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© 2009 IBM Corporation
Technology Architecture, Platforms andNew Technology Selections in Organisations
Jouko Poutanen, 23.2.2015
© 2009 IBM Corporation
Content
Opening
Context–Technology’s Role in a Company
Technology Architecture–Positioning and Role Based on Enterprise Architecture Frameworks–trend : Software Defined Environment, SDE
Technology Platforms–Trend : XaaS, Buy vs. Build, Hybrid Cloud
New Technology Selections in Organisations–Selection criteria and experiences from industry–An Operations Strategy Perspective
© 2009 IBM Corporation4
Resources, Capabilities and Firm Performance
Competitive advantage
StrategyIndustry key
success factors
Organisationalcapabilities
Resources
Tangible• Financial (cash,
securities,..)• Physical (plant,
equipment,..
Human- Skills/know-how- Capacity for
communicationand collaboration
- Motivation
‘individual resources do not confer competitive advantage, they must work together to create organisational capabilities’
Intangible- Technology (patents,
copyrights, ..)- Reputation (brands,
relationships)- Culture
Source:
© 2009 IBM Corporation
Interviews of 4,183 top executives covering more than 20 industries in 70 countriesRespondents represent a wide range of public and private sector organizations
© 2009 IBM Corporation
CxOs World View
Most significant external pressures
CEO and Technology’s Importance
CEOs think technology will be the most important external force shaping the future of their enterprises
© 2009 IBM Corporation
CIOs Perspective
Aspirations of a role change
Focus on technologiesShifting goals
© 2009 IBM Corporation
Information Technology is Paramount for Leading Companies to Create Business Value
Factors impacting organizations:
Source: IBM 2013 Global C-suite Study
Impacts on Business
Increasing interactions with customer
Opportunities for greater productivity
Move to adjacent or new markets
Technology Impacts on Business Increasing interactions with customer
Opportunities for greater productivity
Move to adjacent or new markets
Massive amounts of unstructured data
Rapid product lifecycles
Changing relationships with partners
Web apps
Social data
Location based apps
Cloud apps
Mobile apps
Internet of Things
Source: “The Software Edge: How effective software development and delivery drives competitive advantage,” IBM Institute of
Business Value, March 2013
© 2009 IBM Corporation
Zachman Enterprise Architecture Framework
e.g. DATA
ENTERPRISE ARCHITECTURE - A FRAMEWORK
Builder
SCOPE(CONTEXTUAL)
MODEL(CONCEPTUAL)
ENTERPRISE
Designer
SYSTEM
MODEL(LOGICAL)
TECHNOLOGY
MODEL(PHYSICAL)
DETAILEDREPRESEN- TATIONS(OUT-OF- CONTEXT)
Sub-Contractor
FUNCTIONING
ENTERPRISE
DATA FUNCTION NETWORK
e.g. Data Definition
Ent = FieldReln = Address
e.g. Physical Data Model
Ent = Segment/Table/etc.
Reln = Pointer/Key/etc.
e.g. Logical Data Model
Ent = Data Entity
Reln = Data Relationship
e.g. Semantic Model
Ent = Business Entity
Reln = Business Relationship
List of Things Important
to the Business
ENTITY = Class ofBusiness Thing
List of Processes the
Business Performs
Function = Class ofBusiness Process
e.g. Application Architecture
I/O = User ViewsProc .= Application Function
e.g. System Design
I/O = Data Elements/Sets
Proc.= Computer Function
e.g. Program
I/O = Control BlockProc.= Language Stmt
e.g. FUNCTION
e.g. Business Process Model
Proc. = Business Process
I/O = Business Resources
List of Locations in which the Business Operates
Node = Major BusinessLocation
e.g. Business Logistics System
Node = Business Location
Link = Business Linkage
e.g. Distributed System
Node = I/S Function(Processor, Storage, etc)Link = Line Characteristics
e.g. Technology Architecture
Node = Hardware/SystemSoftware
Link = Line Specifications
e.g. Network Architecture
Node = AddressesLink = Protocols
e.g. NETWORK
Architecture
Planner
Owner
Builder
ENTERPRISEMODEL
(CONCEPTUAL)
Designer
SYSTEMMODEL
(LOGICAL)
TECHNOLOGYMODEL
(PHYSICAL)
DETAILEDREPRESEN-
TATIONS (OUT-OF
CONTEXT)
Sub-Contractor
FUNCTIONING
MOTIVATIONTIMEPEOPLE
e.g. Rule Specification
End = Sub-condition
Means = Step
