tuning applications for ipTuning Applications for IP Executive Summary An enterprise’s decision to move to IP delivers the most value when a substantial ratio of its applications and facilities has been migrated to the converged network. Encouragingly, a global survey of 395 senior executives conducted by the Economist Intelligence Unit for shows that the pace of migration has become inexorable: by mid-2007 about 50% of firms globally – and two-thirds of U.S. firms – will have shifted their voice and data applications over to IP. By mid-2008 this figure will have risen to an average of 72% of firms, based on the survey results. Among the various approaches to IP migration, the “big bang” or enterprise-wide implementation is most popular among firms worldwide, although in the U.S. a phased, department-by-department strategy is much more likely. Less than one in five firms uses small-scale trials, though this can be a highly effective way to iron out difficulties in advance and avoid disrupting business. Surveyed executives view disruption to day-to-day business as the principal risk involved with migration of applications to IP. Migration prepares the way for the integration of applications. Research for this paper shows that most companies today have a strategy in place to integrate applications on IP, and that the market for integration software is burgeoning. Companies are generally adopting “Web services” to provide a standardized way to carry out the difficult task of integration. Of these standards, Session Initiation Protocol (SIP) promises to provide particularly useful support in integrating everything from voice to videoconferencing and advanced collaborative applications. The survey also shows, however, there is a long way to go with applications integration. While many companies are drawing financial benefits from moving to Voice over IP, some have not yet integrated it with other communications services, limiting its usage and potential gains. Reliance on Applications Performance A key concern of executives when it comes to their IT networks is the performance of applications which run on them. Fully 87% of (CRM) system to improve customer service and keep ahead of competitors if it is not adequately integrated with multi-channel IP call center communications. participants in a global survey conducted by the Economist Intelligence Unit (EIU) for cite this as either “critical” or Most executives today recognize the value of applications performance: it is regarded by respondents as significantly more important than “important” to their business. And they have good reason: separate research conducted by the EIU on the subject of IT risk highlights the either scalability or reach of the network. At the same time, the results show that executives are pinning high hopes on their converged IP fact that most core business processes are now driven by IT, and that firms increasingly depend on their IT systems’ performance to achieve networks to improve applications management. In fact, two-thirds of respondents (and more in the U.S.) believe that an improvement in the business goals. How well applications are integrated can influence their own – and the company’s – success. For instance, there is little way new applications can be launched and managed is a key business benefit of network convergence. point in launching an innovative customer relationship management How important are the following network performance attributes to your business? How important are the following applications to your business? (Share responding “critical” Network availability/downtime 96.71% Business process applications 74.05% Speed of network 94.43% Collaboration software 66.75% Reliability of connections 94.12% IP telephony 64.38% Security 93.65% Remote access via an IP phone 62.37% Applications performance 86.70% Contact centers 61.89% Accessibility (i.e., access to full suite 76.47% Video-conferencing 61.42% of network applications from outside the office) Unified messaging 59.14% Multimedia services 59.08% Efficiency/capacity utilization 72.15% Interactive voice response 57.97% Scalability 70.99% Enhanced call forwarding 57.61% Reach (number of end points) 67.01% Open, standards-based architecture 62.82% Source: EIU/ survey, 2006 Ability to prioritize applications 62.76% executives regard collaboration software as key to the business, with respondents in the Asia-Pacific region indicating the strongest focus. According to Richard King, Executive Director for Managed Services, “Making a converged applications environment work effectively is a The ever-burgeoning contact center is also a prized application – hardly surprising, bearing in mind the role that support staff play today challenge many businesses face. Having an applications performance