Showing posts with label Abe Naguib. Show all posts
Showing posts with label Abe Naguib. Show all posts

Tuesday, December 11, 2012

Insurance Leader AIG Drives Business Transformation and Service Performance Through Center of Excellence Model

Transcript of a BriefingsDirect podcast with AIG and HP on the challenges and solutions involved in managing a global center of excellence for IT performance.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to the next edition of the HP Discover Performance Podcast Series. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your moderator for this ongoing discussion of IT innovation and how it’s making an impact on people’s lives.

Dana Gardner
Once again, we're focusing on how IT leaders are improving performance of their services to deliver better experiences and payoffs for businesses and end-users alike.

We're now joined by our co-host and moderator, Chief Software Evangelist at HP, Paul Muller. Welcome, Paul, how are you?

Paul Muller: I'm great Dana. How are you doing?

Gardner: I'm excellent. Where are you coming from today?

Muller: I'm coming from sunny San Francisco. It’s unseasonably warm, and I'm really looking forward to today’s discussions. It should be fun. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Gardner: We have a fascinating show. We're going to be learning about global insurance leader American International Group, or AIG, and how their Global Performance Architecture Group has leveraged a performance center of excellence (COE) to help drive business transformation.

So let me introduce our guest from AIG. We're here with Abe Naguib, Senior Director of AIG’s Global Performance Architecture Group. Welcome back, Abe.

Naguib: Hi, Dana. Hi, Paul. How are you?

Gardner: We're excellent. We've talked before, Abe, and I'm really delighted to have you back. I want to start at a high level. Many organizations are now focusing more on the user experience and the business benefits and less on pure technology, and for many, it's a challenge. From a very high level, how do you perceive the best way to go about a cultural shift, or an organizational shift, from a technology focus more towards this end-user experience focus?
The CIO has to keep his eye forward to periodically change tracks, ensuring that the customers are getting the best value for their money.

Naguib: Well, Paul and Dana, there are several paradigms involved from the COO and CFO’s push on innovation and efficiency. A lot of the tooling that we use, a lot of the products we use help to fully diversify and resolve some of the challenges we have. That’s to keep change running.

Abe Naguib
The CIO has to keep his eye forward to periodically change tracks, ensuring that the customers are getting the best value for their money. That’s a tall order and, he has to predict benefit, gauge value, maintain integrity, socialize, and evolve the strategy of business ideas on how technology should run.

We have to manage quite a few challenges from the demand of operating a global franchise. Our COE looks at various levels of optimization and one key target is customer service, and factors that drive the value chain.

That’s aligning DevOps to business, reducing data-center sprawl, validating and making sense of vendors, products, and services, increasing the return on investment (ROI) and total cost of ownership (TCO) of emerging technologies, economy of scale, improving services and hybrid cloud systems, as we isolate and identify the cascading impacts on systems. These efforts help to derive value across the chain and eventually help improve customer value.

Gardner: Paul Muller, does this jibe with what you're seeing in the field? Do you see an emphasis that’s more on this sort of process level, when it comes to IT with of course more input from folks like the COO and the chief financial officer?

Level of initiatives

Muller: As I was listening to Abe's description I was thinking that you really can tell the culture of an organization by the level of initiatives and thinking that it has. In fact, you can't change one without changing the other. What I've just described is a very high level of cultural maturity.

Paul Muller
We do see it, but we see it in maybe 10 to 15 percent of organization that have gone through the early stages of understanding the performance and quality of applications, optimizing it for cost and performance, but then moving through to the next stage, reevaluating the entire chain, and looking to take a broader perspective with lots of user experience. So it's not unique, but it's certainly used among the more mature in terms of observational thinking.

Gardner: For the benefit of our audience, Abe, tell us a little bit about AIG, its breadth, and particularly the business requirements that your Global Performance Architecture Group is tasked with meeting?

