e m C p e r s p e C t i v e

WHAT YOU NEED TO KNOW ABOUT DATA CENTER TRANSFORMATION

When business as usual is not enough: The CIO’s dilemma

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When business as usual is not enough: the Cio’s dilemma Information technology (IT) organizations are caught in a vicious circle. They are expected to handle, on average, 60 percent more information every year while improving the quality of service they deliver to the business, all on a virtually flat budget. In reality, as more and more of the IT budget is needed just to maintain the status quo, service levels actually decline, risk management suffers, and IT becomes increasingly less supportive of the business. In the worst scenarios, the vicious circle actually becomes a downward spiral.

So, what’s a CIO to do? How do you balance the mandate to become strategic against expectations to keep operations running smoothly? How do you deal with the more sophisticated IT issues like speeding application delivery and managing risk when an increasing percentage of your budget and your resources are consumed with managing business as usual? What do you do when a program of continuous service improvement actually results in service degradation?

Some leading enterprises are deciding that a dramatic change in IT strategy is needed to achieve the speed and agility a successful IT organization needs today. This paper describes a different approach to IT strategy called data center transformation, including its inherent challenges and associated best practices that result in a plan to pull IT out of its downward spiral into a transformed, strategic state.

data Center transformation defined Many organizations coin the phrase “data center transformation” to define their version of a challenging, “step-change” program. However, professionals who run transformational programs define them more precisely as formal, large-scale programs of change that involve multiple concurrent, complementary workstreams touching on people, process, and technology, and that require ongoing measurements and adjustments. Also, data center transformation calls for a new, “transformational” management style—leadership that is willing to challenge the organization’s traditional goals and ways of working, is aware of the scale of change required, and can define and drive rapid delivery and adoption of new strategy, infrastructure, and practices. Not every data center manager is prepared to lead a transformational program.

data Center transformation CharaCteristiCsThe objective of data center transformation is to change the organization from a siloed, technology-focused cost center to a strategic enterprise asset. Transformed, next-generation data centers have the following characteristics:

•Service-oriented:Providingvaluetobusinesscustomersbydeliveringtherighttechnologyservices at “fair-market-value” prices.

•Agile:QuicklysupportingarapidchangeinbusinessdirectionwithrequiredITservicessuch as provisioning.

•Automated:Managingoperationalprocesseswithoutdeviationfrombestpractices,withregular reports on performance against SLOs.

•Protected:Highavailabilityandinformationsecurityfordataatrestandinflight,withoutdata loss.

•GreenSustainable:Efficientoperatingenvironmentmanagedinanenvironmentallyconscious way.

Key Components/ChallengesFor the CIO convinced that these are worthwhile goals to strive for, beginning with several of these “cornerstone” initiatives is the recommended next step:

Service catalog: Achieving service orientation, which should be a primary goal/driver of any data center transformation initiative, starts by defining a service catalog. A service catalog enables the data center to capture business requirements, translate them into technical

Key Drivers of Change in Today’s Data Center

•Cost

•Businessagility

•Virtualization

•Protection

•ServiceDelivery

•GreenIT

•Obsolescence

•People

A transformational leader must be able to:

•Developandcommunicateavisionandastrategy

•Helptheenterpriseunderstandandbelieve the vision

•Motivateandinspiretoachievethevision

•Producechange,oftentoadramaticdegree

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service-level objectives, then define a high-level reference architecture to deliver the required services.

ByaligningbusinesswithIT,aservicecatalogenablesthedatacenter,applicationdevelopers, and business stakeholders to have discussions not about which technologies and vendors to purchase (the old “IT-as-a-parts-supplier” role), but rather on service delivery—what level of IT service is needed. Deploying and managing a service catalog calls for IT to build and maintain a business relationship with their client. Whether the client is the application development organization or the line of business itself, the data center must be able to gather requirements in business language and explain their service commitment in similar terms.

Chargeback: Without financial consequences for their choice of IT services, delivering IT as a service will fail since the lines of business will insist on getting the highest level of service, whether justified or not. When creating a service catalog, therefore, you will need to know the costs of the services you will be delivering. Most forms of chargeback are based on allocation or equal distribution of the total cost of IT to different lines of business. A pure utilization-based model, while ideal for a service-catalog-based infrastructure, is expensive and challenging to implement. Of the three popular methods of charging for IT services—pure allocation, pure utility, and paper-based adjustment based on utilization—the last option is most realistic and achievable.

Consolidation and virtualization: Data center transformation typically leverages consolidationandvirtualizationforcost,efficiency,andagility.Virtualizationchallengesthelines of business to share hardware assets and provides an opportunity to build SAN-based central repositories of data. Organizations looking to leverage consolidation and virtualization for cost-cutting purposes must set proper expectations based on a complete understanding of the operational and tool related cost and challenges. Although server consolidation is sufficient for some companies, consolidation alone does not deliver the same amount of flexibility as taking the next step, which is to virtualize. For optimum results, storage consolidation with deduplication is a prerequisite for virtualization.

