State of California

The Budget Trifecta:gImproving your oddsthrough a New Way

Contributions by HP, CA, IBM,

g yof Managing

yOffice of Systems Integration

Brad AhlfCarlos RamosMark AnthonyJamie MangrumSteven Romero

Optimize the business outcome of IT

State of California

AgendaAgenda

CIO Challenges

CIO Solutions

Moderated Panel Debate

Optimize the business outcome of IT

State of California

CIO Challenges

Optimize the business outcome of IT

Sound Familiar?Time to end budget feuds, governor saysBy Kevin Yamamura and Steve Wiegand | Published: Sacramento Bee Friday, Jan. 09, 2009 | Page 4A

He likened his plan to "a sturdy four legged stool":He likened his plan to "a sturdy four-legged stool":• Reduce spending by $16.5 billion, with most of

the cuts coming in education programs; prisons;the cuts coming in education programs; prisons; and services to the elderly, poor and disabled.

• Increase revenue by $14.8 billion, most of it i f 1 5 t hik i th l t fcoming from a 1.5-cent hike in the sales tax for

three years, and borrow $10.3 billion.• Create jobs by relaxing environmental regulations Create jobs by relaxing environmental regulations

to accelerate public works projects.• Make state government more efficient by g y

eliminating or consolidating redundant or unnecessary programs

Sound Familiar?

Information tech offices for state may be mergedPublished: Sacramento Bee Saturday, Jan. 17, 2009 | Page 7B | Andrew McIntosh

The state's four key information technology agencies may be consolidated under a newly expanded Office of the Chief Information Officer under a proposal unveiled Friday by Gov Arnold Schwarzeneggerproposal unveiled Friday by Gov. Arnold Schwarzenegger.

The governor said he hopes his plan – based on recommendations from the Little Hoover Commission –will help save taxpayers $1 5 billion by 2014will help save taxpayers $1.5 billion by 2014.

The agencies affected include: the Office of the State Chief Information Officer, the Office of Information Security and Privacy Protection's information security operations, thePrivacy Protection s information security operations, the Department of Technology Services and the Department of General Services' telecommunications division.

IT today – highly complex, slow and costly

Manual

Constant Cycle of Change

Complex infrastructure, many applications, systems and stakeholders

ProvisioningDiscovery

Change

Compliance Management

IncidentManagement

Release - Manual- Error prone - Inconsistent

Complex Hand–offs

ChangeManagement

ReleaseManagement

Release Managers Compliance

ManagersOperation Centers

- Between Groups- Between Systems- No process control

p

Monitoring

Unix SystemAdministrators

Networking Engineers

Managers Centers

StorageAdministrators

Source Control

- Splintered visibility- Disparate management

of infrastructure silos

Fragmented App ViewTicketingNetworkingAdministrators

Windows SystemAdministrators

One Application

- Servers, network, storage

Complex Infrastructure

pp

Data Center- 1000s of dependencies- Many locations

IT today – highly complex, slow and costly

Manual

Constant Cycle of Change

Complex infrastructure, many applications, systems and stakeholders

ProvisioningDiscovery

Change

Compliance Management

IncidentManagement

Release - Manual- Error prone - Inconsistent

Complex Hand–offs

ChangeManagement

ReleaseManagement

Release Managers Compliance

ManagersOperation Centers

Portfolio Plans?Project Priorities?

Objective Measures?Funding and

Providing what

IT Service Management?

Change & Release- Between Groups- Between Systems- No process control

p

Monitoring

Unix SystemAdministrators

Networking Engineers

Managers Centers

StorageAdministrators

Source Control

gBusiness needs?Business Value of

IT Projects?

Change & Release Management?Configuration Management?

Customer Experience SLA

Monitoring?

- Splintered visibility- Disparate management

of infrastructure silos

Fragmented App ViewTicketingNetworkingAdministrators

Windows SystemAdministrators

One Application

gData Center Automation?