Naguib: Sure, Dana. AIG is a leading international insurance organization, across 130 countries. AIG’s companies serving commercial, institutional, individual customers, through one of the world’s most extensive property/casualty networks, are leading providers of life insurance and retirement services in the US.

Among the brand pillars that we focused on are integrity, innovation, and market agility across the variety of products that we offer, as well as customer service.
Bringing together our business-critical and strategic drivers across IT’s various segments fosters alignment, agility, and eventually unity.

Gardner: And how about the Global Performance Architecture Group? How do you fit into that?

Naguib: With AIG’s mantra of "better, faster, cheaper," my organization’s people, strategy, and comprehensive tools help us to bridge these gaps that a global firm faces today. There are many technology objectives across different organizations that we align, and we utilize various HP solutions to drive our objectives, which is getting the various IT delivery pistons firing in the same direction and at the right time.

These include performance, application lifecycle management (ALM), and business service management (BSM), as well as project and portfolio management (PPM). Over time our Global Performance organization has evolved, and our senior manager realized our strategic benefit and capability to reduce cost, risk, and mitigate production and risk.

Our role eventually moved out of quality assurance's QA’s functional testing area to focus on emphasizing application performance, architecture design patterns, emerging technologies, infrastructure and consolidation strategies, and risk mitigation, as well increasing ROI and economy of scale. With the right people, process, and tools, our organization enabled IT transparency and application tuning, reduced infrastructure consumption, and accelerated resolution of any system performances in dev and production.

The key is bringing together our business-critical and strategic drivers across IT’s various segments fosters alignment, agility, and eventually unity. Now, our leaders seek our guidance to help tune IT at some degree of financial performance to unlock optimal business value.

Culture of IT

Gardner: What's interesting to me, Paul, about what Abe just said is the evolution of this from test and dev in QA to a broader set of first IT, then operations, and then ultimately even through that culture of IT generally. Is that a pattern you're seeing that the people in QA are in the sense breaking out of just an application performance level and moving more into what we could call IT performance level?

Muller: As I was listening to Abe talk through that, there were a couple of keywords that jumped out that are indicators of maturity. One of them is the recognition that, rather than being a group-sized task, things like application, quality performance, and user experience actually are a discipline that can be leveraged consistently across multiple organizational units and, whether you centralize it or make it uniform across the organization is an important part of what you just described.

Maturity of operational and strategic alignment is something that requires a significant investment on business’s and IT’s behalf to prove early returns by doing a good job on some of the smaller projects. This shows a proven return on investment before the organization is typically going to be willing to invest in creating a centralized and an uniform architecture group.

Gardner: Abe, do you have some response to that?

Naguib: Yes, more-and-more, in the last six or seven years, there's less focus on just basic performance optimization. The focus is now on business strategy impact on infrastructure CAPEX, and OPEX. Correlating business use cases to impact on infrastructure is the golden grail.
I always say that software drives the hardware.

Once you start communicating to CIOs the impact of a system and the cost of hosting, licensing, headcount, service sprawl, branding, and services that depend on each other, we're more aligning DevOps with business.

Muller: You can compare the discussion that I just had with a conversation I had not three weeks ago with a financial institution in another part of the world. I asked who is responsible for your end-to-end business process -- in this case I think it was mortgage origination -- and the entire room looked at each other, laughed, and said "We don't know."

So you've really got this massive gap in terms of not just IT process maturity, but you also have business-process maturity, and it's very challenging, in my experience, to have one without having the other.

Gardner: I think we have to recognize too that most businesses now realize that software is such an integral part of their business success. Being adept at software, whether it's writing it, customizing it, implementation and integration, or just overall lifecycle has become kind of the lifeblood of business, not just an element of IT. Do you sense that, Abe, that software is given more clout in your organization?

Naguib: Absolutely Dana. I truly believe that. I've been kind of an internal evangelist on this, but I always say that software drives the hardware. Whether I communicate with the enterprise architects, the dev teams, the infrastructure teams, software frankly does drive the hardware.