e.g. Rule Design
End = Condition
Means = Action
e.g., Business Rule Model
End = Structural AssertionMeans =Action Assertion
End = Business Objective
Means = Business Strategy
List of Business Goals/Strat
Ends/Means=Major Bus. Goal/Critical Success Factor
List of Events Significant
Time = Major Business Event
e.g. Processing Structure
Cycle = Processing CycleTime = System Event
e.g. Control Structure
Cycle = Component Cycle
Time = Execute
e.g. Timing Definition
Cycle = Machine CycleTime = Interrupt
e.g. SCHEDULE
e.g. Master Schedule
Time = Business Event
Cycle = Business Cycle
List of Organizations
People = Major Organizations
e.g. Work Flow Model
People = Organization Unit
Work = Work Product
e.g. Human Interface
People = RoleWork = Deliverable
e.g. Presentation Architecture
People = User
Work = Screen Format
e.g. Security Architecture
People = IdentityWork = Job
e.g. ORGANIZATION
Planner
Owner
to the BusinessImportant to the Business
What How Where Who When Why
John A. Zachman, Zachman International (810) 231-0531
SCOPE(CONTEXTUAL)
Architecture
e.g. STRATEGYENTERPRISE
e.g. Business Plan
TM
© 2009 IBM Corporation
Example
source: Korkeakoulujen KA ohje, ICT-toimintaympäristön kuvaus, esimerkki
© 2009 IBM Corporation
Architecture Layers
User interface
Application
Middleware
Servers
Network
Operating
System
© 2009 IBM Corporation1414
Future
Rapidly changing workloads, dynamic patterns
Dynamic automatic composition of heterogeneous system
Autonomic and proactive management
Current
Diverse workload, limited patterns
Homogeneous resource pooling
Expert configuration and mapping of workload
Traditional
Few, stable, and well known workloads
Fixed System hardware, manual scaling
Hardwired workload, minimal configuration
W1 W2 W3 W4
R1 R2 R3
V1 V2 V3 V4 V5 … Vn
V1 V2 V3 V4 V5 V5 ... …. Vn
C
C
Changing Business Requirements’ Impact on Technology Architecture
© 2009 IBM Corporation
BEFORE
Software Defined Environment
AFTER
StorageNetwork
Compute Continuous Optimization+
+
+
++
+
++
+
++
+
Application Aware Policy
Compute
Automated IT Delivers Greater Speed, Efficiency and Simplicity
Policy Enforcement
Increasing Automation
Policy
Policy Policy
Policy
• Slow and manual
• Reactive administration
• IT silos and costly specialization
Traditional Infrastructure
• Rapid, repeatable and automated
• Proactive administration
• Fully integrated management
Infrastructure As A Service
© 2009 IBM Corporation
Software
Defined
Environment
Workload
Blueprint
• Workload Blueprint describes
software solution components and
infrastructure resources required by
the solution in a industry standard format (Heat Orchestration Template)
• Infrastructure Pattern maps
software pattern to optimal infrastructure
based on business rules (polices)
• Infrastructure hosts multiple workloads
in a shared environment
• Software Defined Environments
automatically orchestrate deployment
and update of workloads
Policies
Policies
Private Clouds Hybrid Public Clouds
Infrastructure
Pattern
Policies
Software Defined Environments are Application Aware, Automating Best Practices via Patterns of Expertise
© 2009 IBM Corporation
Software Defined Storage
physical
storage
physical
storagephysical
storagephysical
storage
virtualized storage
host host host
© 2009 IBM Corporation
The challenge: Innovate while managing rapid change
200 Billion
SmarterPhysical Assets
Physical assets with IT intelligence
1.2 Billion
Boundless Infrastructures
Consumers willhave SmartPhones
67%
UnpredictableData Flows
of IT traffic will be Cloud-based
60,000
Expanding risk & cost
Cyber attacks every day
Cloud computing provides the foundation to build business opportunities
© 2009 IBM Corporation
Networking Networking Networking Networking
Storage Storage Storage Storage
Servers Servers Servers Servers
Virtualization Virtualization Virtualization Virtualization
O/S O/S O/S O/S
Middleware Middleware Middleware Middleware
Runtime Runtime Runtime Runtime
Data Data Data Data
Applications Applications Applications Applications
Traditional
On-Premises
Clie
nt
Man
ages
Ve
nd
or M
an
age
s in
Clo
ud
Ve
nd
or M
an
age
s in
Clo
ud
Ve
nd
or M
