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 Podcast.com. 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 HP.com 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 Podcast.com. 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:

Case Study: Enel Green Power Uses PPM to Gain Visibility, Orchestrate Myriad Energy Activities Across 16 Countries

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 Podcast.com. 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 Enel Green Power and how their Italian utility business has benefited from improved management of core business processes and gained visibility into new energy projects, also adhering to compliance through better planning and the ability to scope out new projects comprehensively.

To learn about Enel Green Power’s innovative use of project and portfolio management (PPM), please join me now in welcoming Massimo Ferriani, CIO of Enel Green Power in Rome. Welcome.

Massimo Ferriani: Thank you.

Gardner: Tell me a little bit about your issues, your strategy, when it came to managing such a large and diversified company. Perhaps you could start by describing Enel Green Power and where you operate?

Ferriani: Enel Green Power is one of the leaders in the renewables market. We're fighting with the Spanish Iberdrola Renewables every day in order to find out who is the leader of this market.

We have some important differences, compared to the other competitors. First of all, we operate in 16 countries. The next one operates in 12 countries. So, we have 30 percent more, but it's important for us in order to decide our strategy and how we have to invest.

All of the other competitors basically work on a couple of renewable technologies -- wind and solar. Enel Green Power works in all the most mature technologies such as hydro, geothermal, wind, and solar.

If you think about a matrix to cross technologies and countries, we have a lot of trouble, because we operate four technologies in 16 countries. This is very important for the IT strategy as well, because we're slightly different compared to conventional generation, which is arithmetically easy to pace from carbon combustion to the energy product.

Asset portfolio

For renewables, it's difficult, because we have more than 300 plants all around the world with four technologies. So, it's an asset portfolio that we have to operate, and we have to reduce the risks. When we decided to deploy IT platforms, we didn’t think that it was a good idea to deploy conventional generation IT platforms, but to build up new platforms more fitted to renewables' needs.

We thought about the main objective in deploying these platforms and said, "Okay, maybe we have to deploy platforms that permit Enel Green Power to minimize the portfolio risk, in order to know exactly what production should be." For us, knowing the production is a condition. It's not a main output. There's no sense in knowing the exact production of a plant on a small island in Greece. That may be irrelevant, considering all the plants we have.

We have to know production, but we have to know exactly the production that we're promising to sell to the market.

Gardner: You have many different types of renewable sites. This left you with many different choices on those sites, but it seems to me you need it to centralize. You need to have a single PPM solution. Tell me a little bit about why centralization and control became important?

Ferriani: This follows the business strategy. The business strategy is to manage centrally and operate locally. So, IT had to follow the strategy. Our main IT platforms are developed with the objective to be global. Global doesn’t mean managing everything centralized, but to manage the IT platform as centralized, because it's better for synergies and in terms of costs. But, because we have to fit local needs, we we have to localize these platforms in 16 countries.

For PPM, as well, we decided to have a global, centralized, unique platform, in order to gather and collect all the data that we get from the field. This is one of the problems that we frequently have because, in effect, the operation is located everywhere. And, it’s not easy to collect information from each field operation.

It’s important to have global IT platforms, because one of our main objectives is that all our people have to work in the same way.



We have lot of plants in the middle of nowhere -- in the middle of the Nevada desert and in the middle of the Mato Grosso in Brazil. We have to gather information from these plants. So, it’s important to have global IT platforms, because one of our main objectives is that all our people have to work in the same way and because this market is so strange.

It depends a lot on the regulations in a country. It could be that a country that wasn't interesting for us some months ago will become absolutely interesting. This is the case today of Romania. Romania adopted a regulatory incentive scheme so interesting for us that we decided to switch 500 million euros from other countries to Romania.

The whole company has to follow that, but it’s important for us that all the people could work in the same way on the systems. If we have to move people from other countries to Romania, it’s important that they keep on working on the same tools.

Gardner: Very good. So when you looked into what PPM tools and platform would be the right choice, what were the criteria? What were the service level agreements (SLAs) or requirements that you were interested in getting the right choice for your PPM?

