sustain business performance transformation with it ... itsm white paper.pdf• ibm tivoli process...

July 2005

Service management solutionsWhite paper

Sustain business performance transformation with IT service management.Adopt a disciplined approach to business design to enable continuous business innovation.

http://www.ibm.com/us

Sustain business performance transformation with IT service management.2

Executive overview

Highly competitive markets make it difficult for many companies to sustain

advantages. And accelerating user demands and financial pressures create

faster business cycles and increased risks. As a result, leading businesses are

looking into business performance transformation services.

What does business performance transformation services mean? And how is it

relevant to your enterprise? When you read this white paper, you’ll learn how

an engineering-like approach to business design helps businesses enable rapid

innovation and sustain competitive advantage.

You’ll also learn about the industry and business-process expertise — as well

as the technology — that IBM offers to help clients make the most of their

investments in business performance transformation services. Case studies

provide clear examples of how companies already use IBM technology and

services to optimize key business processes.

Defining business performance transformation services

Recent changes in the architecture of computing have given rise to a new way

of conceptualizing and managing business activity. Deep insights into industry

dynamics and business models can now be combined with powerful technologies

to merge what were traditionally distinct spheres. Companies are now taking a

disciplined, structured approach to understanding their business — component

by component — and thereby enable business innovation.

Contents

2 Executive overview

2 Defining business performance

transformation services

3 IBM enables on demand business

performance transformation

4 Strategy and change consulting

services

5 Engineering and technology

6 Business transformation outsourcing

services

7 Business innovation and optimization

solutions

9 IBM IT Service Management

solutions help organizations optimize

IT processes to support business

priorities

10 IBM solutions integrate with existing

heterogeneous business management

applications

13 Innovative IBM solutions help clients

optimize business performance

13 eBay

15 NIBCO

16 Campbell Soup Company

18 For more information


This is business performance transformation services.

Across domains such as supply chain management, product life-cycle

management and engineering services, HR processes, finance and administration,

sales, customer service, research and development, and IT service management,

companies use innovative information technology solutions from IBM to

continually optimize their business processes. They deliver the integration,

responsiveness, flexibility, resilience and efficiency needed to sustain a competitive

advantage. And they measure their success based on the value of ongoing

performance improvements — not one-time savings.

IBM enables on demand business performance transformation

Because business performance transformation services involves the

combination of industry expertise, advanced business models and leading

technology, it’s not something that a company can undertake on its own.

Companies need a partner that can deliver:

• Deep expertise in the company’s industry or in the domains that it seeks to optimize.

• Technologies to model, restructure and optimize core activities.

• Economies of scale — in supporting IT infrastructure and in expertise — that elevate the

performance of the enterprise and its extended business ecosystem.


That’s why business leaders turn to IBM. By leveraging IBM’s expertise and

technologies, a company can successfully execute business performance

transformation initiatives. And by adopting the IBM vision of IT service

management — whether by outsourcing business processes, optimizing core

business processes, tightening the integration between core business processes

and IT processes, or both — companies can make their transformation goals

into realities.

IBM has identified the following four enablers that a business can leverage to

support its business performance transformation initiatives — and, ultimately,

adopt an actionable way to manage IT as a set of services in support of its

business objectives.

Strategy and change consulting services

IBM Business Consulting Services frames industry issues into client-specific

points of view. Then formulates actionable business and IT strategies to

address these issues and the client’s specific business pains. To help a client

transform business performance, IBM Business Consulting Services applies its

consultative capabilities and unique intellectual property in industry-specific

business models. IBM Business Consulting Services draws on the expertise of

IBM integrated technology services to align IT architecture solution designs to

the business requirements.


IBM helps companies align their IT projects

with industry-specific business components

HighlightsExamples of IBM strategy and change consulting services includes process

modeling and measurement, role-based dashboard development, data mining

and integration, and implementing service-level management.

As companies attempt to transform business design, they are turning to IBM

for expertise in applying the engineering and scientific method of breaking a

complex problem into modules, analyzing them individually and reassembling

them. IBM calls this component business modeling. IBM consultants use this

technique to help companies align their IT projects with industry-specific

business components, so that IT investments drive revenue growth while

helping minimize the labor expense associated with the management of IT.