Operational Best Practices?

Application Development Quality

& Performance?Supportable Architecture?

Enforced

- Servers, network, storage

Complex Infrastructure

ppStandards?

Shared Services?Agile and Adaptive

Application Integration?

Data Center- 1000s of dependencies- Many locations

Some Inspirational Thoughts on Changep g g

• From Mark Allen’s inspirational speech today−To “do more with less” you need to change what

you’ve always been doing• “If you keep doing what you’ve always been doing you’ll get• If you keep doing what you ve always been doing, you ll get

more of what you already have” – Mark Allen• (alternative) “The definition of insanity is doing the same thing

over and over again and expecting different results” – Albertover and over again and expecting different results Albert Einstein

−Approach to Change:Cl if• Clarify

• Adjust• Complete

State of California

CIO Solutions

Context for BusinessBusiness Solution Initiatives

Optimize the business outcome of IT

Business Technology Optimization (CIO) viewOptimize the business outcomes of IT

Business Outcomes

p

Business OutcomesReduce

SpendingConsolidate,

IncreaseEfficiency

Eliminate theUnnecessary &

Redundant

CIO Bridges the gap between IT and the Lines of Businessto deliver positive business outcomes

Project Portfolio M t &

Enterprise

APPLICATIONS OPERATIONSSTRATEGY

Management & Planning

Architecture & Consolidation

IT Governance bridging the gaps between functional IT silos to deliver positive business outcomes

IT Governance & Business Value

Management

Solutions and Initiatives within a BTO view

IT management solutions for improving key processes within critical IT functions aligns into different business areas of ITareas of IT

APPLICATIONS OPERATIONSSTRATEGY

Project & PortfolioManagement

Business AvailabilityQuality Service

ManagementPPM drives Applications and Operations priorities

CM

DB

CIO Office

EnterpriseArchitecture Performance

Operations

SAP, Oracle, SOA, J2EE, .NetCTO Office

Architecture,SOA

PerformanceChange &

ConfigurationNetwork Management

EA drives Applications and Operations efficiency

IT Governance bridging the gaps between functional IT silos to deliver positive business outcomes

State of California

CIO Solutions

Business Solution Initiatives:Initiatives:

- IT GovernanceIT Governance - Portfolio Management- Enterprise Architecture p& Consolidation

Optimize the business outcome of IT

Five Key IT Governance Decisions

IT Principle DecisionsClarifying Enterprise Objectives for IT

There is no real Project and Portfolio Planning

Clarifying Enterprise Objectives for IT

IT A hit t

IT InfrastructureDecisions IT Investment and

Investment inNon-strategic

Systems & Apps

Lack Risk Management & Decision Support

IT ArchitectureDecisions

PrioritizationDecisions

Duplicate systems L k bj iBusiness Application

Decisions

Duplicate systems from different

Units

Lack objective measurements & get

political decisions

Unsupportable Redundant

Applications

No prioritization of projects, all are #1, priorities changing

13

Applications

IT Governance bridging the gaps between functional IT silos to deliver positive business outcomes

IT Governance - Defining IT priorities around Business Value

Wh t i d

The CIO roundabout What IT Assets do we have and how are they allocated right What new or improved

business-significant services should we provide this year? What key projects are

we currently working on?

y gnow?

How are my staff i f t t d b d t

Are we focused on only th t i ifi t

on?

infrastructure and budget allocated right now?

the most significant projects to the

business?CIO objective:• Maximize Business Value• Mitigate Risk• Drive Innovation

How can we free up enough resources from existing projects for new

projects?

How can we optimize our IT investments at the

portfolio, program and project levels?

… while meeting budget

Where should we

14

projects?project levels? consolidate and standardize

architecture?

