Achieving IT operational excellence has been the goal of corporations all over the world. The global economy has required all companies to look hard at how IT manages their finances, customer expectations and services to enable them to use IT as a key business differentiator.
Hewlett-Packard has been transforming its own IT systems, organization and operating model to achieve these very same goals. Like many of our customers, we have to accomplish this with significantly fewer dollars. To achieve this transformation in operational effectiveness, HP is implementing change in three key areas using new methods and technologies:
> Employee Utilization: IDC has stated that the average IT organization is currently utilizing 90% of its IT resources on maintenance-related activities, leaving only 10% available for innovation. HP has set a goal to reduce our maintenance-to-innovation ratio to 20% of our IT resources on maintenance and 80% on innovation. We plan to accomplish this by the implementation of standardized shared services, an extensive service oriented architecture and the automation of IT work.
> Asset Utilization: HP, like other corporations, has historically implemented a business-unit centric IT procurement model. This model has created a significant number of underutilized IT assets. We are building six new global next-generation data centres based on shared services that will consolidate our current 85 data centres. These data centres will enable HP IT to dynamically assign servers and storage assets to any application across our business units, and in real time adjust supply of computing power and storage as our business-unit applications require it. It will also allow us to achieve a higher service level than we can deliver today, at a lower cost.
> Service Management: HP operates in a very fast changing competitive environment. Many of our products such as cameras and printers need to be updated every three to six months. As a result, the need for new IT systems has had to be accelerated as well. We can’t take four months to develop a new IT system if the products we are developing have to be changed every three months. To address this rapid development and IT service provisioning challenge, we have implemented IT supply chain theory into IT. In essence, we are applying manufacturing theory to IT to compress the cycle time of service orders, design, development and provisioning, and to improve the overall quality of both the IT processes and IT services.
HP has had to reduce its IT budget significantly over the last few years and plans to reduce it further. In 2002, the combined IT budget of Compaq and HP was about 4.5% of our total revenue. Our goal is to reduce that budget to 1.8% of total revenue by the end of FY2008. These three key programs are our foundation to achieve that goal and improve our operational effectiveness. During the remainder of this article I will describe the methods and technologies we are planning to use to accomplish these programs.
Employee utilization
In the 1980s HP, like all electronic manufacturers, needed to reduce the labour component of the cost envelope of their products. Designing, developing and manufacturing electronic products were very labour intensive. Today, the labour component is a single-digit percentage of the cost. This radical reduction was achieved by implementing quality and industrial engineering theory to change the way the work was done. The employee utilization program at HP in IT is being achieved by employing these same theories.
The IT Service management model defines seventeen key processes for running IT. This work model is the starting point for addressing employee utilization. Each process is examined to determine where:
> Work can be eliminated or automated (maintenance and repair work)
> Work can be consolidated (management efficiency)
> Time to achieve tasks can be compressed (cycle time reduction)
> Maintenance reduction:
We are implementing integrated process-control systems using HP software to allow us to automate a significant number of maintenance related activities, such as server assignment, provisioning and virtualization. This system management architecture detects performance issues within a service and automatically adjusts supply, with no IT employees involved.
> Repair reduction:
Statistical process control and quality improvement programs were key elements in approving manufacturing process quality. These same strategies can now be implanted in IT using HP Service Desk and Performance Insight. These products enable IT to foresee incidents and reduce the amount of reactive repair work, as well as manage incident, problem, change, configuration and service level management processes as one integrated process. This allows IT to facilitate the elimination of repetitive incidents and improve the overall quality of IT services.
> Work consolidation:
We plan to consolidate the majority of our storage farms to one consolidated storage utility. This utility can be managed using HP StorageWorks solutions that allow all storage capacity to be seen on one system. Unused Logical Unit Numbers (LUNs) can be assigned to fiber channels from one control system independent of the individual SAN controllers. LUNs identify SCSI devices so the host can address and access the data on each disk drive in an array. This will allow us to significantly reduce the number of people involved in managing the SAN architecture and allow us to make much better utilization of our storage assets.
Security management requires significant labour to facilitate access control and government regulation compliance. To reduce the work involved in access control, HP Identity Management provides single access control to all applications and improves the management efficiency of security resources.
It enables role-based inheritance security control and provides one centralized source of password and application maintenance. In the area of regulation compliance, HP Compliance Manager was originally developed to facilitate HP’s own Sarbanes-Oxley compliance requirements. It provides a centralized tool to produce the reports required to demonstrate continuous regulation compliance with minimum IT resources involved.
Release management has historically required different tools and processes to facilitate server and PC image management. We have simplified this process by creating one release to production process that is independent of operating system type.
We have implemented one patch and image management tool called HP Configuration Manager. This product provides centralized image and patch management for server platforms. It enables release management work consolidation, improves IT management efficiency and ensures that all server platforms adhere to a desired state.
Management reporting has historically been compiled from many sources. HP IT is now considering using HP Dashboard as the “portal” for management – consolidating the HP software tools underneath (e.g. HP Business Process Insight, HP Operations, HP Internet Services and HP Network Node Manager) into one reporting vehicle. This will reduce the work required to produce reports.
> Cycle time reduction: Incident and problem management requires rapid root-cause analysis. To accomplish this, HP Performance Insight and Service Navigator products enable help desk resources to identify the root cause of performance problems or failures within a service fast, compressing the cycle time of incident and problem resolution.
Asset utilization
The average utilization rates of HP’s Unix servers was about 15%. The averaged utilization of our Microsoft servers and SANs was about 30%. In addition, 30-60% of our servers were dedicated to test and development. These assets were not well utilized. To address this issue, we are re-architecting the majority of our business applications to run in six new next-generation data centres.
