IT Simplification

IT Simplification

          
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IT Simplification

Turning Less into More
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  • In This Article
    • A highly complex IT environment, common in many large companies, can drive up IT costs and weigh on service levels.

    • Reducing IT complexity has always been a tough challenge—but evolving technologies are making it increasingly possible.

    • A global health-care company's technology-driven simplification effort holds lessons for many businesses.

     

    A highly complex IT environment—common in many large companies, especially those active in mergers and acquisitions—can translate into unnecessarily high IT costs and poor service levels. It can also make the IT organization less agile, impeding its ability to help the business seize emerging opportunities. While most IT leaders recognize the problem and many talk about trying to fix it, most ultimately throw up their hands, put off by the perceived investment of time, cost, and effort.

    But advances in technology are changing the calculus by making IT simplification increasingly attainable and feasible. Borrowing a page from the auto industry’s playbook, IT organizations can now substantially reduce complexity by shrinking the number of “brands” (that is, technologies they support) where there is redundancy, adopting a more modular and reusable approach to building infrastructure services, and heavily leveraging the supplier community for technical expertise, low-cost assembly, and better quality. In so doing, IT organizations can achieve gains in efficiency and performance that rival the gains in manufacturing efficiency and profitability witnessed by automakers through their brand and supply-chain simplification efforts.

    A global health-care company is pushing the envelope on this front, having launched an aggressive, new-technology-driven simplification effort designed to radically simplify all its IT, especially the IT back-office, or infrastructure, space. Its experience is sure to intrigue and resonate with any company whose IT projects take too long and cost too much, and whose IT-application portfolio and data-center floor increasingly resemble grown jungles.

    Significant Complexity—and a Mandate for Change

    The company undertaking the initiative is one of the health care industry’s major players, with truly global operations and multiple lines of business. Over time, its growth, which had been fueled both organically and through acquisition, had contributed to an extremely complex IT environment. Complexity was particularly great in the infrastructure operations (IO) realm, which already had an expansive charter: provide 24-7 computing and connectivity across roughly 600 sites, 15-plus global data centers, and 80 countries. And IO was being asked to significantly reduce costs—by up to 15 percent a year—at a time when the number of applications and the quantity of data were growing, and to do so without having a negative impact on the business. This would be a tall order in any environment. High and rising complexity piled on top was making the task proportionately harder.

    Complexity within IO had spiraled especially in application hosting. Each of the company’s acquisitions had brought more facilities, applications, and technologies to manage and support. The company’s global data centers had reached the point where they hosted approximately 2,500 applications; several hundred edge sites hosted an additional 1,500. Simultaneously, owing to multiple factors—including departments operating largely in isolation and unique standards applied across the various technology stacks—the number of technology patterns within the hosting environment (that is, configurations of hardware, software, and middleware elements used to host various applications) had skyrocketed to more than 1,700. (See Exhibit 1.) Each pattern needed to be maintained; each also reduced the company’s ability to leverage scale advantages and reduced the speed with which it could provision and host new applications. And this growth showed few signs of slowing, with 350 new patterns introduced within the previous 12 months. For the IO function, these unwieldy numbers were weighing on the function’s cost profile, flexibility, and ability to match service levels with the business’s needs. IO’s leadership knew it needed to engineer a major overhaul.

    exhibit

    Adding to the urgency to simplify the hosting environment was the company’s recent decision to adopt a different business model in response to an industry backdrop that it expected to be increasingly challenging. The model placed a premium on smaller budgets, cost containment, and generally doing more with less; it also emphasized leveraging partners to a greater extent and forging innovative alliances with outside parties, such as educational and research institutions. With the entire company moving in a new direction, the IO team was expected to do its part and help facilitate the effort. The sizable challenge for IO would be to make the necessary changes without compromising service levels or the quality and speed of delivery.

    An Aggressive Path Forward

    IO’s leadership recognized the magnitude of the challenge but believed that the time was ideal to attempt such a transformation. Advances in nascent technologies, especially cloud computing and mobile connectivity, were making traditional IT-infrastructure delivery mechanisms obsolete and permitting new levels of efficiency. By adopting a single internal cloud technology, for example, and forcing its application teams to build to this environment, the company believed it could move more quickly to a standardized infrastructure and make better use of existing capacity. Embracing the cloud more aggressively would also narrow the set of skills that IT needed to maintain in-house, especially in engineering and design, and would reinforce the company’s move toward a more standardized and streamlined environment. Making greater use of mobile technologies, especially tablet-based ones, would also be advantageous, the company believed, because the more standardized architecture that these devices employ would allow IO to significantly reduce the number of versions it needed to support.