Engineering and technology

IBM also offers the range of enabling technologies needed to model,

restructure and optimize business activities:

• Highly secure, scalable, open software, including:

– IBM DB2® information management software

– IBM Lotus® collaborative software

– IBM Rational® application development tools

– IBM Tivoli® infrastructure management software

– IBM WebSphere® application infrastructure and integration software

• IBM hardware, including:

– A complete range of servers, from the Intel® processor–based IBM xSeries® and UNIX®-based

IBM pSeries® servers to midrange IBM iSeries™ and mainframe IBM zSeries® servers

– The wide array of IBM TotalStorage® products

• IBM Research, including IBM On Demand Innovation Services in:

– Technical disciplines such as computer science; electrical engineering; materials science;

mathematical sciences; physics; and services sciences, management and engineering.

– Cross-disciplines such as communications technology, deep computing, display technology,

online commerce, personal systems, semiconductor technology, storage, and server and

embedded systems.


IBM Global Services — the global leader in business services — draws

on these and other resources to help enterprises implement customized

solutions. Examples include IT services such as IT service management,

security and privacy, storage optimization and Information Lifecycle

Management, and IT performance and business resiliency.

Business transformation outsourcing services

Outsourcing may or may not be part of adopting a component-based

approach to business design and optimizing core business processes. That

said, businesses frequently decide to leverage IBM business transformation

outsourcing services for business processes that are not central to driving

revenue growth and client satisfaction or are a low risk to manage

externally, such as human capital management, payroll, healthcare benefits

and so on.

Business transformation outsourcing services represents a partnership

between IBM and the client. IBM transforms and operates business

processes for the client, and commits to deliver a set of defined business

outcomes that represent substantial gains in business value — continuous

improvement and innovation that enable growth and sustained benefits.

Clients that select IBM business transformation outsourcing services have

immediate access to IBM expertise, skills, global scale and technology:

• A track record of driving sustainable results within IBM’s own organization and for top-tier clients

in a variety of industries — IBM business transformation outsourcing services currently includes

finance and administration, human resources, customer relationship management, supply chain

management, procurement, banking back office, insurance claims processing, integrated service

management and road user charging.

• Unique business insight and technical capabilities.

• Substantial investments in developing process expertise and operational infrastructure.


Together, these capabilities enable the operation and transformation of

business processes to be effective and cost efficient.

Business innovation and optimization solutions

The core of business performance is cross-organizational optimization and

innovation. When everyone throughout a business has the information they

need about how the key performance indicators in their business domains

correlate with overall business goals, then the enterprise has enabled its

employees to make insightful decisions that deliver optimal results.

“Business performance transforma-

tion outsourcing increases a company’s

business effectiveness and strengthens

its core competencies by transforming

processes and, where it makes

sense, having a partner manage

and operate them.”

—Sam Palmisano, Chairman, IBM Corporation, address to investment analysts, May 19, 2004

This sample IBM business transformation outsourcing services framework was created for managing HR processes.

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Business innovation and optimization solutions from IBM combine leading

software, industry expertise and best practices to provide a platform that

helps clients enable continuous business improvement. The power of the IBM

platform lies in the benefits of a number of key activities and in the additional

benefits of performing the activities in combination:

In aggregate, these activities enable continuous improvement and innovation—

creating the opportunity for a business to see and understand what truly

impacts its success and, ultimately, grow the business.

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Activities required for continuous business innovation and optimization.


IBM IT Service Management solutions help organizations optimize IT processes to

support business priorities

A crucial part of business performance transformation initiatives is to

understand IT processes and performance in terms of business processes and

performance. IBM IT Service Management solutions enable clients to leverage

innovative technologies to:

• Manage IT as a business.

• Automate and integrate both IT and business processes.

• Proactively optimize IT services.

• Integrate and share information across the enterprise and throughout its business ecosystem.

At the heart of IBM’s vision for IT service management are key technologies

that help organizations optimize IT processes in support of their business

priorities:

• IBM Tivoli Process Managers — outline ways to create IT processes that are repeatable,

measurable and efficient. These predefined, customizable automation packages help companies

integrate people, resources and information.

• IBM Tivoli Change and Configuration Management Database — delivers a federated view of an

enterprise’s IT data about hardware and software, and the relationships between them. It integrates

IT service functions into a unified, automated infrastructure management platform to provide a

consolidated view of information between disparate IT environments.

• A suite of end-to-end IT infrastructure management products — enable clients to model, deploy,

monitor, analyze and act — to ultimately deliver innovative, differentiated solutions for the business.