That's really the key point here. If you start managing your root cost and performance from a software perspective and then work your way out, you’ve got the key to unlocking everything from efficiencies to optimizing your ROI and to addressing TCO over time. It's all business driven. Know your use cases. Know how it impacts your software, which impacts your infrastructure.

Converged infrastructure

Gardner: Of course, these days we’re hearing more about software-defined networking, software-defined data centers, and converged infrastructure. It really does start to come together, so that you can control, manage, and have a data-driven approach to IT, and that fits into ITIL and some of the other methodologies. It really does seem to be kind of a golden age for how IT can improve as performance, as productivity, and of course as a key element to the overall business. Is that what you’re finding too, Abe?

Naguib: Absolutely. It's targeting software performance, and software-as-a-service (SaaS) applications that depend on each other.

More and more, it's a domino effect. If you don't identify the root cause, isolate it, and resolve it, the impact does have a cascading effect, on optimization, delivery, and even cost, as we’ve seen repeatedly in the last couple of years. That’s how we communicate to our C-level community.

Gardner: Of course we have to recognize it. Just being performant, optimized, and productive for its own sake isn’t good enough in this economy. We have to show real benefits, and you have to measure those benefits. Maybe you have some way to translate how this actually does benefit your customers. Any metrics of success you can share with us, Abe?

Naguib: Yes, during our initial requirements-gathering phase with our business leaders, we start defining appropriate test-modeling strategy, including volumetrics, and managing and understanding the deployment pattern with subscriber demographics and user roles. We start aligning DevOps organizations with business targets which improves delivery expectations, ROI, TCO, and capacity models.
The big transformation taking place right now is that our organization is connecting different silos of IT delivery, in particular development, quality, and operations.

Then, before production, our Application Performance Engineering (APE) team identifies weak spots to provide the production team with a reusable script setting thresholds on exact hotspots in a system, so that eventually in production, they can take appropriate productive measures. Now, this is value add.

Gardner: Paul, do you have any thoughts in terms of how that relates to the larger software field, the larger enterprise performance field?

Muller: As we’re seeing across the planet at the moment, there's a recognition that to bring great software and information is really a function of getting Layers 1 through 7 in the technology stack working, but it's also about getting Layer 8 working. Layer 8, in this case, is the people. Unfortunately, being technologists, we often forget about the people in this process.

What Abe just described is a great representation of the importance of getting not just a functional part of IT, in this case quality and performance working well, but it's about recognizing the software will one day be delivered to operational staff to internally monitor and manage it in a production setting.

The big transformation taking place right now is that our organization is connecting different silos of IT delivery, in particular development, quality, and operations, to help them accelerate the release of quality applications, and to automate things like threshold setting, and optimize monitoring of metrics ahead of time. Rather than discovering that an application might fail to perform in a production setting, where you've got users screaming at you, you get all of that work done ahead of time.

Sharing and trust

You create a culture of sharing and trust between development, quality, and operations that frankly doesn’t exist in a lot of process where the relationship between development and operations is pretty strained.

Gardner: Abe, how do you measure this? We recognized the importance of the metrics, but is there a new coin of the realm in terms of measurement? How do you put this into a standardized format that you’re going to take to your CFO and your COO and say here’s what's really happening?

Naguib: That's a good question. Tying into what Paul was saying, nobody cared about whether we improved performance by three seconds or two seconds. You care at the front end, when you hear users grumbling. The bottom line is how the application behaves, translating that into business impact as well as IT impact.

Business impact is what are the dollar values to make key use cases and transactions that don't scale. Again, software drives the hardware. If an application consumes more hardware, the hardware is cheap now-a-days, but licenses aren’t. You have database and you have middleware products running in that environment, whether it's on-premise or in the cloud.

The point is that impact should be measured, and that's how we started communicating results through our organization. That's when we started seeing C-level officers tuning in and realizing the impact of performance of both to the bottom line, even to the top line.
We were able to leverage consistent dashboards across different IT solutions internally, then target weak spots and help drive optimization.

