On the Road to Sydney: The Open Group Gets Under Enterprise Architecture, Business Architecture and Enterprise Transformation

Transcript of a BriefingsDirect podcast on the role that architects and analysts play in optimizing business capabilities and performance.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: The Open Group.

Dana Gardner: Hello, and welcome to a special BriefingsDirect Thought Leadership interview series, coming to you in conjunction with The Open Group Conference on April 15, in Sydney, Australia.

Gardner

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, and I'll be your host and moderator throughout these business transformation discussions.

The conference, The Open Group’s first in Australia, will focus on "How Does Enterprise Architecture Transform an Enterprise?" And there will be special attention devoted to how enterprise transformation impacts such vertical industries as finance and defense, as well as exploration, mining, and minerals.

We're here now with two of the main speakers at the conference -- Hugh Evans, the Chief Executive Officer of Enterprise Architects, a specialist enterprise architecture (EA) firm based in Melbourne, Australia; and Craig Martin, Chief Operations Officer and Chief Architect at Enterprise Architects.

As some background, Hugh is both the founder and CEO at Enterprise Architects. His professional experience blends design and business, having started out in traditional architecture, computer games design, and digital media, before moving into enterprise IT and business transformation.

In 1999, Hugh founded the IT Strategy Architecture Forum, which included chief architects from most of the top 20 companies in Australia. He has also helped found the Australian Architecture Body of Knowledge and the London Architecture Leadership Forum in the UK.

Since starting Enterprise Architects in 2002, Hugh has grown the team to more than 100 people, with offices in Australia, the UK, and the U.S.

With a career spanning more than 20 years, Craig has held executive positions in the communications, high tech, media, entertainment, and government markets and has operated as an Enterprise Architect and Chief Consulting Architect for a while.

In 2012, Craig became COO of Enterprise Architects to improve the global scalability of the organization, but he is also a key thought leader for strategy and architecture practices for all their clients and also across the EA field.

Craig has been a strong advocate of finding differentiation in businesses through identifying new mixes of business capabilities in those organizations. He advises that companies that do not optimize how they reassemble their capabilities will struggle, and he also believes that business decision making should be driven by economic lifecycles. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]

So welcome to you both. How are you doing?

Hugh Evans: Great, Dana. Welcome everyone.

Craig Martin: Thanks very much for having us.

Big-picture perspective

Gardner: I look forward to our talk. Let's look at this first from a big-picture perspective and then drill down into what you are going to get into at the conference in a couple of weeks. What are some of the big problems that businesses are facing, that they need to solve, and that architecture-level solutions can really benefit them. I'll open this up to both Hugh and Craig?

Evans: Thanks very much, Dana. I'll start with the trend in the industry around fast-paced change and disruptive innovation. You'll find that many organizations, many industries, at the moment in the U.S., Australia, and around the world are struggling with the challenges of how to reinvent themselves with an increasing number of interesting and innovative business models coming through.

Evans

For many organizations, this means that they need to wrap their arms around an understanding of their current business activities and what options they've got to leverage their strategic advantages.

We're seeing business architecture as a tool for business model innovation, and on the other side, we're also seeing business architecture as a tool that's being used to better manage risk, compliance, security, and new technology trends around things like cloud, big data, and so on.

Martin: Yes, there is a strong drive within the industry to try and reduce complexity. As organizations are growing, the business stakeholders are confronted with a large amount of information, especially within the architecture space. We're seeing that they're struggling with this complexity and have to make accurate and efficient business decisions on all this information.

Martin

What we are seeing, and based upon what Hugh has already discussed, is that some of those industry drivers are around disruptive business models. For example, we're seeing it with the likes of higher education, the utility space, and financial services space, which are the dominant three.

There is a lot of change occurring in those spaces, and businesses are looking for ways to make them more agile to adapt to that change, and looking towards disciplined architecture and the business-architecture discipline to try and help them in that process.

Gardner: I think I know a bit about how we got here -- computing, globalization, outsourcing, companies expanding across borders, the ability to enter new markets freely, and dealing with security, but also great opportunity. Did I miss anything? Is there anything about the past 10 or 15 years in business practices that have led now to this need for a greater emphasis on that strategic architectural level of thinking?

Martin: A lot has to do with basically building blocks. We've seen a journey that’s traveled within the architecture disciplines specifically. We call it the commodification of the business, and we've seen that maturity in the IT space. A lot of processes that used to be innovative in our business are now becoming fairly utility and core to the business.

In any Tier 1 organization, a lot of the processes that used to differentiate them are now freely available in a number of vendor platforms, and any of their competitors can acquire those.

Looking for differentiation

So they are looking for that differentiation, the ability to be able to differentiate themselves from their competitors, and away from that sort of utility space. That’s a shift that’s beginning to occur. Because a lot of those IT aspects have become industrialized, that’s also moving up into the business space.

In other words, how can we now take complex mysteries in the business space and codify them? In other words, how can we create building blocks for them, so that organizations now can actually effectively work with those building blocks and string them together in different ways to solve more complex business problems.

Evans: I'll add to that Dana. EA is now around 30 years old, but the rise in EA has really come from the need for IT systems to interoperate and to create common standards and common understanding within an organization for how an IT estate is going to come together and deliver the right type of business value.

Through the '90s we saw the proliferation of technologies as a result of the extension of distributed computing models and the emergence of the Internet. We've seen now the ubiquity of the Internet and technology across business. The same sort of concepts that ring true in technology architecture extend out into the business, around how the business interoperates with its components.

This type of thinking enables organizations to change more rapidly.

The need to change very fast for business, which is occurring now in the current economy, with the entrepreneurship and the innovation going on, is seeing this type of thinking come to the fore. This type of thinking enables organizations to change more rapidly. The architecture itself won't make the organization change rapidly, but it will provide the appropriate references and enable people to have the right conversations to make that happen.

Gardner: So architecture can come as a benefit when the complexity kicks in. When you try to change an organization, you don’t get lost along the way. Give me a sense about what sort of paybacks your clients get when they do this correctly, and what happens when you don’t do this very well?

Evans: Business architecture, as well as strategic architecture, is still quite a nascent capability for organizations, and many organizations are really still trying to get a grip on this. The general rule is that organizations don’t manage this so well at the moment, but organizations are looking to improving in this area, because of the obvious, even heuristic, payoffs that you get from being better organized.

You end up spending less money, because you're a more efficient organization, and you end up delivering better value to customers, because you're a more effective organization. This efficiency and effectiveness need within organizations is worth the price of investment in this area.

The actual tangible benefits that we're seeing across our customers includes reduced cost of their IT estate.

Meeting profiles

You have improved security and improved compliance, because organizations can see where their capabilities are meeting the various risk and compliance profiles, and you are also seeing organizations bring products to market quicker.

The ability to move through the product management process, bring products to market more rapidly, and respond to customer need more rapidly puts organizations in front and makes them more competitive.

The sorts of industries we're seeing acting in this area would include the postal industry, where they are moving from a traditional mail- to parcels, which is a result of a move towards online retailing. You're also seeing it in the telco sector and you're seeing it in the banking and finance sector.

In the banking and finance sector, we've also seen a lot of this investment driven by the merger and acquisition (M&A) activity that’s come out of the financial crisis in various countries where we operate. These organizations are getting real value from understanding where the enterprise boundaries are, how they bring the business together, how they better integrate the organizations and acquisitions, and how they better divest.

