In-Depth

Enterprise Productivity: IT’s Contribution to Business Agility

• 11/01/1999

In an era where "agility" is the watchword for successful businesses, enterprise productivity is increasingly seen as an enabler for Agile IT. As global corporations move into the 21st century, they face a unique set of circumstances that are turning the traditional "IT should-haves" into the "IT must-haves." Organizations must dramatically improve productivity in the development and subsequent operation of their IT assets or face lost opportunity and competitive advantage in their marketplace.

Companies are discovering that investing millions of dollars in their applications portfolio (both custom and packaged) must be enabled by effective operations, or much of the return for their investment is consumed in wasted productivity. Blind productivity enhancements on the operations side are clearly not sufficient. Local optimums (e.g., increasing server space) increasingly lead to overall performance declines. These productivity improvements must be measurable, visible, justifiable and provide a recognizable return on investment.

One emerging category of solutions called Enterprise Productivity Software (EPS) is showing promise for firms struggling with productivity on the infrastructure side of IT. EPS focuses on the productivity of day-to-day operations by alleviating some of the labor-intensive tasks that burden most IT shops. These products reduce labor hours – freeing up more resources for strategic IT initiatives like e-commerce, Enterprise Resource Management and Post-Year 2000 cleanup.

Return on Investments (ROI) are realized through accomplishing more with less labor resources, and identifying and eliminating problems before they manifest themselves in lost time and budget. Using fewer resources translates into budget savings that can be allocated to completing day-to-day operations. Budget savings and available IT staff allow IT to focus on future development and stay on-target with strategic initiatives enabling business agility.

As IT’s ability to be more productive influences businesses’ ability to be agile, there are key factors that drive the need for EPS in today’s IT marketplace. Tales of the demise of the mainframe have been greatly exaggerated as time has shown a resurgence of mainframe activity. Year 2000 has placed IT squarely on the corporate executive’s radar screen, forcing IT organizations to show value for their IT expenditure. The IT labor shortage has created an acute need for productivity improvements in all aspects of the IT organization. Since the solutions to IT demand will not be readily resolved with more staff, individual staff must be enabled to be more productive.

The idea that EPS could serve the mainframe world is not a new one. However, as people started to think client/server was the wave of the future and they would no longer need their mainframe technology, they forgot about EPS. Then, something surprising happened: The mainframe did not die.

In fact, IBM calculates the value of total investments organizations have made in legacy system code to be $5 trillion – an enormous asset that few, if any, organizations can afford to ignore.

Research from International Data Corp. shows shipments of mainframe MIPS shot up 65 percent from 1996 to 1997, the fastest growth in nearly 15 years. Growth from 1997 to 1998 was estimated to rise by 80 percent. META Group reports that MIPS shipped surpassed 1 million in 1998. Increasing demands for MIPS and storage require better management of these more complex environments.

The bottom line is that as new technologies captured the imagination and focus of IT management, mainframe systems became increasingly isolated from the organization’s mainstream business. Access to mainframe resources declined and became fragmented. Knowledge and expertise of mainframe complexities among IT staff suffered a similar fate. In contrast, the mainframe is still completing the majority of mission-critical work. In reality, at least 70 percent of the world’s mission-critical business information still resides on mainframe databases.

The Y2K problem may have been a blessing in disguise for most companies. They knew their systems had problems and could feel the vulnerability. But, in many cases, data centers were treated as a service rather than a business-reliant function and less IT funds were allocated to them. The lingering problems were set aside. However, as the Y2K bug loomed largely on the horizon, the data center, once again, became a priority for businesses. More money was pumped into the data center budget and a great opportunity to enhance business systems was reborn.

META Group Inc. recently analyzed 19 Y2K projects, looking closely at the fault injection rate as changes were made. Distribution of typical maintenance changes introduced an average of three faults for every 3,000 lines of code. For Y2K, five to seven times more maintenance changes were made. Oddly, two-thirds of those faults found were problems that would be considered severe faults in most organizations. Those figures are staggering when one contemplates going back to clean-up systems that were not made Y2K-ready because those systems were put on hold to deal with data corruption. Not only does EPS provide the visibility to solve Y2K problems; it will be there to support data center issues well beyond 2000.

Many IT managers are suffering a double-whammy as the IT talent pool dwindles and existing talent demands higher salaries. In light of this, businesses need to prepare themselves to produce more with fewer people and less money, while maintaining the quality of the data that runs their companies. Outside the data center, it is possible to move people from one project to another without worrying about service issues. In operations, management must keep the headcount at a certain level and maintain an acceptable level of performance. They need to have systems help manage their data.

When an organization undergoes a major conversion, there will always be a temporary drop in performance, causing ripples in production. Whether that drop has to do with the data or the reaction time of the staff, EPS solutions can help reduce the ripple’s size when personnel are moved to aid in conversions. Instead of hiring an additional 10 people – almost an impossibility when budget and the lack of IT talent are considered – businesses are finding that they can have two people perform the job in half the time using enterprise productivity solutions. Businesses will not only perform the conversion in less time with a fraction of the staff, but they also provide better system visibility after its completion.