Gardner: It strikes me, Abe, that this is going to set you up to be in a better position to move to cloud models, consume more SaaS services, as you mentioned earlier, and to become more of a hybrid services delivery shop or have that capability. Does that make sense? Do you feel more prepared for what this next level of compute architecture you seem to be heading toward as a result of the investments you've made?

Naguib: Absolutely Dana. Our role is to provide more insight earlier and quicker to the right people at the right time.

Leveraging HP’s partnership and solutions helped us to address technologies, whether Web 2.0, client-server, legacy systems, Web, cloud-based, or hybrid models. We were able to leverage consistent dashboards across different IT solutions internally, then target weak spots and help drive optimization, whether on premise or cloud.

Gardner: Paul Muller, thoughts about how this is working more generally in the market, how people who get a grasp on global performance architecture issues like AIG are then in a better position to leverage and exploit the newer and far more productive types of computing models?

Muller: In the enterprise today, it's all about getting your ideas out of your head and making them a reality. As Abe just described, most of the best ideas today that are on their way into business processes you can ultimately turn into software. So success is really all about having the best applications and information possible.

Understand maturity

The challenge is understanding how the technology, the business process and the benefits come together and then orchestrating that the delivery of that benefit to your organization. It's not something that can be done without a deliberate focus on process. Again, the challenge is always understanding your organization's maturity, not just from an IT standpoint, but importantly from a broader standpoint.

Naguib: What's the common driver for all? Money talks. Translating things into a dollar value started to bring groups together to understand what we can do better to improve our process.

Gardner: Abe, it strikes me that you guys are really fulfilling this value epicenter role there and expanding the value of that role outside the four walls of IT into the larger organization. Tell me how HP is joining you in a partnership to do that? What is it that you're bringing to the table to improve that value for the epicenter of value benefit?

Naguib: Dana, what we're seeing more is that it's not just internal dev and ops that we're aligning with, or even our business service level expectations. It's also partnerships with key vendors that have opened up the roadmap to align our technologies, requirements, and our challenges into those solutions.

The gains we make are simple. They can be boiled down into three key benefits: savings, performance, and business agility. Leveraging HP's ALM solutions helps us drive IT and business transformation and unlock resources and efficiencies. That helps streamline delivery and an increased reliability of our mission critical systems.
After we've dealt with tuning, we can help activate post-production monitoring using the same script, understanding where the weak spots are.

My favorite has always been HP's LoadRunner Performance Center. It’s basically our Swiss Army Knife to support diverse platform technologies and align business use cases to the impact on IT and infrastructure via SiteScope, HP SiteScope.

We're able to deep dive into the diagnostics, if needed. And the best part is, after we've dealt with tuning, we can help activate post-production monitoring using the same script, understanding where the weak spots are.

So the tools are there. The best part is integrated, and actually work together very well.

Gardner: It really sounds like you've grabbed onto this system-of-record concept for IT, almost enterprise resource planning (ERP) for IT. Is that fair?

Naguib: That's a good way to put it.

Muller: One of the questions I get a lot from organizations is how we measure and reflect the benefit. What hard data have you managed to get?

Three-month study

Naguib: IDC came in and did an extensive three-month study, and it was interesting what they have found. We've realized a saving of more than $11 million annually for the past five years by increasing our economy of scale. Scale on a system allows more applications on the same host.

It's an efficiency from both hardware and software. They also found that our using solutions from HP increased staff productivity by over $300,000 a year. Instead of fighting fires, we're actually now focusing on innovation, and improving business reliability by over $600,000 a year.

So all that together shows a recoup, a five-year ROI, about 577 percent. I was very excited about that study. They also showed that we resolved mean time resolution over 70 percent through production debugging, root cause, and resolution efforts.

