WHITE PAPER. SAS IT Intelligence. Balancing enterprise strategy, business objectives, IT enablement and costs

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1 WHITE PAPER SAS IT Intelligence Balancing enterprise strategy, business objectives, IT enablement and costs

2 Table of Contents Executive summary... 1 SAS IT Intelligence leaping tactical pitfalls... 2 Resource optimization... 3 Measuring resource usage... 3 Forecasting saturation and growth... 4 Maximizing the value of underused infrastructure... 4 Service optimization... 5 Financial optimization... 7 Summary... 8 About SAS... 9

3 Executive summary The pace and depth of technology expansion within enterprises has never been greater. The pressures placed on IT to squeeze costs are relentless. When IT investments don t produce expected cost reductions or meet revenue projections, frustration within the business mounts. That frustration often results in the question: What value does IT really provide? For the sake of the business and in accordance with some government legislation, it is time for IT departments to get their arms around their usefulness, costs and value. One reason for the business to question IT value is the difficulty IT encounters in linking business strategy and objectives to IT investments and financial performance. In many organizations, business and IT sit on opposite sides of a chasm. On one side, executives and planners create enterprise strategy with business unit objectives and then look to IT for technology enablement at a cost and level of service that achieves business objectives. On the other side, IT creates and delivers services and technologies that often miss the mark. The chasm grows when IT is unable to document results to the business, successful or not. With the stakes so high, why hasn t the problem of alignment between business and IT been solved? A look at the challenge of data management for IT reveals the crux of the problem. IT exists in a sea of dissimilar infrastructure components and technical processes. Technical skills are grouped by infrastructure type to keep components functional. With components splintered and isolated by technical attributes, IT must employ niche tools to monitor infrastructure, collect data, apply metrics and respond to emergencies. As a result, information about the infrastructure is often trapped in niche tools and provides little intelligence. IT service and management processes are often ad hoc. Ad hoc responses are generally inefficient and error-prone, resulting in higher costs, messy data, reactive service processes and poor alignment within IT itself. The marketplace is replete with products and ideas for helping IT achieve alignment with the rest of the business. But none of these ideas include applying business intelligence (BI) and forecasting to IT. Like the proverbial mechanic s car, IT is responsible for implementing and maintaining business intelligence for the rest of the enterprise but seldom applies the same technology and resources to the business of IT. Often IT has one of the largest capital budgets in the enterprise and, along with it, a large burden of responsibility for enabling enterprise strategy. When the raw data about IT infrastructure performance is embedded within technology silos, intelligence is limited to those silos. Without the ability to link infrastructure to business planning and objectives, measured business results, service levels and financial results, IT operates blindly. IT is without a foundation from which to create and exploit IT intelligence. IT intelligence provides the basis for aligning objectives with outcomes; forecasting results; and optimizing infrastructure, services and financial results. IT intelligence links technology silos, service processes and financial data for seamless performance. Most of all, IT intelligence provides hindsight to review accurately what has happened, insight to ascertain why it happened and foresight to enable IT to optimize the impact of technology on the organization. 1

4 SAS IT Intelligence combines SAS expertise in data access and analysis with a set of unmatched capabilities for enterprise business intelligence. The first order of business for IT intelligence is getting past the perennial roadblock of disparate data sources, including IT infrastructure, transactional systems, financial sources and workflow engines. Without the ability to extract, transform and load infrastructure data on an enterprise scale and apply predictive analytics, IT intelligence will be blocked. SAS tools and services help organizations get past this roadblock. Frequently, service level management, financial management and capacity planning are not closely coupled to one another or any strategic goals because the tools are not integrated or the data is trapped. Service level agreements (SLAs) are defined without the direction of strategic goals and objectives. When SLAs do exist, they have often been negotiated with the wrong people. Agreements with end users (rather than strategic decision makers) usually result in a tactical situation rather than a strategic one, which prevents IT from being as cost-efficient as possible. Agreements are then measured and met, but business requirements are often missed. SAS IT Intelligence provides solutions for optimizing resources, services and finance: Resource optimization enables organizations to analyze and predict resource requirements based on future business demands and constraints. Using SAS IT Resource Management, IT performance data may be consolidated from any source across the enterprise. SAS analytics are then used to profile and optimize the distribution of business-critical applications and workloads to streamline the delivery of services. Service optimization is driven by SAS IT Service Level Management, a solution integrated with SAS IT Resource Management to automate the calculation and reporting of service level agreements. Financial optimization involves using SAS Activity-Based Management to derive the costs of IT services, service levels, and resources, and to create scenarios for what-if analysis. In short, SAS IT Intelligence helps you balance enterprise strategy, business objectives, IT resources and costs. SAS IT Intelligence leaping tactical pitfalls Let s examine each part of SAS IT Intelligence in detail: resource optimization, service optimization and financial optimization. Each optimization capability equates to a section of management responsibility within IT. And, while each capability could successfully be used in isolation, the true strength of SAS IT Intelligence is its ability to help IT departments align with the business, achieve the best balance between cost and service, and develop accurate forecasts for a more proactive, value-based approach to IT. 2