management plan plays a large role in successfully integrating applications. in customer service. Beyond this, a range of communications-oriented applications are regarded by executives as important, including IP Management tools that provide visibility, control and optimization of the network and applications can enable good applications performance telephony, remote access via IP phones, videoconferencing, unified messaging, interactive voice response and enhanced call forwarding. and smoother introduction of new applications.” As companies seek to optimize the running and inter-working of their applications on IP, “they need to attain the right level of standardization Organizations are finding too that IP-based videoconferencing for collaboration and training can be less expensive – and of higher quality – in their IT architecture,” in the words of Michael Rasmussen, vice president of IT research group Cisco. To help the process of than the multipoint video used previously. Most are seeing an increase in the use of videoconferencing, especially as they try to reduce applications integration succeed, he believes, organizations must strike the right balance. This means avoiding both an over-standardized employee travel, against mounting environmental pressures. Most companies have found however that whereas videoconferencing approach which precludes the use of beneficial technologies if they do not fit, as well as an overly loose approach which makes linkages broadens the availability of training, it must not become a replacement for face-to-face training. Besides, a video that works well for employees in one country may not be effective elsewhere. difficult to achieve. Companies from a wide range of sectors are drawing benefits from moving to Voice over IP (VoIP), and from integrating it with other Where Priorities Lie Before reviewing the progress companies are making with applications migration and integration on IP, it is worth getting a measure of how applications. Having an integrated VoIP system is particularly handy tosupport communications in international projects, says John Bailey, important different types of applications are to businesses. Emerging as the most important, ahead of communications facilities, are CIO of Bechtel Civil, a global construction and engineering organization specializing in rail, aviation and infrastructure. Simply integrating VoIP with the enterprise directory is among the advantages: business process applications, which include the workhorse systems such as CRM, enterprise resource planning (ERP) and supply chain “Tohave all the phone numbers there – and know they’re current – is very useful,” he says. management (SCM). These are deemed either critical or important to the business by three-quarters of surveyed executives. The company is looking to integrate a variety of communications applications on the IP network to create a central building information Next in importance comes collaboration software, as global companies strive to boost the productivity of scattered teams by supplying tools management system for clients. These include IP telephony, access control, CCTV and security systems, so that buildings can be managed Overall, the brisk pace of applications migration will continue in the medium term. Many of those firms that haven't completed the Watertight Systems Architecture for 250-Year-Old Lloyd’s Register Group migration of their major applications by mid-2007 will have done so within the following year. According to survey results, by mid-2008 an Originating in a 17th century London coffee house, Lloyd’s Register Group is now a global risk management average of 72% of firms globally will have migrated their applications and facilities to a converged IP network. organization with about 6,000 employees, more than half of whom are “extremely mobile,” according to group IT Many companies favor a “big bang” approach to migration. Over one- quarter of global respondents use “enterprise-wide implementation” director Stephen Hand. The explanation for the company’s mobility requirements can be found in its mission todescribe their migration strategy, more than those favoring phased approaches or small trials. Enterprise-wide deployment is clearly not statement to promote life and safety at sea (and now on land) entailing the safety and risk inspection of client’s for everyone, however. Group IT director for Lloyd’s Register, Stephen Hand, believes that, when migrating applications to IP, trialling for a marine, energy production and transportation assets anywhere in the world. year in a model office set up for the purpose was very beneficial in avoiding disruption to the business. “We spent considerable effort Belying the stereotype of a centuries-old establishment, Lloyd’s Register