It infrastructure management

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It infrastructure management

  1. 1. Institute for Development and Research in Banking Technology Keynote Address by Shri. R. Gandhi, In-Charge Director, IDRBT, at the Conference of IT Chiefs, IDRBT, Hyderabad on July 04, 2005 IT Infrastructure ManagementThe pace of business is accelerating around the globe, as leading organisations in computer-intensive industries, such as financial, trading, manufacturing and retail industries move toward areal-time business model in which transactions and information sharing are near-instantaneous.For long, it was the understanding that IT infrastructure meant the hardware and software, and ifat all, the related network. Managing it meant procuring and installing them. The rapid pace ofcompetition and growth compelled the organisations to do ‘vertical thinking’, and consequentlythe organizations built both forward and backward linkages to this core IT infrastructure. Today,the IT Infrastructure has been redefined and its meaning has been extended much beyond andbefore the procurement function. It starts from where it should – the IT policy and strategy, theplan and the design of IT architecture, the business process of procurement, installation andmanagement of h/w, s/w, n/w and other related equipments, tools and facilities, IT personnel andexpertise, IT security arrangements and administration, IS audit, application development,integration and management, vendor management and on and on.Further, today’s IT infrastructure has become pervasive in these organizations. It encompassesfront, back and middle offices, covers customers, suppliers, employees and partners, andpermeates every type of operations like strategizing, planning, manufacturing, servicing, etc. Inthe process, mission critical business processes heavily depend on the IT infrastructure. Yetanother development is that this IT infrastructure is getting increasingly complex and specialized,compelling the institutions to develop expertise and specialities in these areas.This transition is putting increasing demands on the performance, capacity, availability, andagility of underlying IT infrastructure. As process timelines are compressed from weeks or days,to hours, minutes or even seconds, the cost of downtime skyrockets. From supplier and customertransactions, to employee communications and financial reporting, business-critical functionsmust be up and running at all times. Business availability and continuity is critically poised on anddirectly correlated to and depends on the capacity, availability and reliability of the ITInfrastructure.Therefore, the management of such a massive and complex infrastructure has become thecurrent focus of discussions in many forums, including this one.Today’s organizations understand the link from the availability and performance of the ITinfrastructure to the availability and performance of business processes as a whole. Themanagement of the IT infrastructure has a significant impact on the success or failure of thebusiness, directly affects the quality of service of business applications, and contributes to thesatisfaction of internal and external users.Business units are asking more of IT organizations. The rate at which new demands are beingplaced on the IT infrastructure is outpacing the capacity of IT organizations to effectively manageand support them. The complexity of what to manage and how to manage is compounded by thesheer number of new managed objects, as well as the legacy objects that must be maintained. Page 1 of 6
  2. 2. Business units, however, see the IT infrastructure as a utility managed in such a way that it isavailable when needed and priced as a commodity.An organizations infrastructure management should address the availability, fault andperformance management of its IT infrastructure. Infrastructure Management covers: • Optimization of the IT infrastructure to meet business needs for high availability, reliability and scalability • IT infrastructure monitoring and testing technologies that deliver service assurance • Technologies needed to build business service views • Capacity-planning processes and best practices • Enterprise Customer Relationship Management • Managed services including Business Processes Management and Hosted ServicesThe Growing Need for High AvailabilityAlmost every aspect of todays business environment has come to rely on the uninterruptedavailability of platforms, applications, and data. From customer relationship management andenterprise resource planning, to employee communication and collaboration, a failed applicationor system can be costly and disruptive.The impact of downtime continues to grow as companies move toward a real-time businessmodel supported by a Services Oriented Infrastructure. Based on Web Services technologies,this approach allows them to integrate their data and applications more completely, and adaptthem more easily. Transactions are processed in real time, instead of waiting for large batch runsat the end of the day.This real-time computing strategy gives businesses and their partners better visibility into theirmarkets and operations, so they can respond more quickly to new opportunities, changingcustomer demands, and unexpected supply challenges. It can also help them address todaysincreasingly stringent regulatory requirements. Yet as companies become more connected andresponse times compress, the cost of downtime continues to increase.Achieving high service availability to meet growing needs requires a combination of people,processes, and technology, including: highly reliable platforms, extensive hardware and softwaretesting, rigorous change management, redundant architecture, highly trained staff and wellestablished emergency procedures.With a sufficient investment, virtually any level of availability can be achieved. Yet costs can beprohibitive, especially as organizations strive to increase availability guarantees from 3-nines(99.9 percent uptime), to 4-nines (99.99 percent), to 5-nines (99.999 percent) and up.Three high-level strategies are crucial to contain total cost of ownership (TCO), while addressingincreasing availability requirements: 1. Standardize Your Infrastructure and Operations — Enterprise standards are essential to optimize the business value of IT, while reducing total cost and risk. Industry standard solutions magnify these benefits. They are more flexible and affordable than proprietary solutions, and are now capable of supporting the most-demanding, business critical environments. 2. Focus on Service Delivery — The business value of an application depends on the ability of end-users to access and use the application, as well as any broader service it might Page 2 of 6
