Journey to SAP Quality — Home Trust Builds Center of Excellence with HP Tools

Transcript of a BriefingsDirect podcast on the steps to build a successful SAP test environment with HP quality assurance tools.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to the next edition of the HP Discover Podcast Series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing sponsored discussion on IT innovation and how it’s making an impact on people’s lives.

Gardner

Once again, we're focusing on how companies are adapting to the new style of IT to improve IT performance and deliver better user experiences, as well as better business results.

This time, we're coming to you from the HP Discover 2014 Conference in Las Vegas to learn directly from IT and business leaders alike how big data, cloud, and converged infrastructure implementations are supporting their goals.

Our next innovation case study interview highlights how Home Trust Company in Toronto has created a center of excellence to improve quality assurance for improved ongoing performance of their SAP applications. To learn how they do it, we are delighted to be joined by Cindy Shen, SAP QA Manager at Home Trust. Welcome.

Cindy Shen: Thank you.

Gardner: First, tell us a little bit about Home Trust. You're a large financial services organization.

Shen: We're one of the leading trust companies in Toronto, Canada. There are two main businesses we deal with. The first bucket is mortgages. We deal with a lot of residential mortgages.

Shen

The other bucket is we're a deposit-taking institution. People will deposit their money with us, and they can invest in a registered retirement savings plan (RRSP) (along with other options for their investment), which is equivalent of the US 401(k) plan.

We're also Canada Deposit Insurance Corporation (CDIC)-compliant. If a customer has money with us and if anything happens with the company, the customer can get back up to a certain amount of money.

We're regulated under the Office of the Superintendent of Financial Institutions (OSFI), and they regulate the Banks and Trust Companies, including us.

Some of the hurdles

Gardner: So obviously it's important for you to have your applications running properly. There's a lot of auditing and a lot of oversight. Tell us what some of the hurdles were, some of the challenges you had as you began to improve your quality-assurance efforts.

Shen: We're primarily an SAP shop. I was an SAP consultant for a couple of years. I've worked in North America, Europe, and Asia. I’ve been through many industries, not just the financial industry. I've touched on consumer packaged goods SAP projects, retail SAP projects, manufacturing SAP projects, and banking SAP projects. I usually deal with global projects, 100 million-plus, and 100-300 people.

What I noticed is that, regardless of the industries or the functional solutions that project has, it's always a common set of QA challenges when it comes to their SAP testing and it’s very complicated. It took me a couple of years to figure the tools, where each tool fits into the whole picture, and how pieces fit together.

For example, some of the common challenges that I'm going to talk about in my session (here at HP Discover) is, first of all, what tools you should be using. The HP ALM, Test Management Tool is, in my opinion, the market leader. That's what pretty much all the Fortune 500 companies, and even smaller companies, are using primarily as their test management tool. But testing SAP is unique.

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What are the additional tools on the SAP side that you need to have in order to integrate back to ALM test suite and have that system record of development plus the system record of testing, all integrated together, and make it flow which makes sense for SAP applications? That’s unique.

Most errors and defects happen in the integration area.

One is toolset and the other one is methodology. If you parachute me into any project, however large or small, complex or simple, local or global, I can guarantee you that the standards are not clear, or there is no standard in place.

For example, how do you properly write a test case to test SAP? You have to go into the granular detail that actually details the action words that you use for different application areas that can enable automation very easily in the future. How do you parameterize?

What’s the appropriate level of parameterization to enable that flexibility for automation? What’s the naming convention for your input parameter and output parameters to make it flow through from the very first test case, all the way to the end, when you test end to end application?

Most errors and defects happen in the integration area. So, how do you make sure your test coverage covers all your key integration points? SAP is very complex. If you change one thing, I can guarantee you that there's something else in some other areas of the application or in the interface that’s going to change without your knowing it, and that’s going to cause problems for you sooner or later.

So, how do you have those standards and methodology consistently enforced through every person who's writing test cases or who's executing testing at the same quality, in the same format, so that you can generate the same reports across all different projects to have the executive oversight and to minimize the duplucate work you have to do on the manual test cases in order to automate in the future.

Testing assets

The other big part is how to maintain such testing assets, so it's repeatable, reusable, and flexible -- and so that you can shorten your project delivery time in the future through automation and a consistent writing test case in manual testing, accelerate new projects coming up, and also improve your quality in terms of post-production support so you can catch critical errors fast.

Those are all very common SAP testing QA themes, challenges, or problems that practitioners like me see in any SAP environment.

Gardner: So when you arrived at Home Trust, and you understood this unique situation, and how important SAP applications are, what did you do to create a center of excellence and an ability to solve these issues?

Shen: I was fortunate to have been the lead on the SAP area for a lot of global projects. I've seen the worst of it. I've also seen a fraction of the clients that actually do it much better than other companies. So, I'm fortunate to know the best practices I want to implement, what will work, and what won't work, what are the critical things you have to get in place in the beginning, and what are the pieces you can wait for down the road.

We had to assess the current status and make sure to come up with a methodology that made sense for Home Trust Company.

Coming from an SAP background, I'm fortunate to have that knowledge. So, from the start, I had a very clear vision as to how I wanted to drive this. First, you need to conduct an analysis of the current state, and what I saw was very common in the industry as well.

When I started, there were only two people in the QA space. It was a brand new group. And there was an overall software development lifecycle (SDLC) methodology in the company. But the company had just gone live with SAP application. So it was basically a great opportunity to set up a methodology, because it was a green field. That was very exciting.

One of the things you have to have is an overarching methodology. Are you using Business Process Testing (BPT), or are you using some other methodology. We also had to comply with, or fit in with, the methodology of SAP which is ASAP, and that’s primarily the industry standard in the SAP space as well. So, we had to assess the current status and make sure to come up with a methodology that made sense for Home Trust Company.

Two, you had to get all the right tools in place. So, Home Trust is very good at getting the industry-leading toolsets. When I joined, they already had HP QC. At that time, it was called QC; now it's ALM. Solution Manager, was part of the SAP solution of the purchase. So, it was free. We just had to configure and implement it.