We're seeing, especially at the strategic level, that the architecture discipline is able to give business decision makers a view into different strategic scenarios.

Martin: We're seeing, especially at the strategic level, that the architecture discipline is able to give business decision makers a view into different strategic scenarios.

For example, where a number of environmental factors and market pressures would have been inputs into a discussion around how to change a business, we're also seeing business decision makers getting a lot of value from running those scenarios through an actual hypothesis of the business model.

For example, they could be considering four or five different strategic scenarios, and what we are seeing is that, using the architecture discipline, it's showing them effectively what those scenarios look like as they cascade through the business. It's showing the impact on capabilities, on people and the approaches and technologies, and the impact on capital expenditures (CAPEX) and operational expenditures (OPEX).

Those views of each of those strategic scenarios allows them to basically pull the trigger on the better strategic scenario to pursue, before they've invested all of their efforts and all that analysis to possibly get to the point where it wasn’t the right decision in the first place. So that might be referred to as sort of the strategic enablement piece.

We're also seeing a lot of value for organizations within the portfolio space. We traditionally get questions like, "I have 180 projects out there. Am I doing the right things? Are those the right 180 projects, and are they going to help me achieve the types of CAPEX and OPEX reductions that I am looking for?"

With the architecture discipline, you don’t take a portfolio lens into what’s occurring within the business. You take an architectural lens, and you're able to give executives an overview of exactly where the spend is occurring. You give them an overview of where the duplication is occurring, and where the loss of cohesion is occurring.

Common problems

A common problem we find, when we go into do these types of gigs, is the amount of duplication occurring across a number of projects. In a worst-case scenario, 75 percent of the projects are all trying to do the same thing, on the same capability, with the same processes.

So there’s a reduction of complexity and the production of efforts that’s occurring across the organizations to try and bring it and get it into more synergistic sessions.

We're also seeing a lot of value occurring up at the customer experience space. That is really taking a strong look at this customer experience view, which is less around all of the underlying building blocks and capabilities of an organization and looking more at what sort of experiences we want to give our customer? What type of product offerings must we assemble, and what underlying building blocks of the organization must be assembled to enable those offerings and those value propositions?

That sort of traceability through the cycle gives you a view of what levers you must pull to optimize your customer experience. Organizations are seeing a lot of value there and that’s basically increasing their effectiveness in the market and having a direct impact on their market share.

What type of product offerings must we assemble, and what underlying building blocks of the organization must be assembled to enable those offerings and those value propositions?

And that’s something that we see time and time again, regardless of what the driver was behind the investment in the architecture project, seeing the team interact and build a coalition for action and for change. That’s the most impressive thing that we get to see.

Gardner: Let’s drill down a little bit into some of what you'll be discussing at the conference in Sydney in April. One of the things that’s puzzling to me, when I go to these Open Group Conferences, is to better understand the relationship between business architecture and IT architecture and where they converge and where they differ. Perhaps you could offer some insights and maybe tease out what some discussion points for that would be at the conference.

Martin: That’s actually quite a hot topic. In general, the architecture discipline has grown from the IT space, and that’s a good progression for it to take, because we're seeing the fruits of that discipline in how they industrialize IT components.

We're seeing the fruits of that in complex enterprise resource planning (ERP) systems, the modularization of those ERP systems, their ability to be customized, and adapt to businesses. It’s a fairly mature space, and the natural progression of that is to apply those same thinking patterns back up into the business space.

In order for this to work effectively well, when somebody asks a question like that, we normally respond with a "depends" statement. We have in this organization a thing called the mandate curve, and it relates to what the mandate is within the business. What is the organization looking to solve?

Are they looking to build an HR management system? Are they looking to gain efficiencies from an enterprise-wide ERP solution? Are they looking to reduce the value chain losses that they're having on a monthly basis? Are they looking to improve customer experience across a group of companies? Or are they looking to improve shareholder value across the organization for an M&A, or maybe reduce cost-to-income.

Problem spaces

Those are some of the problem spaces, and we often get into that mind space to ask, "Those are the problems that you are solving, but what mandate is given to architecture to solve them?" We often find that the mandate for the IT architecture space is sitting beneath the CIO, and the CIO tends to use business architecture as a communication tool with business. In other words, to understand business better, to begin to apply architecture rigor to the business process.

Evans: It’s interesting, Dana. I spent a lot of time last year in the UK, working with the team across a number of business-architecture requirements. We were building business-architecture teams. We were also delivering some projects, where the initial investigation was a business-architecture piece, and we also ran some executive roundtables in the UK.

One thing that struck me in that investigation was the separation that existed in the business-architecture community from the traditional enterprise and technology architecture or IT architecture communities in those organizations that we were dealing with.

One insurance company, in particular, that was building a business-architecture team was looking for people that didn’t necessarily have an architecture background, but possibly could apply that insight. They were looking for deep business domain knowledge inside the various aspects of the insurance organization that they were looking to cover.

So to your question about the relationship between business architecture and IT architecture, where they converge and how they differ, it’s our view that business architecture is a subset of the broader EA picture and that these are actually integrated and unified disciplines.

We're going to see more convergence between these two groups, and that’s certainly something that we are looking to foster in EA.

However, in practice you'll find that there is often quite a separation between these two groups. I think that the major reason for that is that the drivers that are actually creating the investment for business architecture are actually now from coming outside of IT, and to some extent, IT is replicating that investment to build the engagement capability to engage with business so that they can have a more strategic discussion, rather than just take orders from the business.

I think that over this year, we're going to see more convergence between these two groups, and that’s certainly something that we are looking to foster in EA.

Gardner: I just came back from The Open Group Conference in California a few weeks ago, where the topic was focused largely on big data, but analysis was certainly a big part of that. Now, business analysis and business analysts, I suppose, are also part of this ecosystem. Are they subsets of the business architect? How do you see the role of business analysts now fitting into this, given the importance of data and the ability for organizations to manage data with new efficiency and scale?

Martin: Once again, that's also a hot topic. There is a convergence occurring, and we see that across the landscape, when it comes to the number of frameworks and standards that people certify on. Ultimately, it comes to this knife-edge point, in which we need to interact with the business stakeholder and we need to elicit requirements from that stakeholder and be able to model them successfully.

The business-analysis community is slightly more mature in this particular space. They have, for example, the Business Analysis Body of Knowledge (BABOK). Within that space, they leverage a competency model, which in effect goes through a cycle, from an entry level BA, right up to what they refer to as the generalist BA, which is where they see the start of the business-architecture role.

Career path

There's a career path from a traditional business analyst role, which is around requirements solicitation and requirements management, which seems to be quite project focused. In other words, dropping down onto project environments, understanding stakeholder needs and requirements, and modeling those and documenting them, helping the IT teams model the data flows, the data structures but with a specific link into the business space.

As you move up that curve, you get into the business-architecture space, which is a broader structural view around how all the building blocks fit together. In other words, it’s a far broader view than what the business analyst traditional part would take, and looks at a number of different domains. The business architect tends to focus a lot on, as you mentioned, the information space, and we see a difference between the information and the data space.

So the business architect is looking at performance, market-related aspects, and  customer, information, as well as the business processes and functional aspects of an organization.