These data centres are being built in a modular structure using Element Virtualization. Element Virtualization automatically allocates discrete servers, storage, networking and software resources, enabling the supply of individual IT assets to meet business demand in real-time.
These data centres will make use of the new HP BladeSystem and HP Integrity family of server products to facilitate virtualization, reduce data centre footprint and decrease cooling demands. The data centre modules are designed as 11,000 square-foot units with self-contained cooling and system management architectures. They will be replicated as HP capacity requirements increase.
The next-generation data centres are also addressing the inefficiencies in current cooling architecture by implementing HP patented Smart Cooling technology. This cooling architecture is expected to reduce our cooling costs by 50%.
Service management
HP internal customers need IT services fast. They need new servers, PCs, phones, security access, and applications to meet the demands of their business. Their top requirement is to have new services in production ahead of the product lifecycle or when a new employee starts.
To accomplish this need for rapid service provisioning, we have built an integrated IT supply chain system. This service management architecture integrates all system management technology into one IT supply chain system. It allows HP’s IT processes and IT resources to be quickly integrated.
Using the HP service catalogue architecture, an internal customer can order a service from the service catalogue and the IT supply chain system then routes the E-case request to the different IT resources throughout HP to provision that service quickly and efficiently. This operates like an IT ERP system. The architecture can be built using HP Service Centre, which integrates service catalogue, service provision, workflow and asset management into one integrated IT supply chain system.
Ready for today
Adaptive Infrastructure provides the foundation for an HP Adaptive Enterprise. Adaptive Infrastructure is not a product. It’s a set of technologies and services that help move customers from high-cost IT islands to low-cost pools of consolidated and virtualized IT assets.
In an Adaptive Infrastructure, valuable computing and storage resources can be re-provisioned in real time and shared among different applications. We are increasing our investment and offerings across several key “enabling” areas:
> IT systems and services: Standards-based systems and services simplify customers’ IT environments and give them greater control over costs.
> Power and cooling: Innovative power and cooling solutions help cut energy costs.
> Management: Unified infrastructure management delivers end-to-end visibility for real-time monitoring of service-level delivery, enhanced application performance, and lower operational costs.
> Security: Sophisticated security technologies – built into products and solutions – proactively protect businesses against threats.
> Virtualization: Pooling and sharing increase IT resource utilization and enable supply to automatically adjust to meet demand.
> Automation: Advanced automation reduces the risk of errors, improves quality of service, and enables dynamic IT deployment to meet changing business demands.
The next-generation of IT will be characterized by automated 24×7 lights-out computing that must contribute to the business. Adaptive Infrastructure solutions are making this future a reality – today. You now can increase operational excellence, quality of IT service and business agility, while also lowering costs and complexity.
HP understands the challenges facing IT management. We too have to accomplish dramatic transformation. HP looks forward to partnering with you in your operational effectiveness programs.
William Dupley is the Business Solution Manager in the Technology Solutions Group at Hewlett-Packard (Canada) Co.
Sidebar 1
Virtual Data Centre
Today’s unpredictable and competitive marketplace demands an IT environment that mirrors the business and dynamically supplies computing resources. HP virtualization solutions assist you to pool and share IT resources, reduce costs, increase utilization and improve agility.
Our solutions encompass three levels: Element Virtualization, Integrated Virtualization and Complete IT Utility. Element Virtualization automatically allocates discrete servers, storage, networking and software resources to supply individual IT assets to meet business demand in real-time.
Integrated Virtualization enhances multiple infrastructure environments, applications and business processes to automatically meet service level agreements. The HP Virtual Server Environment (VSE) helps increase server utilization, allowing you to automatically add and move resources and workloads.
HP VSE creates virtual servers that can automatically grow and shrink based on the service-level objectives set for each application they host. Through tight integration with partitioning, high availability and utility pricing, VSE allows you to maintain service levels in the event of downtime and to pay for capacity on an as-needed basis.
With intelligent control of a virtualized environment through integrated planning, management and automation, you can consolidate multiple applications on a single server and manage clusters as one entity without compromising performance.
VSE employs the available server capacity and can double resource utilization, while providing the highest priority applications with additional resources during peak times. Complete IT Utility solutions help you virtualize heterogeneous resources so that they are available when needed most.
Sidebar 2
Energy Efficient Computing
The increase of servers and storage technology and the reduction in footprint has introduced new cooling challenges for data centre managers. It is estimated that 30% of an IT organization’s energy bill is dedicated to cooling.
With energy costs rising sharply and data centre cooling systems using more electricity, a higher total cost of ownership is the inevitable result. Some of you may now be spending more on data centre utility bills than on acquiring new computers. Energy consumption is taking an increasingly larger bite out of annual IT budgets.
HP takes a broad, holistic approach, and works actively to optimize systems, racks and data centres to deliver on “energy efficient computing” and reduce energy bills. HP is focused on three areas: efficient systems to reduce power consumption, flexible designs to increase power density, and energy-aware provisioning to optimize power utilization.
We have received more than 1,000 patents for innovations in power and cooling, producing technologies and services to help cut the costs of powering servers and cooling data centres.
The HP Modular Cooling System uses chilled water technology to triple the standard cooling capacity of a single rack. It helps take the heat out of high-density deployments of servers and blades, enabling greater densities in data centres.
HP Data Centre Services encompass a range of customizable assessment and site planning services to help evaluate your environment and develop more effective and efficient power and cooling strategies. Drawing on pioneering research from HP Labs, HP data centre power and cooling solutions have delivered as much as 20 to 50 per cent reductions in power consumption.
Our approach strives to provide the information and insights that you need to plan, add the right equipment when it’s needed, and avoid being constrained by power and cooling. We have always had a strong corporate focus on the environment – a focus that has resulted in approximately 1,000 HP products achieving Energy Star