We also had QTP, which now is called UFT, and we also had LoadRunner. All the right toolsets were already in place. So I didn't have to go through the hassle of procuring all those tools.

Assessing the landscape

When we assessed the landscape of tools, we realized that, like any other company, they were not maximizing the return on investment (ROI) on the toolsets. The toolsets were not leveraged as much, because in a typical SAP environment, the demand of time to market is very high for project delivery and new product introduction.

When you have a new product, you have to configure the system fast, so it’s not too late to bring the product to the market. You have a lot of time pressure. You also have resource constraints, just like any other company. We started with two people, and we didn’t have a dedicated testing team. That was also something we felt we had to resolve.

We had to tackle it from a methodology and a toolset perspective, and we had to tackle it from a personnel perspective, how to properly structure the team and ramp the resource up. We had to tackle it through those three perspectives. Then, after all the strategic things are in place, you figure out your execution pieces.

From a methodology perspective, what are the authoring  standards, what are action words, and what are naming conventions? I can't emphasize this enough, because I see it done so differently on each project. People don’t know the implications  down the road.

It's different from company to company. You have to figure out the minimum effort required, but what makes sense.

How do you properly structure your testing assets in QC that makes sense for SAP? That is a key area. You can't structure at too high of a level. That means that you have a mega scenario of everything in one test case or just a few test cases. If something changes, which I can guarantee you it will, something changes in the application, because you have to redevelop it or modify it for another feature.

If you structure your testing assets at such a high level, you have to rewrite every single asset. You don’t know where it’s changing something somewhere else, because you probably hard-coded everything.

If you put it at a too much of a granular level, maintenance becomes a nightmare. It really has to be at the right level to enable the flexibility and get ready for automation. It also has to be easy to maintain, because maintenance is usually a higher cost than the actual initial creation. So, those are all the standards we are setting up.

What’s your proper defect flow? It's different from company to company. You have to figure out the minimum effort required, but what makes sense. You also have to have the right control in place for this company. You have to figure out naming conventions, the relevant test cases, and all that. That's the methodology part of it.

The toolset is a lot more technical. If you're talking about the HP ALM Suite, what's the standard configuration you need to enable for all your projects? I can guarantee you that every company has concurrent projects going on after post-production.

Even when they're implementing their initial SAP, there are many concurrent streams going on at the same time. How do you make sure its configuration accommodates all the different types of projects? However, with the same set of configuration -- this is a key point -- you cannot, let me repeat, you cannot, have very different configurations for HP ALM  across different projects.

Sharing assets

This will prevent you from sharing the test assets across different projects or prevent you from automating them in the same manner or automating them for the near future and prevent you from delivering projects consistently with consistent quality and with consistent reporting format across the company. It prevents all of those and that would generate nightmares for maintenance and having standards put in place. That’s key. I can't  emphasize that enough.

So from the toolset, how do you design a configuration that fits all? That’s the mandate. The rule of thumb is do not customize. Use out-of-box functionality. Do not code. If you really have to write a query, minimize it.

The good thing about HP ALM is that it's flexible enough to accommodate all the critical requests. If you find you have to write something for it or you have to have a custom field or custom label, you probably should consider changing your process first, because ALM is a pretty mature toolset.

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I've been on very complex global projects in different countries. HP ALM is able to accommodate all the key metrics, all the key deliverables you're looking to deliver. It has the capacity.
When I see other companies that do a lot of customization, it's because their process isn't correct. They're fixing the tool to accommodate for processes that don’t make sense. People really have to have that open mind, and seek out the best practice and expertise in the industry to understand what out of box functionality to configure for HP ALM to manage their SAP projects, instead of weakening the tool to fit how they do SAP projects.

When I see other companies that do a lot of customization, it's because their process isn't correct.

Sometimes, it involves a lot of change management, and for any company, that’s hard. You really have to keep that open mind, stick with the best practice, and think hard about whether your process makes sense or whether you really need to tweak the tool.

Gardner: It's fascinating that in doing due diligence on process, methodology, leveraging the tools, and recognizing the unique characteristics of this particular application set, if you do that correctly, you're going to improve the quality of that particular roll out or application delivery into production, and whatever modifications you need to do over time.

It's also going to set you up to be in a much better position to modernize and be aggressive with those applications, whether it's delivering them out to a mobile tier, for example, or whether there’s different integrations with different data. So when you do this well, there are multiple levels of payback. Right?

Shen: I love this question, because this is really the million-dollar view, or the million dollar understanding, that anybody can take away from this podcast or my session (at HP Discover). This is the million dollar vision that you should seriously consider and understand.

From an SAP and HP ALM perspective and the Center for Excellence, the vision is this (I'm going to go slowly, so you get all the components and all the pieces):

Work closely

SAP and HP work very closely. So your account rep will help you greatly in the toolsets in that area. It starts with Solution Manager from SAP, which should be your system record of development. The best part is when you implement SAP, you use Solution Manager to input all your Business Process Hierarchy (BPH). BPH is your key ingredient in Solution Manager that lays out all the processes in your environment.

Tied with it you should input all the transaction codes (T-codes). The DNA of SAP is T-codes. If you go to any place in SAP, most likely you have to enter a T-code. That will bring you to the right area. When we scope out an SAP project, the key starts with the list of T-codes. The key is to build out that BPH in SAP and associate all the T-codes in different areas.

With that T-code, you actually have all the documentation, functional specification, technical specification, all of the documentation and mapping associated at each level in your BPH along with your T-code. Not only that, you should have all your security IDs and metrics associated with each level at the BPH and T-codes, and all the flows and requirements all tied together, and of course the development, the code.

So, your Solution Manager should be the system record of development. The best practice is to always implement your SAP initial implementation with Solution Manager. So by the time you go live, you've already done all that. That’s the first bucket.