Aligning The IT Requirements to the Business Valueto the Business Value

Need to invest in IT Business Value with highest business i t d IT d t li ITimportance and IT needs to align IT requirements to that business value direction

Strategy/

Need for a structured IT Governance process between IT and the business to review a common set of criteria to select and

Initiatives

The Gapprioritize IT project portfolio

Need IT Value Evaluation Process to match the planning process toMarkets/Projects to match the planning process to help in decision making for projects and technologies

j

IT Go ernance g ides the process

15

IT Governance guides the processIT Portfolio Management bridges the Gap

Enterprise Architecture & Consolidation supports the process

Synchronizing IT Portfolio with the Business Portfoliothe Business Portfolio How will we balance Business Value and Risk with IT Value

and Risk if we cannot see the difference?

How will we make choices in a cross functional situation or do we wish to evaluate opportunity by Business Portfolio and that specific Business IT Portfolio?

• Centralized IT must consider this and communicate it’s best methodology using strong IT Governance

• The Opportunity to provide additional value to the businessis enormous

• Requirement is to understand the IT and Business Value d Ri k th t th tf li l l d thand Risk, measure them at the portfolio level, and then

use a standardized IT Governance process for planning and executing projects

• Business Value decisions must then be executed within

16

• Business Value decisions must then be executed within IT according to these business requirements including tough decisions in Enterprise Architecture and Consolidation

Portfolio Management:The reality in today’s IT environment

OperationsQADevelopmentProject Team BProject team APMO

Manual reports or data extracts passed between teamsppjj

Corporate annualbudget

Service desk

Projectpipeline

Application lifecycle

management

g

Projectscheduling

Resource

Testing requirements/

defectsTime

recording

17 PPM environment

Resourceplanning Project issues,

risks, scope changes

Enterprise Architecture & ConsolidationBusiness Value Benefits Summary

Top Benefits Cumulative Benefits2009 - 2011

Benefit Type Benefit Class Project Name Contribution to Top Benefits

End User Outage Effect - Risk Mi i i (@10% DDM)

$3,055,050 Operating Expense (All d)

Indirect Benefit Customer Experience SLA i i &

39.1%Mitigation (@10% DDM) (Allocated) SLA monitoring &

CMDB correlation

Configuration Management Process Efficiency

$1,129,167 Operating Expense (Allocated)

Direct Benefit CMDB and Discovery 14.5%

Incident Management Process Efficiency

$993,122 Operating Expense (Allocated)

Direct Benefit ITSM 12.7%

Automated Relationship Mapping Process Efficiency

$730,288 Operating Expense (Allocated)

Direct Benefit CMDB and Discovery 9.3%

Change Management Process Efficiency

$431,452 Operating Expense (Allocated)

Direct Benefit ITSM and PPM and ITG

5.5%

Change Management Process Efficiency

$426,680 Operating Expense (Allocated)

Direct Benefit Data Center Automation

5.5%

Availability Management Process Efficiency

$265,510 Operating Expense (Allocated)

Direct Benefit Customer Experience SLA monitoring

3.4%

Release Management Process Efficiency

$219,490 Operating Expense (Allocated)

Direct Benefit ITSM and Data Center Automation

2.8%

End User Outage Effect - Risk Mitigation (CCM)

$208,614 Operating Expense (Allocated)

Indirect Benefit ITSM and PPM and ITG

2.7%

Problem Management Process Efficiency

$145,402 Operating Expense (Allocated)

Direct Benefit ITSM 1.9%

All other Included Benefits $206,079 2.6%

18

$ ,

Total $7,810,852 100.0%

The Solution to This Problem?Business Value – ITG – PPM – EABusiness Value ITG PPM EA

& Consolidation

The Approach to This Solution?

19

The Approach to This Solution?People – Process - Technology

State of California

The Budget Trifecta:I i ddImproving your oddsthrough a New Way

f M iof Managing

P l D b tCarlos Ramos - ModeratorM k A th

Panel Debate

Mark AnthonyJamie MangrumSteven Romero

Optimize the business outcome of IT