has been running all 650 of its testing and re-writing the backend of applications” he says “before they had to perform “for real.”” applications on IP for four years. Among the ways that it exploits IP is to use video applications to link dispersed mobile staff together, and also to run interactive training sessions for them, integrating video and data. “Our Contrasting Anxieties Global survey respondents rank the risk of disruption to the business as the toughest challenge of migrating applications to the IP network operational model has driven the move to IP,” says Hand. Many of Lloyd’s Register’s engineers are out inspecting, (cited by 39% of executives). The fear of disruption is particularly high in the U.S., where 48% of respondents stress this as the most serious assessing or classifying ships and a range of other assets including oil rigs, in a market covering more than 100 challenge to be overcome. European firms, by contrast, are most worried about security; indeed, security experts warn that with countries. They often need to tap each other’s knowledge while on site, and good communications are indispensable. applications running on a more open network, careful consideration needs to be given to security at both the network and application level. “People need access to business and technical data from wherever they are,” Hand says, and “applications can be centralized but access must be distributed.” These concerns also resound strongly among Asia-Pacific executives, but a lack of in-house skills required to achieve migration is cited as “The key is in designing applications to run effectively across the IP network,” observes Hand. Currently there is their top challenge. This mirrors Asia-Pacific respondents’ broader apprehension with a growing shortage of talent in the technology functions needed to manage the convergence process. room for improvement, and “heavy” client-based software is slowing traffic. Yet Hand says that to date, tools have The process of applications integration itself does not appear daunting to most companies in the survey. Executives worldwide seem relatively been lacking to optimize performance. He advocates a move towards a “thin client” computing model in which confident of their ability to ensure application availability and reliability, and to manage the co-existence of IP and legacy applications. With applications are centralized and accessed by use of web services via a common “portal approach.” Hand is also many having migrated their applications already, the focus is increasingly on integration, and here the survey respondents appear confident of considering Service-Oriented Architecture (SOA) to improve time to market for new applications and to their ability to pull it off without difficulty. streamline access by improving identity management. As well as a boost in performance, the model espoused by Hand promises a security bonus: “We want tohave as little Integration Underpinned by Standards “Most companies have a strategy to integrate applications on IP,” says Una du Noyer, head of Infrastructure and Engineering at the IT services of our information on laptops as possible,” he says. The emphasis will be on direct connectivity tothe data center. firm Capgemini. “Most are also trying to move towards using Web services.” These provide a standardized way to integrate applications However, Hand observes that it is not always easy to persuade users to invest in a corporate approach when the existing model appears to be doing its job locally. on IP using XML and other open standards. “The underlying protocols are well-established,” she says. Many organizations are carrying out trials using the SIP standard which is particularly useful for integrating voice, multimedia and text on IP, and The Relentless Pace of Migration The pace of migrating applications and facilities such as videoconferencing toIP is rapid: 61% of the U.S. firms surveyed will have moved their promises tosupport advanced collaborative applications. Additionally, Service-Oriented Architecture (SOA) can be effective in fusing applications: enterprise applications to a converged network by mid-2007. Other regions are not far behind: nearly half will have done so worldwide its forte is to get applications to avoid repeating the same processes so the same services can be shared by different applications. within that timeframe, with Europe lagging somewhat. The strong demand for tools to support integration is shown in a recent forecast from the U.S. technology research firm WinterGreen Research.1 U.S. firms are also shown to be ahead in migrating their voice and data applications toIP. Nearly two-thirds of U.S. companies (65%) will The global enterprise application integration software market is expected to rise from $1.4 billion