• IBM best practices and IBM Global Services consultants with IT service management expertise —

help clients apply the above technologies in their businesses.

Understanding IT processes and performance

in terms of business processes and

performance is a crucial part of business

performance transformation initiatives

Highlights

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IBM solutions integrate with existing heterogeneous business management applications

Companies frequently manage one or many core and noncore business

processes with heterogeneous blends of technologies and off-the-shelf

products they use to build custom business applications. Examples include:

• SAP R/3 for ERP and a mySAP Business Suite application for supply chain management.

• Siebel for customer relationship management.

• Dassault CATIA and ENOVIA for product life-cycle management engineering and design.

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IBM IT Service Management software supports every phase of the IT process life cycle.


IBM solutions integrate with heterogeneous

environments from global independent software

vendors to help clients optimize existing

business processes

Highlights

To help clients optimize existing business processes, IBM solutions integrate

with heterogeneous environments that incorporate applications from global

independent software vendors such as these. Using innovative technology

from IBM, companies can transform their business processes to enable

growth. Because all of these core business process applications depend heavily

on IT resources — such as servers, network switches, routers and firewalls,

storage and more — IBM can deliver incremental value by helping clients

align their IT investments with business priorities.

The open-standard Business Process Execution Language (BPEL) provides

the key linkage between IT and business that facilitates this integration.

IBM technologies support BPEL to help enterprises visualize existing

business processes, identify components that support the processes,

correlate data across the enterprise to measure how resource outages impact

the business and optimize business decision making.

For example, IBM WebSphere Business Integration Modeler draws on BPEL

extracts of business models from the mySAP business process platform

and NetWeaver environment to create a visual model of an enterprise’s

business processes and make that model available to other business and IT

management applications.

IBM Tivoli Business Systems Manager can transform the BPEL code into

XML and help the enterprise visualize IT resources in the context of business

processes. The software correlates enterprise-wide IT-level data — from IBM


Tivoli Enterprise Console® and other IBM and leading non-IBM tools — to

help a business:

• Analyze the performance of both the overall business process and of the individual

components that support it.

• Track dependencies between business processes.

• Identify the business impact of an IT outage.

• Drill down to the offending resource, rapidly identify the root cause and route the problem to

the appropriate owner — with contextual information intact — when problems do occur.

By minimizing the time required to identify the root cause of a problem that

impacts the execution of a revenue-generating business process, a company

can also minimize both the cost of fixing the problem and the revenue lost

to downtime.

The performance data from Tivoli Business Systems Manager can be made

even more valuable when leveraged proactively with a leading business

intelligence tool such as IBM DB2 Alphablox to facilitate intelligent business

decisions. Fine-tuning the business model in WebSphere Business Integration

Modeler, for example, creates a closed loop that drives ongoing enhancement

of business performance. In other words, IBM software helps businesses link

strategic intent to business results.

IBM software helps businesses link strategic

intent to business results

Highlights


For more detailed information about a specific example of using the business

process choreographer that is part of WebSphere Business Integration

Modeler to integrate business processes, read the IBM Redbook Using BPEL Processes in WebSphere Business Integration Server Foundation Business Process Integration and Supply Chain Solutions.*

Innovative IBM solutions help clients optimize business performance

A wide variety of client experiences demonstrate how IBM services and

solutions facilitate industry-specific, component-based approaches to business

design. The following examples demonstrate the real business value that

companies are already gaining by partnering with IBM for their investments

in business performance transformation services.

eBay

With more than 100 million registered users, more than US$20 billion in

goods and services changing hands, and more than 400,000 small business

storefronts all on its online marketplace, eBay is a prime example of a

company that must dynamically adjust its services to support rapidly changing

demand. But to maximize the consistency, reliability and availability of the

eBay Web site, the company needed to automate and streamline its service

management and delivery processes.

http://publib-b.boulder.ibm.com/abstracts/sg246324.html




Thanks to IBM services and Tivoli best practices, eBay implemented an

integrated business innovation and optimization solution in under six months.

By automating processes with IBM technology, the company can focus on

its core business: delivering new features and functionality to users while

ensuring the reliability of its service.

eBay uses Tivoli software to automate monitoring of the operating

environment, and predict and rapidly respond to service issues before they

impact performance. Even as growth and user traffic continue to escalate,

the company can maximize the availability and performance of its services.

