Toward the Elastic Enterprise: Enabling True IT-Business Alignment

RFG believes the ultimate goal of initiatives such as "utility" or "on-demand" computing and IT-business alignment is creation of the "elastic enterprise." Such an enterprise is based on an integrated IT-business infrastructure able to bend, contract, and expand without breaking, in timely, agile response to changing business conditions. IT executives should begin moving toward this ideal by working with their line of business (LOB) counterparts and other "C-level" executives to identify and prioritize key business services, and their interdependencies with underlying technological elements. IT executives should then focus on selecting, then deploying and integrating, management solutions that enable and support the availability, elasticity, flexibility, measurability, and service levels required for business success.

Business Imperatives:

  • To build an elastic enterprise, IT executives and their teams must collectively manage and abstract IT infrastructure elements, while enabling business services to be defined, exposed, and manipulated. IT executives should contribute to this latter process by helping to create and maintain business service profiles (BSPs), repositories of information regarding specific business services and relevant interdependent IT elements and services. IT executives should also ensure that creation and maintenance of BSPs, as well as business application profiles (BAPs) and user application profiles (UAPs), incorporate and reflect input and feedback from non-IT constituents across the enterprise.
  • The elastic enterprise, like related IT initiatives and goals from cost reduction and server consolidation to utility or on-demand computing and IT-business alignment, requires comprehensive, business-centric management of IT infrastructures. Achievement and maintenance of comprehensive IT infrastructure management is essential to maximize the business value of all enterprise IT initiatives. IT executives should therefore look to establish policies and practices that enable the most effective possible IT infrastructure management, and the evaluation and integration of promising new solutions as they appear.
  • While IT and non-IT executives at many organizations share the desire to build effectively elastic enterprises, many IT executives also face considerable pressure to deliver measurable ROI and business benefits, frequently on a quarter-by-quarter basis. IT executives should establish and enforce policies for vendor and solution evaluation and selection that weigh these complementary goals appropriately for their enterprises' specific needs and constraints. IT executives should also implement metrics that can demonstrate short- and long-term ROI, return on value (ROV), and business benefits that are easily understood by C-level executives, LOB managers, and other stakeholders.

RFG believes the term "elastic enterprise" succinctly describes what almost every enterprise of every type desires to be. In short, that goal is to be sufficiently flexible to respond rapidly and gracefully to fluid business conditions and constraints, without irreparable damage to the business. Another goal of the truly elastic enterprise is to derive maximum business benefit from every IT investment, no matter how large or how small. An elastic enterprise is a cost-conscious, cost-effective user of IT, focused on high levels of ROI and ROV.

The concept of the elastic enterprise builds upon and extends beyond those underlying utility-like, services-based IT management and the bi-directional IT-business alignment discussed in previous RFG research.

Comprehensive, Business-Centric IT Infrastructure Management: A Core Requirement

The evolution of IT-business alignment and business-centric, services-based computing into the elastic enterprise involves some significant prerequisites. Specific prerequisites, as well as their order of importance, will likely vary from enterprise to enterprise, and within individual enterprises over time.

However, there is one prerequisite that will serve IT executives and their enterprises whether those enterprises seek to become effectively elastic or not. That is comprehensive, business-centric management of the enterprise's IT infrastructure. As an enterprise increasingly relies on IT to conduct business, comprehensive, business-centric IT infrastructure management is increasingly essential to effective integration of disparate business elements and processes.

Business-centric management shifts focus away from specific vendor solutions, and onto what the enterprise needs and wants. Business-centric IT infrastructure management is also essential to the maximum effectiveness of customer-centric initiatives, such as customer relationship management (CRM). Such management includes, but is not limited to, the characteristics and features listed below.

Business-Centricity infrastructure management information must be as explicitly linked and related to each enterprise's particular overall and LOB-specific business goals, metrics, and requirements as possible.

Comprehension infrastructure management information must be provided in forms that are easily understood and acted upon by those receiving the information, be they executives, LOB managers, or technical staff.

Integration disparate management tools must interoperate at meaningfully high levels, and feed into central "dashboards" or similar consolidation points, to give the enterprise a true 360-degree view and command of the infrastructure. (This is especially true and challenging in environments where solution "islands" have been implemented separately and/or before integration was made a priority.)

Pervasiveness no element of the business, nor any IT resources, can be excluded.

Scalability like the IT infrastructure itself, infrastructure management must be scalable, in capacity reach and range, and in its ability to gracefully accept new technologies as they are introduced to the enterprise.

Comprehensive IT infrastructure management must go far beyond identifying and cataloging IT infrastructure elements and whether or not they are functioning. Comprehensive IT infrastructure management should also help IT and non-IT executives immediately and clearly grasp the interdependencies of various IT infrastructure elements with enterprise applications, and the users and business processes supported by those applications.

