Enterprises must optimize to reduce operating costs while improving operational processes. They need to modernize and make strategic investments to improve the efficiency and productivity of their organization and to drive higher ROI.

• Risk reduction: Enterprises can’t eliminate risk, but they can manage it to their advantage. Whether in a private or public environment, they need to manage risk from a variety of places: the unknown, security threats, regulations, and data.

Service delivery for an Instant-On Enterprise

8

The SITAS portfolio of capabilitiesThe capabilities that SITAS provides can help a CIO to achieve several vital goals. Among them:• Provide the enterprise with a significant competitive

and service advantage• Deliver a better ROI by reducing costs and

improving process• Produce faster response to changing business needs• Enable business innovation• Manage risk from whatever source—including IT

assurance and regulatory compliance

Many paths to the Instant-On EnterpriseOur portfolio is designed to provide multiple paths to becoming an Instant-On Enterprise. A business may travel one of these paths—or all of them—depending on its needs. Each of these paths is designed to answer critical business or technology questions that businesses are facing today.

These paths to the Instant-On Enterprise include:• IT Strategy and Transformation• Strategic Service Management• Enterprise Architecture• Business Value of IT• Cloud Business Readiness• Mergers and Acquisitions• Performance Engineering

IT Strategy and TransformationDeveloping a long-term business-centric strategy for IT and then transforming IT begins with aligning IT and business strategies. Once business and IT have common goals, the next step is creating a comprehensive strategy and roadmap for IT transformation and moving beyond alignment to truly empowering the business with IT.

Our approach to IT Strategy and Transformation is to:• Align business and IT objectives• Perform gap analyses and assess change

requirements• Develop governance requirements and models• Develop the IT Transformation Plan and Strategy,

including: – Projects – Business cases – Governance structure – Risk management

Strategic Service ManagementA hallmark of the Instant-On Enterprise is the ability to design and prioritize IT services that create true business value—that is, to align the IT organization with a strategic approach to creating and delivering services that support business objectives. Once this is accomplished, the next step is building the capabilities needed to deliver these vital business services.

The scope of Strategic Service Management includes IT governance, business analysis, project management, service management, organization, knowledge, people, skills, and competence.

HP’s approach is:• Flexible, based on supplementing the skills of an

existing IT team• Limited to the services IT actually needs• Cooperative in terms of coaching, mentoring, and

training• Based on an agreed statement of work

Enterprise ArchitectureAn Instant-On Enterprise requires a flexible, scalable IT architecture plus a robust governance model. An Enterprise Architecture capable of enabling the Instant-On Enterprise meets business, IT, and governance requirements while actively supporting corporate security and integrity.

We partner with IT organizations to establish an end-state architecture that delivers on those requirements. Our approach to Enterprise Architecture is to:• Develop a vision of end-state architecture that

conforms with IT and business specifications• Confirm that business architecture is in place to

support the organization’s business strategy• Provide a governance structure with deployable

resources of HP Technical Services• Establish information and technology architecture to

support the business and IT strategic goals• Put a migration strategy and roadmap in place—

along with a process to support architecture change management

Along with those steps, the process provides for a highly secure enterprise—one that covers all aspects of IT: physical, human, and process.

9

Business Value of ITIn the coming years, IT will need to understand the precise business value of any new technologies. IT performance metrics will need to incorporate quantitative measures of business value. Moreover, IT will need to be able to make a compelling business case for all future technology investments.

As part of the Business Value of IT, our consultants can help businesses establish the actual monetary value of new and existing IT solutions.

Our approach to the Business Value of IT includes:• Data collection to obtain operating metrics from

all stakeholder organizations through semi-formal interviews and discussions

• Data processing, using the data collected to assign approximate values to the improved processes

• Workshops to simulate the new process flow in order to confirm that it meets objectives—and that key stakeholders recognize and agree on the benefits of any new technology

• Follow-up to ensure that all concerns are addressed and stakeholders give their full support

Cloud Business Readiness In repositioning for tomorrow, CIOs must find ways to improve business processes, enable new business models, and transpose the ratio of maintenance to innovation. At the same time, the volume of data—both structured and unstructured—is growing rapidly. But hardwired, rigid infrastructures of legacy hardware and software are costly to run. Furthermore, there is a growing problem of virtual sprawl, now reaching a breaking point, with no clear path toward unified management tools for physical and virtual environments.

One powerful way of addressing these challenges is to implement shared services over a cloud infrastructure. HP can help CIOs and other managers make a compelling business case for cloud and related technologies.

The process begins by introducing broad-level understanding of the cloud, identifying exactly what it is and what it is not. The goal is to provide a financial and corporate justification for implementing shared services from a top-line perspective. By marrying the implementation of shared services with the cloud’s pay-as-you-go pricing, IT can achieve exceptional savings.