For example, Tivoli Configuration Manager software has helped reduce

application downtime, cutting the time it takes to remove and reactivate

a system from 20 minutes to just 4 minutes. Deployment of new antivirus

software updates to more than 2,800 services takes less than 30 minutes.

According to Mark Hydar, Manager of Enterprise Management Systems for

eBay, Tivoli software is also crucial in helping the company cost-effectively

maintain high service levels — despite the fact that the number of systems

under management more than doubled in one year. “Our environment is

constantly changing. New systems are put into service on a regular basis.

With Tivoli software, we have maximized our availability and productivity

levels with minimal interruptions,” says Hydar.

Furthermore, eBay leverages WebSphere technology and xSeries servers to

rapidly and reliably deliver new features and functionality to users. When the

company activated its next-generation search engine — which needed to be

deployed across more than 70 systems — it took less than 10 minutes.

“The IBM on demand automation blue-

print will help us move to full-auto and

gain new levels of resiliency, efficiency,

responsiveness and flexibility.”

— Mark Hydar, Manager, Enterprise Management Systems, eBay


“One of the primary reasons for picking

the SAP and IBM solution was that

we are a mid-size company that needs

world-class performance.”

—Gary Wilson, Chief Information Officer, NIBCO

IBM Software Services for WebSphere supported the implementation of these

IBM solutions. “We received help from every corner of IBM,” explains Hydar.

“IBM is responsive to our needs and provides us with the support we need

to be successful.”

NIBCO

NIBCO, an internationally recognized leader of flow control products, faced a

problem familiar to many large enterprises: multiple business units with their

own computing systems and islands of information that were difficult to integrate.

The company elected to start over with a leading enterprise resource

planning (ERP) system and chose SAP solutions on an IBM infrastructure.

The centralized system has generated multiple benefits for NIBCO and

its customers:

• Faster customer order response times — reduced from three days to ten hours, with on-time

deliveries now at 99 percent.

• Improved information availability — reduced stock-outs from 11 percent to 2 percent.

• Lower costs — inventory savings of more than US$50 million.

Furthermore, IBM Business Consulting Services pinpointed a cost-effective

way for NIBCO to leverage its previous investment in SAP Business

Information Warehouse to optimize inventory planning. The company’s

inventory reporting and planning processes were labor-intensive, and its

efforts to reduce inventory levels had reached a plateau. IBM researchers

delivered customized inventory optimization algorithms that NIBCO deployed

to streamline inventory management and reduce inventory levels. NIBCO


realized an additional US$400,000 in inventory asset savings within three

months of implementation and projects enterprise-wide savings from

decreasing inventory levels of 12.8 percent within one to three years.

NIBCO also uses the combination of IBM and SAP technologies to handle

the dramatic growth in its data storage needs. With SAP applications and

IBM TotalStorage Enterprise Storage Server 800 fully integrated with

Tivoli Content Manager and Tivoli Storage Manager, the company manages

product data — including the storage of CAD engineering files, which can be

very large. The solution is also highly scalable — the company currently uses

only a fraction of the 27.9TB that can be installed in its IBM TotalStorage

Enterprise Storage Server 800.

Gary Wilson, Chief Information Officer of NIBCO, says, “We now have a

very homogeneous technology platform based on leveraging the IBM and

SAP skill sets. The IBM hardware offers high performance at low cost, and

that runs well from a NIBCO point of view. These two primary solution

providers contribute significantly to our business results. IBM has a strong

SAP practice, and helps us leverage the SAP application as much as they

can, which is good for us and good for our customers.”

Campbell Soup Company

The global manufacturer and marketer of more than 20 market-leading

brands also faced disjointed IT infrastructure and business processes among

individual businesses that evolved separately over time. At Campbell, the

disconnected processes created internal inefficiencies and redundancies,

led to ill-timed product promotions, delayed product availability, frustrated

collaboration across the company and with partners, and stood in the way of

enhancing the company’s overall culture of knowledge management.


“Only by becoming a more on demand

company could we focus on our core

differentiating capabilities. And that

meant building a new IT foundation that

enables each department to operate with

clarity and decisiveness.”

—Doreen Wright, Chief Information Officer, Campbell Soup Company

To create a more agile, responsive enterprise based on a business-oriented

IT infrastructure, Campbell chose to build a robust, scalable IT foundation;

transform and streamline employee-facing processes; and optimize market-

facing processes in the future.