Identifying and Profiling Core Business Services

Beyond comprehensive IT infrastructure management, IT executives must participate in and encourage identification, formal definition, and prioritization of key business processes, and the IT infrastructure elements and applications that support them. At many enterprises, the most effective process for doing this has been to "follow the money."

Specifically, IT and non-IT executives at more elastic enterprises have begun by looking at all the things that generate revenue for the enterprise, and ranking these based on the revenue levels they produce. Thus, for example, a provider of diverse financial services may discover that monitoring automated teller machines (ATMs) and fixing broken ones quickly may be a less important service to the enterprise than wealth management for its most affluent customers. The technological infrastructure elements that support the latter would then be given higher priorities than those supporting the former, enabling more efficient and business-centric deployment of IT support resources. (Even greater elasticity would enable the same enterprise to identify their most heavily used ATMs, and assign greater importance to the maintenance of those high-use machines.)

At some enterprises, the priorities unearthed by this approach may differ from those previously determined by IT executives and their teams. IT executives should strive to rationalize any differences wherever possible, and to ensure support of the resulting, common agenda from LOB counterparts and C-level executives. The level of elasticity possible at any enterprise is largely determined by the ability of IT, LOB, and other senior non-IT executives to agree on a vision, goals, strategies, and tactics.

Another approach to identifying core business processes involves determining where the greatest and least demands are currently placed on both business and IT resources, and the relative business value of those "peaks and valleys." True elasticity involves making the most of all available resources doing the most with the least. IT executives should therefore explore working with LOB counterparts and other C-level executives to determine where the biggest "points of pain" are now, and the resource shifts most likely to alleviate these. This information can be distilled into specific business services, which can then be linked to specific applications and IT infrastructure elements via BSPs.

As business services are identified and prioritized, IT executive should work closely with LOB managers and other senior non-IT executives, to define processes for recognizing and integrating new business processes as they arise. IT executives should also foster creation and management of BSPs, in close coordination with the building and maintenance of BAPs and UAPs.

BSPs should include detailed information about the applications and infrastructure elements supporting each core process, and interdependencies with other business processes. Some enterprises create and maintain "service catalogues" containing similar information. IT executives should also ensure that the BSP definition and maintenance processes are themselves reviewed and refined frequently, to develop and maintain optimum elasticity of both business processes and supporting IT infrastructures. BSP creation and management should also be integrated closely with any business logic modeling or business process management (BPM) initiatives under way or being considered.

Evaluating and Choosing Vendors and Solutions

Comprehensive, business-centric IT infrastructure management and high-level IT-business alignment are goals fairly well understood by many IT management solution vendors, both established and emerging. However, each takes a different approach to the challenge, and each addresses different factors affecting it in different ways. Also, each vendor has its particular combination of strengths and weaknesses.

IT executives should assess both incumbent and candidate solutions closely and frequently, to ensure those solutions in place at their enterprises deliver the knowledge and management needed to achieve maximum cost reduction and IT-business alignment. This will serve those enterprises well, whether or not they plan to eventually strive to become truly elastic.

When selecting solutions for effective IT infrastructure management, IT executives should eschew IT-business management solutions that require dependence on extensive, vendor-defined "frameworks" and/or prohibitive investments in and reliance upon vendor-provided professional services. Instead, IT executives should focus on solutions that are modular, interoperable with other vendors' solutions, and compliant with relevant standards. IT executives should then deploy vendors' professional services selectively, and at little to no cost to their enterprises wherever possible.

Perhaps most important when dealing with younger and/or smaller companies, IT executives should protect their companies via contractual relationships that include clearly defined "out" clauses, and migration or escrow strategies. IT executives should also establish policies that enable and encourage frequent review of available alternatives and evaluation of vendor health. This will help enterprises identify both promising emerging solutions and those in danger of losing viability as early as possible.

Comprehensive IT infrastructure management, identification of core business processes, and discovery and monitoring of those processes' interdependencies with one another and with IT infrastructures, enable creation of truly elastic enterprises. Such steps can also enable greater success with initiatives that may be less potentially pervasive, but no less important to the enterprise's business goals. In addition, such an approach can give IT executives and their teams greater ability to focus on initiatives that deliver short-term return while moving towards greater enterprise elasticity. This is an important balancing act to get right, given the sometimes apparently contradictory pressures on IT to demonstrate both immediate ROI and long-term strategic vision.

The definition of "elastic enterprise" will vary from company to company, but should always be driven by each company's specific business goals, and not by the characteristics of any vendor's particular solution or framework. IT executives should strive to help maintain this primary focus on the goals of their respective enterprises, especially in defense against attempts by vendors to sell "around" IT directly to CEOs, CFOs, or other senior corporate executives. IT executives should also strive to ensure that their enterprises give preference to vendors who promise and demonstrate the ability to tailor their solutions to enterprise business needs.

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