Setting the main goals

Ferriani: First of all, it’s important to set the main goal of the PPM solution. Now, the PPM solution lets Enel Green Power manage its own worldwide portfolio initiatives, both business development side and the plant construction Phase 2, because we have to remember that the business development hands over the construction of the project.

We have to do it through building a unique centralized integrated platform, valuable to all the countries, designed to certify the market value of the pipeline and the potential future production related to that pipeline. For us, it's absolutely important to forecast better, to make budgets, and so on. It had to be designed to support people, our colleagues, in activities like planning, project development, reporting, document management, and so on.

So when we decided to deploy this platform, we had a lot of work for a couple of reasons.

First of all, because we wanted to develop an integrated in-house platform in order to map the AGP core processes of the project, and at the same time to implement algorithms to develop a portfolio evaluation.

The second was to investigate adopting a standard solution available on the market that allowed us, with little customization, to fit the need of the business. It's important to underline that, when we started this project, it was the end of May, 2010. We already knew we were going to have an IPO. We didn’t know the time exactly, but we had to be ready for the end of October, the estimated date of the IPO.

A few days after the IPO, the result of the third quarter were to be presented. So, it was very important to have the platform ready at the end of October in order to certify the value of the pipeline after the IPO -- and we did it.

We adopted the HP solution, because the HP people convinced us that with a minimal set of customization we would be ready for the end of October -- and we did it.



Gardner: So this was very important for your company, but the time had to be quick in order for you to reach your financial objectives and, in a sense, create the right value for your company. Tell me how you were able to do this so quickly.

Ferriani: In the market, there is a great variety of PPM solutions. We decided not to make our own solution, because, in general, we prefer to buy standard solutions in the market. Considering the level of centralization of this project we decided to adopt a standard solution with only a set of customizations that permitted us to reach our goals and be ready for the end of October.

We adopted the HP solution, because the HP people convinced us that with a minimal set of customization we would be ready for the end of October -- and we did it.

We chose HP because of the elements important to deploy such a platform. First of all, strong automation in the collection of the data. As I said before, also important for us were simplicity and flexibility. Also, with reference to our geographical distribution everywhere, the adoption of a solution supported with global support was another constraint and was absolutely important.

We needed a standard technology accessible from a lot of countries and with integration with other applications that we have, for example Microsoft Project. We also required scalability and platform growth -- and HP has a strength on this point -- because we are adopting a web service architecture. And, we wanted the viability of a unique homogenous view of mandating KPIs.

Gardner: What were the results? You had an awfully big challenge and you had a little bit of time to do it. Tell me how it worked out in the end?

A long life ahead

Ferriani: First of all, it's important to say that we are in the first phase of the project. So the project has a long life ahead.

We're only in the first phase in order to support the IPO and to support the certification of the market value of the pipeline. But, the main benefits of this platform for the business are acquisition and centralization of the data.

This is, as I said, for the certification of the market value of the portfolio initiatives in general, both business development and construction as well. Knowing that these steps that would flow is very important to a lot of the departments in this value chain. One is procurement, because they have to plan all the purchasing in relation of the progress state of the pipeline and the operation. And, it’s important for the operations, when you think of switching investments from one country to another one.

Business development has decided to switch a big part of the pipeline from North America to Romania. That's absolutely huge to manage. It’s important for the automation to monitor all the steps of the workflow, of the individual steps of the process, to manage the workflow authorization of the individual steps, and monitor progress of the individual steps. All these data have to support us in order to plan the strategy. So, there are plenty of benefits and maybe more benefits in the future with the evolution of this platform.

Gardner: Very good. Is there anything in particular about the PPM platform from HP that has really impressed you? Is there anything that you didn’t expect but have been surprised?

For us, the flexibility was one of the three main strengths on this platform and the reasons we chose HP.



Ferriani: Yes, the flexibility. For us, the flexibility was maybe one of the three main strengths on this platform and the reasons we chose HP. But, the best one, as I said before, was the minimum customization we needed in order to fit the first phase. It’s not easy to have only three months time to set 64 workflows, because the local business development wants to fit their workflow on these needs. It is not easy, because the central business development wanted to manage centrally.