The company worked with IBM Business Consulting Services to define and

implement a standards-based IBM On Demand Workplace environment as

a foundation for electronic work environments. IBM also helped Campbell

build role-based electronic work environments, as well as implement

new enterprise applications that employees access through the custom

work environments.

The integrated architecture and role-based work environments enable

Campbell to:

• Quickly implement portals that facilitate collaboration across and beyond the company.

• Help maximize employee productivity by providing employees with access to real-time information

and helping them work smarter.

• Drive responsiveness to employees, customers and suppliers while optimizing competitive positioning.

• Help maximize business agility by quickly implementing and changing applications and processes

in response to market drivers.

Campbell’s industry standards–based, global architecture extends the value

of the company’s existing IT investments to help the company minimize

implementation risks and costs. The company was also able to address its

budgetary realities when IBM wrapped its software and services together in

a three-year IBM Global Financing package. In the end, Campbell could

afford to implement a new system that helped it synergize its IT and business

organization goals and processes.


For more information

To help your enterprise adopt a disciplined, component-based approach to

business design, turn to a partner with the expertise and technologies you need

to succeed with business performance transformation services. Turn to IBM.

To learn more about IBM solutions for IT service management and for

business innovation and optimization — including Tivoli software — contact

your IBM representative or IBM Business Partner, or visit any of the following

Web sites for additional information:

IBM Business Consulting Services:

• ibm.com/services/us/index.wss/gen_bus_cons

• ibm.com/services/us/bcs/html/bcs_strategyplanning.html

• ibm.com/services/us/bcs/html/bcs_casestudies.html

Engineering and technology:

• IBM Systems Group: ibm.com/products/

• IBM Software Group: ibm.com/software/

– IBM Tivoli software: ibm.com/tivoli

– IBM IT Service Management: ibm.com/tivoli/features/it-serv-mgmt

• IBM Research: research.ibm.com

http://www.ibm.com/services/us/index.wss/gen_bus_cons

http://www.ibm.com/services/us/bcs/html/bcs_strategyplanning.html

http://www.ibm.com/services/us/bcs/html/bcs_casestudies.html

http://www.ibm.com/products/

http://www.ibm.com/software/

http://www.ibm.com/tivoli

http://www.ibm.com/tivoli/features/it-serv-mgmt

http://www.research.ibm.com


IBM Global Services IT services:

• ibm.com/services/us/index.wss/bus_serv_services/bcs/a1005270

• ibm.com/services/us/index.wss/allservices

Business transformation outsourcing services:

• ibm.com/services/us/index.wss/bus_serv/bcs/a1005264

• ibm.com/services/us/index.wss/detail/bcs/a1001537

Business innovation and optimization services:

• ibm.com/software/info/topic/perform/

Case studies:

• eBay: ibm.com/software/success/cssdb.nsf/CS/SCHS-5ZXVGK

• NIBCO: ibm.com/software/success/cssdb.nsf/CS/MFRH-5TLLPJ

• Campbell Soup Company: ibm.com/software/success/cssdb.nsf/CS/JSTS-67SSR5

http://www.ibm.com/services/us/index.wss/bus_serv_services/bcs/a1005270

http://www.ibm.com/services/us/index.wss/allservices

http://www.ibm.com/services/us/index.wss/bus_serv/bcs/a1005264

http://www.ibm.com/services/us/index.wss/detail/bcs/a1001537

http://www.ibm.com/software/info/topic/perform/

http://www.ibm.com/software/success/cssdb.nsf/CS/SCHS-5ZXVGK

http://www.ibm.com/software/success/cssdb.nsf/CS/MFRH-5TLLPJ

http://www.ibm.com/software/success/cssdb.nsf/CS/MFRH-5TLLPJ

© Copyright IBM Corporation 2005 IBM Corporation Software Group Route 100 Somers, NY 10589 U.S.A.

Produced in the United States of America 07-05 All Rights Reserved

DB2, IBM, the IBM logo, iSeries, Lotus, the On Demand Business logo, pSeries, Rational, Tivoli, Tivoli Enterprise Console, TotalStorage, WebSphere, xSeries and zSeries are trademarks of International Business Machines Corporation in the United States, other countries or both.

Intel is a trademark of Intel Corporation in the United States, other countries or both.

UNIX is a registered trademark of The Open Group in the United States and other countries.

Other company, product and service names may be trademarks or service marks of others.

*Available at publib-b.boulder.ibm.com/abstracts/sg246324.html

G507-1131-00

http://www.ibm.com/us

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