The second bucket is HP Tool Suite. We'll start with HP ALM Test Management Tool. It allows you to input your testing requirements, and they flow through the requirement to a test. If you’re using Business Process Testing (BPT), then you should flow through to the component in BPT, and flow through the test case module. Then, you flow through to the test plan, test lab and flow through to the defects. Everything is well integrated and connected.

Your Solution Manager should be the system record of development.

And then there is something we call an adapter. It’s a Solution Manager and HP ALM adapter. It enables Solution Manager and HP ALM to talk. You have to configure that adapter between Solution Manager and ALM. This is able to bring your hierarchy, your BPH in Solution Manager, and all the related assets, including the T-codes, over to the requirement model in HP ALM.

So if you have your Solution Manager straightened out, whatever you bring over to ALM, that's already your scope. It tells you what T-codes is in scope to test. By the way, in SAP it's often a headache that each T-code can do many, many things, especially if you're heavily customized.

So a T-code is not enough. You have to go down to a granular level of getting the variants. What are the typical scenarios or typical testing variants it has? Then, you can create that variance in the Solution Manager in the BPH. Then, it's going to flow through to the Requirement module in HP ALM and list out all your T-codes' possible variants.

Then, based on that, you start scoping out your testing assets. What are the components, test cases, or whatever you have to write. You put them in a BPT or you put them in your test case model. Then you link the requirement over. So you already have your test coverage. Then, you flow through a test case, flow through your execution in test lab, flow through to defects, and then it all ties back together.

And where does automation come in play? That's the bucket after HP ALM. So, UFT today is still the primary tool people use to automate. In the SAP space, SAP actually has its own. It's called, Test Acceleration and Optimization (TAO). That’s also leveraging UFT. That's the foundation to create a specific SAP automation, but either is fine. If you already have UFT, you really could start today.

Back and forth

So, the automation comes in place. This is very interesting. This is how it goes back and forth. For example, you already transported something to production and you want to check if anything slipped through the cracks? Is all the testing coverage there?

There's something called Solution Document Assistant. From the Solution Manager side, you can actually read from EarlyWatch reports to see what T codes are actually being used in your Production system today. After something is transported over into Prod, you can re-run it again to see what are the net new T-codes in the production system. Then, you can compare that. So there's a process.

Then you can see what are the net new ones from the BPH and flow through that to your HP QC or HP ALM, and see whether we have coverage for that. If not, here’s your scope for net new manual and automated testing.

I have yet to see a company that’s very good with documentation, especially with SAP.

Then, you keep building that regression and you eventually will get a library. That’s how you flow through back and forth. There is also something called Business Process Change Analyzer (BPCA). That already comes free with Solution Manager. You just have to configure it.

It allows you to load whatever you want to change in production into the buffer. So, before you actually transfer the code into production, you'll be able to know what area it impacts. It goes into the core level. So, it allows you to do targeted regression as well. We talked about Solution Manager. We talked about ALM. We talked about UFT. Then, there is LoadRunner, the performance center, the load testing, the performance testing, stress testing, etc., and this all goes into the same picture.

The ideal solution is that you can flow through your content in Solution Manager to HP ALM and you can enable automation for all tests together -- and all those performance, stress, whatever, testing -- in one end-to-end flow and you're able to build that regression library. You're able to build that technical testing library. And you're able to build that library and Solution Manager and maintain them at same time.

Gardner: So the technology is really powerful, but it's incumbent on the users to go through those steps of configuring, integrating, creating the diligence of the libraries and then building on that.

I'd like to go up to the business-level discussion. When you go to your boss's boss, can you explain to them what they're going to get as a value for having gone through this? It's one thing to do it because it's the right thing to do and it's got super efficient benefits, but that needs to translate into dollars and cents and business metrics. So what do you tell them you get at that business level when they do this properly?

Business takes notice

Shen: Very good question, because this exercise we did can be applied to any other companies. It's at the level that business really takes notice. One common challenge is that when you on-board somebody, do they have the proper documentation to ramp it up?

I yet have to see a company that’s very good with documentation, especially with SAP, where is that list of scope of all the T-codes that are today in production we use? What are the functional specs? What are the technical specs? Where is the field map? Where are the flows? You have to have that documentation in order to ramp somebody up or what typically ends up happening is that you hire somebody and you have to take other team members for a few weeks to ramp the person up.

Instead of putting them on the project to deliver right away, start writing the code, start configuring SAP, or whatever, they can’t start until few months later. How do you  accelerate that process? You build everything up with Solution Manager, you build everything up in HP ALM, you build everything up in your QTP and UFT and everything.

So this way, the person will come in, they can go to Solution Manager and look at all the T-codes and scope, look at all the updated T-codes, updated business areas, look at updated functional specs, understand what the company’s application does and what's the logic and what's configuration. Then, the person can easily go to HP ALM and figure out, the testing scenarios, how people test, how they use application, and what should be the expected behavior of the application.

Point one is that you can really speed up the hiring process and the knowledge transfer process for your new personnel. A more important application of this is on projects. Whether SAP or not, companies usually use very high-end products, because you have to constantly draw out new applications, new releases, and new features based on market conditions and based on business needs.

Testing is the most labor-intensive and painstaking process and probably one of the most expensive areas in any project delivery.

When a project starts, a very common challenge is the documentation of existing functionality? How can you identify what to build? If you have nothing, I can guarantee you that you'll spend a few weeks of the entire project team trying to figure out current status.

Again, with the library and Solution Manager, the regression testing suite, the automated suite in HP ALM and UFT, and all of that, you can get that on day one. It's going to shorten the project time. It's going to accelerate the project time with good quality.

The other thing is that a project is so important that anything in the project is very necessary. When you actually figure out your status quo, you start building.

Testing is the most labor-intensive and painstaking process and probably one of the most expensive areas in any project delivery. How do you accelerate that? Without existing regression library, documented test scenarios, and even automated existing regression libraries, you have to invent everything from scratch.