Process rationalization and optimization: Organizations looking to improve service delivery viastandardssuchasITILandCOBITcannotoverlooktheneedtomodifytheirorganizationand align it with the new operational processes. Consider that any data center process worth improving is usually fairly complex and has components that different IT roles support. In the ideal situation, your IT organization will be organized around platform specialization/focus (network, compute, and storage) and will require planners to architect your information infrastructure, senior-level engineers to build it, and more junior-level staff to monitor and administer it.

Rationalized processes will be aligned with the right platform skills and roles to ensure that tasksareperformedsmoothlyandclearlymeetpromisedservicelevels.EMC® Consulting has seen up to a 400 percent improvement in the number of management processes executed per data center employee when process improvement is accompanied with an organizationalrealignment.Also,withITILV3puttinganewemphasisonservicelifecycle,an optimized operations function will be constantly seeking to refresh service delivery levels.

Automation: Only after you are satisfied that your processes are well streamlined should you introduce technology to automate them. Remember that the introduction of new technology is not only intended to discipline the organization to follow their best practices, but also to monitor, measure, and report benefits realization on a regular basis to management. Automation is also the key to preventing organizations from reverting back to the older, more familiar but less efficient processes.

People change: A transformational program aligns the data center organization with newly optimized processes and procedures, giving people greater clarity regarding their present roles and responsibilities as well as career path and growth opportunities—and ironically, injecting the organization with a sense of energy rather than a fear of change which is sometimes exhibited at the start of large change programs.

Considerations for Successful Virtualization

Virtualizationispowerful—butbecauseofitsprofound impact on operations and core processes, it is essential to achieve the right balance between aggressiveness and care when deploying this new technology. For this reason, it is critical to embrace virtualization holistically and on a large scale—consolidate servers (and networks), optimize operations, and then virtualize—and to leverage professionals who have the appropriate knowledge, experience, tools, and skills to understand the broad range of associated issues, create a strategy, and set proper expectations.

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starting your transformation journeySince it is extremely difficult to address all of your transformational objectives at the same time, you need to identify and prioritize your key business and associated IT challenges to determine where you want to focus your transformation efforts first. You also need to establish your current data center capabilities and set goals for your transformational program.

The combination of a transformational framework and maturity model such as the ones illustrated here can help you evaluate your current capabilities—where you are today. The data center transformational framework organizes your change program into key workstream categories(Customer/Service,Organization/Process,Infrastructure/Toolset,People,andBenefitsRealization)andisapowerfultooltoidentifythecriticalsuccessfactorsthatshouldbe in place to drive a comprehensive transformational program. It helps you focus not only on the technologies you should adopt, but also on the expected capabilities or characteristics of the data center at each progressive stage of maturity. An assessment of your data center against this framework can enable you to have strategic discussions on the business value of deploying new technologies to improve the current state of your IT infrastructure and address cost issues, security risk, and operational agility.

Customer and Service

Organization and Process

Infrastructure and Toolsets

People

Benefits Realization

Basic Standardized Rationalized Dynamic

Support technology always in “react” mode

No formal processes, procedures

Technology “silos” supporting single applications

Many non-integrated tools

Employees support technologies without training experience

IT viewed as cost center IT value difficult to articulate

Service catalog established

Process efficiency baseline established

Some best practice processes documented

RACI alignment

Tiering, application alignment

Availability alternatives assessed

Targeted, policy-based archiving

Infrastructure consolidation

Limited virtualization deployed

Backup architecture rationalized

Career paths defined

Skill set assessed, training plan in place

Lower-cost, efficient data centers

Consistent IT services across enterprise

Information pooled, available for re-use

Service catalog SLA reports to clients

Allocation-based chargeback

IT best practices documented, measured

Managed automation

Operations for virtualization in place

Broader virtualization deployed

Policy-based data classification

Backup to disk, optimization

Strong retention through career growth, mobility

Energy related savings from virtualization

IT service performance reports

Decision support enabled

Utilization-based chargeback

Automated services management

Continuous process improvement

Automated management reports

Complete production virtualization

Multi-site load balanced DR

Policy-based data mobility

Business requirements gathering skills in IT

Agile infrastructure

IT service performance reports

Business intelligence enabled

DataCenterTransformationalFramework:InthisexampleofatransformationalframeworkusedbyEMCConsulting, each workstream category comprises a series of related elements that constitute possible initiatives in your program, accompanied by a list of related best-practices/critical success factors at each level of maturity that need to be addressed to achieve a fully transformed, next-generation data center. Depending on which business drivers you are responding to, you will focus on one or more workstream category, sometimes concurrently.

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aChieving and sustaining momentum

The duration and complexity of a data center transformation—and the need to maintain progress on all concurrent workstreams without dropping the ball on day-to-day operations—can make it difficult for an organization to sustain momentum for continuous improvement over time. A phased approach with multiple measurement checkpoints not only at the end of, but also at multiple points within each phase, can help to sustain the sense of success and progress and allow the organization to refresh its commitment at each milestone. As the successes mount, so too will the momentum and commitment to continue driving the transformational journey.

The following best practices are also key to achieving and sustaining a successful data center transformation initiative:

•Obtainexecutivesponsorshiptochampiontheinitiativeandresolveconflictswhennecessary.