You can see that the business analysts could almost be seen as the soldiers of these types of functions. In other words, they're the guys that are in the trenches seeing what's working on a day-to-day basis. They've got a number of tools that they're equipped with, which for example the BABOK has given them.

And there are all different ways and techniques that they are using to elicit those requirements from various business stakeholders, until they move out that curve up into the business architecture and strategic architecture space.

There is certainly a pattern emerging, and there are great opportunities for business analysts to come across into the architecture sphere.

Evans: There's an interesting pattern that I've noticed with the business-analyst-to-business-architecture career journey and the traditional IT track, where you see a number of people move into solution architect roles. There might be a solution architect on a project, they might move to multiple projects and ultimately do a program, and a number of those people then pop out to a much broader enterprise view, as they go through their career.

The business analyst is, in many respects, tracking that journey, where business analysts might focus on a project and requirements for a project, might look across at a high view, and possibly get to a point where they have a strong domain understanding that can drive high level sort of strategic discussions within the organization.

There is certainly a pattern emerging, and there are great opportunities for business analysts to come across into the architecture sphere. However, I believe that the broader EA discipline does need to make the effort to bridge that gap. Architecture needs to come across and find those connection points with the analyst community and help to elevate and converge the two sides.

Gardner: Craig, in your presentation at The Open Group Conference in Sydney, what do you hope to accomplish, and will this issue of how the business analyst fits in be prominent in that?

Martin: It’s a general theme that we're using leading right up to the conference. We have a couple of webinars, which deal specifically with this topic. That’s leading up to the plenary talk at The Open Group Conference, which is really looking at how we can use these tools of the architecture discipline to be able to achieve the types of outcomes that we've spoken about here.

Building cohesion

In other words, how do I build cohesion in an organization? How do I look at different types of scenarios that I can execute against? What are the better ways to assemble all the efforts in my organization to achieve those outcomes? That’s taking us through a variety of examples that will be quite visual. 

We'll also be addressing the specific role of where we see the career path and the complementary nature of the business analyst and business architect, as they travel through the cycle of trying to operate at a strategic level and as a strategic enabler within the organization.

Gardner: Maybe you could also help me better understand something. When organizations decide that this is the right thing for them -- as you mentioned earlier, this is still somewhat nascent -- what are some good foundational considerations to get started? What needs to be put in place? Maybe it’s a mindset. How do you often find that enterprises get beyond the inertia and into this discussion about architecture and about the strategic benefits of it?

Martin: Once again, it’s a "depends" answer. For example, we often have two market segments, where a Tier 1 type company would want to build the capability themselves. So there's a journey that we need to take them on around how to have a business-architecture capability while delivering the actual outcomes?

Tier 2 and Tier 3 clients often don’t necessarily want to build that type of capability, so we would focus directly on the outcomes. And those outcomes start with two views. Traditionally, we're seeing the view driven almost on a bottom-up view, as the sponsors of these types of exercises try to get credibility within the organization.

It's not just a bunch of building blocks, but the actual outcome of each of those building blocks and how does it match something like a business-motivation model.

That relates to helping the clients build what we refer to as the utility of the business-architecture space. Our teams go in and, in effect, build a bunch of what we refer to as anchor models to try and get a consistent representation of the business and a consistent language occurring across the entire enterprise, not just within a specific project.

And that gives them a common language they can talk about, for example, common capabilities and common outcomes that they're looking to achieve. In other words, it's not just a bunch of building blocks, but the actual outcome of each of those building blocks and how does it match something like a business-motivation model.

They also look within each of those building blocks to see what the resources are that creates each of those building blocks -- things like people, process and tools. How do we mix those resources in the right way to achieve those types of outcomes that the business is looking for? Normally, the first path that we go through is to try to get that sort of consistent language occurring within an organization.

As an organization matures, that artifact starts to lose its value, and we then find that, because it has created a consistent language in the organization, you can now overlay a variety of different types of views to give business people insights. Ultimately, they don’t necessarily want all these models, but they actually want insight into their organizations to enable them to make decisions.

We can overlay objectives, current project spend, CAPEX, and OPEX. We can overlay where duplication is occurring, where overspend is occurring, where there's conflict occurring at a global scale around duplication of efforts, and with the impact of costs and reduction and efficiencies, all of those types of questions can be answered by merely overlaying a variety of views across this common language.

Elevating the value

That starts to elevate the value of these types of artifacts, and we start to see our business sponsors walking into meetings with all of these overlays on them, and having conversations between them and their colleagues, specifically around the insights that are drawn from these artifacts. We want the architecture to tell the story, not necessarily lengthy PowerPoint presentations, but as people are looking at these types of artifacts, they are actually seeing all the insights that come specifically from it.

The third and final part is often around the business getting to a level of maturity, in that they're starting to use these types of artifacts and then are looking for different ways that they can now mix and assemble. That’s normally a sign of a mature organization and the business-architecture practice.

They have the building blocks. They've seen the value or the types of insights that they can provide. Are there different ways that I can string together my capabilities to achieve different outcomes? Maybe I have got different critical success factors that I am looking to achieve. Maybe there are new shift or new pressures coming in from the environment.

How can I assemble the underlying structures of my organization to better cope with it? That’s the third phase that we take customers through, once they get to that level of maturity.

Evans: Just to add to that, Dana, I agree with Craig on the point that, if you show the business what can actually be delivered such as views on a page that elicit the right types of discussions and that demonstrate the issues, when they see what they're going to get delivered, typically the eyes light up and they say, "I want one of those things."

It's not just enough to know the answer. You have to know how to engage somebody with the material.

The thing with architecture that I have noticed over the years is that architecture is done by a lot of very intelligent people, who have great insights and great understanding, but it's not just enough to know the answer. You have to know how to engage somebody with the material. So when the architecture content that’s coming through is engaging, clear, understandable, and can be consumed by a variety of stakeholders, they go, "That’s what I want. I want one of those."

So my advice to somebody who is going down this path is that if they want to get support and sponsorship for this sort of thing, make sure they get some good examples of what gets delivered when it's done well, as that’s a great way to actually get people behind it.

Gardner: I'm afraid we will have to leave it there. We've been talking with Hugh Evans, the CEO of Enterprise Architects, a specialist EA firm in Melbourne; and Craig Martin, the COO and Chief Architect at Enterprise Architects. Thanks to you both.

Evans: Thanks very much Dana, it has been a pleasure.

Martin: Thank you, Dana.

Gardner: This BriefingsDirect discussion comes to you in conjunction with The Open Group Conference, the first in Australia, on April 15 in Sydney. The focus will be on "How Does Enterprise Architecture Transform an Enterprise?"

So thanks again to both Hugh and Craig, and I know they will be joined by many more thought leaders and speakers on the EA subject and other architecture issues at the conference, and I certainly encourage our readers and listeners to attend that conference, if they're in the Asia-Pacific region.

This is Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator through these thought leadership interviews. Thanks again for listening, and come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: The Open Group.

Transcript of a BriefingsDirect podcast on the role that architects and analysts play in optimizing business capabilities and performance. Copyright The Open Group and Interarbor Solutions, LLC, 2005-2013. All rights reserved.