By the way, that involves figuring out the scope, the testing scope that involves writing the test case from scratch, building all the parameters, and building all the data. That takes a lot of time. If you already have an existing library, that’s going to shorten your lifecycle a lot.

So all this translates into dollar saving plus better coverage and faster delivery, which is key for business. By the way, when you have all this set in place, you're able to catch a lot more defects before it goes to production. I saw study that said it's about 10 times more expensive if you catch a defect in production. So the earlier you catch it, the better.

Security confidence

Gardner:  Right, of course. It also strikes me that doing this will allow you to have better security confidence, governance risk and compliance benefits, and auditability when that kicks in. In a banking environment, of course, that’s really important.

Shen: Absolutely. The HP ALM tool allows the complete audit trail for the testing aspect of it. Not at this current company, but on other projects, usually an auditor comes in and they ask for access to HP QC. They look at HP ALM, auto test cases, who executed, the recorded results, and defects, that’s what auditors look for.

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Gardner: Cindy, what is it that’s of interest to you here at HP Discover in terms of what comes next in HP's tool, seeing as they're quite important to you? Also, are you looking for anything in the HP-SAP relationship moving forward?

Shen: I love that question. Sometimes, I feel very lonely in this niche field. SAP is a big beast. HP-SAP integration is part of what they do, but it's not what they market. The good thing is that most SAP clients have HP ALM. It's a very necessary toolset for both HP and SAP to continue to evolve and support.

It's a niche market. There are only a handful of people in the world that can do this from end to end properly. HP has many other products. So, you're looking at a small circle of SAP end clients who are using HP toolsets, who need to know how to properly configure and run this efficiently and properly. Sometimes I feel very lonely, overlapping the circle of HP and SAP.

The good thing is that most SAP clients have HP ALM. It's a very necessary toolset for both HP and SAP to continue to evolve and support.

That’s why Discover is very important to me. It feels like a homecoming, just because here I'll actually speak to the project managers and experts on HP ALM sprinter, the integration, and the HP adapter. So I know what the future releases are. I know what's coming down the line, and I know the configuration I might have to change in the future.

The other really good of part, which I'm passionate about, having doing enough projects, is that I've helped clients, and there's always this common set of questions and challenges. It took me a couple of years to figure these out. There are many, many people out there in the same boat as I was years back, and I love to share my experience, expertise, and knowledge with the end clients.

They're the ones managing and creating their end-to-end testing. They're the ones facing all these challenges. I love to share with them what the best practices are, how to structure things correctly, so that you don’t have to suffer down the road. It really takes expertise to make it right. That’s what I love to share.

As far as the ecosystem of HP and SAP. I'd like to see them integrate more tightly. I'd like to see them engage more with the end-user community, so that we can definitely share the lessons and share the experience with end user more.

Also, I know all the vendors in the space. Basically, the vendors in the space are very niche and most of them come from SAP and HP backgrounds. So I keep running into people I know. My vendors keep running to people they know, and it's that community that’s very critical to enable success for the end user and for the business.

Gardner: This has been very interesting and I appreciate your candor and depth of understanding. We've been learning about how Home Trust Company in Toronto has been creating a Center of Excellence and improving on their Application Lifecycle Management across SAP implementations, and how the combination of HP tools and SAP in integration together with proper methodologies can have very substantial paybacks, both technically, security- and compliance-wise and in business and productivity terms.

So a huge thank you to our guest, Cindy Shen, SAP QA Manager at Home Trust Company. Thanks so much.

Shen: Thank you very much. My pleasure.

Gardner: And I'd also like to thank our audience for joining us for this special new style of IT discussion coming to you directly from the HP Discover 2014 Conference in Las Vegas. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HP-sponsored discussions.  Thanks again for listening, and don’t forget to come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.
Transcript of a BriefingsDirect podcast on the steps to build a successful SAP test environment with HP quality assurance tools. Copyright Interarbor Solutions, LLC, 2005-2014. All rights reserved.

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How Waste Management Builds a Powerful Services Continuum Across Operations, Infrastructure, Development, and IT Processes

Transcript of a BriefingsDirect podcast on how a large environmental services company uses HP BSM tools to provide always-on, always-available services to customers and internal users.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to the next edition of the HP Discover Podcast Series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing sponsored discussion on IT innovation and how it’s making an impact on people’s lives.

Gardner

Our next innovation case study interview highlights how Waste Management in Houston, Texas is improving the quality of their services and operations in IT for a variety of their users, both internal and external.
To help us learn more about Waste Management’s experience, we're here with Gautam Roy, Vice President of Infrastructure, Operations and Technical Services at Waste Management. Welcome.

Gautam Roy: Hi. Thank you.

Gardner: You're a very large organization across North America with more than 20 million customers. This size and scale requires an awful lot of IT. Tell us about the scope and size of your operation.

Roy: Water Management is an environmental services company. We have primarily three lines of business. First is waste service. This is our traditional waste pickup, transfer, and disposal. Our second line of business is renewable energy or green energy, and our third is recycling.

Roy

What makes Waste Management different from others in the waste industry is that we also invest quite a lot of effort in next-generation waste technology. We invest in companies like Agilyx, which converts very hard-to-recycle waste, such as plastic, into crude oil. We convert organic food waste into natural gas. We pressurize, scrub, and dry municipal solid waste into solid fuel, which burns cleaner than coal.

And we're quite diverse, a global company. We have operations in the US and Canada, Asia, and Europe. We have our renewable energy plants. There is quite a large array of technology and IT to support these business processes to ensure consistent business-services availability.

Gardner: As with many organizations, gaining greater visibility into operations -- having earlier detection of problems, and therefore earlier remediation -- means better performance. What were some of the drivers for your organization specifically to mature your IT operations?

Business transformation

Roy: I'll give a few business reasons, and a couple of technology reasons. From the business side, we began business transformation a couple of years ago. We wanted to ensure that we unlocked the value for our customers and for us, and to institutionalize the benefits for Waste Management.

