© 1999, chuck ehrlich all rights reserved1 e-business systems planning chuck ehrlich...

© 1999, Chuck Ehrlich all rights reserved

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E-Business Systems Planning

Chuck [email protected] 415-441-7140


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E-Business Systems Planning

Systems Planning process How to, relationship to business plans

Systems Strategy issuesOutsourcing options


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Systems Planning

E-businesses are systems businessesSystems are key elements of

Competitive advantage Technical Feasibility Strategic Direction Schedules Cost


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Systems influence Plans

Schedule for launchCost to buildOperating costs Staffing requirements


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Systems Planning Process

Business Concept

Process Model

Application Architecture

Systems Architecture

Capacity Planning Model

Implementation Plan


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Systems Planning

Level of detail and formality varies: Napkin Flip Chart Specification documents CASE tools

Process is iterative and subject to change


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Systems Bus Planning

Process Model operations plan

Application Architecture and Systems Architecture design plans

Capacity Planning Model operating costs

Implementation Plan development costs and schedule


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Business Concept

Your idea for the business, all of its flows

Your Business

Inflows

Outflows

Interactions


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Process Model

‘Operationalize’ the business concept

Information flowsBusiness process definitions

(manual and automated)Who does what to whom and what

do they need?


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Process Modeling tools

Analogies to excellent businessesFlow charts and process diagrams

Visio, Process Charter, Case toolsProcess descriptionsData Dictionary

Define what information is required Analysis Data Dictionary case tools


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Application Architecture

Defines Applications Maps Business Processes to

ApplicationsDefines information flows between

applications


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Application checklist

Make sure you include:Customer billingFinancial and tax accounting Sales, Customer Relationship Management,

Customer ServiceSupply chain managementManaging and accounting for alliancesMarketing management and reporting (DW)


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Applications Architecture tools

DiagramsDescriptionsData Dictionary


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Systems Architecture

Defines specific systems and packages

Maps Application Architecture to implementation environment

Reuse is essential, don’t build things that you can outsource or buy


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Systems Architecture tools

DiagramsDescriptionsData Dictionary


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Capacity Planning Model

Predict resources requirements for different levels of activity

Tool for: Estimating costs Evaluating trade-offs Predicting and avoiding problems


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Capacity Planning items

Number of users, transactions/time period Peak hour, day, month, etc.

Page views and bandwidth required Other interface activity levels Database access, update ratesDatabase and file sizes


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Capacity Planning example

Average 1,000 users per dayAverage 100 pages/user =

100,000/day30% returning customers= 300

lookups10% new registrations= 100

creates/dayPeak period is 20% of daily volume


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Capacity Planning tips

Integrate capacity and business models Like sales models, for consistency

Document your assumptions clearly Assumptions are a key part of the process

Test your assumptions as early as you can And update the model based on reality


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Capacity Planning tools

Excel and similar programsSpecialized system modeling toolsStatistical analysis toolsSimulation programs


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Implementation Plan

DeliverablesTasks definitionsSchedules and MilestonesResource requirementsCosts


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Implementation Planning process

Plan backwards: Define you deliverables (systems,

applications, facilities, etc.) Identify what has to be done to create

them (development lifecycle, build, test train, etc.)

Schedule based on tasks and resources (critical path method)

Build cost and cash flow models


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Implementation Planning tools

Excel and similar programsProject Management software

Microsoft Project Primavera, etc.


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Getting the numbers

Estimating cost and schedule is hard Look for comparable projects/companies Look for relevant experience in

consultants, employees, vendorsVendors may be ‘optimistic’

Talk to other customers directly


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Systems strategy

Think big, scalable systems, applications you won’t outgrow

Think fast, time-to-marketThink continuously, 24x7Think globally, no boundaries on the

NetFocus, outsource everything that is

not your core business


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The -ility definitions

Scalability: can increase system capacity

Reliability: works without dropping, mangling, or duplicating transactions

Availability: percentage of time the system can be used

Related and not free


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Scalable

Mainframe approach: get a bigger boxInternet approach: add more serversRequires load balancing tools to

distribute traffic over multiple servers or locations Ex: Cisco Distributed Request Protocol

(DRP) Agent, Local Director, Distributed Director


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Reliable

Protect data against loss Backups, multiple media, etc.

