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

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. © 2018 IBM Corporation 8 February 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 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
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. 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. © 2018 IBM Corporation 8 February 2019 IBM Services7
IBM POV on
the future
of ADM

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
• 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
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
• 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
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
• 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
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
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
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 © 2018 IBM Corporation 8 February 2019 IBM Services17
Key considerations
in a comprehensive
ADM strategy
17

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. 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
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. © 2018 IBM Corporation 8 February 2019 IBM Services21
Tom Crane
Next-gen ADM Global Leader
tom.crane@us.ibm.com
Thank you

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