an
age
s in
Clo
ud
Clie
nt M
an
age
s
Clie
nt M
an
age
s
Customization; higher cost; slower time to value
Standardization; lower cost; faster time to value
SoftLayer Bluemix
Cloud Service Models
Infrastructure as
a ServicePlatform as a
Service
Software as
a Service
© 2009 IBM Corporation
IBM Next Generation Cloud Platform
External Ecosystem
MarketplaceApp
API
Services
API
Analytics
API
Commerce
API
Collaboration
API
Location
API
Data
APIAPI
Management PlatformWorkload definition, optimization and orchestration
Software-defined compute Software-defined storageSoftware-defined
networking
Resource abstraction and optimization
Traditional workloads
Services and composition patternsAPI and integration
services
Solutions
DataMobileDevelopment OperationalApplication
servicesSecurity…
Infrastructureas a Service
Platformas a Service
Softwareas a Service
API economy
Cloudoperating
environment
Software-defined
environment
© 2009 IBM Corporation
OpenShift
OAuth
OSLCInfrastructure
as a Service
Platformas a Service
Softwareas a Service
API economy
Cloudoperating
environment
Software-defined
environment
TOSCA
Building the Next Generation of Cloud Architecture on Open Technologies
© 2009 IBM Corporation
Automation and Analytics
Application AwareApplication Aware
ComputeCompute StorageStorage NetworkNetwork
AnalyticsPatternsDefinition
Resource SmartResource Smart
What the business wants:
•Define business needs
•Identify service opportunities and requirements
•Quickly experiment and test new services
What Software Defined Environments provides:
•Patterns of Expertise to link solution to infrastructure based on business rules
•Automated orchestration of workloads
•Analytics-based optimization of workload to maximize outcomes
Con
tin
uous O
ptim
iza
tio
n
PriorityPolicyService
PriorityPolicyService
© 2009 IBM Corporation
NEW TECHNOLOGY SELECTIONS IN ORGANISATIONS
An Operations Strategy Perspective
© 2009 IBM Corporation
Operations Strategy
‘Operations’ is the activity of managing the resources and processes that produce and deliver goods and services
Operations strategy is the total pattern of decisions which shape the long-term capabilities of any type of operation and their contribution to overall strategy, thought the reconciliation of market requirements with operations resources
© 2009 IBM Corporation
Operations Strategy
Operations resources
Capacity
Supply networks
Process technology
Development and organisation
Market requirements
Quality
Speed
Dependability
Flexibility
Cost
Top - down
Corporate strategy
Business strategy
Functional strategy
Bottom - up
Emergent sense of what the strategy
should be
Operational experience
OperationsStrategy
Operations strategy must reflect four perspectives – top-down, bottom-up, market requirements, and operations resources.
© 2009 IBM Corporation
Tangible and intangible resources
Operations capabilities
Operations processes
Operations strategy
decision areas
Operations strategy is the strategic reconciliation of market requirements with operations resources
Customer needs
Market positioning
Competitors’ Actions
Performance objectives
Understanding resources and processes
Strategic decisionsCapacitySupply networksProcess technologyDevelopment and organization
Required performanceQualitySpeedDependabilityFlexibilityCost
Understanding markets
© 2009 IBM Corporation
Process Technology
a.k.a. production technology
Process technology strategy is ‘the set of decisions that define the strategic role that direct and indirect process technology can play in the overall operations strategy of the organisation and sets out the general characteristics that help to evaluate alternative technologies
» Slack and Lewis (2008)
© 2009 IBM Corporation
Relevant Questions
What does the technology do which is different from other similar technologies?
How does it do it?
What constraint does using the technology place on the operation?
What skills will be required from the operations staff in order to install, operate and maintain the technology? How can technology vendor support implementation?
What capacity does each unit of technology have?
