The first day's Technical Architecture track kicked off with

							                                         Conference report

                 Adaptive IT – managing the marriage of business
                                  and computing
                           22–24 June 2004, London UK


eema’s 17th conference brought together the world’s leading experts to explain how the
component parts of an Adaptive IT strategy fit together to enhance business processes. The
conference was sponsored by Hewlett Packard and Microsoft and was divided into two tracks:
Strategic Management and Technical Architecture.

Keynote addresses
In the first keynote address, Peter Vanderfluit, of Hewlett Packard highlighted the fact that
there are no IT Projects, only business projects with an IT element and, additionally, that the
trend towards operational support within IT budgets must be reversed – otherwise innovation
will stagnate. Michael Emanuel of Microsoft followed with the second keynote address
highlighting the need for intelligent IT components. In the final keynote address, Leo Steiner,
IBM, noted that the theory of Adaptive IT has been around for many years but the technology
has lagged. He noted that we have reached a crux where business pressure is mounting at a
time when technology is maturing into practical solutions. There then followed a lively debate
led by Patrick Gannon, OASIS. Though lively, the panel was mostly in agreement that IT
needed to move more towards a business focus and build flexible, reusable ‘services’
adaptable to business needs.

Strategic Management
The first of the strategic management tracks revisited many of the issues addressed in the
opening plenary and showed through vendor and user case studies how these are applied.
Kevin Brearley (Micro Focus) looked at how financial organisations are approaching
modernising their legacy business applications, 75% of which are running on COBOL with the
inherent inflexibility associated with expensive updates and the cost of downtime. He
observed that 22% of CIOs now report to the company CFO (double the previous year's
figures) and that 70–80% of the average IT budget is 'business as usual' placing an
imperative on minimising risk whilst reducing costs and general business transformation.
Chris Tofts (HP Labs) challenged some general preconceptions about agility by asking how
much a risk reduction strategy is worth and how the balance of agility versus optimality may
be assessed and measured. For any given situation, agility can be defined from many
different    perspectives:     what    is   good     and    how      much     is   enough?

Steve Malde (BT Global Solutions) spoke of the changes being undertaken at BT that are
saving the company £5B through cross-industry practices and the lessons learnt that are
being applied in best practices with BT's customers. John Alexander (HISL) pointed out that
technology is often a constraint and not an enabler, and that IT services often spend 70% of
their time digging one hole, and the remaining 20/30% digging the next hole. He spoke of the
need for 'holistic process redesign' to further the elimination of functional silos and the
associated legacy costs, and that a variable cost/pricing model is fundamental to the
acceptance of a new model, which will be comparable to the today's telephone business
model.

The alignment of business and IT
Michael Munro (Cisco Systems) discussed the challenges facing Cisco, a company of 35,000
employees, who currently have a return of US$657K with 38% operating expenses and are
striving to reach US$750K revenue/employer with 35% operating expenses. A perceived
crucial part of this process centres around an alignment of business and IT involving both the
CIO and the CEO; and to understand the criteria that are to be used they have instituted a
business process operating council (BPOC) chaired by a senior vice president. One of the
issues addressed is out-tasking versus outsourcing and getting the right balance of control
and monitoring which ultimately is the arbiter of a successful partnership. So far, Cisco has
put in place a number of governance mechanisms and now faces the exciting and daring
journey           to           execute          on           its            strategy.

Proliferation of websites
Finally, Roger Hazlewood (Unilever), described the nightmarish discoveries made by the
Global Infrastructure Organisation at Unilever when it started to investigate the proliferation of
websites worldwide associated with Unilever and its many well-known brands. Because of the
evolution of the website as an extension of marketing rather than a function of IT, each brand
had developed its own site, using its own set of third party partners, with varying degrees of
security and with little or no cross-referencing. The result was a massive overspend and
overlap of investment. Over an extended period of time, the team, with corporate
sponsorship, were able to rein the free-form activity associated with presenting Unilever
through the web to a policy-driven, cost-effective process that still enables the brands the
independence it requires but also protects the umbrella Unilever brand.

Overall themes
The overall themes that came through during the course of the afternoon were that the
process of achieving an adaptive or agile organisation is a matter of negotiation or 'dancing'
between business and IT involving the highest levels of management, with a requirement for
a thorough and ongoing understanding of criteria and dependencies and a deep
understanding of the impact of 'events' on a business. As one speaker said, quoting the
Harvard Business Review (May 2003), ‘IT doesn't matter’.

Bringing living technology to the digital world
On the second day, Theo Smit of Philips Semiconductors demonstrated an interesting parallel
between the rate of change in the high tech chip manufacturing business and the IT
infrastructure and processes which manage it. The design and manufacture of silicon chips
for the consumer electronics market is characterised by huge capital and plant costs,
extremely short time to market for new products and very short product life (both 2–3
months). Presented as a case study of the business challenges posed by the need to respond
in such a demanding market with rapid product evolution, this presentation showed the
development of Adaptive IT based around a ‘virtualised’ datacentre and a set of flexible
application development processes. These had enabled a reduction in application
development and deployment time from 18 months to 1 day and a reduction in the growth rate
for IT expenditure from 18% annually to 3%. High levels of redundancy and contingency were
used in all aspects of the architecture. The final message revolved around the people issues
in a fast changing business. The ability to accept change as a normal part of the working
environment is key for every employee.

Commercial risks and implications of Adaptive IT
Many of the other presentations indicated the need for a ‘business dashboard’ to give real
time visibility of operational indicators. Francois D'Haegeleer of TIBCO EMEA demonstrated
with a comprehensive set of screen shots how this had been achieved in several of their client
companies allowing them to fine tune their IT assets to respond to the business needs.
Conversely it was also possible to review the impact of IT operational failures on specific
business processes and therefore prioritise the responses and minimise impact. The
granularity which was possible in monitoring and tuning to the very edges of business process
was impressive and showed that each process could be terminated to generate a further
business opportunity. The presentation included a comprehensive breakdown of adaptive
techniques which work and those that don’t.

