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.

1. 1
Next Gen ADM
The future of
application services
February 2019
Thomas Crane
IBM Global Business Services
NextGen ADM Global Leader

2. 2
Table of Contents
The ADM market 03
Market trends
Client observations
The “new normal”
IBM POV on the future of ADM 09
The three performance zones in ADM
Details of each model
Portfolio assessment and alignment
The shift over time
Key Considerations in a Comprehensive 19
ADM Strategy
ADM team constructs
Convergence of AM and AD
Integrated AD/AM model
POV on Automation
Our POV on Service Integration / Management
Client stories 26
Client examples
Moving Forward
Moving Forward 32
Overview of the Next Gen ADM story

3. © 2018 IBM Corporation 29 January 2019 IBM Services3
The ADM market

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 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 capex to
opex.
Expanding breadth of user
experiences, including advanced 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 both 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
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 SaaS and
BPaaS solutions, they must provide
comprehensive integration of solutions at
a service layer to meet customer
expectations.
AI-driven optimization
Advanced AI will transform ADM with
predictive analytics, machine learning
and 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%.

5. 5
The ADM Market
IBM client observations
Our clients are working to adapt to changing market trends
We need to modernize IT, making cultural changes,
process changes (moving to agile), people changes
(changing how we work with vendors), and
technology changes.
We need to integrate service management with
AD capabilities for a seamless view of the E2E value
chain, with no manual intervention. We also need
to modernize our application portfolio with
incremental benefits in the journey.
We need to improve our engineering practices and
accelerate development beyond our current agile
processes.
We need cost optimization and higher QoS by
integrating AD and AM capabilities.
What will IT look like in 2025? How we will
operate? What will the vendor’s role be? How will
we manage large-scale change without running a
huge transformation program? Show us people who
have already made this change.
We are operating in an agile, product-based
environment for about 1500 users; the next
challenge is scaling the product environment to
about 17,000 users.
We need a new DevOps platform to support our
various app dev groups and to innovate quickly.
We need to transform field force with new
experiences that will drastically lower costs,
enabling us to move down to the middle market.

6. 6
The ADM Market
Using a flexible
microservices architecture
to accelerate development
Using a consistent agile
development framework
Using standardized DevOps
and QE capabilities
To meet increasing
expectations
around agility,
time to value, and
cost optimization,
our clients are
seeking new ways
to manage apps.
Using product-based teams
to increase innovation and
speed
Automating low-value,
repetitive processes
IBM client observations
Our portfolio of work validates the transformation we see in the market

7. 7
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 reuseability 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
presenter.
Please highlight
specific players and
trends that are relevant
for the client to whom
you are speaking

8. 88
Process
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 multi-skilled. This
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, process and technology

9. © 2018 IBM Corporation 29 January 2019 IBM Services9
IBM POV on
the future
of ADM

10. 1010
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 &
growth

11. 11
• Traditional app dev 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

12. 12
People
§ Factory model with high offshore
leverage and necessary time zone
coverage for support
§ Functional squads for improved
collaboration and deskilling
§ Shared 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
resolution closer to customers)
§ Robotic process automation for
productivity and quality
§ Operation analytics/IT autonomics for
proactive incident management and
faster troubleshooting
§ Code quality review and reverse
engineering to reduce cost of transition
and maintenance
§ Test innovation IGNITE: CTD, scriptless
testing, cognitive defect analytics for
defect prevention
§ SaaS adoption for enterprise
applications
§ ISV product-driven modernization (such
as SAP S4/HANA)
Process
§ Aspirational goal: To eliminate
need for AM
§ Shift left application support:
Put incident resolution closer to
the customer
§ Agile/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

13. 13
• Wrap new tech and
features around existing
apps to unlock value.
• Take advantage of new
tech in a hybrid model.
• 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

14. 14
People
§ Squads/Scrum for app dev: Mature
product owner concept, Scrum
master with cross-functional team
resources (two-week sprints)
§ Squads/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
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)
Process
§ 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: Design Thinking (where
applicable) with empowered
product owner and strong focus on
shift-left automated testing
Other
Considerations
Culture/business agility
§ Agile/lean culture at the portfolio
level
§ Culture of grooming business
product owners
§ DevOps culture
§ User Centricity (mobile,
omnichannel)
Unlock legacy
Wrap modern technology and approaches around existing
apps to improve flexibility, feedback and user experience
What good looks like

15. 15
• Uses modern tech 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 that create
competitive advantage.
• Apps using PaaS and
SaaS capabilities like IBM
Cloud, ServiceNow,
Azure, or 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)

16. 16
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 engineering (SREs)
§ Combined app
dev/maintenance: Maintenance
team part of continuous squad
§ Co-located teams are ideal:
Reduce long time-zone overlaps
The Future of ADM
Technology
§ Modern languages: Node,
Angular, JS, Spring
§ Cloud-native patterns: Circuit
breaker, service registration and
discovery
§ Cloud native development:
Microservices, 12-factor
abstraction, RESTful APIs, self
healing
§ Modern Toolchain: Automated
CI/CD Pipeline/Toolchain
§ Self-service dev and QA
environments: Can be built and
tore down quickly
§ Hybrid footprint: Leverage both
private and public clouds
Process
§ MVP-based starting points:
Lean work streams, Design
Thinking with defined market
outcomes
§ Tight feedback loops: One-
week iterations with daily
feedback loops
§ XP practices: Test-driven
development (TDD), pair
programming, continuous with
CI/CD
§ Maintenance and app dev
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/Watson,
blockchain, IoT, and more)
§ Scalability/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

17. 17
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

18. 18
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 LOB portfolio
Score
3. Assess capabilities
Build the roadmap
Tailor 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
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.