Customer care, providing outstanding, world-class customer service is aligned completely with our business strategy. Business services availability is crucial, it's in our DNA. Our IT business service availability scorecard a few years ago wasn't too good. So we had to put the focus on people, process, and technology to ensure that we provide a very consistent service set to our customers.

Gardner: Moving across the spectrum of development, test, and operations can be challenging for many organizations. You have put in place standardized processes to measure, organize, and perform better across the DevOps spectrum. Tell us how you accomplished that. How did you get there?

Roy: That's a very good question. For us, IT business-service availability is really not about having a great monitoring solution. It starts even before the services are in production. It starts with partnership with our business and business requirements. It starts with having a great development methodology and a robust testing program. It starts with architecture processes, standardization, and communication. All those things have to be in place. And you have to have security services and a monitoring solution to wrap it up.

We try to approach it from the front end, instead of chasing it from the back end.

What we are trying to do is to not fight the issue at the back-end. If a service is down, our monitoring software picks it up, our operational team and engineering team jumps on it, we are able to fix the problem ASAP before it impacts the customer. Great. But, boy, wouldn’t it be nice if those services aren't going down in the first place? So we try to approach it from the front-end, instead of just chasing it from the back-end.

Gardner: So it’s Application Lifecycle Management (ALM) and Business Service Management (BSM), not one or the other, but really both -- and simultaneously?

Roy: Exactly, ALM, BSM, testing, and security products. We also want to make sure that the services are not down from intentional disruption. We want to make sure that we produce code with quality and velocity, and code that is consistent with the experience of our customer.

With our operational processes, ITIL and Lean IT, we want to make sure that the change management and incident management are followed to our prescription. We want to make sure that the disaster-recovery (DR) program, the high-availability (HA) program, the security operation center (SOC), the network operation center (NOC), and the command centers are all working together to ensure that the services are up 24/7, 365.

Gardner: And when you do this well, when you have put in place many of the capabilities that we have been describing, do you have any sense of payback? Do you keep score?

Availability scorecard

Roy: A few years ago, when we were not as good at it, we started rebuilding this all from the ground up, and our availability scorecard was pretty bad. Our services were down. At times, we didn’t know that our services were down. Our first indication of a problem was from customers calling us.

Now, fast-forward a few years, with making the appropriate choices and investments in technology -- such as in people and processes --  and our scorecard is very good. We know of the problems rapidly. We proactively detect problems and fix the problems before they impact our customers.

We have 4 9s availability for our critical applications. We're able to provide services to our customers via wm.com, our digital channel, and it has been quite a success story. We still have work to cover, but it has been following the right trajectory.

Gardner: Here at HP Discover, are there any developments that you're monitoring closely? Are there some things that you're particularly interested in that might help you continue to close the gap on quality?

We want to provide optimal solutions at a right price point for our customers and our business.

Roy: Sure. Things like understanding what's happening in the world of big data and HP’s views and position on that. I want to understand and learn about testing, software testing, how to test faster and produce better code, and to ensure, on a continuous basis that we're reducing the cost of running the business. We want to provide optimal solutions at a right price point for our customers and our business.

Gardner: On that topic of big data, are you referring to the data generated within IT, in your systems, to be able to better analyze and react to that? Or perhaps also the data from your marketplace, things that your customers might be saying in social media, for example? Or is it all of the above?

Roy: It’s all of the above. We have internal data that we're harvesting. We want to understand what it’s telling us. And we'd like to predict certain trends of our system, across the use of our applications.

Externally, we have 18 call centers. We get user calls. We also want to know our customer better and serve them the best. So we want to move into a situation where we can take their issues, frame them into solutions, and proactively service them the best in our industry.

Gardner: I'm afraid we will have to leave it there. We've been discussing how Waste Management improves their IT operations across the BSM spectrum, from development through operations, and then embarking on more use of big data to analyze their business requirements as well as their marketplace.

So a big thank you to Gautam Roy, Vice President of Infrastructure, Operations and Technical Services at Waste Management in Houston. Thanks so much.

Roy: Thank you, Dana.

Gardner: And thank you, too, to our audience for joining this special HP Discover new style of IT discussion.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HP-sponsored discussions. Thanks again for joining, and come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect podcast on how a large environmental services company uses HP BSM tools to provide always-on, always-available services to customers and internal users. Copyright Interarbor Solutions, LLC, 2005-2014. All rights reserved.

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Insurance Leader AIG Drives Business Transformation and Service Performance Through Center of Excellence Model

Transcript of a BriefingsDirect podcast with AIG and HP on the challenges and solutions involved in managing a global center of excellence for IT performance.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to the next edition of the HP Discover Performance Podcast Series. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your moderator for this ongoing discussion of IT innovation and how it’s making an impact on people’s lives.

Dana Gardner

Once again, we're focusing on how IT leaders are improving performance of their services to deliver better experiences and payoffs for businesses and end-users alike.

We're now joined by our co-host and moderator, Chief Software Evangelist at HP, Paul Muller. Welcome, Paul, how are you?

Paul Muller: I'm great Dana. How are you doing?

Gardner: I'm excellent. Where are you coming from today?

Muller: I'm coming from sunny San Francisco. It’s unseasonably warm, and I'm really looking forward to today’s discussions. It should be fun. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Gardner: We have a fascinating show. We're going to be learning about global insurance leader American International Group, or AIG, and how their Global Performance Architecture Group has leveraged a performance center of excellence (COE) to help drive business transformation.

So let me introduce our guest from AIG. We're here with Abe Naguib, Senior Director of AIG’s Global Performance Architecture Group. Welcome back, Abe.

Naguib: Hi, Dana. Hi, Paul. How are you?

Gardner: We're excellent. We've talked before, Abe, and I'm really delighted to have you back. I want to start at a high level. Many organizations are now focusing more on the user experience and the business benefits and less on pure technology, and for many, it's a challenge. From a very high level, how do you perceive the best way to go about a cultural shift, or an organizational shift, from a technology focus more towards this end-user experience focus?