So what we found, and technologists would agree with me, is that today, with hardware being cheaper than software, there is a hidden cost associated with hosting an application. The bottom line, if we don’t test and tune our applications holistically, either the architecture, code, infrastructure, and shared services, these performance issues can quickly degrade quality of service, uptime, and eventually IT value.
I have a saying, which is that quality costs money but bad quality costs more.

Muller: I have a saying, which is that quality costs money but bad quality costs more. There you go.

Gardner: Abe, any recommendations that you might have for other organizations that are thinking of moving in this direction and that want to get more mature, as Paul would say. What are some good things to keep in mind as you start down this path?

Naguib: Besides software drives the hardware -- and I can't stress that enough -- are all the ways to understand business impact and translate whatever you're testing into the business model.

What happens to the scenarios such as outages? What happens when things are delayed? What is the impact on business operability, productivity, liability, customer branding. There are so many details that stem from performance. We used to be dealing with the "Google factor" of two-second response time, but now, we're getting more like millisecond response, because there are so many interdependencies between our systems and services.

Another fact is that a lot of products come into our doors on a daily basis. Modern technologies come in with a lot of promises and a lot of commitments.

Identify what works

So it's being able to weed through the chaff, identify what works, how the interdependencies work, and then, being able to partner with vendors of those solutions and services. Having tools that add transparency into their products and align with our environment helps bring things together more. Treating IT like a business by translating the impact into dollar value, helps to get lined up and responsive.

Gardner: Very good. Last word to you, Paul. Any thoughts about getting started? Are there principles that you are seeing in common, threads or themes for organizations, as they begin to get the maturity model in place and extend quality and process performance assurance improvements even more generally into their business?

Muller: It might be a little controversial here, but the first step is look in the mirror and understand your organization and its level of maturity. You really need to assess that very self-critically before you start. Otherwise, you're going to burn a lot of capital, a lot of time, and a lot of credibility trying to make a change to an organization from state A to state B. If you don’t understand the level of maturity of your present state before you start working on the desired state, you can waste a lot of time and money. It's best to look in the mirror.

The second step is to make sure that, before you even begin that process, you create that alignment and that desired state in the construct of the business. Make sure that your maturity aligns to the business's maturity and their goal. I just described the ability to measure the business impact in terms of revenue of IT services. Many companies can’t even do something as fundamental as that. It can be really hard to drive alignment, unless you’ve got business-IT alignment ahead of time.

I have said this so many times. The technology is a manageable problem, Layers 1 through 7, including management software to a certain degree, have solved problems the most time. Solving the problem of Layer 8 is tough. You can reboot the server, but you can’t reboot a person.
Solving the problem of Layer 8 is tough. You can reboot the server, but you can’t reboot a person.

I always recommend bringing along some sort of management of organizational change function. In our case, we actually have a number of trained organizational psychologists working for us who understand what it takes to get several hundred, sometimes several thousand, people to change the way they behave, and that’s really important. You’ve got to bring the people along with it.

Gardner: Well we have to take a hint from you, Paul. Maybe our next topic will be The Psychology of IT, but we won’t be able to get to that today. I am afraid we'll have to leave it there and I have to thank our co-host Paul Muller, the Chief Software Evangelist at HP. Thanks so much for joining us.

Muller: Always a pleasure.

Gardner: And like to thank our supporter for this series, HP Software, and remind our audience to carry on the dialogue with Paul and other experts there at HP through the Discover Performance Group on LinkedIn.

You can gain more insights and information on the best of IT performance management at And you can always access this in other episodes of our HP Discover Performance podcast series at and on iTunes under BriefingsDirect.

Of course, we also extend a big thank you to our guest. Abe Naguib, Senior Director of AIG’s Global Performance Architecture Group. Thanks so much, Abe.

Naguib: Thank you, Dana, thank you, Paul. I really appreciate the opportunity.