So, the ability to mix this central point of view with the local ones was another strength of HP Solution.

Gardner: Well great. We have been hearing about how Enel Green Power’s innovative use of project and portfolio management has benefited their business. It sounds as if you’ve got in quite a bit of upfront completeness and yet flexibility that’s allowed you to balance the needs of your local organizations with the demands of your central organization. Thank you so much.

Ferriani: Thank you very much.

Gardner: We've been joined by Massimo Ferriani, the CIO of Enel Green Power in Rome. This is Dana Gardner coming to you from a BriefingsDirect live podcast in Barcelona at the HP Software Universe 2010 Conference.

Look for this and other podcasts from this event at the HP.com website as well as via the BriefingsDirect network. Thanks for joining, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. 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:

Wednesday, December 01, 2010

HP Software GM Jonathan Rende on How ALM Enables IT to Modernize Businesses Faster

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 Podcast.com. 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 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 Software Universe Live discussions. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

To learn more about HP’s big application lifecycle management (ALM) news, the release of ALM 11, and its impact on customers, please join me now in welcoming Jonathan Rende, Vice President and General Manager for Applications Business at HP Software. Welcome, Jonathan.

Jonathan Rende: Hey Dana. How are you doing?

Gardner: I'm doing well. I don’t think it’s an exaggeration to say that applications are more important than ever, and they're probably going to become even more important. What’s more, we're looking at a significant new wave of applications refresh. So it strikes me that we're at a unique time, almost an inflection point in the history of software. Am I overstating the case?

Rende: No, not at all, Dana. Over the last 25 years that I've been in the business, I've seen two or three such waves happen. Every seven to 10 years, the right combination of process and technology changes comes along, and it becomes economically the right thing to do for an IT organization to take a fresh look at their application portfolio.

What’s different now than in the previous couple of cycles is that, as you said, there is no lack of business applications out there. With those kind of impacts and requirements and responsibilities on the business, the agility and innovation of an application, is now synonymous with the agility and innovation of the applications themselves in the business.

Gardner: It seems like we're also at a point where we need to speed up the process. The legacy, the traditional means of application development, the sequential process, perhaps even the siloed organizational approach -- are all conspiring to hold us back. What needs to happen to break that logjam?

Rende: It’s not really the case that the people building, provisioning, testing, and defining the applications are lacking or don’t know what they're doing. It’s mostly that the practices and processes they're engaged in are antiquated.

What I mean by that is that today, acquiring or delivering applications in a much more agile manner requires a ton more collaboration and transparency between the teams. Most processes and systems supporting those processes just aren’t set up to do that. We're asking people to do things that they don’t have the tools or wherewithal to complete.

Gardner: The more I hear about ALM 11, it seems to me that not only are you trying to bring together the disparate parts of the application process, you're also extending it. An analogy might be an umbilical cord or cords into other parts of the business, so that they aren’t isolated. Does that hold true? Are we looking at both unification and an extension into the large organization?

Lifecycle roles

Rende: Exactly. Not only are we bringing together -- through collaboration, transparency, linking, and traceability -- the core app lifecycle roles of business analysts, quality performance, security professionals, and developers, but we're extending that upstream to program management office and project managers. We're extending it upstream to architects. Those are very important constituents upstream who are establishing the standards and the stacks and the technologies that will be used across the organization.

Likewise, downstream, we're extending this to the areas of service management and service mangers who sit on help desks who need to connect. Their lifeblood is the connection with defects. Similarly, people in operations who monitor applications today need to be linked into all the information coming upstream along with those dealing with change and new releases happening all the time.

So, yes, it extends upstream much further to a whole group of people -- and also downstream to a whole group of audiences.

Gardner: What are the businesses looking for? What do they need? We've defined the problem -- and clearly there is a lot of room for improvement. What do enterprises and governments then do about it?

