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Next Gen ADM: The future of application services.

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Rapid technology advances are driving higher expectations around speed, efficiency and resilience. Expectations for how technology should help meet business goals are rising. To meet increasing expectations around agility, time to value and cost optimization, Businesses are seeking new ways to manage apps. Born-digital companies are setting new standards for speed, efficiency and resilience. We will discuss how companies can optimize the core, unlock legacy and unleash digital to thrive in the new normal.

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Next Gen ADM: The future of application services.

  1. 1. 1 Next-gen ADM The future of application services February 2019
  2. 2. 2 Table of contents The ADM market Market trends Client observations The “new normal” IBM point of view (POV) on the future of ADM The three performance zones in ADM Details of each model Portfolio assessment and alignment The shift over time Key considerations in a comprehensive ADM strategy ADM team constructs Convergence of AM and AD Integrated AD and AM model POV on automation Our POV on service integration and management Client stories Client examples Moving forward Overview of the next-gen ADM story
  3. 3. © 2018 IBM Corporation 8 February 2019 IBM Services3 The ADM market
  4. 4. 4 The ADM market Market trends driving the future of ADM Rapid technology advances are driving higher expectations around speed, efficiency and resilience Supporting growth of the business is the top priority for chief information officers (CIOs). Gartner. Increasing expectations for consumer-like experiences in workplace apps. Rising digital ambitions driven by the need to push customer-centric offerings to market quickly. Increasing financial pressure to shift spend from app maintenance to digital reinvention, and to move from capital expenditure (capex) to operational cost (opex). Expanding the breadth of user experiences, including advanced user interfaces (Uis), connected cars, mobile accessibility, virtual assistants and social media integration. Increasing hyper-personalization requires real-time data capture and analysis. Business expectations Expectations for how technology should help meet business goals are rising Technology trends Businesses are using new tools to improve speed, quality and efficiency Accelerated cloud adoption Hybrid cloud environments are becoming standard. Large enterprises need to innovate using cloud and legacy systems, where new cloud-native architectures are transforming how we deliver and operate solutions. Omnichannel experience The pervasive mobile and next-gen UI is transforming how customers consume business capabilities. Next-gen UIs and devices are creating new complexity around design, testing and management. Application decomposition Composable business functions bring portability, security, speed and efficiency to traditional applications, enabled by application programming interfaces (APIs), microservices and containers. Data fabrics A core component of digitization is treating data as an asset. To be successful with digitization, businesses must use data management and governance techniques to free data from supporting IT components. Service integration As enterprises further externalize application capabilities using software as a service (SaaS) and business process as a service (BPaaS) solutions, they must provide comprehensive integration of solutions at a service layer to meet customer expectations. AI-driven optimization Advanced artificial intelligence (AI) will transform ADM with predictive analytics, machine learning and a proactive self-healing system. DevOps Advanced DevOps enables continuous delivery and optimization (such as telemetry and continuous monitoring), while agile methods allow organizations to deliver incremental business value. Technology velocity and security Technologies evolve rapidly, enabled by open source and cloud ecosystems and the need for increased security. Automation-led productivity Robotic process automation (RPA) will cut app support costs by about 50 percent.
