To prosper, stay ahead of change

Business Times - 25 Jun 2009

What is needed today is an infrastructure that supports the convergence of business and IT needs and assets

By CHEAH SAW PHENG

WE have long known that organisations are living systems - made up of smaller components and systems. As the planet becomes a smarter planet - and more human beings, man-made systems and natural systems become interconnected, instrumented and intelligent - we begin to achieve unprecedented freedom to build, assemble, reassemble, loosely couple and link resources in the organisation.

Organisations that are prospering most are those that are dynamic and resilient enough to stay ahead of the change required of them.

And it's not just about pervasive connectivity. For the first time, massively powerful computers can be applied affordably to processing, modelling, forecasting and analysing just about any workload or task. New approaches to service delivery are taking hold, such as cloud computing models - creating a new kind of user experience - particularly in the consumer Web space - in search, social networking, retail and productivity applications.

From the user perspective, cloud computing holds promise for organisations to acquire services without needing to understand the underlying technology. Utility wires, automobiles and packaged goods are becoming increasingly 'instrumented' with sensors, transistors or RFID tags.

We are all now 'interconnected' no matter where we are thanks to the Internet. And becoming ever more 'intelligent' thanks to advanced software that communicates with vast supercomputing data centres.

Major shift underway

A whole host of rapidly accelerating changes are unfolding: mergers of 100-year-old companies, creation of new industries and the demise of others, the emergence of new economies, the opening of long-isolated markets, the imposition of new government regulations and the relaxation of others, and so on.

Today, the PC model of the 1980s and the highly distributed model of the 1990s must be replaced by a new, more integrated paradigm, based on openness, networks, powerful new technology and the integration of digital intelligence into the fabric of everyday work and life.

Take a look at The Fullerton Hotel in Singapore, a six-star luxury hotel with 400 rooms and suites carefully designed to provide both business and leisure travellers with a sanctuary of serenity and comfort in which to retreat and rejuvenate.

To take its guest service and operation capabilities to new heights, the Fullerton replaced its ageing computing infrastructure with a more robust, highly scalable, reliable and energy-efficient infrastructure to support its new business intelligence, human resources and inventory management applications.

Its goal was to leverage leading-edge technology that will enable its staff to enhance efficiency and better service to its guests, while having a positive effect on the environment and running a more cost-effective operation.

The result? The new infrastructure has reduced the hotel's data centre server footprint by 75 per cent, helping to save on facilities space and cabling. With fewer systems to manage and update, the hotel's system management is streamlined and there are savings on labour costs.

Adding to that, the drop of at least 30 per cent in the power and cooling costs of its data centres is helping the hotel make its mark in going green and caring for the environment.

The change gap

Recent surveys indicate that 98 per cent of CEOs plan business model changes and 83 per cent expect substantial or very substantial change. But the gap between those who expect change and those who believe they can handle it has tripled in the past two years.

For instance, take the utility industry. Who wouldn't want to better manage demand with available capacity rather than build expensive new power plants. Or if you actually knew what consumer demand was, automatically reroute power rather than overload the grid and end up with another power outage.

So what's holding them back? To do that, they'd have to take their IT assets out of their silos. And take their business or 'operational' assets - that network of power plants and distribution systems - out of their silos.

And integrate them into a 'smarter grid' which would allow them to manage all those transformers and breakers, and even the smart meters and thermostats in our homes and harvest all that intelligence from their IT systems.

In the food industry, consumer pressure and government regulations now mandate that food producers ensure the safety of the food supply across the supply chain. Yet headlines about salmonella and E coli outbreaks are way too frequent.

So what's holding back the food industry? The way the food companies monitor and control the temperature of their perishable goods is not working. They don't have an infrastructure in place that connects the farm, to the truck, to the supermarket shelves.

So whether it is food or utilities - while they are totally different industries, they all share something in common.

What's holding them back? What we call a 'change gap'. Their business or 'operations' and IT assets are highly fragmented and highly distributed, thereby creating an environment that has business and IT operations working in silos. There is a large gap between our progress digitising and instrumenting critical applications and processes and the rigidity of the underlying infrastructure.

Infrastructure needs

What is needed today in this digitally connected world is an infrastructure that supports the convergence of business and IT needs and assets, creating integrated 'smart' assets that will enable organisations to reduce costs, manage risk and improve service while reducing costs.

The key requirements that such an infrastructure has to address include the integration of digital and physical infrastructure, the need to manage, store and analyse a massive amount data and reduce massive inefficiencies of energy, data centres and server utilisation.

The underlying technical capabilities that allow the development of such a converged, dynamic and smart infrastructure include:

• Virtualisation - Breaking out of the barriers of physical devices in a data centre, servers, storage, networks, data and applications giving businesses improved total cost of ownership, resiliency and flexibility
• Energy efficiency - Optimising the energy efficiency of the IT infrastructure to reduce costs, resolve space, power and cooling constraints
• Service management - Integrated visibility, control and automation across all of the business and IT infrastructure components that support differentiated service delivery and accelerated business growth
• Asset management - Enhanced asset reliability, availability and uptime that underpin quality delivery of service according the priorities of the business while also maximising return on lifetime asset investment along with inventory optimisation, labour efficiency, and mitigating the risk of equipment failures that jeopardise the environment and the health and safety of people.
• Security - Adopt a new approach to managing risk and security across organisations, processes, and information as the IT and business infrastructure become more interconnected
• Business resiliency - Build in capabilities to rapidly adapt and respond to risks, as well as opportunities, in order to maintain continuous business operations, reduce operational costs, and enable growth in an increasingly connected world
• Information infrastructure - Supported by a resilient infrastructure for securely storing and managing information and mitigating business risks.

These are unique and challenging times. But times of challenge also bring with them great possibilities. Smart systems are transforming energy grids, traffic systems and supply chains. They are ensuring the security of financial transactions and the safety of our food supply.

They are changing our business models and how we work together. Rising cost pressures, higher service expectations, new risks and threats and emerging smarter and more adaptive technologies, such as cloud computing, virtualisation and Web 2.0 are some of the driving forces that are further accelerating the need for this change. In fact, in this globally integrated economy, a converged, dynamic infrastructure that enables a business access and extracts value from all types of assets, whether it's physical, digital, or virtual, is becoming the basis of competitive advantage.

The author is general manager, Systems & Technology Group, IBM Singapore