  3. 3. support. That service may depend on multiple applications, servers, networks, etc., and these relationships must be considered in assessing availability requirements. 3. Measure the Business Value of High Availability —This allows standard ROI metrics to be established, so decision-makers can align high-availability investments with the actual business value they deliver.Recent Trends in IT Infrastructure ManagementNow, let us have a quick survey of the recent trends elsewhere in the world, the developedworld’s IT infrastructure. The followings trends are easily discernible: • Business process management • Hosted services • Application management services • Customer service management • Governance of IT Infrstructure ManagementThese trends pose their own challenges and raise several issues. Let us have a close look onthem.Business Process Management ServicesOutsourcing isnt just for the big organizations anymore. Thanks to Internet technology and avariety of self-service options, mid-market organizations are finding ways to save money, managetalent, keep investors happy, and find their own strategic focus.The same business benefits and economies of scale that have made generalized outsourcing asuccess, also apply to infrastructure, operations and management services provisioning. Not onlycan service providers offer more robust, timely and complete solutions than most companies canprovide internally, they also provide technological expertise and leadership at a time of rapid andongoing technological change.Many large enterprises now view sourcing and services provisioning as the only practicalalternative for meeting their IT infrastructure, applications and management operational goals.While selective sourcing of IT infrastructure, operations and management services has proven tobe much less risky and more successful than the earlier all-or-nothing sourcing approaches,business managers must clearly understand the potential and pitfalls that selective services andsourcing entails. Business Process Management Services should focus on the evaluation,negotiation, implementation and management of sourcing transactions in order to meet businessobjectives and minimize risks. It involves identifying mature operational areas that could becompetitively sourced. Usually, the scope of definition is complex and includes complex financialanalysis and/or development of an activity based cost model (ABC). Sourcing assessment shouldcover a quick study of the business case for proceeding with a sourcing strategy or to determinethe viability of sourcing as a business alternative. It should evaluate the current environment andcosts relative to the market to test viability and be prepared to go forward with a sourcingtransaction if results indicate sourcing is a viable option.We should develop Competitive Sourcing Strategies like Total and Selective OutsourcingStrategies and Solutions, Performance Work Statement, Management Plan (Most EfficientOrganization, Technical Performance Plan, Transition Plan, In-House Cost Estimate), RFPPreparation, Response Reviews, Process and Service Improvement Page 3 of 6
  4. 4. Hosted ServicesTo reduce the cost, time and burden of supporting IT infrastructures, operations andmanagement, business and technical managers are now looking to a new generation of servicesand sourcing offerings. One such class of solution is infrastructure, management and operationssourcing. The primary benefits of infrastructure, management and operations sourcing includesinitial and ongoing cost reduction, and the provision of higher quality, better performing, morerobust, and dynamically scalable solutions than could be developed and deployed internally. Inaddition, by sourcing their infrastructure and operations, business and technical managers canfocus on their core business, with the flexibility to exploit emerging technologies and new globalbusiness opportunities. These services include • Networked infrastructure management services • Remote server management • Security services provisioning • Business continuity services • Web hosting solutions • Systems management • Storage management and storage service providers • Monitoring and management services • Service management/services automation tools • Enterprise application delivery systems and application service providers (ASPs)Organizations have never been more dependent on communications for the success of theirbusinesses. Improving network efficiency is highly critical.One of the IT managers worst nightmares is having a key system crash or having datacompromised. Eliminate these risks through managed services, which provide confidence inbusiness continuity through: • Secure facilities, • Secure systems, • Distributed and redundant sourcing of power, data and processing, • Timely disaster recovery, • Scalability, and • Highly experienced staff with appropriate security clearances.Avail an enterprise hosting environment with firewalls, intrusion detection, automated monitoringand physical and network security.Customer ServicesIs your organisation presenting one face to the customer through the web? Email? Call centers?Can your customers be serviced 24/7? Are you operating at your maximum efficiency?Integrating your customer interactions across all channels can drastically improve the level ofservice provided to the customer. Customers today are looking for access to needed informationat a time of their choosing. Over the last few years, increased customer expectations are puttingnew pressures on organisations to deliver timely service and account information throughalternate channels.The following will enable you to deliver the world-class service supports customers value: • Channel Management (Single view of customer, Cost-to-serve Analysis). Page 4 of 6