The use of open source to achieve Adaptive IT
Eddie Bleasdale of netproject presented the case for open source approaches citing the
recent trend away from client server (mainly proprietary) architectures and the growth of thin
client approaches. These were viewed as analogous to a return to a centralised mainframe
approach. Some of the benefits of open source such as access to and ownership of source
code, standard interfaces, etc. are well known and widely adopted. This presentation
reviewed some of the EU and Global projects and initiatives (e.g. Mozilla and GNOME) which
were taking the ‘open’ message into all areas of IT. The benefits of shared code versus
proprietary lock-in were discussed with vigour, raising the issues of version control, support
etc. in live deployments.

Technical Architecture
The first day's Technical Architecture track kicked off with a presentation by Bill Pugsley, MD
of Perwill plc, in which he outlined his thoughts on the role of the Enterprise Service Bus
methodology to provide a means of implementing Adaptive IT independently of the
technological base of the underlying applications. Paul Allen, Principal Web Services
Strategist with Computer Associates, then shared his thoughts on managing expectations for
the effective use of a service-oriented architecture. The formal presentations concluded with
James Bryce-Clark, Manager for Technical Standards Development at OASIS, who
summarised the use of standards to create e-business implementations, the distinctions
between open and proprietary standards and the range of Web Services and service-oriented
architecture standards that are currently available.

Following these sessions, Ian Curtis, Director of Enterprise Marketing for HP, Michael
Emanuel, Director of Management Products for Microsoft Corporation and Geoff Forrest,
Head of Sales at BT Transform, each gave short presentations of their company's offerings
that are aimed at helping organisations adopt and implement Adaptive IT, and participated in
a panel discussion of points raised by the audience.

Grid Computing
The Technical Architecture track brought together an eclectic range of presentations. For
example, delegates heard Matt Schofield of the London Technology Network talk about Grid
Computing. The mission of the London Technology Network is to help UK businesses gain
access to the technology research that is going on in the capital’s Universities and Research
Institutes. Matt talked about the three types of Grid computing that companies are currently
looking to the Universities for help with – computational (where specific resources are
reserved for intensive workloads); scavenging (CPU cycles are ‘scavenged’ from idle servers
and desktops); and data grids (a collection of resources dedicated to managing data within an
organisation). He also outlined some of the issues for grid computing:
     • Parallel computing – resource reservation, provisioning
     • Quality of Service/charging
     • Security & permissions
     • Infrastructure development trial applications.

The full presentation had information on which Universities are working in these areas.

User collaboration
IBM is very keen on the concept of user collaboration as the cornerstone of the Adaptive
Enterprise. So keen, in fact, that Stuart McRae came directly from an overnight flight to tell us
about it. The aim of collaboration is to make more people more productive. Stuart suggested
that we are in the ‘third wave’ of collaboration. Where the first was about personal productivity
and the second about creating virtual teams, the latest wave is about connecting people to
business processes. He contends that service oriented architectures are the arteries of an on-
demand organisation. We need to rethink IT from the user’s perspective and provide them
with an easy way to access the information they need. Portals plus collaborative applications
are the key. Portals bring applications together in a single user experience and help to
manage the costs associated with rich client environments It is important, however, that the
user experience can be easily adapted to the specific role. We need to make sure that they
have the right tools for the job.

Security
An important component of Adaptive IT is, of course, security, and Bart Vansevenant from
Ubizen talked about a security foundation for Adaptive IT. As he explained, Adaptive IT
compounds the problems of a disappearing perimeter, leaving more applications exposed to
threats from outside. Traditional security architectures, with a straightforward DMZ, are no
longer adequate. Bart went on to outline ‘Transaction Zones’, a DMZ that is tailored to the
specific type of transaction. For example, customers would require differing levels of
authentication to trusted business partners who might have access to more sensitive
applications. Identity and access management become critical at two levels: to prevent
malicious attacks and to ensure that users comply with acceptable use policies. It is important
to complement infrastructure level controls with application level controls.

Identity management
Beverley Holdsworth from Royal Mail gave a taste of the complexity of identity management
(IDM) in a large and diverse organisation. In a challenging business environment including
increasing competition and recovering from large losses, Royal Mail is trying to cope with a
number of conflicting factors:
    • Increasing numbers of users as more business processes go online
    • Increasing expectations on IT, from all parties including customers, business partners
        and the regulators
    • The increasing exposure to threats that comes with greater dependence on IT.

Beverley outlined the importance of identity management in coping with all these issues and
explained how Royal Mail is tackling it with a combination of technology and business
process. She gave us an interesting example of starting the IDM process at the recruitment
interview. By taking a photograph using a PDA, the line manager can make sure that the
same person turns up to do the job, eliminating identity fraud by professional ‘interviewees’.
This is the marriage of business and computing on the ground.

Closing Plenary
The closing plenary kicked-off with a presentation from Dick Raman, TIE Holding N.V., who
posed a question as to whether the solutions already exist within current integration
technologies. Howard Wright, Royal Mail, followed with an informative look at aspects of
creating agility and reacting to change. Peter Abrahams, Bloor Research Ltd., wrapped up the
closing session, looking at his vision of a joined-up and flexible future.

In summary, eema’s highly successful conference highlighted the need for a marriage of
business and computing and there was much enthusiasm for the subject from all concerned.
Keep an eye on the Adaptive IT focus area on the eema website for future developments!