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As Indiana Health Care Provider Goes Fully Virtualized, it Gains Head Start on BYOD and DR Benefits

Transcript of a BriefingsDirect podcast on how Associated Surgeons and Physicians, LLC went from a 100 percent physical to 100 percent virtual infrastructure.

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

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.

Gardner

Today, we present part one of a two-part sponsored interview series on how a mid-market health services provider has rapidly adopted server and client virtualization. In doing so, they've gained significant new benefits, including the ability to move to mobile, bring your own device (BYOD), and ultimately advanced disaster recovery (DR).

Today we'll hear how Associated Surgeons and Physicians, LLC in Indiana went from 100 percent physical to 100 percent virtualized infrastructure, and how both compliance and efficiency goals have been met and exceeded as a result.

Stay with us now to learn more about creating the right prescription for allowing users to designate and benefit from their own device choices, while also gaining an ability to better manage sensitive data and to create a data-protection lifecycle approach.

Here to share his story on the best methods and technologies for better IT and business results in the health care services sector, we're joined by, and we welcome, Ray Todich, Systems Administrator at Associated Surgeons and Physicians. Welcome, Ray. [Disclosure: VMware is a sponsor of BriefingsDirect podcasts.]

Ray Todich: Hi. How are you?

Gardner: I'm good. Let’s take this first at a high level. A lot of organizations are looking to improve their IT and expand their business. They have various goals for compliance and making sure that their users are kept up-to-date on the latest and greatest in respective client technologies. Yet I'm curious what attracted you, at the beginning, to go to much higher total levels of server -- and then client -- virtualization.

Todich: When I first started here, the company was entirely physical. And as background, I came from a couple of companies that utilized virtualization at very high levels. So I'm very aware of the benefits, as far as administration, and the benefits of overall redundancy and activities -- the software and hardware used to allow high performance, high availability, access to people’s data, and still allow security be put in place.

Todich

When I came in, it looked like something you might have seen maybe 15 years ago. There were a lot of older technologies in place. The company had a lot of external drives hanging off the servers for backups, and so on.

My first thing to implement was server virtualization, which at the time, was the vSphere 4.1 package. I explained to them what it meant to have centralized storage, what it meant to have ESX host, and how creating virtual machines (VMs) would benefit them considerably over having physical servers in the infrastructure.

I gave them an idea on how nice it is to have alternate redundancy configured correctly, which is very important. When hardware drops out, RAID configuration goes south, or the entire server goes out, you've just lost an entire application -- or applications -- which in turn gives downtime.

I helped them to see the benefits of going virtualized, and at that time, it was solely for the servers.

Technology more important

Gardner: So over the past 10 or 15 years, as you pointed out, technology has just become so much more important to how a health provider operates, how they communicate to the rest of the world in terms of supplies, as well as insurance companies and payers, and so forth. Tell me a little bit about Associated Surgeons and Physicians. How big is the organization, what do you do, how have they been growing?

Todich: Pretty rapidly. Associated Surgeons and Physicians is a group of multi-specialty physicians and practices in Northeast Indiana and Northwest Ohio.

It began at the practice level, and then it really expanded. We're up to, I think, 14 additional locations and/or practices that have joined. We're also using an electronic medical record (EMR) application, given to us by Greenway, and that’s a big one that comes in.

We're growing exponentially. It went from one or two satellite practices that needed to piggyback Greenway, to probably 13 or 14 of them, and this is only the beginning. With that type of growth rate, you have to concern yourself with the amount of money it costs to serve everybody. If you have one physical server that goes out, you affect hundreds of users and thousands of patients, doctors, and whatnot. It’s a big problem, and that’s where virtualization came in strong.

Gardner: When I go to the physician’s office, and I just happened to be there yesterday, they've gotten so efficient at moving patients in and out, that the scheduling is amazing. It has to be tight. Every minute is accounted for. Downtime is just very detrimental and backs up everything. You can think about it, I suppose, like an airport. If one flight gets backed up, the whole rest of the country does. Is that the case with you all there too, that this critical notion of time management is so paramount?

The ability that virtualization gives us is the core or heart of the entire infrastructure of the business.

Todich: Oh, it’s absolutely massive. If we have a snag somewhere, or even if our systems are running slow, then everything else runs slow. The ability that virtualization gives us is the core or heart of the entire infrastructure of the business. Without an efficient heart, blood doesn’t move, and we have a bigger problem on our hands.

Gardner: How about this in terms of the size of the organization? How many seats are you accommodating in terms of client, and then what is it about an IT approach to an organization such as yours that also makes virtualization a good fit?

Todich: Right now, we have somewhere around 300 employees. As far as how many clients this overall organization has, it’s thousands. We have lots of people who utilize the organization. The reality is that the IT staff here is used in a minimalist approach, which is one thing that I saw as well when I was coming into this.

One or even two persons to manage that many servers can be a nightmare, and on top of that, you try to do your best to help all the users. If you have 300-plus people and their desktops, printers, and so forth, so the overall infrastructure can be pretty intimidating, when you don’t have a lot of people managing it.

Going virtual was a lifesaver. Everything is virtualized. You have a handful of physical ESX hosts that are managing anything, and everything is stored on centralized storage. It makes it considerably efficient as an IT administrator to utilize virtualization.

The right answer

That’s actually how we went into the adoption of VMware View, because of 300-plus users, and 300-plus desktops. At that point, it can be very hairy. At times, you have to try and divine what the right answer is. You have this important scenario going on, and you have this one and another one, and how do you manage them all. It becomes easier, when you virtualize everything, because you can get to everything very easily and cover everyone’s desktops.

Gardner: And you have a double whammy here, because you're a mid-market size company and don’t have a large, diversified IT staff to draw on. At the same time, you have branch offices and satellites, so you're distributed. To have people physically go to these places is just not practical. What is it about the distributed nature of your company that also makes virtualization and View 5.1 a good approach for a lean IT organization?

Todich: It helped us quite a bit, first and foremost, with the ability to give somebody a desktop, even if they were not physically connected to our network. That takes place a lot here.We have a lot of physicians who may be working inside of another hospital at the time.

Instead of them creating a VPN connection back into our organization, VMware View gave them the ability to have a client on their desktop, whether it be a PC, a MacBook, an iPod, an iPad, or whatever they have, even a phone, if they really want to go that route. They can connect anywhere, at anytime, as long as they have an Internet connection and they have the View client. So that was huge, absolutely huge.

It helped us quite a bit, first and foremost, with the ability to give somebody a desktop, even if they were not physically connected to our network.

They also have the ability to use PC-over-IP, versus RDP, That’s very big for us as well. It keeps the efficiency and the speed of the machines moving. If you're in somebody else’s hospital, you're bound to whatever network you are attached to there, so it really helps and it doesn’t bother their stuff as much. All you're doing is borrowing their Internet and not anything else.

Gardner: Of course, we get back to that all-important issue for these physicians, surgeons, and practitioners about their time management, scheduling, understanding where they are supposed to be an hour from now, and in what office. All of that is now getting much more efficient as a result.

Todich: Yes, absolutely.

Gardner: Tell me a bit more about your footprint. We've spoken about vSphere 4.1 and adopting along the path of 5.1. You even mentioned View. What else are you running there to support this impressive capabilities set?