  5. 5. • Contact Center Optimization (Operational efficiency, Process optimization, Diagnostic). • Online Self Service. • Content Management (Portal design & development, Single face to customer, Fulfillment).Application Management ServicesThe application management services market is now in the process of shifting from firstgeneration, "emerging solutions", to second-generation "growth markets". With this shift hascome market maturation, in terms of viable product offerings and services models, and entry intothe enterprise market. There have also emerged a dazzling array of choices, along with marketsegmentation and the rapid development of whole new classes of offerings. For example, ASPofferings were formally limited to ERP solutions targeted to the small-to-medium businessesmarket. Today, all manner of applications are available as hosted or managed solutions. Theseofferings range from horizontal systems applicable to all classes and sizes of organizations, toniche systems limited to very narrow vertical market segments. Similarly, the number and scopeof application management services that are available today are increasing rapidly and are just asequally rapidly being employed by the largest organizations in the world. Unfortunately, fewbusiness and technology managers know that these new solutions and services exist, to saynothing of the process of selecting competitive offerings.These services include: • Application management: The potential and pitfalls • Hosted vertical market solutions • Application management trends • Software as a service • ERP and back-office applications options • Hosted desktops and front-office systems • Hosting options for wireless services • Technical evaluation and selection • Managed applications and e-services including: o Procurement o Supply chain o Content management o Email, Groupware and collaboration o Virtual office solutions o Data warehousing o Storage o Software development and testing o e-MarketingGovernance in IT Infrastructure ManagementThe ability of organizations to exploit IT infrastructure, operations and managementsourcing/service solutions not only depends on the availability, cost and effectiveness ofapplications and services, but also with coming to terms with solution providers, and managingthe entire sourcing process. In the rush to reduce costs, increase IT quality and increasecompetitiveness by way of selective IT sourcing and services, many organizations do notconsider the management side of the equation. The predictable result of this neglect isoverpayment, cost overruns, unmet expectations and outright failure. • Negotiating service level agreements (SLAs) • Using third party negotiators Page 5 of 6
  6. 6. • Performance metrics/ROI • Service options of Web hosting companies • Establishing security-related Service Level Agreements • Cost analysis and budget considerations for infrastructure, operations and management outsourcing • Metering, Service Level Agreements and relationship management • Service level management • Managing the sourcing process • Customer/user relationship and support issues • Contract negotiations, out clauses, escalation procedures • Penalties for non-performance • Employing external measurement services • Contracting, staffing and outsourcing optionsIT Infrastructure in Banks in IndiaThe banking industry in India has been leveraging IT for its business for the past twenty-fiveyears. However, the technology adoption and therefore the creation of IT infrastructure have notbeen uniform across all the banks. There are leaders who are on par with any internationalorganization in terms of IT infrastructure build-up and usage and there are laggards who are stillrudimentary in terms of approach, magnitude and coverage.However, the noteworthy feature is the common direction in which all members of the industry aretraveling, i.e. towards ever increasing use of IT. Therefore the trends that we have beendiscussing till now are very relevant, immediately to those banks which are in the forefront and innear future for the others who are rapidly catching up. Both the groups are toiling to understandthe implications and take the best advantage of the trends. I am very happy to note that a selectrepresentative of each group is going to discuss in detail later in this conference the challengesthat they faced and the solution that they have adopted in managing their IT infrastructure.Related issues are the network design and architecture, security and legal issues. As 85% of ourbanking industry is still to fully husband the benefits of the connectivity, issues on networking andsecurity is of immediate relevance. And, as we increasingly eliminate manual processes andrecords and rely on electronic records, we need to create general awareness, processes, caselaws, conventions, best practices, etc. for ensuring legality of e-records and data. Thoughtfully,the Conference will be discussing these subjects as well.ConclusionTo conclude, enterprise infrastructures have become increasingly complex. Most have a widediversity of platforms, operating systems, and applications. New systems are being implementedthat integrate end-to-end business processes across Web servers, application servers, ERPapplications, legacy applications, and even partner and supplier systems. Managing thisinfrastructure and pinpointing failure points in a distributed process spanning multiple systems isa difficult task. The deliberations in this conference, I am sure, will help the IT Chiefs of banksdeal with the growing complexity of managing diverse infrastructures. I hope, it will explore bestpractices, and offer tips from analysts and experienced on keeping your diverse infrastructure upand running. Page 6 of 6

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