The CIO has to keep his eye forward to periodically change tracks, ensuring that the customers are getting the best value for their money.

Naguib: Well, Paul and Dana, there are several paradigms involved from the COO and CFO’s push on innovation and efficiency. A lot of the tooling that we use, a lot of the products we use help to fully diversify and resolve some of the challenges we have. That’s to keep change running.

Abe Naguib

The CIO has to keep his eye forward to periodically change tracks, ensuring that the customers are getting the best value for their money. That’s a tall order and, he has to predict benefit, gauge value, maintain integrity, socialize, and evolve the strategy of business ideas on how technology should run.

We have to manage quite a few challenges from the demand of operating a global franchise. Our COE looks at various levels of optimization and one key target is customer service, and factors that drive the value chain.

That’s aligning DevOps to business, reducing data-center sprawl, validating and making sense of vendors, products, and services, increasing the return on investment (ROI) and total cost of ownership (TCO) of emerging technologies, economy of scale, improving services and hybrid cloud systems, as we isolate and identify the cascading impacts on systems. These efforts help to derive value across the chain and eventually help improve customer value.

Gardner: Paul Muller, does this jibe with what you're seeing in the field? Do you see an emphasis that’s more on this sort of process level, when it comes to IT with of course more input from folks like the COO and the chief financial officer?

Level of initiatives

Muller: As I was listening to Abe's description I was thinking that you really can tell the culture of an organization by the level of initiatives and thinking that it has. In fact, you can't change one without changing the other. What I've just described is a very high level of cultural maturity.

Paul Muller

We do see it, but we see it in maybe 10 to 15 percent of organization that have gone through the early stages of understanding the performance and quality of applications, optimizing it for cost and performance, but then moving through to the next stage, reevaluating the entire chain, and looking to take a broader perspective with lots of user experience. So it's not unique, but it's certainly used among the more mature in terms of observational thinking.

Gardner: For the benefit of our audience, Abe, tell us a little bit about AIG, its breadth, and particularly the business requirements that your Global Performance Architecture Group is tasked with meeting?

Naguib: Sure, Dana. AIG is a leading international insurance organization, across 130 countries. AIG’s companies serving commercial, institutional, individual customers, through one of the world’s most extensive property/casualty networks, are leading providers of life insurance and retirement services in the US.

Among the brand pillars that we focused on are integrity, innovation, and market agility across the variety of products that we offer, as well as customer service.

Bringing together our business-critical and strategic drivers across IT’s various segments fosters alignment, agility, and eventually unity.

Gardner: And how about the Global Performance Architecture Group? How do you fit into that?

Naguib: With AIG’s mantra of "better, faster, cheaper," my organization’s people, strategy, and comprehensive tools help us to bridge these gaps that a global firm faces today. There are many technology objectives across different organizations that we align, and we utilize various HP solutions to drive our objectives, which is getting the various IT delivery pistons firing in the same direction and at the right time.

These include performance, application lifecycle management (ALM), and business service management (BSM), as well as project and portfolio management (PPM). Over time our Global Performance organization has evolved, and our senior manager realized our strategic benefit and capability to reduce cost, risk, and mitigate production and risk.

Our role eventually moved out of quality assurance's QA’s functional testing area to focus on emphasizing application performance, architecture design patterns, emerging technologies, infrastructure and consolidation strategies, and risk mitigation, as well increasing ROI and economy of scale. With the right people, process, and tools, our organization enabled IT transparency and application tuning, reduced infrastructure consumption, and accelerated resolution of any system performances in dev and production.

The key is bringing together our business-critical and strategic drivers across IT’s various segments fosters alignment, agility, and eventually unity. Now, our leaders seek our guidance to help tune IT at some degree of financial performance to unlock optimal business value.

Culture of IT

Gardner: What's interesting to me, Paul, about what Abe just said is the evolution of this from test and dev in QA to a broader set of first IT, then operations, and then ultimately even through that culture of IT generally. Is that a pattern you're seeing that the people in QA are in the sense breaking out of just an application performance level and moving more into what we could call IT performance level?

Muller: As I was listening to Abe talk through that, there were a couple of keywords that jumped out that are indicators of maturity. One of them is the recognition that, rather than being a group-sized task, things like application, quality performance, and user experience actually are a discipline that can be leveraged consistently across multiple organizational units and, whether you centralize it or make it uniform across the organization is an important part of what you just described.

Maturity of operational and strategic alignment is something that requires a significant investment on business’s and IT’s behalf to prove early returns by doing a good job on some of the smaller projects. This shows a proven return on investment before the organization is typically going to be willing to invest in creating a centralized and an uniform architecture group.

Gardner: Abe, do you have some response to that?

Naguib: Yes, more-and-more, in the last six or seven years, there's less focus on just basic performance optimization. The focus is now on business strategy impact on infrastructure CAPEX, and OPEX. Correlating business use cases to impact on infrastructure is the golden grail.

I always say that software drives the hardware.

Once you start communicating to CIOs the impact of a system and the cost of hosting, licensing, headcount, service sprawl, branding, and services that depend on each other, we're more aligning DevOps with business.

Muller: You can compare the discussion that I just had with a conversation I had not three weeks ago with a financial institution in another part of the world. I asked who is responsible for your end-to-end business process -- in this case I think it was mortgage origination -- and the entire room looked at each other, laughed, and said "We don't know."

So you've really got this massive gap in terms of not just IT process maturity, but you also have business-process maturity, and it's very challenging, in my experience, to have one without having the other.

Gardner: I think we have to recognize too that most businesses now realize that software is such an integral part of their business success. Being adept at software, whether it's writing it, customizing it, implementation and integration, or just overall lifecycle has become kind of the lifeblood of business, not just an element of IT. Do you sense that, Abe, that software is given more clout in your organization?

Naguib: Absolutely Dana. I truly believe that. I've been kind of an internal evangelist on this, but I always say that software drives the hardware. Whether I communicate with the enterprise architects, the dev teams, the infrastructure teams, software frankly does drive the hardware.