in 2005 to $4.9 billion by 2012. have shifted their fixed voice and data to IP within a year. A still higher ratio says they will also have moved their mobile voice and data over Over what timeframe will your company migrate the following applications or facilities to a convergent IP network? (Share indicating they have already migrated applications or plan to do so in the next 12 months) venerable applications around, written 20 or more years ago, which continue to fulfil a vital role and which could be very expensive and Conclusion According to survey results, by mid-2008 an average of 72% of firms globally will have migrated their applications and facilities to a risky to re-write. Even these can be “front-ended,” according to du Noyer, “but you have to play by their rules” – bearing in mind, for example, that they were written for a particular type of terminal and protocol. converged IP network. Having moved their applications over to IP, companies must arm themselves with the advanced methods now Once they are Web-enabled, load-balancing can be applied to applications to improve performance; the processing “load,” for available to integrate applications and bring out the value of their IT assets. Most firms are not as yet exploiting IP communications to the instance that of a Web site application that is in intensive use, can be spread across different locations. Du Noyer also advises that an access fullest, but those that are forging ahead have created a more responsive organization. Nevertheless, in the global rush towards IP migration and integration, companies need to take stock: as Bechtel strategy be worked out for applications running on IP so that the user gets a consistent experience whether working from home or on the CIO John Bailey points out: “You have to plan around your business model to take best advantage.” move with a mobile device. With an increased number of applications considered critical to business success, performance and management of those applications becomes even more important. “Understanding what applications are References 1. “Enterprise Application Integration Market Opportunities, Strategies, and Forecasts, 2006 to 2012,” October 2006. running on the network, the amount of resources they are using and how the applications are performing together is key to being able to make decisions about controlling and optimizing them,” says ’s King. “Often applications are tested in a lab environment with little thought to users scattered around the world. Improved information and management can help identify performance issues before they create problems.” What are the biggest challenges for your company of migrating applications to an IP network? (Select up to two responses) Global North America Europe Asia- Pacific 80 70 1. Risk of disruption to business during migration 39.19% 48.72% 37.04% 36.67% 60 50 2. Lack of in-house skills and expertise in relevant 32.82% 29.91% 27.41% 38.33% 40 technologies 3. Security 29.26% 15.38% 42.96% 24.17% 30 4. Complexity of managing IP networks 23.41% 28.21% 19.26% 24.17% 20 5. Difficulty in ensuring application availability and 22.90% 25.64% 24.44% 21.67% 10 0 1 2 3 4 5 6 7 reliability on IP networks 6. Maintaining some applications on legacy 16.28% 10.26% 19.26% 16.67% networks while migrating others 7. Difficulty in integrating applications on an 14.76% 18.80% 10.37% 15.83% Source: EIU/ survey, 2006 IP network Appendix The following findings are drawn from a survey of 395 global executives in a range of industries. The survey was conducted in June 2006, and we are grateful for the time and insights of everyone who participated. How important are the following network performance attributes to your business? Critical Important Of minor Not Don’t importance important know 100 80 1. Security 64.72% 28.93% 5.58% 0.76% 0.00% 2. Network availability/downtime 61.52% 35.19% 3.04% 0.25% 0.00% 60 3. Reliability of connections 48.08% 46.04% 5.37% 0.00% 0.51% 40 4. Speed of network 38.23% 56.20% 5.32% 0.25% 0.00% 5. Accessibility (i.e., access to full 29.16% 47.31% 18.67% 3.84% 1.02% 20 suite of network applications from outside the office) 0 1 2 3 4 5 6 7 8 9 10 11 6. Applications performance 28.39% 58.31% 12.28% 0.51% 0.51% 7. Efficiency/capacity utilization 21.52% 50.63% 23.80% 1.77% 2.28% 8. Scalability 18.83% 52.16% 24.43% 1.27% 3.31% 9. Open, standards-based architecture 18.21% 44.62% 26.41% 6.92% 3.85% 10. Ability to prioritize applications 16.58% 46.17% 30.10% 4.85% 2.30% 11. Reach (number of end points) 15.74% 51.27% 26.90% 2.54% 3.55% How valuable are these benefits of network convergence to your business? Great value No value Don't know 100 80 1. Reduced cost of voice calls 39.24% 32.41% 15.44% 9.11% 2.03% 1.77% 2. Simplified network management 32.66% 41.01% 18.23% 