Gardner: Again, a last thank you to our audience for joining us for this special HP Discover Performance podcast discussion. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your co-host for this ongoing series of HP-sponsored business success story. Thanks again for joining and come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect podcast with AIG and HP on the challenges and solutions involved in managing a global center of excellence for IT performance. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

You may also be interested in:

Friday, December 03, 2010

Case Study: AIG Insurance Group Leverages ALM to Attain IT Performance Architecture Advantage

Transcript of a sponsored BriefingsDirect podcast, part of a series on application lifecycle management and HP ALM 11 from the HP Software Universe 2010 conference in Barcelona.

Listen to the podcast. Find it on iTunes/iPod and Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you from the HP Software Universe 2010 Conference in Barcelona.

We're here in the week of November 29, 2010 to explore some major enterprise software and solutions, trends and innovations making news across HP’s ecosystem of customers, partners, and developers. [See more on HP's new ALM 11 offerings.]

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, and I'll be your host throughout this series of HP sponsored Software Universe Live Discussions. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Our customer case study today focuses on AIG-Chartis insurance and how their business has benefited from ongoing application transformation and modernization projects.

To learn more about AIG-Chartis insurance’s innovative use of IT consolidation and application lifecycle management (ALM) best practices, please join me in welcoming Abe Naguib, Director of Global Performance Architecture and Infrastructure Engineering at AIG-Chartis in Jersey City, NJ. Welcome to the show, Abe.

Abe Naguib: Hello, Dana. Nice to be here.

Gardner: Abe, tell me a little bit about the scope of your organization and the type of applications activities that you are undergoing and why moving toward some newer products made sense?

Naguib: Let me step back for a second, Dana, and give you a background on AIG and its applications. AIG is a global insurance firm, supporting worldwide international insurance of different varieties.

We're structured with 1,500 companies and roughly about eight lines of businesses that manage those companies. Each group has their own CIO, CTO, COO structure, and I report to the global CTO.

What we look at is supporting their global architecture and performance behavioristics, if you will. One of the key things is how to federate the enterprise in terms of architecture and performance, so that we can standardize the swing over into the Java world, as well as middleware and economy of scale.

Gardner: Given the breadth and depth of the organization, where are you in terms of your applications? What are some of your goals in terms of improving how things are done?

Proliferation of middleware

Naguib: I started about 10 years back, when I came on board to standardize architecture, and I saw there was a proliferation of various middleware technologies. As we started going along, we thought about how to standardize that architecture.

As we faced more and more applications coming into the Java middleware world, we found that there’s a lot of footprint waste and there’s a lot of delivery cycles that are also slipped and wasted. So, we saw a need to control it.

After we started the architectural world, we also started the production support world and a facility for testing these environments. We started realizing, again, there were things that impacted business service level agreements (SLAs), economy of scale, even branding. So, we asked, how do we put it together?

One of the key things is, as we started the organizational performance, we were part of QA, but then we realized that we had to change our business strategy, and we thought about how to do that. One key thing is we changed our mindset from a performance testing practice to a performance engineering practice, and we've evolved now to performance architecture.

The engineering practice was focused on testing and analyzing, providing some kind of metrics. But, the performance architectural world now has influence into strategies, design practices, and resolution issues. We're currently a one-man or one-army team, kind of a paratrooper level. We're multi-skilled, from architecture, to performance, to support, and we drive resolution in the organization.

Gardner: What is your role in that team?

Naguib: I manage the organization in terms of deliveries. We hold internal best-practice discussions. We catch trends and metrics in our knowledge base. We influence design. We even influence vendors that come in. We partner with a lot of the products that come in.

So, we meet with IBM, HP, and Oracle products, and as we influence and capture trends, we work back with the product development teams to figure out how to first resolve internal development, as well as the product that we build on.

Gardner: And as you were making the transition to this performance architecture, what were some of the important considerations you had in terms of making that more holistic, more managed, and more comprehensive?