  5. 5. 5 The ADM market Speed Born-digital companies use highly automated and mature DevOps capabilities to shift the baseline of product releases from months to incremental real-time releases. Resilience Consumer-centric, born-digital organizations use always-up, zero-downtime capabilities to ensure service resilience. Efficiency These organizations use test automation and reuse of composable business services created in a DevOps-enabled cloud platform to maximize the efficiency of their apps. The “new normal” Born-digital companies are setting new standards for speed, efficiency and resilience Facebook rapidly delivers new features based on customer insights Amazon has the ability to deploy every 12 seconds Uber has a fully API- enabled enterprise Google has pretrained cloud- based AI capabilities to augment RPA Spotify has hidden features to expose integration issues early Netflix has an always-up production system Industry-specific content – To be added by the presenter. Please highlight specific players and trends that are relevant for the client to whom you are speaking
  6. 6. 66 Processes A modular breakdown of work focused on agility, user-centric design, and automation is increasing efficiency, responsiveness and quality. Technology Businesses are developing and releasing software quicker thanks to the rapid evolution of software frameworks, such as web and mobile; modular technology paradigms, such as microservices; and containerization accelerated by cloud- based ecosystems. People Teams are reorganizing to be small, self-contained and multiskilled. This reorganization allows them to work in an end-to-end fashion, and helps create collaborative, accountable organizations. The ADM market The new normal is underpinned by paradigm shifts across people, processes and technology
  7. 7. © 2018 IBM Corporation 8 February 2019 IBM Services7 IBM POV on the future of ADM
  8. 8. 88 Optimize the core Cut costs and maximize efficiency Digital transformation in a multispeed environment with next-gen ADM To compete in the new normal, organization must consider three performance zones The future of ADM Unlock legacy Develop new capabilities Unleash digital Deliver speed and growth
  9. 9. 9 • Traditional app development and maintenance refined with modern tools and approaches • New development driven primarily by legal and regulatory needs • Maintain core value, while removing lower-value costs Best fit for: • Monolithic architectures supported by legacy skills • Complex enterprise continuity systems that need limited changes, reactive maintenance and minimal investment • Apps that are important, but aren’t economically viable to modernize Optimize the core Cut costs and maximize efficiency The future of ADM Labor arbitrage, RPA and cognitive computing drive the following benefits: • 50% fewer incidents • 50%-70% productivity benefits over five years • 30% cost reduction • 60% test-case reduction • Complete regulatory change cycles with reduced complexity
  10. 10. 10 People § Factory model with high offshore leverage and necessary time zone coverage for support § Functional squads for improved collaboration and deskilling § Shared subject matter expert (SME) squads for leveraging expertise § Apprentice models for training, especially for legacy skills that are rare The future of ADM Technology § Cognitive automation: Improve quality of support through shift left—put the resolution closer to customers § Robotic process automation for productivity and quality § Operation analytics and IT autonomics for proactive incident management and faster troubleshooting § Code quality review and reverse engineering to reduce cost of transition and maintenance § Test innovation IBM® IGNITE: Critical technology development (CTD), scriptless testing, cognitive defect analytics for defect prevention § SaaS adoption for enterprise applications § Independent software vendor (ISV) product-driven modernization, such as SAP S4/HANA Processes § Aspirational goal: To eliminate need for application management (AM) § Shift left application support: Put incident resolution closer to the customer § Agile and lean processes § Security practices to improve resilience § Hybrid labor model with operational oversight on bots Other considerations § Automation-first culture for effort elimination § Drive simplification by continuously maturing DevOps Optimize the core Intelligent, efficient and secure application management with low TCO, using automation tools, cognitive assets and targeted security practices What good looks like
  11. 11. 11 • Wrap new technology and features around existing apps to unlock value. • Take advantage of new technology in a hybrid model. • Have the potential to fully move to cloud over time. Best fit for: • Legacy apps with key data and embedded business rules, requiring new ways of user access • Monolithic apps where a full rewrite would be cost-prohibitive • Apps that contribute to differentiation • Portion of the core where investment can help improve speed, flexibility and user experience Unlock legacy Develop new capabilities The future of ADM Prioritized modernization based on business value drives the following benefits: • 40% faster time to market • 60% less build and deployment time • Omnichannel enablement in weeks, not months • Up to 50% productivity benefits over five years