What is the expected useful lifetime of the technology?
Where does the technology exist in its lifecycle?
How is good is the technology vendor’s economic viability?
Are there relevant customer references available?
How much skills exist in the market for this technology?
© 2009 IBM Corporation
What Kind of Technology We Need?
Source: Hayes, R.H. and Wheelwright, S.C. (1979) , Link Manufacturing Process and Product Life Cycles, Harvard Business Review, Jan-Feb, pp. 133-40
Typ
e o
f p
rod
uct
ion
pro
cess
Requirements on the production process
© 2009 IBM Corporation
Evaluating Technology Strategically
Evaluating process technology means determining its value or worth
This involves exploring the strategic consequences of adopting technologies in terms of its – ‘feasibility’: the degree of difficulty in adopting it– ‘acceptability’: how far it takes a firm towards its strategic objectives– ‘vulnerability’: the extent to which the firm is exposed if things go wrong
© 2009 IBM Corporation
Technology Investment Must be Feasible
If the resources required to install a piece of technology are greater than those which are either available or can be obtained, it is infeasible. Three broad questions are worth asking:
What kinds of skills, technical or human, are required? – Every investment in process technology needs a set of specific skills to cope with the
implementation – If an investment is similar to the usual activities of the organisation, these skills will
probably be present. However, with a completely novel process, novel implementation skills might be needed
What quantities of operational resources are necessary? – This involves determining the number of resources – people, facilities, space,
materials, etc. – which would be required to implement the process.
What are the funding or cash requirements? – For many decisions the major feasibility issue concerns the cash which would be
required. For some decisions this could mean simply examining a one-off cost, such as the purchase price. Other, more strategic, process investments may need an examination of their effects on the cash requirements of the whole organisation.
© 2009 IBM Corporation
Technology Investment Must Give Acceptable Benefits
Process technology should provide resource capabilities which give a sustainable advantage by– being scarce, difficult to move, difficult to copy and/or difficult to substitute for
All process technology should contribute to the business in an operational context. – use operations performance objectives to assess acceptability – giving more weight
to those which contribute directly to competitiveness.
The financial impact of process technology is the comparison of the costs to which the investment commits the operation and the financial benefits which might accrue. – Ideally, both the ‘costs’ of the investment and the resulting benefits ought to include
everything which is influenced by the investment over its life. In fact, this is impossible in any absolute sense.
– The effects of any large process decision ripple out like waves in a pond, impinging on and influencing many other decisions.
© 2009 IBM Corporation
Assessing the Acceptability of a Technology
Operations Resources Market Requirements
OperationsStrategy
Proposed technology
How does the technology affect• Quality?• Speed?• Dependability?• Flexibility?• Cost?
Is the technology• Scarce?• Difficult to move?• Difficult to copy?• Difficult to substitute for?
Financial evaluation
Does the technology give anacceptable ROI necessary for this adoption?
Source: Slack and Lewis, Operations Strategy (2008), Prentice Hall
© 2009 IBM Corporation
Financial Evaluation Methods, examples
Payback period (PP)– Treats all technology options as same in below example – but they are not
• can’t detect how fast cash comes in, neither the cash flows after the payback period
Net present value (NPV) is the preferred method – it detects– The timing of the cash flows and time value of money– The whole of the relevant cash flows, the net benefit of investment after financing costs are met
Technology 1
Technology 2
Technology 3
100 200 300 400 500
Yr1
Yr2
Yr3
Yr4
Yr5
Yr1
Yr2
Yr3
Yr4
Yr5
Yr5
Yr4
Yr3
Yr2
Yr1
Cumulative cash flows
Payback periodThe investments withpositive NPVvalue are viable.Select technology with thehighest value (e.g. option 3 in
this example)
© 2009 IBM Corporation
Technology Investment Must not Expose the Operation to Excessive Vulnerability
The risk inherent in any process investment is there because one cannot totally predict–How it will affect the performance of the whole operation–The external conditions prevailing after the investment is made – for
example, the volume of demand or the interest rate–The reaction of outside companies to the investment – for example, whether
competitors are likely to make similar investments
All these need assessing and putting in terms of the downside risk for the operation – the most pessimistic outcome possible. The key question then becomes : ‘is the downside risk worth taking?’