5 For the enterprise as a whole to be successful, all three optimization capabilities must also build off the same representations of data and business applications. An IT data mart reconciles infrastructure data from across the enterprise and in turn provides the basis for these representations. Through the process of creating IT intelligence, business application representations will continually be used in conjunction with capacity forecasts, service level results and financial capabilities to aid the alignment of IT services, cost and business objectives. Because the allocation of resources remains a primary issue for IT, we ll begin with resource optimization. Resource optimization As organizations become increasingly dependent on technology, there is a renewed emphasis on capacity planning and demand management. It is imperative to buy and deploy the right amount of infrastructure at the right time without wasting existing resources. Doing so saves money and ensures that the needs of the business are met. For organizations that specify standardized service offerings, the task is even more difficult. Forecasts must be made both by standard service and by business application. To acquire and deploy resources in the right amount and at the right time, IT departments need the ability to predict where the business is going and then translate that information into IT resources. Successful resource optimization requires the completion of three vital tasks: Measuring resource usage. Forecasting resource saturation levels and workload growth based on service objectives. Maximizing the value of underused infrastructure through appropriate server consolidation. Measuring resource usage Capacity managers seek alignment between business objectives, requirements and volume estimates. The key to this level of alignment is building end-to-end representations of business applications using infrastructure data from the disparate sources throughout the enterprise. SAS IT Resource Management overcomes many of the challenges of creating workload characterizations in shared environments or developing end-to-end application logical representations by correlating disparate data (e.g., transaction IDs) from virtually any source. As a result, IT can understand how all IT infrastructure components interact to facilitate business activities. This picture of resource usage in terms of business activities is an essential component of business alignment, financial optimization and service level management. With SAS IT Resource Management, you can drill into this information to identify the root causes of problems. You can even employ SAS forecasting software to analyze and predict resource consumption over time. 3

6 Forecasting saturation and growth A key enabler of resource optimization, forecasting is part art and part science. The science involves forecasting workload characterizations by testing multiple alternatives under identical and repeatable conditions. These experiments are most effective with actual workload data rather than synthetic data. While synthetic data is only as reliable as the synthetic model, actual data provides a reliable and repeatable representation. The art of forecasting involves studying the possible changes in workload that result from adjusting the model. To ensure that capacity planning activities align with enterprise goals, business plans and initiatives should be used to determine the new capabilities IT must provide. Typical plans include volume projections, growth objectives and service level criteria for any given business investment. But business plans alone aren t enough to encompass all growth factors. Forecasting technology can help you predict saturation levels and then vary business transactions and services according to peak business times and trends. Such advanced planning techniques are a significant step toward helping IT align with business goals. Existing trends in resource utilization are often excellent predictors of future growth. For example, a credit card company s accounts in force could be tracked as a business metric and used when forecasting capacity. Resource optimization provides sophisticated statistical analysis of trends that is much more accurate than simple trend lines. Forecasts can help account for an annual upsurge experienced during peak seasons, for example. Determining resource saturation levels requires accounting for multiple resources simultaneously. CPU, memory, disk space, disk I/O rates and network utilization must all be considered and should be planned for peak periods. Saturation thresholds have an impact on service levels and service level management as well. Thresholds that are consistently exceeded without service level problems are probably set too low. Thresholds that are never exceeded but do cause service level violations are set too high. It is vital when optimizing IT resources to correlate service levels with specific resources (components) to pinpoint the cause of service level problems. Maximizing the value of underused infrastructure While providing the correct capacity at the right time is an essential and complex undertaking, harvesting and repurposing underused infrastructure is a facet of optimization that directly impacts the bottom line. Great savings can be realized by eliminating non-business resource usage, minimizing redundant resources and combining server workloads. SAS software provides the power to consolidate disparate data and generate workload characterizations of shared resources or end-to-end business applications. As a result, IT finally has the information it needs to deploy the right amount of infrastructure at the right time for strategic business applications. 4

7 Figure 1 illustrates just some of the information that resource optimization provides: The IT components used by each business application. Whether or not those components were provided as a part of a standard service package. The amount of capacity being used for each component. Figure 1: An illustration of resource capacity arranged by business application. In the next section, we will see how the same representation used for resource optimization can be applied to another key SAS IT Intelligence capability: service optimization. Service optimization The first real measures of success or failure in IT business-centric resource optimization are service level agreements delivered to the business. When logical representations of business application capacity are used for resource optimization, SLAs will mirror those logical representations either within the business application models or within the standard service pools. Service optimization measures the performance of business application models, isolates performance issues and links to capabilities for financial optimization to further the process of optimizing IT performance. As companies streamline IT processes, many turn to a framework of best practices. Those practices, such as the IT Information Library (ITIL), provide a repeatable and efficient means for delivering the underlying IT management, service and support needed to sustain service levels. In addition to providing efficient and effective IT processes, the ITIL framework also provides measurable processes. 5