  12. 12. 12 People § Squads and scrum for app development: Mature product owner concept, scrum master with cross-functional team resources, two-week sprints § Squads and Kanban for maintenance: Kanban for efficiency and rotating talent between maintenance and enhancements § Mixed-location strategy: Often distributed, up to 90% offsite; mission-critical or systems of engagement applications are more likely to be onsite § Full-stack teams: Move away from project teams, toward product-oriented squads that have autonomy over the full vertical stack The future of ADM Technology § APIs to wrap legacy apps: Wrap commercial off-the-shelf (COTS) and monolithic apps to help unlock value and allow new user experiences—mobile, web, kiosk § DevOps automation: DevOps pipelines to improve flexibility and speed of feedback § Cloud readiness: Start to modernize apps for the cloud— containerization, modern tool chains, removing monoliths, user experience focus Processes § Lean portfolio management: Lean work streams § Coordinated programs: Release planning, release trains with program increments § Team on same cadence: Two-week sprints coordinated with other teams (both agile and traditional) § DevOps processes: Eliminate culture of separate dev and ops silos § Modernized requirements and design: IBM Design Thinking (where applicable) with empowered product owner and strong focus on shift-left automated testing Other considerations Culture/business agility § Agile and lean culture at the portfolio level § Culture of grooming business product owners § DevOps culture § User centric—mobile, omnichannel Unlock legacy Wrap modern technology and approaches around existing apps to improve flexibility, feedback and user experience What good looks like
  13. 13. 13 • Uses modern technology to innovate faster and support strategic initiatives. • Builds new or improved digital experiences. Best fit for: • Market-facing apps that impact revenue. • Systems that require speed, flexibility and agility to capture growth. • Apps that need continuous improvement and delivery. • Apps using platform as a service (PaaS) and SaaS capabilities like IBM Cloud™, ServiceNow, Microsoft Azure or Red Hat Open Shift Unleash digital Deliver speed and growth The future of ADM Increased speed and innovation and reduced maintenance needs drive the following benefits: • 40% - 50% faster time to market • 50% faster feedback loops • New and improved digital experiences • Improved scalability and resiliency • Intrinsic resilience by design, self-healing apps
  14. 14. 14 People § Product squads: Product focus versus project focus, with active and empowered product owner § Cross-functional full-stack teams: Technical squad leader, team of self-learners with full- stack skills, including site reliability engineers (SREs) § Combined app development and maintenance: Maintenance team part of continuous squad § Colocated teams are ideal: Reduce long time-zone overlaps The future of ADM Technology § Modern languages: Node, Angular, JavaScript, Spring § Cloud-native patterns: Circuit breaker, service registration and discovery § Cloud native development: Microservices, 12-factor abstraction, Representational State Transfer (RESTful) APIs, self healing § Modern Toolchain: Automated CI and CD pipeline and toolchain § Self-service development and quality assurance (QA) environments: Can be built and torn down quickly § Hybrid footprint: Leverage both private and public clouds Processes § Minimum viable product (MVP)- based starting points: Lean work streams, Design Thinking with defined market outcomes § Tight feedback loops: One- week iterations with daily feedback loops § Extreme programming (XP) practices: Test-driven development (TDD), pair programming, continuous with continuous integration (CI) and continuous delivery (CD) § Maintenance and app development backlog: Maintenance backlog is combined with new work Other considerations § Innovation focused: Speed and agility, fail fast, rapid feedback, A/B testing, shift left § Innovation capabilities: Create a capability to continuously innovate with persistent innovation squads and experiment with new technologies—AI and IBM Watson®, blockchain, the Internet of Things (IoT) and more § Scalability and resiliency: Horizontal scaling for elasticity, zero-downtime deployments and self-healing software with immutable infrastructure Unleash digital Full digital reinvention of applications to drive growth What good looks like
  15. 15. 15 Shift toward modern application management practices The journey will be driven by business and technology triggers The future of ADM Shareofportfolio Time Unlock legacy Unleash digital Optimize the core IllustrativeThe shift over time The dominate model among incumbents today is the traditional legacy model—optimize the core. Over time, more companies will shift to modern management approaches, but the traditional model will not disappear altogether. Today Future
  16. 16. 16 Unleash roadmap Unlock roadmap The future of ADM Align applications to the appropriate ADM models Application portfolio transformation: a path to the next-gen ADM Associate apps with preferred models Assess capabilities to deliver within a model • Understand capabilities of each group of apps within a model. • Rate capabilities within key areas for each model, such as cognitive, robotics, engineering, development approach, skills and architecture. • Define the gaps compared with the desired future state. Optimize Unlock Unleash Unleash capability rating framework Unlock capability rating framework Optimize capability rating framework 1 2 3 4 ü ü ü 2. Determine best fit for applications Future state 1. Understand the portfolio Enterprise or line-of-business (LOB) portfolio Score 3. Assess capabilities Build the roadmap Tailor the roadmap from current state to the desired end state for each group of apps, within each model Score Score Optimize roadmap 4. Develop roadmaps The business context The technology context IBM proprietary industry-specific component business model Client application portfolio and user inputs 1. Business outcomes supported 2. Criticality 3. Source of business differentiation 4. Total cost of ownership (TCO) 1. Tech currency 2. Architecture maturity 3. Usage and system reliability 4. Maintainability 5. Speed of innovation required 1. Standardize parameterization of application attributes to define future-state environment mapping. 2. Identify opportunities to retire, consolidate or replace. 3. Consider cloud affinity, future-state deployment options, and cost of ownership scenarios. Applications to unleash Applications to unlock Applications to optimize Based on the defined scope of apps to be addressed, align apps into the three environments based on the desired end state of the business.