Rende: Number one, they need to be able to share important information. There’s so much change that happens from the time an application project or program begins to the time that it gets delivered. There are a lot of changing requirements, changing learnings from a development perspective, problems that are found that need to be corrected.

All of that needs to be very flexible and iterative. You need those teams to be able to work together in very short cycles, so that they can effectively deliver, not only on time, but many times even more quickly than they did in the past. That’s what’s needed in an organization.

There isn’t a single IT organization in the world that doesn’t have a mixed environment, from a technology perspective.



On top of that, there isn’t a single IT organization in the world that doesn’t have a mixed environment, from a technology perspective. Most organizations don’t choose just Visual Studio to write their applications in -- or just Java. Many have a combination of either of those, or both of those, along with packaged applications off-the-shelf.

So, one of the big requirements is heterogeneity for those applications, and the management of those applications from a lifecycle approach should be accommodating of any environment. That’s a big part of what we do.

Gardner: It sounds as if you need to be inclusive in terms of the technologies that you relate to, but at the same time -- based on what we spoke about a minute ago -- you need to also be more of a single system of record, pulling it all together. How can we conceptualize this, being agnostic, but also being unified?

Rende: You have to be able to maintain and manage all of the information in one place, so that it can be linked, and so you can draw the right, important information in understanding how one activity affects another.

But that process, that information that you link, has to be independent of specific technology stacks. We believe that, over the past few years, not only have we created that in our quality solutions, in our performance solutions, but now we have added to that with our ALM 11 release -- the same concepts but in a much broader sense.

Integrating to other environments

B
y bringing together those core roles that I mentioned before, we've been able to do that from a requirements perspective, independent of [deployment] stack -- and from a development environment. We integrate to other environments, whether it’s a Microsoft platform, a Java platform, or from CollabNet. The use-cases that we've supported work in all of those environments very tightly -- between requirements and tests -- and pull that information all together in one place.

Gardner: Jonathan, this really strikes me as a maturity inflection point for application lifecycle development to deployment, and reminds me a little bit what happened in data several years ago. The emphasis became more on the management of the metadata about the data, letting the data reside where it may.

Is there an analogy or similarity between what you are talking about in terms of ALM metadata, if you will, over the applications process, while at the same time allowing the process to exist in a variety of different technologies, or even vendor supported platforms?

Rende: It’s very similar, if you think about different activities and the work that’s done in those different activities. A business analyst or a subject matter expert who is generating requirements, captures all that information from what he hears of what’s needed, the business processes that need to built, the application, and the way it should work. He captures all of that information, and it needs to reside in one single place. However, if I'm a developer, I need to work off of a list of a set of tasks that build to those requirements.

It’s important that I have a link to that. It’s important that my priorities that I put in place then map to the business needs of those requirements. At the same time, if I'm in quality-, performance-, and security-assurance, I also need to understand the priority of those.

So, while those requirements will fit in one place, they'll change and they'll evolve. I need to be able to understand how that impacts my test plans that I am building.

With ALM 11, we're already seeing returns where organizations are able to cut the delivery time, the time from the inception of the project to the actual release of that project, by 50 percent.



Maybe the last example is a developer who is building toward all these priorities, what he is given as requirements. Those, in turn, need to also link as changes to everything that’s happening in the quality, performance, and security areas. Although the information is distinct, it has to be related and that can only be done if you store it in one place.

Gardner: So we're unifying, managing, and governing -- but we're still able to adapt and be flexible given the different environments -- the different products -- in a variety of different types of organizations, as well as across departments within those organizations -- a great deal of heterogeneity.

So, if you do this right, what sort of paybacks do you get? I'm hearing some pretty interesting things about delivery and defects and even managerial or operational benefits?

Rende: Huge benefits. If you look at some of the statistics that are thrown around from third parties that do this research on an annual basis: In almost two-thirds of projects today, application projects still fail. Then, you look at what benefits can be put in place, if you put together the right kind of an approach, system, and automation that supports that approach.

With ALM 11, we're already seeing returns where organizations are able to cut the delivery time, the time from the inception of the project to the actual release of that project, by 50 percent.