Todich: We moved from vSphere 4.1 to 5.1, and going to VMware View. We use 5.1 there as well. We decided to utilize the networking and security vCloud Networking package, which at the time was a package called vShield. When we bought it, everything changed, nomenclature wise, and some of the products were dispersed, which actually was more to our benefit. We're very excited about that.

As far as our VDI deployment, that gave us the ability to use vShield Endpoint, which takes your anti-virus and offloads it somewhere else on the network, so that your hosts are not burdened with virus scans and updates. That’s a huge.

The word huge doesn’t even represent how everybody feels about that going away. It's not going away physically, just going away to another workhorse on the network so that the physicians, medical assistants (MAs), and everybody else isn’t burdened with, "Oh, look, it's updating," or "Look, it's scanning something." It's very efficient.

Network and security

Gardner: You mentioned the networking part of this, which is crucial when you're going across boundaries and looking for those efficiencies. Tell me a bit more about how the vCloud networking and security issues have been impacted.

Todich: That was another big one for us. Along with that the networking and security package comes a portion of the package called the vShield Edge, which will ultimately give us the ability to create our own DMZ the way that we want to create it, something that we don’t have at this time. This is very important to us.

Utilizing the vShield Edge package was fantastic, and yet another layer of security as well. Not only do we have our physical hardware, our guardians at the gate, but we also have another layer, and the way that it works, wrapping itself around each individual ESX host, is absolutely beautiful. You manage it just like you manage firewalls. So it’s very, very important.

Plus, some of the tools that we were going to utilize we felt most comfortable in, as far as security servers for the VDI package, that you want them sitting in a DMZ. So, all around, it really gave us quite a bit to work with, which we're very thankful for.

Gardner: How long did it take you to go from being 100 percent physical to where you are now, basically 100 percent virtual?

VMware, in itself, has the ability to reach out as far and wide as you want it to. It’s really up to the people who are building it.

Todich: We've been going at it for about about a year-and-a-half. We had to build the infrastructure itself, but we had to migrate all our applications from physical to virtual (P2V). VMware does a wonderful job with its options for using P2V. It’s a time saver as well. For anybody who has to deal with the one that’s building the house itself, it can really be a help.

VMware, in itself, has the ability to reach out as far and wide as you want it to. It’s really up to the people who are building it. It was very rapid, and it’s so much quicker to build servers or desktops, once you get your infrastructure in place.

In the previous process of buying a server, in which you have to get it quoted out and make sure everything is good, do all the front-end sales stuff, and then you have to wait for the hardware to get here. Once it’s here, you have to make sure it’s all here, and then you have to put it altogether and configure everything, so forth. Any administrator out there who's done this understands exactly what that’s all about.

Then you have to configure and get it going, versus, "Oh, you need another server, here, right click, deploy from template," and within 10 minutes you have a new server. That, all by itself, is priceless.

Gardner: We've talked a lot about software, but tell me a bit about your partners. It sounds as if you went along a pretty comprehensive hardware upgrade path as well. Did you also go to things like solid-state drives? Did you look for storage efficiencies through modernization? Tell me a bit about the hardware infrastructure path.

Centralized storage

Todich: I'm a bit of a storage junky. I love storage and what it can do. I'm a firm believer that centralized storage, and even more the virtualized centralized storage, is the answer to many, many, many issues. So I did a lot of research on whose price was efficient and whose hardware and software packaging was efficient.

I came from an IBM storage background, but after doing a lot of research, I kept coming back to Compellent, which Dell had purchased. I really liked what Compellent was doing. Even more so, I started to do some research on EqualLogic, and that’s what we ended up going with. We ended up with Dell’s EqualLogic centralized storage, and I can't speak enough of how great that stuff is.

I believe they took some of the technologies of the Compellent storage and moved it down to EqualLogic. It’s highly intelligent storage. We're very happy with that. And we went with an entire Dell overall package. Our infrastructure in the data center is everything Dell, their simplicity and their efficiency.

They make great hosts. Right now for out hosts we use Dell R710 servers as our ESX host, and I believe we're going to move to 810 as well. They can expand a lot more.

As I said, we're using EqualLogic. We're even using Dell’s Force10 as our backbone iSCSI infrastructure. I'm a fibre guy by trade initially, and it just seemed more efficient to use iSCSI backbone, which has been priceless as well. It's cost efficient and the quality is just as good. I see no difference.

I'm a firm believer that centralized storage, and even more the virtualized centralized storage, is the answer to many, many, many issues.

Gardner: Okay. We've talked a lot about infrastructure and how you've set things up. Let's talk a bit more now about what you get for all that investment, work, and progress. One of the things, of course, that’s key in your field is compliance and there's a lot going on with things like HIPAA, documents, and making sure the electronic capabilities are there for payers and provided. Tell me a bit about compliance and what you've been able to achieve with these advancements in IT?

Todich: With compliance, we've really been able to up our security, which channels straight into HIPAA. Obviously, HIPAA is very concerned with people’s data and keeping it private. So it’s a lot easier to manage all our security in one location.

With VDI, it's been able to do the same. If we need to make any adjustments security wise, it’s simply changing a golden image for our virtual desktop and then resetting everybody's desktops. It’s absolutely beautiful, and the physicians are very excited about it. They seem to really get ahold of what we have done with the ability that we have now, versus the ability we had two years ago. It does wonders.

Gardner: Ray, are there any other aspects to compliance and being in alignment with what the market expects of you?

Todich: Upgrading to a virtual infrastructure has helped us considerably in maintaining and increasing meaningful use expectations, with the ability to be virtual and have the redundancy that gives, along with the fact that VMs seem to run a lot more efficiently virtually. We have better ways to collect data, a lot more uptime, and a lot more efficiency, so we can collect more data from our customers.

Exceeding expectations

The more people come through, the more data is collected, the more uptime is there, the more there are no problems, which in turn has considerably helped meeting and exceeding the expectations of what's expected with meaningful use, which was a big deal.

Gardner: I've heard that term "meaningful use" elsewhere. What does that really mean? Is that just the designation that some regulatory organization has, or is that more of a stock-in-trade description?

Todich: My understanding of it, as an IT administrator, is basically the proper collection of people's data and keeping it safe. I know that it has a lot in with our EMR application, and what is collected when our customers interact with us.

Gardner: I'm going to guess, Ray, that you have a variety of personality types, when it comes to IT adoption. I know people who are just dying to get the latest and greatest. And then I have folks who I know, where if it works, they don’t want to budge.

So given that you probably had a variety of cultural approaches to IT among your constituents, how have you been able to basically satisfy that diversity? How have you been able to keep everyone moving along toward some of these newer capabilities?

The more people come through, the more data is collected, the more uptime is there, the more there are no problems.

Todich: Just by exposing them to the ultimate efficiency that we are creating was a big thing to them. It still is and it always will be, especially in their field. These people are here to help other people and they have to be able to get their data. At some point, they have to be able to get it whenever, wherever, immediately.

Whether they were IT savvy or not, the ability to explain to them, anywhere, anytime, 365, 24x7, really seals the deal right there. It's the simplicity of, "Doc, you could be sitting at a coffee shop in New Hampshire, and if you need, for whatever reason, to be able to get into your computer at work, you launch your View client and away you go, as long as you have Internet" I think that spoke to them.