8 Measuring the processes that sustain IT service delivery helps provide a link between resource and financial optimization. With this information, IT moves one step closer to understanding the true cost of delivering business services. Figure 2 illustrates service optimization by showing the availability, response time and throughput of the same IT resources listed in Figure 1 as they map to service level agreements. Figure 2: The performance of business applications against service level agreements. At the core of each SLA are the infrastructure components that comprise that particular business application. Some are standalone components and some shared, but all are necessary for the business application to function. In essence, service level management is about enforcing the agreed definition of a service (the hardware and software components that enable a certain business application) and the agreed quality of the service. Quality of service is expressed in terms of the availability, response time and throughput of the individual components and the service as a whole. The service optimization process relies first on SAS IT Resource Management to collect, transform and load resource data. Then SAS IT Service Level Management can be used to create service contracts, identify components, set measurement criteria, automatically calculate performance and report the results. SAS IT Service Level Management also measures and highlights SLA performance. Availability is often a key concern for IT. If availability is poor, the entire service is affected. Merely reporting results is not adequate, however. IT managers should be able to identify which specific components affected availability when service was below agreed quality levels. 6

9 Service optimization supplies additional value to both resource optimization and financial optimization. IT-enabled business applications can be built by capacity managers to provide certain levels of service. But without the knowledge of actual performance displayed in varying time increments, capacity planners fly blind. Likewise, without access to the same results, contracts and metrics, financial managers would be unable to determine the cost of a particular service. Financial optimization Financial optimization is the glue that binds resource and service optimization to enterprise strategy. As crucial as resource and service level management are, both must still be balanced with cost expectations. Resource and service management leave unanswered: Why are we spending the money? How much do I have to spend? How much and how fast am I spending? Where am I spending the money? How can I improve financial performance? It is easy to overspend and, as a result, hurt the business. Without tying service costs to results, it is impossible to align IT with strategic business goals. To complete the picture, SAS enables organizations to analyze and predict resource requirements based on future business demands and constraints. Using SAS IT Resource Management, IT performance data may be consolidated from any source across the enterprise. SAS analytics are then used to profile and optimize the distribution of business-critical applications and workloads in order to streamline the delivery of services. SAS Activity-Based Management, which produces the cost of both resource and service optimization, completes the picture and helps IT users compare actual results to expected results and fully exploits SAS data consolidation capabilities. Figure 3, still using the same IT resources built from disparate IT data, illustrates the added knowledge that can be gained through financial optimization: the performance of IT service level agreements against budget goals. SAS Activity-Based Management employs a process that converts IT raw materials into IT production activities and from production to products or cost objects. While activity-based costing is not limited in scope, financial performance models can be designed primarily to answer, What is the cost of an IT service (the cost of an SLA)? Secondarily, these models can capture IT labor costs, pinpoint excessive costs and calculate total cost of ownership. Optimization of IT costs also means calibrating a sharp focus on IT s largest investment: human capital. Consumption of human capital resources within IT can be optimized when you can determine the cost of IT processes and the business value of those processes, as well as whether all SLAs are consuming resources equally. SAS Activity-Based Management extracts, transforms and loads financial data from general ledger accounts, HR applications, asset management applications and other sources to load the raw costs for infrastructure and IT personnel. 7

10 Figure 3: An illustration of resource cost by business application. Summary SAS IT Intelligence provides SAS data consolidation and business intelligence to solve the issues that prevent true alignment between IT and business. Consolidating data about IT resources into a form that shows their relevance for various business applications builds the foundation organizations need to provide the right services to the right people at the right time and the right cost. The ability of the IT infrastructure to enable business applications is then measured in terms service level agreements. SAS automatically tracks availability, response time and throughput against those agreements. Capping the results of the service, SAS calculates the costs of the service. Costs that are too high impact the bottom line and break alignment with the business. With knowledge of costs based on consumption, IT and their business partners can discuss resources and business goals in terms of the value IT provides. Only this kind of intelligence allows IT to evolve from supplier to partner to trusted advisor. 8

11 About SAS SAS is the market leader in providing a new generation of business intelligence software and services that create true enterprise intelligence. SAS solutions are used at more than 40,000 sites including 96 of the top 100 companies on the FORTUNE Global 500 to develop more profitable relationships with customers and suppliers; to enable better, more accurate and informed decisions; and to drive organizations forward. SAS is the only vendor that completely integrates leading data warehousing, analytics and traditional BI applications to create intelligence from massive amounts of data. For nearly three decades, SAS has been giving customers around the world The Power to Know. 9

12 SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright 2009, SAS Institute Inc. All rights reserved.

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