That's really the key point here. If you start managing your root cost and performance from a software perspective and then work your way out, you’ve got the key to unlocking everything from efficiencies to optimizing your ROI and to addressing TCO over time. It's all business driven. Know your use cases. Know how it impacts your software, which impacts your infrastructure.

Converged infrastructure

Gardner: Of course, these days we’re hearing more about software-defined networking, software-defined data centers, and converged infrastructure. It really does start to come together, so that you can control, manage, and have a data-driven approach to IT, and that fits into ITIL and some of the other methodologies. It really does seem to be kind of a golden age for how IT can improve as performance, as productivity, and of course as a key element to the overall business. Is that what you’re finding too, Abe?

Naguib: Absolutely. It's targeting software performance, and software-as-a-service (SaaS) applications that depend on each other.

More and more, it's a domino effect. If you don't identify the root cause, isolate it, and resolve it, the impact does have a cascading effect, on optimization, delivery, and even cost, as we’ve seen repeatedly in the last couple of years. That’s how we communicate to our C-level community.

Gardner: Of course we have to recognize it. Just being performant, optimized, and productive for its own sake isn’t good enough in this economy. We have to show real benefits, and you have to measure those benefits. Maybe you have some way to translate how this actually does benefit your customers. Any metrics of success you can share with us, Abe?

Naguib: Yes, during our initial requirements-gathering phase with our business leaders, we start defining appropriate test-modeling strategy, including volumetrics, and managing and understanding the deployment pattern with subscriber demographics and user roles. We start aligning DevOps organizations with business targets which improves delivery expectations, ROI, TCO, and capacity models.

The big transformation taking place right now is that our organization is connecting different silos of IT delivery, in particular development, quality, and operations.

Then, before production, our Application Performance Engineering (APE) team identifies weak spots to provide the production team with a reusable script setting thresholds on exact hotspots in a system, so that eventually in production, they can take appropriate productive measures. Now, this is value add.

Gardner: Paul, do you have any thoughts in terms of how that relates to the larger software field, the larger enterprise performance field?

Muller: As we’re seeing across the planet at the moment, there's a recognition that to bring great software and information is really a function of getting Layers 1 through 7 in the technology stack working, but it's also about getting Layer 8 working. Layer 8, in this case, is the people. Unfortunately, being technologists, we often forget about the people in this process.

What Abe just described is a great representation of the importance of getting not just a functional part of IT, in this case quality and performance working well, but it's about recognizing the software will one day be delivered to operational staff to internally monitor and manage it in a production setting.

The big transformation taking place right now is that our organization is connecting different silos of IT delivery, in particular development, quality, and operations, to help them accelerate the release of quality applications, and to automate things like threshold setting, and optimize monitoring of metrics ahead of time. Rather than discovering that an application might fail to perform in a production setting, where you've got users screaming at you, you get all of that work done ahead of time.

Sharing and trust

You create a culture of sharing and trust between development, quality, and operations that frankly doesn’t exist in a lot of process where the relationship between development and operations is pretty strained.

Gardner: Abe, how do you measure this? We recognized the importance of the metrics, but is there a new coin of the realm in terms of measurement? How do you put this into a standardized format that you’re going to take to your CFO and your COO and say here’s what's really happening?

Naguib: That's a good question. Tying into what Paul was saying, nobody cared about whether we improved performance by three seconds or two seconds. You care at the front end, when you hear users grumbling. The bottom line is how the application behaves, translating that into business impact as well as IT impact.

Business impact is what are the dollar values to make key use cases and transactions that don't scale. Again, software drives the hardware. If an application consumes more hardware, the hardware is cheap now-a-days, but licenses aren’t. You have database and you have middleware products running in that environment, whether it's on-premise or in the cloud.

The point is that impact should be measured, and that's how we started communicating results through our organization. That's when we started seeing C-level officers tuning in and realizing the impact of performance of both to the bottom line, even to the top line.

We were able to leverage consistent dashboards across different IT solutions internally, then target weak spots and help drive optimization.

Gardner: It strikes me, Abe, that this is going to set you up to be in a better position to move to cloud models, consume more SaaS services, as you mentioned earlier, and to become more of a hybrid services delivery shop or have that capability. Does that make sense? Do you feel more prepared for what this next level of compute architecture you seem to be heading toward as a result of the investments you've made?

Naguib: Absolutely Dana. Our role is to provide more insight earlier and quicker to the right people at the right time.

Leveraging HP’s partnership and solutions helped us to address technologies, whether Web 2.0, client-server, legacy systems, Web, cloud-based, or hybrid models. We were able to leverage consistent dashboards across different IT solutions internally, then target weak spots and help drive optimization, whether on premise or cloud.

Gardner: Paul Muller, thoughts about how this is working more generally in the market, how people who get a grasp on global performance architecture issues like AIG are then in a better position to leverage and exploit the newer and far more productive types of computing models?

Muller: In the enterprise today, it's all about getting your ideas out of your head and making them a reality. As Abe just described, most of the best ideas today that are on their way into business processes you can ultimately turn into software. So success is really all about having the best applications and information possible.

Understand maturity

The challenge is understanding how the technology, the business process and the benefits come together and then orchestrating that the delivery of that benefit to your organization. It's not something that can be done without a deliberate focus on process. Again, the challenge is always understanding your organization's maturity, not just from an IT standpoint, but importantly from a broader standpoint.

Naguib: What's the common driver for all? Money talks. Translating things into a dollar value started to bring groups together to understand what we can do better to improve our process.

Gardner: Abe, it strikes me that you guys are really fulfilling this value epicenter role there and expanding the value of that role outside the four walls of IT into the larger organization. Tell me how HP is joining you in a partnership to do that? What is it that you're bringing to the table to improve that value for the epicenter of value benefit?

Naguib: Dana, what we're seeing more is that it's not just internal dev and ops that we're aligning with, or even our business service level expectations. It's also partnerships with key vendors that have opened up the roadmap to align our technologies, requirements, and our challenges into those solutions.