Gardner: Are there any milestones or achievements you've been able to make in terms of this adoption, such as behaviors and then the protection of the documents and privacy data that has perhaps moved you into a different category and allows you to move forward on some of these regulatory designations?

Todich: It's given us the ability to centralize all our data. You have one location, when it comes to backing up and restoring, versus a bunch of individual physical servers. So data retention and protection has really increased quite a bit as far as that goes.

Gardner: How about DR?

Disaster recovery

Todich: With DR, I think there are a lot of businesses out there that hear that and don’t necessarily take it that seriously, until disaster hits. It’s probably the same thing with people and tornadoes. When they're not really around, you don’t really care. When all of a sudden, a tornado is on top of your house, I bet you care then.

VMware gives you the ability to do DR on a variety of different levels, whether it’s snapshotting, or using Site Recovery Manager, if you have a second data center location. It’s just endless.

One of the most important topics that can be covered in an IT solution is about our data. What happens if it stops or what happens if we lose it? What can we do to get it back, and how fast, because once data stops flowing, money stops flowing as well, and nobody wants that.

It’s important, especially if you're recording people’s private health information. If you lose certain data that’s very important, it’s very damaging across the board. So to be able to retain our data safely is of the highest concern, and VMware allows us to do that.

Also, it’s nice to have the ability to do snapshotting as well. Speaking of servers and whatnot, I'll have to lay it on that one, because in IT, everybody knows that software upgrades come. Sometimes, software upgrades don’t go the way that they're supposed to, whether it’s an EMR application, a time-saving application, or ultrasounds.

If it doesn’t work out in your favor, you have the ability to delete that snapshot and you're back to where you started from before the migratio.

If you take a snapshot before the upgrade and run your upgrade on that snapshot, if everything goes great and everybody is satisfied. You can just merge the snapshot with the primary image and you are good to go.

If it doesn’t work out in your favor, you have the ability to delete that snapshot and you're back to where you started from before the migration, which was hopefully a functioning state.

Gardner: Let’s look to the future a bit. It sounds as if with these capabilities and the way that you've been describing DR benefits, you can start to pick and choose data center locations, maybe even thinking about software-defined networking and data center. That then allows you to pick and choose a cloud provider or a hosting model. So are you thinking about being able to pick up and virtually move your entire infrastructure, based on what makes sense to your company over the next say 5 or 10 years.

Todich: That’s exactly right, and the way this is growing, something that's been surfacing a lot in our neck of the woods is the ability to do hosting and provide cloud-based solutions, and VMware is our primary site on that as well.

But, if need be, if we had to migrate our data center from one state to another, we'll have the option to do that, which is very important, and it helps with uptime as well. Stuff happens. I mean, you can be at a data center physically and something happens to a generator that has all the power. All of a sudden, everybody is feeling the pain.

So with the ability to have the Site Recovery, it’s priceless, because it just goes to location B and everybody is still up. You may see a blip or you may not, and nothing is lost. That leaves everybody to deal with the data-center issue and everything is still up and going, which is very nice.

Creating redundancy

Gardner: I imagine too, Ray, that it works both ways. On one hand, you have a burgeoning ecosystem of cloud and hosting, of providers and options, that you can pursue, do your cost benefit analysis, think about the right path, and create redundancy.

At the same time, you probably have physicians or individual, smaller physician practices, that might look to you and say, "Those guys are doing their IT really well. Why don’t we just subscribe to their services or piggyback on their infrastructure?" Do you have any thoughts about becoming, in a sense, an IT services provider within the healthcare field? It expands your role and even increases your efficiency and revenues.

Todich: Yes, our sights are there. As a matter of fact, our heads are being turned in that direction without even trying to, because a lot of people are doing that. It’s a lot easier for smaller practices, instead of buying all the infrastructure and putting it all in place to get everything up, and then maintaining it, we will house it for you. We'll do that.

Something that's been surfacing a lot in our neck of the woods is the ability to do hosting and provide cloud-based solutions, and VMware is our primary site on that as well.

Gardner: Great, we've had a wonderful discussion, part one of a two-part sponsored podcast series, on how a mid-market health services provider has rapidly adopted server and client virtualization. We’ve seen how Associated Surgeons and Physicians, LLC has gained significant benefits from virtualization by extending the benefits to mobile, embracing BYOD, and then moving into advanced DR.

We've seen how they used a VMware-centric infrastructure approach to go from a 100 percent physical to a 100 percent virtualized infrastructure in less than two years, and in doing so, gaining compliance and efficiency goals that have met and exceeded their initial goals.

So a big thank you to our guest, Ray Todich, Systems Administrator at Associated Surgeons and Physicians in Indiana. Thanks so much, Ray.

Todich: Thank you for having me. I greatly appreciate it.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks also to you, our audience, for listening, and don’t forget to come back next time.

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

Transcript of a BriefingsDirect podcast on how Associated Surgeons and Physicians, LLC went from a 100 percent physical to a 100 percent virtual infrastructure. Copyright Interarbor Solutions, LLC, 2005-2013. All rights reserved.

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ERP for IT Helps Dutch Insurance Giant Achmea to Reinvent IT Processes to Improve Business Performance Across the Board

Transcript of a BriefingsDirect podcast on how Achmea Holding has taken big strides to more successfully run their IT department like a business within the business.

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.

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.

I am now joined by our co-host for this sponsored podcast, Georg Bock, Director of the Customer Success Group at HP Software, and he's based in Germany. Welcome, Georg. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Georg Bock: Thanks a lot. Welcome, everybody, to this podcast.

Gardner: Our discussion today will take a deep look at Achmea Holding, one of the largest providers of financial services and insurance in the Netherlands, and we'll examine how they've taken large strides to run their IT operations more like an efficient business.

We'll learn how Achmea has rearchitected its IT operations to both be more responsive to users and more manageable by the business, based on clear metrics.

To learn more about how they've succeeded in making IT governed and agile -- even to attain enterprise resource planning (ERP) for IT benefits -- please join me now in welcoming our special guest, Richard Aarnink, leader in the IT Management Domain at Achmea in the Netherlands. Welcome, Richard.

Richard Aarnink: Thank you very much and welcome, all, to this podcast as well.

Gardner: Let me begin with asking you, as an IT architect, why is running IT more as a business important? Why does this make sense now?

Aarnink: Over the last year, whenever a customer asked us questions, we delivered what he asked. We came to the conclusion that delivery of every request that we got was an intensive process for which we created projects.

It was very difficult to make sure that it was not a one-time hero effect, but that we could deliver to the customer what he asked every time, on scope, on specs, on budget, and on time. We looked at it and said, "Well, it is actually like running a normal business, and therefore why should we be different? We should be predictive as well."

Gardner: Georg Bock, this notion of running IT with the customer most in mind is different than say 10 or 15 years ago. Is this something you are seeing more and more of in the field?

Trend in the market

Bock: Yes, we definitely see this as a trend in the market, specifically with the customers that are a little more mature in their top-down strategic thinking. Let’s face it, running IT like a business is an end-to-end process that requires quite a bit of change across the organization -- not only technology, but also process and organization. Everyone has to work hand in hand to be, at the end of the day, predictable and repeatable in what they're doing, as Richard just explained.

That’s a huge change for most organizations. However, when it’s being done and when it has lived in the organization, there's a huge payback. It is not an easy thing to undertake but it’s inevitable, specifically when we look at the new trends around cloud multi-sourcing, mobility, etc., which brings new complexity to IT.