19. 19 © 2018 IBM Corporation 29 January 2019 IBM Services19
Key Considerations
in a Comprehensive
ADM Strategy
19

20. 20
ProxyScrum
Master
CrossFunctional
ADMSquadTeam
Cross Functional ADM
SquadTeam
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 SquadTeam
Designer
Squad Lead
Client-Site, IBM Centers
Co-Located Teams
IBM Garage Method
Time to Value & Impact
Optimized
(Product Driven ADM)
Cost (horizontal integration) (vertical Integration) Speed
Highest Priority Transformation Initiatives
(Maximum Flexibility/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 Dev /
Kanban Maintenance)
Cost Optimized
(Project Driven App Dev /
Kanban Maintenance)
Traditional Model
Global Factory Delivery
Global Delivery
Center
Client-Site
Project Based App
Dev 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 & Cost
Optimized
(Product Driven ADM)
DesignerDesigner Kanban Maintenance Teams
Pair
Prgmg.
Pair
Prgmg.
Pair
Prgmg.

21. 21
A Comprehensive ADM Strategy
Applications
Users/
Processes
3. Automated
Resolution
Mechanisms:
RPA
Scripts & other
deterministic
automation
Impact:
Quick & Consistent
Response / Resolution
Reduced/eliminate L1/
1.5 effort
1. Self-Heal
Application Level
(eg. Akka)
System Level (TTL,
Ping, etc.)
Hardware Level
2. Self Service
Cognitive assisted
user touch points
4. Event
Correlation
Mechanisms:
Event correlation
engines with heuristics
Impact:
Faster troubleshooting
& resolution
Reduced L2 efforts
The convergence of AM and AD
Stand-alone application maintenance (AM) efforts will continue to be integrated into application development (AD).
This will be enabled by the advent of shift-left approaches like agent assist, event correlation, and machine learning.
Resulting in Improved Service Resilience, Efficiency & User Experience
through Proactive, Automated & Cognitive Application Maintenance
Shift Left in Application Maintenance
Key Levers to “Shift Left” that enable incident resolution closer to the source of incidents
5. Predictive
Indictment
Management
Mechanisms:
Cognitive Automation
Machine Learning
Real-time automated
responses
Impact:
Incident prevention &
reduced tickets
Reduced Support Efforts
L1/L2/L3 efforts
6. Cognitive
Problem
Management
Mechanisms:
Advanced Analytics for
RCA
Feedback to other incident
management mechanisms
Impact:
Improved Resilience
Reduced Incidents
Faster Resolution
Reduced efforts (L1/L2/L3)

22. 2222
Integrated
operations
Colocated and
integrated
The integrated AD/AM model
A Comprehensive ADM Strategy
SRE squad
Power user /
L 1.5 squad
LowerSkillHigherSkill
Delivery towers
Application development
and management services
Compute services
Network services
Service integration and
management
Resiliency and storage
services
Integrated managed
infrastructure
App ops
Shift-left activities
RepetitiveHigherValue
SRE squad
• Group of individuals with skills
based on client requirements,
with an SRE mindset
• Spend at least half their time
eliminating reliability issues
using systems thinking
• Use end-to-end system
knowledge to drive quicker
resolution of major incidents
• Represent about 5% of the
typical organization
• Drive improvement projects
while maintaining focus on
reliability
Delivery towers
• Manage activities that are
not in the realm of the SRE
and L1.5 teams
• Contribute resources to the
SRE squad based on
requirements
• Author activities as runbooks
to be managed by the L1.5
team
• Move repeatable activities to
the L1.5 team
• Create and manage fewer
incidents, reducing the effort
required by the delivery
team
Power user (L1.5 squad)
• Colocated common team for applications and infrastructure
• Resolve incidents that haven’t been eliminated by code fixers or
automation using runbooks
• Should handle 30-40% of routine activities (future state)

23. 2323
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 partner with Clients to deliver
enterprise application
automation “out of the box”, to
drastically reduce Total Cost of
Ownership and improve speed
and quality.
How?
A new breed of IT & Application
automation engineers will
deliver enhanced application
services by bringing together
AI/Watson API’s, RPA and
associated automation
technologies using a fully
integrated automation tool kit on
the IBM Cloud.

24. 24
Our POV on automation
Automation will be used to execute work without human intervention, driving greater productivity
>50%reduction in service
desk calls
>20k
User interactions
per month
Implemented an IT support chatbot that
understands 37 different languages, and
presents rich content, including how-to videos
and relevant URLs, to help answer user queries.
>33%reduction in
application tickets
17%
run cost
reduction
Deployed an integrated approach using IBM
Automation with Watson to automate service
requests, introduce self-healing and improve
practitioner productivity.
A Comprehensive ADM Strategy

25. 25
Our POV on
Service
Integration /
Management
In an environment where Application and Infrastructure
capability 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 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,
requires specialist skills and effective deployment of tools well
beyond the traditional scope of 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 client establish these capabilities or even operate
them on behalf of the client.
Service Integration
becomes a key
function in both
unlocking Value for
the business from the
portfolio and
maintaining business
stability and control.
A Comprehensive ADM Strategy

26. © 2018 IBM Corporation 29 January 2019 IBM Services26
Client stories
26

27. 2727
Client
examples
Client Stories
Optimize
the Core
Unlock
Legacy
Unleash
Digital