Our approach to Cloud Business Readiness is to:• Collect financial information related to productivity

and staffing costs for non-core organizations• Establish financial projections for targeted savings

under a shared services scenario—while maintaining undiminished productivity

• Engage executives so that they understand and acknowledge the savings that can be realized from shared services

Mergers and AcquisitionsSooner or later, nearly every enterprise either merges with or acquires another—or it divests itself of one or more business units. The resulting impact on IT can be crushing. In such cases, HP can develop specific strategies to support IT through these significant business changes.

When merging different businesses, our process begins by defining the scope and information baseline of the companies. It establishes common data elements and specifies compulsory replicas and underlying infrastructure requirements. And it determines the personnel necessary to support both the merger and ongoing operations. We will also develop (or relocate) the optimal infrastructure supporting software—with an appropriate firewall. Because the legal ramifications of mergers, acquisitions, and divestitures are often so labyrinthine, we help to define them in detail.

10

Our approach to Mergers and Acquisitions is to:• Define the necessary data elements needed to

support the business on a business-function basis• Develop the ideal financing model for the acquisition

and release of hardware and software licenses• Map the data extraction/transformation requirement

to the target business—as well as sunsetting requirements—while maintaining data integrity

• Define new business process requirements so there is no information loss or delay

• Identify the personnel needed to support the transition and ongoing maintenance

Performance EngineeringBecause today’s businesses rely on critical systems, performance issues can have real business impacts. Both rapidly diagnosing and quickly remediating performance issues are essential for the always-on enterprise.

Problem diagnosisIf necessary, HP will diagnose the root cause hindering a platform’s business performance and end-user experience. In many case, the cause of a sluggish system has very little to do with hardware items such as CPU or RAM. More likely, the problem stems from incompatibility issues that kick in only when the system’s load rises above a certain level.

Organizations often respond by throwing new hardware at the problem—an expensive and ultimately futile exercise. We help businesses avoid unnecessary capital expenditures through:• Data collection • System monitoring of key system and database

activities• Analysis of choke points • Troubleshooting and diagnostics

Problem remediationCorrecting any serious problem within the technology infrastructure may require redeploying the architecture (database, servers, network) or modifying the application. Through a variety of procedures, including architect/fix, workaround parameter changes or SQL hinting/rewrite, and backstop performance issues, we can help get the platform back on track.

Our approach to Performance Engineering (remediation) is to:• Fix the problem without modifying applications• Thoroughly test the fix • Closely assess the fix at deployment• Document the fix

HP SITAS: business driven, technology basedOur consultants have all worked in senior positions for major corporations and leading consulting firms around the world. Their particular experience and expertise is solving business problems through the strategic use of technology. In the process, they offer the kind of high-level strategic consulting—together with unequaled solution delivery—that can help accelerate the transition from enterprise to Instant-On Enterprise.

Their method is to listen, learn, and lead in a partnership with CIOs and other C-level executives to create a long-range IT strategy—as well as to build a strong business case for IT transformation. This approach is designed to deliver the right solutions for the enterprise, providing highly responsive IT services.

The ultimate result is faster growth (including expansion into new markets), distinct performance and innovation advantages that can help the enterprise overtake competitors, and more value for every dollar of IT investment.

11

SummaryThe very near future will see a vastly transformed IT function that is so closely aligned with business goals that it becomes the key driver of growth and profitability. But to accomplish such changes, CIOs will need to build an Instant-On Enterprise in which IT:• Applies technology innovation to business

challenges• Uses new technologies to create new markets• Responds quickly and effectively to changing

business and needs• Minimizes operating costs while improving

operational processes• Reduces risk while capitalizing on opportunities

made possible by technology and pervasive connectivity

HP Strategic IT Advisory Services can be a key resource in developing long-term IT strategies. We bring together extraordinary expertise and experience to complement and partner with your existing team. Our portfolio of services was designed around the different paths that your organization may travel on the journey to becoming the Instant-On Enterprise.

No matter where you are in your journey, getting started is easy. The following table shows options for businesses that want to take advantage of our capabilities on an accelerated timetable.

For more informationwww.hp.com/services/SITAS

Table 2. HP Strategic IT Advisory Services Service area How to get started

IT Strategy and Transformation • Enterprise IT health check• IT strategic planning• IT transformation planning

Strategic Service Management • Service portfolio planning• Service capability planning• Service strategy definition• Organization design and change

Enterprise Architecture • Enterprise architecture planning• Enterprise architecture design

Business Value of IT • Business transformation experience• Business benefits analysis• Strategic architecture planning

Cloud Business Readiness • Hybrid delivery strategy• Cloud roadmap• Cloud business architecture

Mergers and Acquisitions • Pre-deal due diligence• Program planning and PMO• Post-merger IT optimization

Performance Engineering • Performance analysis• Performance diagnosis• Performance remediation

Get connectedwww.hp.com/go/getconnected

Get the insider view on tech trends, alerts, and HP solutions for better business outcomes

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

4AA3-4345ENW, Created April 2011

Share with colleagues