Naguib: One of the biggest things was the time to market. We also saw that resolution had to happen quickly and effectively. Carnegie Mellon did a study about five years ago and it said that post-live application resolution of performance issues was seven times the cost of pre-live [performance application resolution].

In other words, we realized that the faster we resolved issues, the faster to market, the faster we can address things, the less disruption to the delivery practices.

Too many people involved

In normal firefighting mode, architecture is involved, development is involved, and infrastructure is involved. What ends up happening is there are too many people involved. We're all scrambling, pointing fingers, looking at logs. So, we figured that the faster we get to resolution, the better for everyone to continue the train on the track.

We built a practice with architectural engineers and DBAs to get to issues and resolve them faster.

Gardner: So, when you've got multiple teams and then fairly large numbers of people involved with these teams, they're probably distributed as well. What’s the overall umbrella concept? What did you need to pull that all together and to give you that view into these activities to make that performance, integrity, and speed come together?

Naguib: The key thing is that we started working with the CIOs at that level, and figuring out a strategy to develop a service-level target, if you will. As we went along, we began working with the development teams to build a relationship with the architectural teams and the infrastructure teams.

We became more of a team model, building more of a peace-maker model. We regrouped the organization, so that rather than resolve and point fingers at each other, we resolved issues a lot faster.

Now, we're able to address the issue. We call it "isolate, identify, and resolve." At that point, if it’s a database issue, we work directly with the DBA. If it’s an infrastructure or architecture issue, we work directly with that group. We basically cut the cycle down in the last two or three years by about 70 percent.

A lot more CIOs have started bringing in more applications. We see a trend growth internally of roughly about 20-30 percent every year.

Gardner: And as you're increasing your goals of speed and integrity are you also able to handle more applications at once? Does this improve the volume of applications going through your pipeline?

Naguib: Absolutely. Because there is a change in our philosophy, in our strategy to focus more on business value, a lot more CIOs have started bringing in more applications. We see a trend growth internally of roughly about 20-30 percent every year.

I have a staff of nine. So, it’s a very agile, focused team, and they're very delivery-conscious. They're very business value-conscious, and we translate our data, the metrics that we capture, into business KPIs and infrastructure KPIs.

Because of that metric, the CIOs love what we do, because we make them look good with the business, which helps foster the relationship with the business, which helps them justify transformation in the future.

Gardner: Can you share with us any of those KPIs, what’s the report card that you could bring back to your superiors in a business sense? What’s the business case and rationale you can provide?

Footprint is key

Naguib: If you look at ITSM model, Service Level Delivery, one of the key things is the footprint of applications. One thing that organizations are starting to realize now is that software drives the hardware. For example, the cost of IBM WebSphere on hardware is much more expensive than actually buying a server.

In traditional firefighting mode, people tend to hire consultants, bring in hardware, and end up increasing their cost. What we found is that, if you address the software angle of it, then you can improve your TCO and ROI.

By taking a looking at correlating business transactions to a footprint on a server, and improving those transactions and their consumption rate, you're actually effectively improving the consumption of that application particularly. And as you improve that, there is more room for capacity. When there's more room for capacity, your economy of scale goes up. So, if TCO improves, ROI improves, and your technical debt actually gets resolved a lot faster.

Gardner: It sounds as if managing the development, test and deployment cycle effectively really is almost like the head of a pyramid -- and affects the entire IT economic equation.

Naguib: Absolutely. There is a new paradigm now, they call it the "Escalator Message." In 60 seconds or less, we can talk to a CIO, CTO, COO, or CFO about our strategy and how we can help them shift from the firefighting mode to more of an architecture mode.

In 60 seconds or less, we can talk to a CIO, CTO, COO, or CFO about our strategy and how we can help them shift from the firefighting mode to more of an architecture mode.

If that’s the case, the more they can salvage their delivery, the more they can salvage their effective costs, and the more they can now shift to more of an IT-sensitive solutions shop. That helps build a business relationship and helps improve their economy of scale.