Maintain transaction integrity Locking, journaling, transaction roll-back

Database systems provide data protection Oracle and other relational databases


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Available

Design to minimize the effect of failures Monitor to detect problems quickly

Network and system monitoring systemsRecover to minimize the impact of

failures Redundant equipment Backup systems Automatic restart


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Outsourcing options

HostingCollocationASPBSPCSP


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Hosting provides

Servers and software Dedicated servers for large users

Massive (shared) Internet connectivityComputer room facilities

Security, air conditioning, fire suppression, backup power, etc.

24x7 Systems monitoring and supportOther resources and services (varies)


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Reasons for hosting

Access to skills and systems expertise Network connectivity: OC-48 linksSpeed of deployment

faster than getting lines and building centers

Cost savings In-house $1.5m first year vs. $4,000/mo

24/7 operation


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Hosting’s downside

Growing pains and resource shortages From $400m in 97 to $900m in 98 Hosters learn as they go

Confusing products and specialties Web of partnerships Changing strategies


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Successful hosting tips

Define requirements before you start And match vendors to needs

Shortlist vendors meeting requirements

Do your homework Site visits, detailed plans, service level

agreements, etc.Manage the relationship(s)

And monitor the systems externally


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Hosting checklist

Data Centers: Security, power, fire suppression, etc.

Network Redundancy, capacityOperations

Monitoring, 24x7 technical support, load balancing, backups, auditing, etc.

Customer Service Technical support team, Service Level

Agreements, Web based reporting


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Collocation services

Variation on hosting that provides space and connectivity, not hardware Secure rack space or vaults

Client retains control over hardware, software, data, etc.

Other services optional Installation, systems monitoring,

security, etc.


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The new A B C’s

ASP application service provider $2b in 03 License, maintain and rent software for

a range of clientsBSP business service provider

Offer a suite of services for an industryCSP computer service provider

Server farms for ASP, BSP, e-business


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ASP example: Corio

Rents Peoplesoft software Servers at Exodus Monthly charges

$10 for self-service user$795 for an active (daily) user

Promises 30% cost savings over five years

Siebel Sales Force Automation and Customer Service also available


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Some ASPs

Qwest/KPMG w/SAP, SiebelEDS w/SAPOracle w/OracleUSinterworking w/Broadvision,

Microsoft, Peoplesoft, Sagent Technology, Siebel

US Web/CKS w/Microsoft


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BSP example: Tibersoft

Food-distribution industry system Connects vendors, distributors,

restaurantsSysco uses Tibersoft with 300,000

customers Order supplies, schedule delivery, track

orders


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Some BSPs

Bidcom.com constructionE-steel marketplace for steelMail.com e-mailMarket-Touch.com sales fulfillment Sales.com w/SiebelWorks.com office product purchases


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CSP example: Exodus

Santa Clara: Clients: Lycos, Hotmail, Microsoft, etc. Broadband connections to six carriers 2,500 servers 55,000 square foot data center

Growing 40%/quarter, 2 customers/day from 12 to 21 data centers this year


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Some CSPs

Above.netDigexExodusFrontier Global CenterGTEQwestUUNet


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Recent entrants

Banks—mix of ASP and CSP Bank of America Wells Fargo & First Data Corp.

Intel Online Services CSP 10,000 servers racked and ready Pentium III and Sun


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Future directions

Large companies can’t afford not to hostIntegrators and ASPs focus on services

And work with any data centerCarrier’s networks give them advantages

Lower costs, better access to bandwidthLess collocation, more higher valued

services


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For more information

How It Works, Jeffrey Davis, Business 2.0, February 2000, pages 112-140.

Users’ Guide to Hosting, Forrester Research, July 1999 www.forrester.com

Buying Web Services, J. P. Frenza, Wiley, 1999

http://www.forrester.com/

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