Cutting cost of delivery

We're seeing organizations similarly cut the cost of releasing an application, that whole delivery process -- cut the cost of delivery in half. And, that’s not to mention side benefits that really have a far more reaching impact later on, identifying and eliminating on creation up to 80 percent of the defects that would typically be found in production.

As a lot of folks who are close to this will know, finding a defect in production can be up to 500 times more expensive to fix than if you address it when it’s created during the development and the test process. Some really huge benefits and metrics are already coming from our customers who are using ALM 11.

Gardner: That, of course, points up that those organizations that do this well, that make this a core competency, should have a significant competitive advantage.

Rende: A big advantage. Again, if you go back to the very beginning topic that we discussed, there isn’t a business, there isn’t a business activity, there isn’t a single action within corporate America that doesn’t rely on applications. Those applications -- the performance, the security, and the reliability of those systems -- are synonymous with that of the business itself.

If that’s the case, allowing organizations to deploy business critical processes in half the time, at half the cost, at a much higher level of quality, with a much reduced risk only reflects well on the business, and it’s a necessity, if you are going to be a leader in any industry.

It really scales from the smallest to the largest organization, and from a single geography to multiple geographies.



Gardner: This cuts across the globe. This isn’t just for advanced economies or developing emerging economies. It’s pretty much across the board?

Rende: Across the board in a couple directions or vectors. One, from small organizations to large organizations, ALM 11 allows small project teams to be able to take advantage of this and get the same benefits as well as large Fortune 10 enterprises that have hundreds of projects, which get linked together into a single release, and those projects are being built in unison around the globe.

It’s really scales from the smallest to the largest organization, and from a single geography to multiple geographies, so they can collaborate, because, as we know, development can happen in many locations today. In the final equation, you have to make sure that what [applications] you're releasing are reflective of an organization, no matter where those activities take place.

Gardner: And as far as that goes for all types of organizations, we have enterprises, small and medium size businesses, we are also talking about governments, and we're also talking about now the variety of different hosting organizations, whether it’s telecom, cloud, mobile, or what have you.

Rende: Exactly. There are so many different options of how people can deploy or choose to operate and run an application -- and those options are also available in the creation of those applications themselves. ALM 11 runs through on-premise deployment, or also through our software as a service (SaaS), so will allow flexibility.

Gardner: We've heard a lot about how important software is to HP as a larger organization across the company and its strategy. Is it fair to say that ALM 11 is a strategic initiative for HP? How does it fit into the bigger HP direction?

Deep software DNA

Rende: As you said, software and our software business are increasingly important. If you look at the leadership within the company today, our new CEO has a very deep software DNA. Bill Veghte, who came in from Microsoft, has 20 plus years. The rest of the leadership team here also has 20 plus years in enterprise software.

Aside from the business metrics that are so beneficial in software versus other businesses, there is just a real focus on making enterprise software one of the premier businesses within all of HP. You're starting to see that with investments and acquisitions, but also the investment in, more importantly, organic development and what’s coming out.

So, it’s clearly top of list and top of mind when it comes to HP. Our new CEO, Leo Apotheker, has been very clear on that since he came in.

Gardner: Super. We've heard a lot about ALM 11 here in Barcelona, and I expect we're going to be hearing more about how this relates to that larger software equation. I'm looking forward to that.

I want to thank you, Jonathan Rende, Vice President and General Manager for Applications Business in HP's Software & Solutions organization. I hope you're having a good show. I appreciate your time.

In the final equation, you have to make sure that what you're releasing is reflective of an organization, no matter where those activities take place.



Rende: Thanks very much, Dana. Hopefully, everybody can get out there and learn a little bit more about ALM and how it fits into some of the larger initiatives, applications, and transformation, that are really changing the entire industry. So good luck, everybody.

Gardner: Great. I want to thank also our listeners for joining the special BriefingsDirect podcast, coming to you from the HP Software Universe 2010 Conference in Barcelona.

Look for other podcasts from this event on the hp.com 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 again for listening, and come back next time.

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

Transcript of a sponsored BriefingsDirect podcast 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.

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