•Establishaprogramofficeorcenterofexcellencetohelpsetexpectations,removeobstacles, communicate objectives and progress, measure benefits, and renew commitment.

•Focusoninformationanditsservicerequirements—notontechnology.•Changeinterimgoalsormeasurementpointsasneededtoenergizetheorganizationasit

transitions through the transformation phases.•Usesavingsrealizedfromshort-termefficiencygains(e.g.,fromconsolidationand

virtualization) to fund longer-term program goal initiatives.•Focusonsystemmanagementandoperationstoensuresuccessfulvirtualization

deployment and sustained benefits.•Leveragechargebacktoensurethatbusinesscustomerschoosetherightservicesatthe

right cost points.•DevelopITbusinessservices,andformalizegovernance.•Establishkeyperformanceindicatorsthatmeasuretheeffectivenessofyouroperations

and service levels.•Augmentprocessimprovementinitiativeswithorganizationalalignment.

reaping the reWards Successfully making the transition from a tactical utility to a strategic, next-generation data center requires significant time, commitment, and dedication. The stakes are high and there are no magic bullets—not even virtualization. Senior IT leaders need to ask if a transformational approach is required, and how they will manage such a long-term change initiative. Not everyone is a candidate for a data center transformation.

Nonetheless, there is significant measurable ROI to be achieved; companies that have successfully completed a data center transformation have documented multiple millions of dollarsinsavingsrepresentingasignificantreturnontheirinvestment.Perhapsthegreatervalue of data center transformation is in the “intangibles”—speed, agility, and control. A programmatic approach to data center transformation—especially when leveraging industry best practices, expertise, and tools such as a transformational framework—will deliver steady improvements/benefits at every step in the journey with the greatest benefits realizedafterthefirstyear.Ultimately,transformationprogramsinjectmeaninganddirection into organizations and yield remarkable results that reach beyond the group/organization being transformed.

Data Center Transformation Case Study

Likemanyofitscustomers,EMC’sownITorganization faces diverse challenges in its day-to-day operations as it supports a rapidly growing business that has undertaken 25 acquisitions in three years and has over 44,000 employees around the world. With more than 500 applica-tions—21 of which are classified as mission critical—distributed over three enterprise data centers and two regional data centers, EMCITmustsimultaneouslymanageitscurrent application portfolio while improving service levels and business agility as well as reducing costs and risk. The changing environment and the need to improve service levels provided the impetus forEMCITtoundertakeadatacentertransformation initiative.

EMCConsultinghelpedachievethistransformation with a phased approach that focused on classifying data as well as consolidating, tiering, archiving, and virtualizing the infrastructure. Several years intotheproject,EMCITisnowundertakingfurther change initiatives, leveraging best practices from the first phases.

EMCITaccomplisheditsobjectivesinthistransformation by reducing costs while improving alignment with the business through a service-oriented approach. The program generated hard benefits of greater than $80 million over three years, as well as improved compliance and operational efficiency—evenwhileEMCwasexperienc-ing 70 percent growth during that period. Examplesofthesesavingsinclude:

•Consolidating,classifying,andtieringdata eliminated redundant data and yielded cost avoidance of $42 million.

•Archivingdataandapplyingpolicy-drivendata tiering yielded cost avoidance of more than $29 million.

•Streamliningbackupssavedapproxi-mately1.2PBofstorage.

•Virtualizingserversproducedacostavoidance of at least $9 million.

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are you a Candidate for data Center transformation?Successful transformation is brought about by deep organizational willingness to change at its core—its approach, its organization and processes, its infrastructure and toolsets, and its skillsets—and by the ability to address and stay focused on the many multiple threads of a transformation initiative until the desired end state is achieved. Some organizations that have achieved a certain level of efficiency and maturity may not require a transformation, and some may even choose to wash their hands of technology altogether and outsource to a third party. You and your management should consider the following questions to help you determine if your organization is a candidate for this journey:

•Doyouunderstandtheprofoundopportunityinherentinadatacentertransformation?•Doyouunderstandthechallengesaheadandareyoureadytoassumetherisk?•Doyouhavethedisciplinetostickwithatransformationinitiativeevenwhenprogressand

benefits realized at any point are not up to expectations?•Doyouhavethestrongsponsorshipyouneedtosupportyouthroughoutyourjourney?•Doyouhavethe“can-do”culturetoenableandsustainmomentumandachieveyour

transformation goals? •Doyouhavethetransformationalleadershipinplace?•Doyouhavetherightstafftocarryoutthisjourney?

ContaCt usTolearnmoreabouthowEMCConsultingservices can help solve your business and IT challengescontactyourlocalEMCConsult-ingrepresentativeorvisitusatwww.EMC.com/consulting.

EMCConsultingdrawsonauniquemixofindustry, business, and technology expertise to help organizations solve today’s toughest challenges and transform information into business results, using field-tested tools, proven methodologies, best practices, and industry standards to minimize risk and optimize time-to-value. Visitwww.EMC.com/consultingformoreinformation.