    The leaders of the IO function also believed that new entrants into the “technology solutions” supplier market, including Amazon, Google, and Rackspace, were introducing creative solutions. And it noted that increasing competition among these players was driving down prices across the board. All told, the time was right to move. By leveraging these technologies and making greater use of external suppliers, IO would be able to aggressively streamline and standardize its hosting environment. And it could do so while maintaining or even improving IO’s performance and cutting costs materially.

    Armed with that confidence, IO’s leadership took to the task of simplification. It appointed a team of architects to examine the 1,700-plus technology patterns currently in place and identify commonalities and opportunities for standardization. (See Exhibit 2.) The team first grouped the patterns into roughly 120 metapatterns based on similar high-level characteristics. It then identified the top 20 such metapatterns, which it determined would cover the vast majority of existing applications; identified the specific standards that would need to be defined to cover most applications; and worked with subject-matter experts to define full technology patterns for each standard.

    exhibit

    Ultimately, the team determined that a very small number of standard technology patterns—seven—would be sufficient to cover approximately 80 percent of the company’s application needs. All seven would make extensive use of shared assets, including databases, middleware, Web servers, and Web services—a sharp contrast to the original 1,700 patterns, 90 percent of which were independent and which often ran on their own hardware or software stack and were not shared. The architects also defined 13 “special use” patterns to cover exceptions (for example, mission-critical and performance-intensive environments, such as the SAP environment and plant-operating applications) that would require dedicated resources.

    The move to an aggressively streamlined, standardized, and virtualized hosting environment will, IO’s leadership believes, deliver a range of outsized benefits. (See Exhibit 3.) For example, moving to an internal cloud will increase server utilization, which will greatly reduce the server footprint and associated managed-service-provider costs. Limiting the number of technologies will reduce the time it takes to design new solutions; it will also permit the sharing of resources and simplify learning curves. The use of preprovisioned configurations that have been engineered for use in many situations, as well as a fully automated provisioning process, will shorten cycle times. Ultimately, IO’s leadership expects the effort to deliver cost savings in the core data centers and remote sites of roughly 15 percent over the next three years.

    exhibit

    The effort is well under way. Teams are working to identify and execute quick wins. Suppliers are working to establish the necessary environment. And some applications are under reconstruction. Pending next steps for IO’s leadership include applying standard patterns to all new applications and refreshes and implementing a governance process to halt any nonstandard development early in the process; communicating standards internally to facilitate rapid adoption; creating a detailed business case and timeline for migrating existing applications to the new paradigm; and developing the necessary pattern life-cycle management and governance procedures.

    Must-Haves for Success

    Pulling off such a transformation places a number of demands on IT leaders. Chief among them are vision, a willingness to interact differently with both external and internal partners, and the fortitude to stick with the program.

    First, IT leaders must recognize that technologies have evolved to the point where such a change is indeed possible. But making this type of transformation succeed requires a nuanced, eyes-open view of these technologies. This is particularly the case with regard to cloud services.

    Cloud is being hyped by some as the answer to every problem, and both cloud capacity and functionality continue to expand. But creating the type of development and hosting platform that this global health-care company is driving toward—one that is extremely efficient and flexible and truly on-demand—necessitates far more. It requires a rigorous, comprehensive approach to the design of the full technology stack, including the hardware, operating system, middleware, and database layers—a “super cloud,” if you will, that extends far beyond computing on demand. And it requires a similarly rigorous look at implementation. Assuming that the problem is essentially solved once the macro decision has been made to share computing power through cloud or virtualization is overly simplistic thinking.

    Success also requires the willingness to forge new or different relationships with suppliers. Traditional suppliers may not be able to operate comfortably in this new environment, because it forces them to think differently about packaging and pricing their solutions and shifts the capacity-utilization burden and risk from clients to them. Instead, a company may need to form new relationships with new suppliers or supplier alliances that offer better solutions at lower cost. As IT services continue on the path toward commoditization, the task of benchmarking providers and identifying those that offer the best value, flexibility, and quality will become progressively easier.

    IT leaders will also need to actively manage the business’s expectations through the transformation, as there will undoubtedly be hiccups along the way. They will have to manage the business’s longer-term expectations as well, particularly regarding the future degree of customization of support.

    Finally, to successfully lead a large-scale IT simplification effort, IT leaders must be able and willing to assume risk, take a long-term perspective, and feel comfortable at the forefront of change. They must also be able to build cooperation among functions and departments that have historically operated and viewed themselves as silos. And they must be willing to leave the details to those on the frontline who manage the environment.


    Acknowledgments

    The authors would like to thank Michael Goff, Daan Livestro, and Greg Pope for their contributions to this article.

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