The gains we make are simple. They can be boiled down into three key benefits: savings, performance, and business agility. Leveraging HP's ALM solutions helps us drive IT and business transformation and unlock resources and efficiencies. That helps streamline delivery and an increased reliability of our mission critical systems.

After we've dealt with tuning, we can help activate post-production monitoring using the same script, understanding where the weak spots are.

My favorite has always been HP's LoadRunner Performance Center. It’s basically our Swiss Army Knife to support diverse platform technologies and align business use cases to the impact on IT and infrastructure via SiteScope, HP SiteScope.

We're able to deep dive into the diagnostics, if needed. And the best part is, after we've dealt with tuning, we can help activate post-production monitoring using the same script, understanding where the weak spots are.

So the tools are there. The best part is integrated, and actually work together very well.

Gardner: It really sounds like you've grabbed onto this system-of-record concept for IT, almost enterprise resource planning (ERP) for IT. Is that fair?

Naguib: That's a good way to put it.

Muller: One of the questions I get a lot from organizations is how we measure and reflect the benefit. What hard data have you managed to get?

Three-month study

Naguib: IDC came in and did an extensive three-month study, and it was interesting what they have found. We've realized a saving of more than $11 million annually for the past five years by increasing our economy of scale. Scale on a system allows more applications on the same host.

It's an efficiency from both hardware and software. They also found that our using solutions from HP increased staff productivity by over $300,000 a year. Instead of fighting fires, we're actually now focusing on innovation, and improving business reliability by over $600,000 a year.

So all that together shows a recoup, a five-year ROI, about 577 percent. I was very excited about that study. They also showed that we resolved mean time resolution over 70 percent through production debugging, root cause, and resolution efforts.

So what we found, and technologists would agree with me, is that today, with hardware being cheaper than software, there is a hidden cost associated with hosting an application. The bottom line, if we don’t test and tune our applications holistically, either the architecture, code, infrastructure, and shared services, these performance issues can quickly degrade quality of service, uptime, and eventually IT value.

I have a saying, which is that quality costs money but bad quality costs more.

Muller: I have a saying, which is that quality costs money but bad quality costs more. There you go.

Gardner: Abe, any recommendations that you might have for other organizations that are thinking of moving in this direction and that want to get more mature, as Paul would say. What are some good things to keep in mind as you start down this path?

Naguib: Besides software drives the hardware -- and I can't stress that enough -- are all the ways to understand business impact and translate whatever you're testing into the business model.

What happens to the scenarios such as outages? What happens when things are delayed? What is the impact on business operability, productivity, liability, customer branding. There are so many details that stem from performance. We used to be dealing with the "Google factor" of two-second response time, but now, we're getting more like millisecond response, because there are so many interdependencies between our systems and services.

Another fact is that a lot of products come into our doors on a daily basis. Modern technologies come in with a lot of promises and a lot of commitments.

Identify what works

So it's being able to weed through the chaff, identify what works, how the interdependencies work, and then, being able to partner with vendors of those solutions and services. Having tools that add transparency into their products and align with our environment helps bring things together more. Treating IT like a business by translating the impact into dollar value, helps to get lined up and responsive.

Gardner: Very good. Last word to you, Paul. Any thoughts about getting started? Are there principles that you are seeing in common, threads or themes for organizations, as they begin to get the maturity model in place and extend quality and process performance assurance improvements even more generally into their business?

Muller: It might be a little controversial here, but the first step is look in the mirror and understand your organization and its level of maturity. You really need to assess that very self-critically before you start. Otherwise, you're going to burn a lot of capital, a lot of time, and a lot of credibility trying to make a change to an organization from state A to state B. If you don’t understand the level of maturity of your present state before you start working on the desired state, you can waste a lot of time and money. It's best to look in the mirror.

The second step is to make sure that, before you even begin that process, you create that alignment and that desired state in the construct of the business. Make sure that your maturity aligns to the business's maturity and their goal. I just described the ability to measure the business impact in terms of revenue of IT services. Many companies can’t even do something as fundamental as that. It can be really hard to drive alignment, unless you’ve got business-IT alignment ahead of time.

I have said this so many times. The technology is a manageable problem, Layers 1 through 7, including management software to a certain degree, have solved problems the most time. Solving the problem of Layer 8 is tough. You can reboot the server, but you can’t reboot a person.

Solving the problem of Layer 8 is tough. You can reboot the server, but you can’t reboot a person.

I always recommend bringing along some sort of management of organizational change function. In our case, we actually have a number of trained organizational psychologists working for us who understand what it takes to get several hundred, sometimes several thousand, people to change the way they behave, and that’s really important. You’ve got to bring the people along with it.

Gardner: Well we have to take a hint from you, Paul. Maybe our next topic will be The Psychology of IT, but we won’t be able to get to that today. I am afraid we'll have to leave it there and I have to thank our co-host Paul Muller, the Chief Software Evangelist at HP. Thanks so much for joining us.

Muller: Always a pleasure.

Gardner: And like to thank our supporter for this series, HP Software, and remind our audience to carry on the dialogue with Paul and other experts there at HP through the Discover Performance Group on LinkedIn.

You can gain more insights and information on the best of IT performance management at www.hp.com/go/discoverperformance. And you can always access this in other episodes of our HP Discover Performance podcast series at hp.com and on iTunes under BriefingsDirect.

Of course, we also extend a big thank you to our guest. Abe Naguib, Senior Director of AIG’s Global Performance Architecture Group. Thanks so much, Abe.

Naguib: Thank you, Dana, thank you, Paul. I really appreciate the opportunity.

Gardner: Again, a last thank you to our audience for joining us for this special HP Discover Performance podcast discussion. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your co-host for this ongoing series of HP-sponsored business success story. Thanks again for joining and come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect podcast with AIG and HP on the challenges and solutions involved in managing a global center of excellence for IT performance. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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