You'd better have your bread and butter business under control before moving into those areas. That’s why also the timing right now is very important and top of people’s minds.

Gardner: Before we learn more about what you have done with your IT operations, Richard, tell us a bit about Achmea, the size of your organization, what you do, and why IT is so fundamentally important to you?

Aarnink: As you already stated, Achmea is a large insurance provider in the Netherlands. We have around eight million customers in the Netherlands with 17,000 employees. We're a very old and cooperative organization, and we have had lots and lots of mergers and acquisitions in the last 20 years. So we had various sets of IT departments from all the other companies that we centralized over the past years.

Aarnink

If you look at insurance, it's actually having the trust that whenever something happens to a customer, he can rely on the insurer to help him out, and usually this means providing money. IT is necessary to ensure that we can deliver on those promises that we made to our customers. So it’s a tangible service that we deliver, it’s more like money, and it’s all about IT.

Gardner: Tell us a bit more about the scope of your IT department and how you're able to bring together a variety of different IT departments, given your mergers and acquisitions activity, just a bit more detail on your IT organization itself.

Aarnink: Of the 17,000 employees that we have in the Netherlands, about 1,800-2,000 employees work in the centralized IT department. Over the last year, we changed our target operating model to centralize the technologies in competence centers, as we call them, in the department that we call solution development.

We created a new department, IT Operations, and we created business-relationship departments that were merged with the business units that were asking or demanding functionality from our IT department. We changed our entire operating model to cope with that, but we still have a lot of homegrown applications that we have to deliver on a daily basis.

Changing the department and the organizational structure is one thing, and now we need to change the content and the applications we deliver.

Gardner: You are leading in the IT management domain area and you also have a strategy and governance department. How has that briefly allowed you to better manage all of the aspects of IT and make it align with the business? What organizational structure have you been able to benefit from here?

Strategy and governance

Aarnink: To answer that question I need to elaborate a little bit on the strategy and governance department, which is actually within the IT department. What we centralized there were project portfolio and project steering, and also the architectural capabilities.

We make sure that whatever solution we deliver is architectured from a single model that we manage centrally. That's a real benefit that we gained in centralizing this and making sure that we can, from both the architecture and project perspectives, govern the projects that we're going to deliver to our business units.

Gardner: Georg, this notion of a strategy and governance department that helps to standardize these processes, align for automation, and make visible what’s actually going on in IT in a common way, I suppose gets at that systems-of-record approach and even ERP for IT approach. Is this something Achmea is in a leadership position on? Do you see this as a model for others, or is this something that’s happening more generally in the market?

Bock: Absolutely, Achmea is a leader in that, and the structure that Richard described is inevitable to be successful. ERP for IT, or running IT as a business, the fundamental IT processes, is all about standardization, repeatability, and predictability, especially in situations where you have mergers and acquisitions. It’s always a disruption if you have to bring different IT departments together. If you have a standard that’s easy to replicate, that’s a no-brainer and winner from a business bottom-line perspective.

In order to achieve that, you have to have a team that has a horizontal unit and that can drive the standardization of the company. Richard and Achmea are not alone in that. Richard and I have quite a number of discussions with other companies from other industries, and we very much see that everyone has the same problem, and given those horizontal teams, primary enterprise architecture, chief technology officer (CTO) office, or whatever you like to call those departments, is definitely a trend in the industry and for those mature customers that want to take that perspective and drive it forward that way.

It’s not rocket science from an intellectual perspective, but we have to cut through the political difficulties.

But as I said, it’s all about standardization. It’s not rocket science from an intellectual perspective, but we have to cut through the political difficulties of driving the adoptions across the different organizations in the company.

Gardner: Let’s look a bit more deeply, or in a detailed way, at the journey that Achmea has taken. Richard, what sort of problems or issues did you need to resolve, what were some of the big early goals that you had in terms of changing things for the better?

Aarnink: We looked at the entire scope of implementing ERP for IT and first we looked at the IT projects and the portfolio. We looked at that and found out that we still had several departments running their own solutions in managing IT projects and also budgets. In the past, we had a mechanism of only controlling the budget for the different business units, but no centralized view on the IT portfolio, as a whole, for Achmea.

We started in that area, looking at one system of record for IT projects and portfolio management, so we could steer what we wanted to develop and what we wanted to sunset.

Next, we looked at application portfolio management and tried to look at the set of applications that we want to currently use and want to use in the future and the set of applications that we want to sunset in the next year and how that related to the IT project. So that was one big step that we made in the last two years. There's still a lot of work to be done in that area, but it was a big topic.

Service management

The second big topic was looking at service management. Due to all the mergers, we still had lots of variations on IT process. Incident management was covered in a whole different way, when you looked at several departments from the past.

We adopted service desks to cater to all those kind of deviations from the standard ITIL process. We looked at that and said that we had to centralize again and we had to make sure that we become more prescriptive in how these process will look and how we make sure that it's standardized.

That was the second area that we looked at. The third area was more on the application quality. How could we make sure that we got a better first-time-right score in delivering IT projects? How could we make sure that there is one system of record for requirements and one system of record for test results and defects. That’s three areas that we invested in in the first phase.

Gardner: One of the things I hear from organizations, Richard, is that some people fear that by going to standardized processes and rationalizing their portfolio, they will lose control over applications or they won’t be able to customize or change applications. I think, however, that that might be a false premise.

Is there something that you found in moving towards more standardized processes that allows you to be more responsive and agile with your applications? Has the ability to change applications been effective?

Aarnink: It’s still a little bit early to say, and your thoughts are right. There's always a discussion with the business units that in the past owned their own set of applications. They want to control that for being agile, but they also see that the cost of having all those applications is running up and up. We become less agile, because we have to solve many problems in all kinds of applications that they are currently running.

Something had to change, and the financial crisis that we've had from 2008 on emphasized that we need to lower the total cost of ownership (TCO) on IT.

Something had to change, and the financial crisis that we've had from 2008 on emphasized that we need to lower the total cost of ownership (TCO) on IT and we had to do something about it. So it was also a top-down statement that we had to do something about it. We changed the governance to enable us to control that and to make sure that we got the right mandate to enable us to drive application virtualization.

The other thing is that if you standardize your IT components and your IT applications, you also enable yourself to deliver faster. It was the first time that we succeeded in delivering a new policy, a new product, into the marketplace in six weeks, instead of having it in six months or so.

That's is the aim or the goal that we're after, but it’s still too early in the process to look at benefits in that area and to see the cultural change that this embraced, instead of rejected, from the business perspective.

Gardner: Well it certainly sounds like the progress that you’ve made so far has allowed you to increase the time to value, that is to say, make the ability to deliver apps and services to your end-users, to your customers, happen more rapidly. Is that something that we can attribute to the changes you’ve made or is it still too soon for that?

Change going on

Bock: If you ask our customers, they'll say it's still too soon, but we see that the changes in our internal IT organization are already going on. I expect that in 2013, we'll gain the first benefits from this.

Gardner: Georg. I’ve heard this notion of ERP for IT for some time, and I've also heard people be a bit cynical -- it’s a vision, it’s esoteric, or it maybe science fiction. What is it that you're hearing from Achmea and what have you have seen in the market that leads you to believe that ERP for IT is not a vision, but is, in fact, happening and that we're starting to see tangible benefit.