4.30% 1.27% 2.53% 60 3. Improved network scalability to 40 accommodate business growth 24.30% 44.05% 21.77% 6.08% 0.51% 3.29% 4. Better network redundancy 20 (for back-up in the event of an outage) 28.10% 39.49% 23.80% 5.57% 0.25% 2.78% 0 5. Better ability to launch and 1 2 3 4 5 6 7 8 manage new applications 21.43% 43.37% 25.51% 5.61% 1.53% 2.55% 6. Better customer service 35.37% 32.82% 21.12% 6.62% 2.29% 1.78% 7. Better collaboration with customers, suppliers and partners 35.62% 35.11% 18.58% 7.38% 1.78% 1.53% 8. Expanded number of access types (e.g., fixed-line, mobile, web-based) by which employees can connect to the corporate network 28.75% 38.93% 22.14% 6.87% 1.78% 1.53% How important are the following applications to your business? Critical Important Of minor Not Don’t importance important know 100 80 1. Interactive voice response 13.67% 44.30% 29.87% 10.38% 1.77% 2. Contact centers 14.83% 47.06% 27.62% 7.93% 2.56% 60 3. IP telephony 17.30% 47.07% 26.21% 8.14% 1.27% 40 4. Remote access via an IP phone 15.98% 46.39% 28.09% 7.99% 1.55% 5. Collaboration software 18.16% 48.59% 25.58% 4.09% 3.58% 20 6. Video-conferencing 16.24% 45.18% 29.95% 7.87% 0.76% 0 7. Unified messaging 13.71% 45.43% 29.44% 8.88% 2.54% 1 2 3 4 5 6 7 8 9 10 8. Multimedia services 11.76% 47.31% 30.18% 9.46% 1.28% 9. Enhanced call forwarding (e.g., 13.96% 43.65% 32.74% 7.11% 2.54% “find me, follow me” capabilities) Over what timeframe will your company migrate the following applications or facilities to a convergent IP network? Already migrated migrate Plan to Plan to migrate No plans to migrate Don't know/ in next 1 to 2 Not 12 months years applicable 100 80 1. Mobile voice and data 18.02% 28.68% 24.87% 15.48% 12.94% 2. Voice and data (non-mobile) 23.16% 29.52% 25.19% 10.43% 11.70% 60 3. Enterprise applications 20.87% 27.23% 26.72% 10.69% 14.50% 40 4. Contact centers 14.07% 23.02% 26.85% 15.86% 20.20% 5. Corporate telephony 22.39% 27.48% 25.45% 12.98% 11.70% 20 6. Multimedia services 14.76% 24.68% 26.72% 12.98% 20.87% 0 1 2 3 4 5 6 What are the biggest challenges for your company of migrating applications to an Which of the following best describes your company’s IP network? (Select up to two responses) migration strategy for IP networks? Enterprise-wide 17.35% 23.21% 100 implementation, implement department by department, etc. 80 17.86% 60 Enterprise-wide implementation 27.04% 40 Implement department by department 12.24% 1.53% 20 Roll out in parallel with legacy networks 0.77% 0 Trial convergence in small, localized experiments Implement at remote sites only Risk of disruption to business during migration 39.19% Don't know Lack of in-house skills and expertise in 32.82% relevant technologies Security Other 29.26% Complexity of managing IP networks 23.41% Difficulty in ensuring application availability 22.90% and reliability on IP networks Maintaining some applications on legacy networks while migrating others 16.28% Difficulty in integrating applications on an 14.76% IP network Other 1.78% Survey Demographics 2.55% In which region are you personally based? What is your company’s global annual revenue in U.S. dollars? 17.30% 22.90% 30.10% Asia-Pacific Latin America North America 32.14% Under $500m $500m to $1bn $1bn to $5bn 8.65% Eastern Europe Western Europe 2.04% $5bn to $10bn $10bn or more 13.99% 37.15% 4.57% In which country are you personally based? 7.67% 4.86% 8.44% Which of the following best describes your job title? 3.58% 2.05% 10.91% 7.61% 10.23% 7.36% 2.05% United States France Board member CEO/President/Managing director CFO/Treasurer/Comptroller 19.29% 10.49% 12.44% Japan Germany Canada 20.72% CIO/Technology director Other C-level executive 8.88% 29.92% 3.30% United Kingdom India SVP/VP/Director Head of business unit Head of department 18.53% 7.11% Australia China Other Manager Other What are your main functional roles? What is your primary industry? 100 80 60 40 20 0 Customer service 15.74% Finance 15.99% Agriculture and agribusiness 2.28% General management 37.31% Automotive 3.30% Human resources 5.08% Chemicals 2.79% Information and research 14.72% Construction and real estate 2.28% IT 20.81% Consumer goods 6.35% Legal 6.85% Education 3.55% Marketing and sales 19.04% Energy and natural resources 3.55% Operations and production 12.44% Entertainment, media and publishing 2.28% Procurement 2.79% Financial services 20.30% Risk 10.41% Government/Public sector 4.82% R&D 5.84% Healthcare, pharmaceuticals 7.36% Supply-chain management Strategy and business development 24.37% 2.79% and biotechnology IT and technology 13.71% Other 2.79% Logistics and distribution 1.27% Manufacturing 6.60% Professional services 9.64% Retailing 1.78% Telecommunications 5.84% Transportation, travel and tourism 2.28% |
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