Gardner: We're hearing a lot here at Software Universe about ALM 11, a new launch by HP. You've been a beta user of at least some of the components of that. Tell us how that started and what you experienced?

Naguib: Sure. My background is that I dealt with the Mercury products back in the late 1990s. I have experience with Quality Center and the improvements that have gone on over the years. Because of our focus, we built our paradigm out of QA and into the performance world, and we started focusing on improving that process.

The latest TruClient product, which is a LoadRunner product, has been a massive groundbreaking point solution. In the last two years, frankly, with HP and Mercury getting adjusted, there’s been kind of a lag, but I have to give kudos to the team.

One of the key things is that they have opened up their doors in terms of the delivery, in terms of their roadmap. I've worked extensively for the last roughly year with their product development team, and they have done quite a bit of improvement in their solution.

Good partnership role

They have also improved their service support model; the help desk actually resolves questions a lot faster. And we also have a good partnership role, and we actually work with things that we see, and to the influence of their roadmap as well.

This TruClient product has been phenomenal. One of the key things we're seeing now is BPM solutions are more Ajax-based, and there are so many varieties of Ajax frameworks out there than we know how to deal with. One of the key things with the partnership is that we're able to target what we need, they are able to deliver, and we are able to execute.

Gardner: So, trying to fit that into our larger equation, the test and development deployment scenario is very important to the overall IT equation economically. How does this product, TruClient, fit into that in terms of aiding and abetting your goals?

Naguib: One of the key things is how to build partnerships across the organization, internally and externally. LoadRunner and TruClient allow us to get in front of the console, work with the business team, capture their typical use cases in a day-in-the-life scenario, and automate that. That gets buy-in and partnership with the business.

We're also able to execute a test case now and bring that in front of the IT side and show them the actual footprint from a business perspective and the impact and the benefits. What ends up happening is that now we're bringing the two teams together. So, we're bridging the gap basically from execution.

Frankly, nobody really cares as much about the footprint cost, until they start realizing the dollars that are spent.

Gardner: And as an early adopter and user, is there any 20-20 hindsight advice that you might offer to others who would be going down this trail as well?

Naguib: I would definitely send the message out to think in business value. Frankly, nobody really cares as much about the footprint cost, until they start realizing the dollars that are spent.

Also, now, business wants to see us more involved from the IT side, in terms of solutions, top-line improvements, and bottom-line improvements. As the performance teams expand and mature and we have the right toolsets, innovative toolsets like TruClient, we're able to now shift the cost of waste into a cost of improvements, and that’s been a huge factor in the last couple of years.

Last, I would say that in 8,000+ engagements -- we're actually closing in on now 10,000 events this year -- we've seen roughly $127 million in infrastructure savings that we have recouped. Again, that helps to benefit the firm. Instead of waste, now we're able to leverage that into more improvement side.

Gardner: So, the unfortunate reality for IT is they often have to do more with less. You've found a way to actually make that happen and perhaps continue it on an ongoing basis.

Naguib: Absolutely. I am excited about what I do. We have a great team and a great strategy. The support from my CEOs is fantastic. And again, we are seeing that just the whole partnership model across both the vendor side and internally has been a super benefit to the organization as well as the industry.

Gardner: Well, great. We've been discussing IT consolidation, applications lifecycle best practices with Abe Naguib, Director of Global Performance Architecture and Infrastructure Engineering at AIG Chartis insurance. Thanks so much, Abe.

Naguib: Thank you. I appreciate it.

Gardner: We're here in Barcelona at HP's Software Universe 2010 Conference. Look for this podcast and others on the website, as well as via the BriefingsDirect network.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this series of Software Universe Live discussions. Thanks for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Download the transcript. Sponsor: HP.

Transcript of a sponsored BriefingsDirect podcast, part of a series on application lifecycle management and HP ALM 11 from the HP Software Universe 2010 conference in Barcelona, Spain. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

You may also be interested in: