Industrializing IT Service DeliveryViewpoint paper

the power of the people network.

connect

Turn islands of expertise of the past into powerful solution networks of the future and deliver secure, seamless, and context-aware experiences to your customers.

Table of contentsIntroduction ...........................................................1 The current factory model ......................................1 Introducing the HP Industrialized Delivery System (IDS) ..2 What is the HP Industrialized Delivery System? ............3 The HP Industrialized Delivery Model .........................4 Industrialized Delivery (the Production System) ...........5 Sustainable workforce: Agile Capacity Management ....5 The Experience Management System ..........................6 The Client Engagement Model ...................................7 Building a value-added network of IDS Centers ............7 Benefits of the IDS Delivery Model .............................8 About the author .....................................................9

Developing solutions for the modern enterprise requires a shift from a world of standardization and factory-based development to one of mass customization. We must abandon the hierarchical command-and-control management style of yesterday in favor of a model that harnesses the power of a global network of expertisea network characterized by collaboration, cooperation, coordination, and communication.IntroductionAs we enter the second decade of this millennium, a hypercompetitive environment propelled by rapidly changing technology is moving us to an increasingly interconnected worldone where technology is both easily accessible and pervasive across all aspects of our daily lives. In this emerging world, consumers are more comfortable with technology and use it in all aspects of their personal lives. This has led to a trend commonly called the consumerization of IT. This trend refers to customers and employees growing expectations that the companies they work for and do business with provide consumer-oriented technologies and solutionssuch as smart phones, video, audio, social networking, micro-blogging, and universal access. For example, a few years ago, people were content to receive their monthly banking statements in the mail and go to an ATM or a branch office to deposit their checks and transfer money between accounts. Today, these same customers expect the bank to provide electronic statements and allow for online fund transfers. They want the ability to deposit a check by taking a picture of it using the camera on their mobile device. And they want to be able to rate and blog about their experience on their favorite social networking sites. their daily operations. In many cases, these new requirements are incompatible with the factory model for application development and maintenance that is the backbone of many IT organizations. This model was the offshoot of business drivers at the end of the last millennium that called for automating business processes and modernizing the legacy systems required to handle Y2K. The model effectively addressed the tasks they were created for; however, they have not been able to readily adapt to the changing nature of todays technology-enabled businesses. As the demand for IT services has grown in recent years, clients have seen a noticeable drop in the quality and service levels these factories provide. This drop in service levels can be attributed to five key issues: 1. Many of these factories do not understand the context of the businesses they support. This includes industry knowledge, a good understanding of how the IT application enables a business process, and the productivity of the end user (such as a claims representative, a broker, or a customer service representative). This leads to major issues with how requirements are understood, captured, communicated, and eventually implemented by the development team. The current factory model most IT service providers use is based on hierarchy, command, and control. In addition to having single points of failure and an increased reliance on key individuals, this model is not good at sensing and adapting to the rapidly changing requirements, faster technology cycles, and evolutionary nature of the technology industry.

The current factory modelTodays businesses are more dependent on technology, and they, in turn, depend on their IT departments to rapidly adopt and implement these technologies with quality. They also require IT to be more nimble, understand the context (industry and business process), and drive more innovation into

2.

1

3.

Application factories have an incomplete production Move away from building large, monolithic model that emphasizes software engineering. It applications that do everything for everyone to more places less focus on the cultural, organizational, specialized applications that focus on a few tasks and temporal differences between the client and and deliver meaningful experiences across all the the service provider. This tends to have a serious touch points between the business and its customers. impact on the factorys productivity, quality, and Shift how these applications are builtfrom a custom, overall effectiveness. As an example, many of hand-crafted model to a model where applications these companies claim to adopt agile development are assembled from applications and services that methods and tools to improve speed to market, are procured as-a-Service from the cloud. but they fail to understand that agile methods rely Leverage the knowledge stored in the network on people and interactions. This becomes and the power of Metcalfs law in developing, extremely difficult to do in a factory model that is harvesting, sharing, and reusing knowledge and managed using a strict hierarchical management expertise in a globally distributed delivery model. model and a workforce characterized by high (Note: Metcalfs law states that the power and attrition rates. This constant churn of people value of the network is proportional to the square means that these factories will struggle to maintain of the connected nodes on the network.) effective context-sensitive client interactions. In short, to develop solutions in this environment, we 4. Another key fault in the factory model design need to expand our current model of standardization is its inability to adapt to changes in the to embrace mass customization and improve speedmacroeconomic and geopolitical environment. For to-market and quality by assembling and tailoring example, over the past two years, we have seen solutions based on standardized components. We an increase in geopolitical instability caused by must abandon the command-and-control management security concerns, protectionism, financial trouble, style of yesterdays factory-based development political turmoil, and natural disasters. The heavily in favor of a model that harnesses the power of people-dependent factory model has not been global networks of expertisenetworks that are able to adapt rapidly to these events. characterized by collaboration, cooperation, 5. Finally, as the economies of developing countries coordination, and communication within the network. continue to expand, their internal demand for IT We call this the HP Industrialized Delivery System. services increases. This, in turn, drives a shortage The HP Industrialized Delivery System is an innovative of skills, high attrition rates, and wage inflation. and first-of-a-kind application delivery model that When combined with inflation in these economies leverages a global network of interconnected centers and devaluation of the U.S. dollar, this is rapidly of expertise we call HP Industrialized Delivery eroding labor arbitrage, which was a critical Centers (IDS Centers). These centers are designed driver of the factory model. to define and deliver solutions for the consumer In other words, the high level of standardization and and the enterprise in a connected world. It does commoditization in these factories is not producing the this by delivering secure, seamless, and contextgains and benefits we expected when we set them up aware experiences that help our clients differentiate a few years ago. So what is the solution? Is the factory themselves in their marketplace. These centers help model dead? If it is, what should replace it? clients optimize traditional environments, build and manage cloud-based architectures, create the mobile Introducing the Industrialized Delivery enterprise, and enable seamless transformation from current legacy systems to hybrid models. System (IDS) In todays world, new business products and processes in many industries are enabled by technology. This means that todays IT organizations must: Understand the context in which their applications are deployed and used. Be able to develop and deploy applications quickly and be highly adaptable to changes in the underlying technology and business operations.

2

Figure 1 Anatomy of an Industrialized Delivery Center

Sales and solutioning leadership Thought leadership & intellectual capital Consistent methods, tools, & processes

Industry point of view Industry frameworks Client demos and prototypes White papers, technique papers, etc. Reusable code, designs, & frameworks Process & technology patents Expert networks Consistent agile methods and metrics Lean management & CMMi HP software, hardware, devices Software from partners Sustainable pool of skilled resources Skilled mentors @ a 1:10 ratio 10-20-70 adult learning model Agile capacity management Global skills Interconnected centers Consistent metrics Continuous improvement

Skilled resources at scale with available mentors (seasoned practitioners) A global footprint that provides the best balance of expertise, quality, and cost

What is the HP Industrialized Delivery System?In designing the HP Industrialized Delivery System, we started by analyzing the root cause that leads to the breakdown of IT factories. We believe the factory model fails because of four primary reasons: 1.

3.

Art versus scienceMost application development models are built around an implicit and sometimes unrecognized assumption that building software 4. is more of an art than science. We believe that although there is a certain amount of artistry, more than 90% of software development is a science, which makes it well suited for structure, rigor, automation, measurement, and continuous improvement. Its all about technologyTodays factories have extensive processes, best practices, and certifications such as CMMi. We believe these components are necessary but not sufficient to build an effective delivery model. To build a sustainable delivery model, we need to reengineer management models, talent-development approaches, and how we foster and encourage innovation in the employees who work in these centers.

Factories are not designed for sharingAt its core, a factory is designed to control, standardize, and not share its trade secrets with the people who interact with the model. In addition to limiting scalability and making the factory more susceptible to problems in the external environment, sharing is also a sure-fire way to make the factory obsolete and irrelevant in a short time frame. Factories are not designed to get the best out of peopleThe workforce and management approach in a factory-based model is designed to leverage automation and standardization to deliver predictable outcomes. This model is not conducive to innovation, experimentation, and continuous improvement. It also leads to issues with employee morale and high attrition in most high-technology jobs.

2.

HP is one of the industry leaders in application services. We depend heavily on our ability to help CIOs and their IT departments deliver IT-enabled business capabilities for competitive advantage. So we had to solve this problem with a comprehensive approach that deals with the short-term issues of expense pressure and skills availability. At the same time, we had to address the long-term concerns of sustainability and competitiveness in an ever-changing marketplace.

3

Figure 2 HP Industrialized Delivery Model

The Production SystemThe Production System that is focused on effective, efficient, and high-quality application development and maintenance through the use of Lean Software Development, Agile Methods, Automation enabled by HP tools and processes, and measurements based on Industry Standards.

Sustainable WorkforceA global workforce model that strikes the right balance across dimensions of experience, technical skills, industry experience, and geographical location. This model also includes a career development and adult learning model that is required to sustain this global workforce.

HP Industrialized Delivery Model

Client Engagement ModelAn innovative engagement process that is focused on solutions and outcomes (not skills), industry, and technology accelerators and delivered through a network of centers located in key onshore and offshore locations.

Experience ManagementA model that extends traditional document-based knowledge management models by focusing on human networks and the collaboration among people. It is built on Open Source concepts including transparency, sharing, social networking, and crowd-sourcing.

The HP Industrialized Delivery Model

Before we developed a solution, we visited several of our clients IT departments. We also looked at the factories we had established to help our customers at several of our Best Shore locations across the Experience ManagementWe use an experience globe. During these visits, we saw several innovative management model that extends traditional knowledge approaches aimed at getting faster, better, and management efforts that are typically built around cheaper at application development and maintenance; document management-based collaboration models to however, we knew we had to go beyond incremental a people-based collaboration model built on todays approaches to improve current capabilities and popular Social Networking concepts. This model takes leapfrog into what is required in todays marketplace. advantage of sharing real-life client experiences and The result is the HP Industrialized Delivery Model. This access to people whose expertise is determined by the model is radical and innovative because it is built on a value they add to the network and other techniques set of comprehensive and forward-looking design borrowed from the Open Source community. principles across four key domains (see Figure 2): Although none of these constructs taken in isolation is Industrialized Delivery (the Production System) new or ground-breaking, the way in which we have We have implemented a comprehensive merged them is unique and is the key differentiator of production system for application development our model. Success with this model requires the right and maintenance that fosters innovation, increases mix of a good production system supported by global productivity, improves quality, and increases speed talent with effective knowledge-sharing, facilitated to market for solutions. by a flexible management model that encourages Sustainable WorkforceA people management transparency and continuous improvement. model that builds and maintains a highly skilled and Our objective was simple: Build a highly scalable sustainable workforce by attracting, developing, and sustainable software development model that and retaining the right mix of experience and skills rapidly delivers high-quality solutions to our clients at required to operate the production system effectively. a competitive cost. A secondary yet equally important objective is to develop the industry and process expertise required to drive innovative technologyenabled business solutions for our clients.

Client Engagement ModelA general client engagement model that streamlines the engagement and operations model that values the principles of lean thinking, visual management, empowerment, collaboration, and continuous improvement.

4

Industrialized Delivery (the Production System)The Production System is a highly optimized software development environment that is designed from the ground up using principles of Lean Software Engineering, the Software Engineering Institutes Personal Software Process (PSP), Team Software Process (TSP), and CMMi. Its aim is to improve productivity by improving flow, driving quality into all phases of the applications development life cycle, and dramatically increasing the speed at which these applications are built. This system is made up of: Agile methods, test-driven development, requirements visualization, continuous integration, lightweight support processes, and metrics that enable rapid, iterative, and incremental applications development and maintenance. A proven approach based on HPs EDGE methods that allow us to create applications that are Designed for RunSM and uses pragmatic automation enabled by HPs market-leading Application Lifecycle Management software tools. This software foundation is augmented by specific Open Source and partner tools, such as Eclipse, Rally, and Visual Studio. Our workload management system reduces the unevenness in demand that most project teams experience by streamlining and structuring workload to maximize flow. Because all teams have comparable skills, common processes, and standardized tool sets, it is easy to move work to an idle or partially used line to balance the workload across teams. Requirements analysis, development, and testing resources can move from one line to another without having to deal with the long learning curve associated with picking up new tools and processes. The production system also looks at how work is executed and is designed to maximize the throughput and productivity of employees on project teams. It does this through techniques such as eliminating project team member multitasking and having office hours for subject-matter experts to gain the most benefit from these critical resources. We also use several technologies to implement continuous integration and highly available test environments to minimize unproductive time. Finally, the production system is based on proven lightweight software engineering processes such as PSP, TSP, and Software Quality Assurance that build the institutional knowledge and capability that provides us with an effective hedge against attrition and dramatically improves our ability to scale our workforce.

Sustainable workforce: Agile Capacity ManagementThe Agile Capacity Management System is designed to provide the workforce required to take full advantage of the production system. It focuses on organizational design, team design, coaching, training, and developing and building a sustainable talent pipeline within the system. The core elements of this system are:Standing Teams

The IDS Center uses a unique organizational model and team structure. The organizational structure is flat with minimal management overhead and no visible or assumed vestiges of hierarchy. The center is built around the concept of standing teams. Each of these teams has four key positionsIteration Manager, Requirements Leader, Technical Leader, and Testing Leader. These positions are staffed by expert practitioners who form the core of a development line and act as practitioner coaches for the other members on the line. This four-member core stays together from one project to another and is deployed as a team to new projects. This concept enables us to build teams around these skilled positions and use these individuals as practitioner coaches to build scale by training our existing workforce. This model also enables us to build teamwork, reinforce best practices, and eliminate the waste associated with start-up and tear-down that is typically incurred by most IT projects. These standing teams leverage lean methods that enable them to introduce agility by eliminating waste from all aspects of software development. Standing teams and co-location improve collaboration among project teams, other application teams, and our business partners. Staying together across multiple projects also promotes a team environment based on shared experiences. Every member of the team gains a common understanding of what success means for their team and what they need to do to enable that success. They learn each others working styles and personalities and begin to truly operate as a high-performing team.

5

Adult Learning Model

The skills-development model the center uses is as leading-edge as our technology. It aims to build and sustain a culture of continuous learning by using the 10-20-70 adult learning model that makes sure all employees in the center have the desire and opportunity to improve their skills throughout their career. This model is based on the premise that 10% of learning comes from reading and staying abreast of what is happening in the industry; 20% of learning comes from just-in-time training courses that are aimed at specific concepts, technologies, or processes; and 70% of learning comes from being apprentices under experienced mentors. The standing team structure and practitioner coaches in our IDS Centers allow us to reduce learning cycles, gain experience, and reduce our exposure to the loss of talent on these teams. For example, we use paired programming on several standing teams. In this method, a practitioner (expert programmer) also plays the role of a coach, pairing up with another programmer to help increase a practitioners understanding of a programming language. More importantly, the associate learns how to write better code and learns what does and does not work from the coachs experience. This unique learning model significantly improves the chances of up-skilling and retooling employees who are well versed in older tools and technologies. This has the direct benefit of improving the efficiency of software development and mitigates the risk of shortand long-term skills and wage stagnation.Expert Network: Our IDS Centers

The Experience Management SystemOne of the perennial challenges IT and technology organizations face relates to how they identify, harvest, harden, and reuse work that is done on client engagements. Even the organizations that have solved this problem struggle with making it easy to find this information and effectively use it on new projects. The HP Industrialized Delivery System goes beyond traditional knowledge-management efforts; it focuses on managing the collective experience of all the individuals and systems that are a part of the center. We do this by: Enabling seamless communication across organizational and geographic boundaries with our employees in the IDS Centers supported by the latest communications and collaboration technology. This technology includes social networking tools from HP and our partners that enable people to find and tag resources and content, share intellectual capital and assets, and establish and foster active associate communities. Developing an Expert network for key domains by identifying experts and influencers from across the globe and providing them incentives to actively contribute to and foster the community of practice. Establishing recognition events and incentives to drive applied innovation within the IDS Networks. This includes encouraging active participation and contributions to the expert network. This concept leverages key techniques and approaches that have been successful in public crowd-sourcing communities. Enabling a learning system that fine-tunes the expert network based on the value individuals add to a network. To do this, we are leveraging a patentpending technology from HP Labs to allow this network to determine its value and contribution to client solutions.

These centers have industry and technology domain experts who are the subject-matter experts who can provide the industry, business process, and technology domain expertise required by many projects developed within the center. These experts are also connected to others across our global network of centers (IDS Networks) and with subject-matter experts at our client sites through the Experience Management System (see next section). This provides the client context required to make the delivery system more effective at delivering business solutions and outcomes for our clients across the globe.

6

Figure 3 Example: HP QA/Testing IDS Network

UK

AMERPontiac US El Paso US

EMEAEgypt Chongqing

Bangalore

Manila

APJ

KeyIDS Center HubArgentina

IDS Center Spoke

Adelaide

The Client Engagement ModelThe final and probably the most important component of the delivery system is a unique Client Engagement Model that aims to increase client engagement in the applications development life cycle, improve predictability of delivery, and set the stage for a culture of innovation, transparency, and continuous improvement within the system. The IDS Centers are key components of our engagement model:

Have a global footprint that provides our clients the ability to implement projects on-site, in on-shore centers, in near-shore centers within a geographic region or in far-shore centers in countries (India, China etc.) that provide access to large number of delivery resources

Builds in continuous improvement into the organizations culture by leveraging Kaizen and implementing an interaction model that relies on personal interactions and frequent and open Provide Context that allows for them to be integrated communicationnot documentation and formal into our Client Environments in a way in which contracts. The interaction model values face-totraditional factories are not able to. Each center face conversations, video conferencing, and audio has industry and technology domain experts who conferencing over email and documents. can provide subject matter expertise to projects that are delivered in the centers. In addition, the Building a value-added network of experience management network connects on-site IDS Centers practitioners to those in an IDS facilitating seamless Each IDS Center will specialize in a specific software two-way collaboration between the Client and the center. Finally, these SMEs stay engaged in a project solution such as cloud computing, mobile and pervasive application development, applications development, through the entire applications lifecycle ensuring smooth transition from plan, to build and into the run management using SAP, quality assurance, and testing and predictive business intelligence and analytics. phases of a project These centers also will add value by customizing these Built around industry and technology solutions and solutions for specific industries such as financial services, engineered around how we work with our clients. manufacturing, healthcare, and transportation. As an example, when we engage with one of our banking clients to implement a banking app our on-site client teams will engage on-site practitioners who are familiar with and can work with the appropriate Mobile and Cloud centers across the globe

7

Each IDS Center will be networked with one or more similar centers across the globe and eventually to experts and practitioners working on-site at client locations around the world. This IDS Network is designed so it has one or more Best Shore locations, one or more onshore locations in our three global regions (Americas, EMEA, and APJ), and key client sites with a sizeable population of HP practitioners and individual practitioners located across the globe. Per Metcalfs law, the value of an IDS Center grows every time it is connected to another center or practitioner at a client site. This networked model provides us a geographically dispersed and interconnected network of expertise that provides scale, high availability, and redundancy. This makes the Industrialized Delivery System less susceptible to issues that could crop up in any part of the world. It also provides us a way to provide valueadded capabilities to our public sector and defense clients that prefer work be done in the country with local workers.

Takes advantage of HPs global footprint, established Best Shore development centers, and deep expertise we gained working with more than 400 of the Fortune 500 companies Builds a sustainable workforce that focuses on skills development through the use of innovative staffing techniques (standing lines, practitioner coaches) and the use of the 10-20-70 adult learning model to retrain our workforce For our IT clients, this model provides a secure, scalable, effective, and reliable way to build and maintain applications: faster, better, and cheaper. The model also enables us to reduce the inherent risk associated with any dependence on external skills from one particular region in the world. The agile approach these centers use enables our clients to rapidly develop and deliver applications and easily adapt to an ever-changing technology landscape. Finally, these centers provide the critical worldwide industry knowledge that is required to conceive, build, and deploy leading-edge, technology-enabled business applications. For our employees, this model provides a unique value proposition that includes: The standing teams concept, which provides clear expectations for our employees and line of sight as to how their work affects the projects they support A unique staffing model that brings work to employees instead of moving employees to where the work is Access to leading-edge technology and tools to improve productivity and make their job easier An opportunity to work on application development for multiple clients, enabling them to pick up new business and technology domain knowledge An investment in updating their skills and maintaining them through the unique training and knowledgetransfer approaches mentioned previously We expect this approach to drive an increase in adoption, which leads to more discretionary effort from our employees and generates increased quality and productivity. This virtuous cycle should pay significant dividends as we continue to sustain and grow the IDS Networks and achieve our objective of making HP a place where people can deliver their best work on a daily basis, bringing superior solutions to our clients through the collective expertise of HP.

Benefits of the IDS Delivery ModelThe HP Industrialized Delivery Model is an innovative organizational construct that delivers better business results by combining a unique management and operational model with an investment in our employees. Our next-generation delivery model offers several important benefits: Improves decision velocity, productivity, and efficiency by implementing an innovative business management system based on the discipline of lean management Improves the flexibility of software development through the use of agile methods Improves the quality of our applications through the use of current software development techniques such as paired programming, continuous integration, testdriven development, and continuous integration Increases speed to market through the use of an integrated application development platform and predefined application and infrastructure patterns based on HPs industry-leading Application Lifecycle Management suite Uses advanced collaboration techniques that include expert social networks, and crowd sourcing

8

About the authorSrinivas Koushik

Srinivas (Srini) Koushik is vice president of Worldwide Application Development for HP. In this role, he ensures HP is working with clients to provide the best possible balance of cost, speed, quality, and risk for large-scale transformational programs, systems integration projects, and innovative technology initiatives. Previously, Koushik was senior vice president and CIO at Nationwide Insurance, a Fortune 100 financial services company. During his tenure, he drove the design and implementation of a cutting-edge business analytics environment, a first-of-a-kind banking environment based on cloud computing, a large-scale transformation of the companys infrastructure, and one of the worlds first CMMi Level 3 Application Development Centers. Koushik was also previously vice president and worldwide architecture practice leader at IBM. He was appointed as an IBM distinguished engineer in 1998 and elected to the IBM Academy of Technology in 1999. Koushiks highly decorated career includes being named an Elite 8 CIO by Insurance & Technology, a Top 25 CTO by Infoworld, and one of the Top 10 All Stars in the Financial Services Industry by techdecisions. He is also an Open Group Distinguished Certified Architecture Profession Leader. Koushik holds a bachelors degree in physics from the University of Madras, a masters degree in computer science from the University of Bombay, a masters degree in business administration from Ohio State University, and has taken several executive education courses from both MITs Sloan School of Management and Duke University.

9

Share with colleagues

Get connectedwww.hp.com/go/getconnected

Get the insider view on tech trends, alerts, and HP solutions for better business outcomes

Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein. 4AA3-6366ENW, Created September 2011