It makes sense: With good visibility, mistakes are avoided. And, if software provides fidelity, one works faster and makes better decisions. The key is applying solutions that provide a window into the data. Productivity software provides clear visibility and provides opportunity for clear focus beyond simply carrying the organization through the day.

Using software that encompasses the EPS philosophy is not only beneficial because it frees staff to work on strategic initiatives, it also reduces the number of errors that a large group of people may introduce as they work on the system. The larger the team of people on the job, the greater the potential for error. People make mistakes, especially when it comes to tedious tasks like data conversion. It is not a "one brilliant thought gets it fixed" solution – it’s several small thoughts – that, when combined, could have an error in it. Alternatively, software applications are algorithmic and have a predictable level of quality.

Getting custom software to work efficiently in combination with packaged software produces its own level of strife. Migrating the data between the two (or more) poses further challenges. The question is: "How do we convert data from diverse systems, migrate it to this new architecture and clean it up so that we do not introduce a Pandora’s box of hidden hydras that replicate themselves in the system?"

One function the EPS suite encompasses is the absolute ability to improve the application maintenance process by speeding it up and reducing errors. These solutions make it possible to convert all the data in diverse environments and clean it up before it is released in the system. In order to avoid a huge, labor-intensive data effort, these organizations need solutions on many levels: providing data-management visibility that allows management to make decisions, general data cleanup, structuring, conversion and more.

There is a tendency for companies to think of IT as an entity that is broken up into pieces: Applications folks right there … maintenance folks here … operations and data center people over there … network folks somewhere else … and help desk folks on the second floor. The reality is that all of those services are integrated and interrelated with one another, making the performance of one affect the performance of the others. From that standpoint, if more errors and faults are introduced, how will they affect performance? Availability and reliability are going to decrease dramatically and operations people will not meet their service level agreements.

Consequently, the help desk gets more calls and an increased staff is needed to handle the volume. The ripple then flows back to the development staff who is forced to spend more time providing second-level support and developing quick fixes. Now, all of these people are tied up in putting out fires. Capacity is down and strategic development has screeched to a halt. Money that was once dedicated to strategic initiatives is now being rededicated to keep everyday operations up and running.

There is a panacea. EPS is a tool that helps reduce the number of errors. Consequently, there might be a reduction in defects. What does that do to the organization, overall? It is going to have the reverse affect. Availability and reliability will once again increase, without nearly as much staffing for the help desk, and more people will be dedicated to creating applications that will propel the company forward – not to mention the increase in user confidence.

Consider this scenario: An organization is building confidence within its customer base because its system is reliable and maintains its predetermined quality level, while productivity increases across the board. Ultimately, these are the design goals of the IT system. Money is invested to achieve these goals – producing a risk-reward situation. With risk comes the opportunity for productivity. IT managers must capitalize on these opportunities. Using productivity software will decrease errors and faults on the operational level – thereby increasing performance, availability and reliability. Productivity solutions reduce response time. Help desks receive fewer calls, allowing for a reduction of staff. Development is overjoyed because they have been able to reduce fixes. Management can go back to concentrating on strategic initiatives. But, where the system is really making an impact is with the individual customer. They are receiving the utmost in communication and business efficiencies.

An organization builds confidence in the customer base by its ability to respond. Regular reporting capabilities at all service levels create visibility and allow for customer service improvements. The goal is to outperform the competition.

Productivity is a function of effort in and performance out. Whether it is lines of code or utilization, the fundamentals are the same. Output variation corresponds relatively to human intervention and margin of error increases with the number of staff involved. Software applications, on the other hand, are algorithmic and frequently provide a predictable level of quality (i.e., a reduction of human error).

According to the 1998 Worldwide Benchmark (Dr. Howard Rubin, META Group Fellow), 7.1 of revenues were spent on IT. Infrastructure costs represented over 37 percent of the total IT budget (Data Center/Operations – 8.5 percent, Network – 8.3 percent, Hardware – 12.2 percent, Software – 8.3 percent) while only 31 percent (maintenance, 15.4 percent, and development, 16.0 percent) was devoted to future applications development and maintenance. Reducing day-to-day operations costs provides a significant amount of money that can be redirected toward development efforts.

Productivity is an essential factor in determining the IT value proposition. Since this now centers on agility, productivity contributes to the rates at which an organization can perform. Better productivity translates directly to better value of IT to the business.

There are three concerns that are consistently on the minds of IT decision-makers: future development and strategic initiatives; budget concerns and resource limitations; and day-to-day operations. If these three concerns are viewed as being interconnected and a common dominator is found, the concern becomes productivity.

Using enterprise productivity software, day-today operations are significantly improved and problems are eliminated before they become problems. The bottom line in operations is doing more while using fewer resources and minimizing headcount, while maintaining acceptable service level agreements.

The EPS philosophy takes that need to the next level, allowing an organization to divert the resources saved in budget and labor toward completing future development. So, in effect, EPS is furthering strategic development by maximizing the amount of resources devoted to it.

About the Author: Stephen Avalone is the Director of Product Management and Marketing at Allen Systems Group (Naples, Fla.). He can be reached at steveav@asg.com.