  17. 17. 17 © 2018 IBM Corporation 8 February 2019 IBM Services17 Key considerations in a comprehensive ADM strategy 17
  18. 18. 18 Proxyscrum master Cross-functional ADMsquadteam Cross-functional ADM squad team Product owner Product ownerLocal product ownerProduct owner Optimize the core Unlock Unleash A comprehensive ADM strategy ADM team constructs: Illustrative Optimizing the workforce and operating at scale Cross-functional ADM squad team Designer Squad lead Client site, IBM centers Colocated teams IBM Garage Method Time to value and impact optimized Product-driven ADM Cost: Horizontal integration Vertical integration Speed Highest-priority transformation initiatives Maximum flexibility and impact Distributed agile teams 2 hour overlap during working hours Partial scrumteam Scrum master Growth initiatives Mainstream components Migrations Partial scrum teams Client site Global delivery center Cost optimized with flexibility Agile specialization App Development and Kanban maintenance Cost optimized Project-driven app development and Kanban maintenance Traditional model Global factory delivery Global delivery center Client site Project-based app development teams Kanban maintenance teams Client leadership Factory requirement creation Functional initiatives Traditional development Global distributed squad structure Time-zone focused 100% screen share Squad lead Transformation initiatives Key growth initiatives Faster time to market than scrum Client-site squads Distributed squads Flexibility, quality and cost optimized Product-driven ADM DesignerDesigner Kanban maintenance teams Pair Prgmg. Pair Prgmg. Pair Prgmg.
  19. 19. 1919 Why? To meet client productivity expectations and to enhance quality, compliance and scalability. Our POV on automation Automation will be used to execute work without human intervention, as well as to augment knowledge workers with AI to drive higher productivity and better decision-making A comprehensive ADM strategy In the next generation of ADM, every engagement will include automation to delivery 30%-40% productivity and workforce savings. IBM Automation offers enterprise-grade automation solutions across infrastructure, applications and business processes to help clients in becoming a cognitive enterprise. What? We will offer solutions that use embedded intelligent automation to remove human intervention from routine, repetitive work and augment knowledge work. We team with clients to deliver enterprise application automation “out of the box” to drastically reduce TCO and improve speed and quality. How? A new breed of IT & Application A new breed of information technology (IT) and application automation engineers will deliver enhanced application services by bringing together AI and Watson™ API’s, RPA and associated automation technologies using a fully integrated automation tool kit on the IBM Cloud.
  20. 20. 20 Our POV on service integration and management In an environment where application and infrastructure capabilities are broadly externalized through the use of SaaS, BPaaS and platforms, maintaining control of the performance and cost of the portfolio becomes an increasingly complex service integration task. In addition, this environment becomes increasingly dynamic as a non-customized best-of-breed approach supports just-in- time switching of capabilities. This approach demands new capabilities in the domains of service-level enforcement, architectural standards enforcement, data management, cost control, and demand and supply management. Effective structuring of this capability can be complicated. It requires specialist skills and effective deployment of tools well beyond the traditional scope of IT Infrastructure Library (ITIL) into domains, such as data fabric management, environment brokering, tool capability and architecture assessment, and so on. Vendors can play a role in helping the client establish these capabilities or even operate them on behalf of the client. Service integration becomes a key function in unlocking value for the business from the portfolio and maintaining business stability and control. A comprehensive ADM strategy
  21. 21. © 2018 IBM Corporation 8 February 2019 IBM Services21 Tom Crane Next-gen ADM Global Leader tom.crane@us.ibm.com Thank you
  22. 22. 22 © Copyright IBM Corporation 2019 IBM Corporation New Orchard Road Armonk, NY 10504 Produced in the United States of America February 2019 IBM, the IBM logo, ibm.com, Cloudant, IBM API Connect, IBM Cloud, IBM Watson, UrbanCode, and Watson are trademarks or registered trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml. Microsoft and Azure are trademarks of Microsoft Corporation in the United States, other countries, or both. The document is current as of the initial date of the publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. Trademarks and notes

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