Bock: That’s a very good question. I hear that very, very often and across various distinct contingencies, but Richard very much nicely described real, practical results, rather than coming up with a dogmatic, philosophical process in the first place. I think it’s all about practical results and practical results need to be predictable and repeatable, otherwise it’s always the one-time hero effort that Richard brought up in the beginning, and that’s not scalable at all.

At some point you need process, but you shouldn’t try that dogmatically. I also hear about the Agile versus the waterfall, whatever is applicable to the problem is the right thing to do. Does that rule out process? No, not at all. You have to live the process in a little different way.

Technology always came first and now we look for the nail that you can use that hammer for. That’s not the right thing to do.

Everyone has to get-away from their dogmatic position and look at it in a little more relaxed way. We shouldn’t take our thoughts too seriously, but when we drive ERP for IT to apply some standard ways of doing things, we just make our life easier. It has nothing to do with esoteric vision, but it's something that is very achievable. It’s about getting a couple of people to agree on practical ways of getting it done.

Then, we can draw the technological consequences from it, rather than the other way around. That's been the problem in IT from my perspective for years. Technology always came first and now we look for the nail that you can use that hammer for. That’s not the right thing to do.

Gardner: Just to be clear, this isn’t something that’s specific to Achmea or a certain vertical industry. This is really across all industries in all regions. This is moving towards a more scientific and practical way of doing IT.

Bock: Absolutely. From my perspective, standardization is simply a necessary conclusion from some of the trial-and-error mistakes that have been made over the last 10-15 years, where people tried to customize the hell out of everything just to be in line with the specificity of how things are being done in their particular company. But nobody asked why it was that way.

If you ask that question, you very quickly get to the revelation. It’s not that different. Richard, if you recap some of the discussions we had with your architect colleagues in other companies, I think you might want to comment on that.

Aarnink: I completely agree. We had several discussions about how the incident process is being carried out, and it’s the same in every other company as well. Of course there are slight differences, but the fact is that an incident needs to be so resolved, and that’s the same within every company.

Best practice

You can easily create a best practice for that, adopt it within your own company, and unburden yourself from thinking about how you should go for this process, reinvent it, creating your own tool sets, interfaces with external companies. That can all be centralized, it can all be standardized.

It’s not our business to create our own IT tools. It’s the business of delivering policy management systems for our core industry, which is insurance. We don’t want all the IT that we need in order to just to keep the IT running. We want that standardized, so we can concentrate on delivering business value.

Gardner: Now that we've been calling this ERP for IT, I think it’s important to look back on where ERP as a concept came from and the fact that getting more data, more insight, repeatability, analyzing processes, determining best processes and methods and then instantiating them, is at the core of ERP. But when we try to do that with IT, how do we measure, what is the data, and what do we analyze?

Richard, at Achmea, are you looking at key performance indicators (KPIs) and are using project portfolio management maturity models? How is it that you're measuring this so that you can, in fact, do what ERP does best, make it repeatable, make it standardized?

The IT project is a vehicle helping you deliver the value that you need, and the processes underneath that actually do the work for you.

Aarnink: If you look from the budget perspective, we look at the budgets, the timeframes, and the scope of what we need to deliver and whether we deliver on time, on budget, and on specs, as I already said. So those are basically the KPIs that we're looking for when we deliver projects.

But also, if you look at the processes involved when you deliver a project, then you talk about requirements management. How quickly can you create a set of requirements and what is the reuse of requirements from the past. Those are the KPIs we're looking for in the specific processes when you deliver an IT project.

So the IT project is a vehicle helping you deliver the value that you need, and the processes underneath that actually do the work for you. At that level we try to standardize and we try to make KPIs in order to make sure that we use as much as possible, that we deliver quality, and we have the resources in place that we actually need to deliver those functionalities.

Gardner: I'm afraid that we're almost out of time but I wonder, Richard, if you wouldn’t mind putting yourself in the position of a master here and relating some of your experience for an organizations that may not have started down this path towards ERP for IT to the same degree. Now that you’ve done it and now that you’ve been involved with it, do you have any 20-20 hindsight or recommendations that you could provide from your position of experience to someone who’s just beginning?

Aarnink: It’s a difficult question. You need to look at small steps that can be taken in a couple of months’ time. So draw up a roadmap and enable yourself to deliver value every, let’s say 100 days. Make sure that every time you deliver functionality that’s actually used, and you can look at your roadmap and adjust it, so you enable yourself to be agile in that way as well.

The biggest thing that you need to do is take small steps. The other thing is to look at your maturity. We did a CMMi test review. We didn't do the entire CMMi accreditation, but only looked at the areas that we needed to invest in.

Getting advice

We looked at where we had standardized already and the areas that we needed to look at first. That can help you prioritize. Then, of course, look at companies in your network that actually did some steps in this and make sure that you get advice from them as well.

Gardner: Georg, just quickly, any thoughts on either affirming what Richard said or other ideas for organizations that are just beginning down the ERP for IT path?

Bock: I absolutely agree with what Richard said. If we're looking for some recipe for successes, you have to have a good balance of strategic goals and tactical steps towards that strategic goal. Those tactical step need to have a clear measure and a clear success criteria associated with them. Then you're on a good track.

I just want to come back to the notion of ERP for IT that you alluded to earlier, because that term can actually hurt the discussion quite a bit. If you think about ERP 20 years ago, it was a big animal. And we shouldn’t look at IT nowadays in the same manner as ERP was looked at 20 years ago. We don’t want to reinvent a big animal right now, but we have to have a strategic goal where we look at IT from an end-to-end perspective, and that’s the analogy that we want to draw.

If we're looking for some recipe for successes, you have to have a good balance of strategic goals and tactical steps towards that strategic goal.

ERP is something that has always been looked as an end-to-end process, and having a clear, common context associated from an end-to-end perspective, which is not the case in IT today. We should learn from those analogies that we shouldn’t try to implement ERP literally for IT, because that would take the whole thing in one step, where as Richard just said very nicely, you have to take it in digestible pieces, because we have to deal with a lot of technology there. You can't take that in one shot.

Gardner: Okay, very good. I am afraid we will have to leave it there. I want to thank our co-host, Georg Bock, Director of the Customer Success Group at HP Software. Thank you so much, Georg.

Bock: My pleasure. Thank you.

Gardner: And I'd also like to thank our supporter for this series, that is HP Software, and remind our audience to carry on the dialogue through Discover Performance Group on LinkedIn. You can also gain more insights and information on the best of IT Performance Management at www.hp.com/go/discoverperformance.

And you can always access this and other episodes in our HP Discover Performance Podcast Series on iTunes under BriefingsDirect.

And now, I'd like to thank our special guest, Richard Aarnink. He is the leader of the IT Management Domain at Achmea in the Netherlands. Thank you so much, Richard. Very insightful.

Aarnink: Thank you, and you're very welcome.

Gardner: And lastly, a 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 host for this ongoing series. We appreciate your attention, and please come back next time.

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

Transcript of a BriefingsDirect podcast on how Achmea Holding has taken big strides to more successfully run their IT department like a business within the business. Copyright Interarbor Solutions, LLC, 2005-2013. All rights reserved.

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