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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 Thomas Crane IBM Global Business Services NextGen ADM Global Leader
  2. 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. 3. © 2018 IBM Corporation 29 January 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 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. 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. 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. 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. 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. 9. © 2018 IBM Corporation 29 January 2019 IBM Services9 IBM POV on the future of ADM
  10. 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. 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. 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. 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. 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. 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. 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. 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. 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. 19 © 2018 IBM Corporation 29 January 2019 IBM Services19 Key Considerations in a Comprehensive ADM Strategy 19
  20. 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. 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. 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. 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. 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. 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. 26. © 2018 IBM Corporation 29 January 2019 IBM Services26 Client stories 26
  27. 27. 2727 Client examples Client Stories Optimize the Core Unlock Legacy Unleash Digital