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Virtual Data Center in a box for one million

How good is virtualization market? According to Gartner recent Data Center Conference poll 94% of IT organization is going through some sort of virtualization. 80% are either in the process of server consolidation project or have already completed one. Only 3% of the poll respondents had no plans on virtualization. 40% of the polls said their data center run a combination of mainframe, Unix, Linux and windows servers. 25% runs Unix, Linux and windows servers.

In an earlier survey of Gartner for enterprises with more than 10,000 employees, on an average there are about 87.4 data center sites. The survey also showed that most of them are looking to reduce this number by 58.8% average. The same story goes with mid-sized organization, with an average 15.3 sites reducing 44.4% to 8.5 sites.

Cost versus savings

Now, lets break this up in terms of servers. For a mid-size to large enterprises data center, on an average there are 350 servers of all sizes at any time. Alinen research says that on an average 100GB of storage is used by a single server. Comparing only 10% might be a SAN solution. According to Boyd Company recent Most affordable data center market, 2008 research, assuming an average size of 125,000 square feet data center, the annual cost of maintaining can range from $11-12 million, taking only the cost of land, labor, power and property taxes. VMWare TCO calculator shows 50% or more TCO savings on server and infrastructure consolidation savings in a given 3 year time.

Solution in a box

Here is a simple solution how you could consolidate your servers. In any organization, no matter how you interpret, the heart beat of any day is communication, and the most preferred way is email. An email Exchange virtualization is much easy way to start your server consolidation initiative. Other categories are your development, test and QA, backup and batch processing servers. These are servers that you utilize very minimal in your daily business cycle.

Reference Architecture

By consolidating all the high end servers into a virtual framework you could reduce or replace your low capacity servers by 50% or more. The high-end servers in combinations with SAN solution could create a high available and reliable solution in a box as show in Figure above. You could now extend this into a symmetric architecture to enable maximum availability architecture. Assuming Sun Fire x4100 series or Dell Power Edge 2900 series, and using VMWare solutions you could start putting an efficient and affordable data center solution in a box for one million.

About the author: Sam Chakkanat has been in management consulting industry since 1992. Prior to founding CEAUG, he was the Vice President of Enterprise Architecture practice at Agilex Technologies, servicing fortune 500 clients. Before that he was Enterprise Solution Architect and consulting manager at Oracle Consulting at their Platform and Performance Solution Architecture Group and had architect and managed multi-million dollar programs and business technology initiatives for clients. Mr.Chakkanat holds a bachelor's degree in electronics and communication engineering from Pune University. He serves as a though leader and subject matter expertise in multiple domains in IT strategy and Enterprise Architecture. He can be reached through our contact forum.

Master data management (MDM)

Master Data Management is on the short-list for many CIOs, it is worthwhile to consider how MDM projects are spawning in organizations and how an organization can evaluate their potential for success. Recent surveys by some industry analysts recommend what the software mega-vendors such as IBM, SAP, and Oracle have been hyping—that CIOs must look at the MDM effort holistically and embark upon an enterprise-wide MDM initiative. Today, MDM is a seductive vision that is sold primarily to the CIO office. However, the mainstream success of MDM depends on enrolling business as the sponsor—or the master—of such initiatives, because master data is inherently tied to solving business problems. Rather than falling victim to mega-vendor promises, CIOs are now opting for a more prudent approach that enables them to start small with a business-sponsored project to demonstrate the high return on investment (ROI) that can be realized using MDM technology, and then evolve that technology into an enterprise-wide MDM platform over time.

Data Governance in Infancy

The MDM vision being sold to the CIO paints a picture where all information silos within the organization are dissolved and the data is set free to flow among systems in real-time; data that is accurately unified with other data and is transmitted securely and viewed discretely by each business user at their desired frequency and latency. At a loftier level, the IT vision being presented is one that supports a set of universal definitions of all core business data entities—or master data—that are shared across all business processes and systems.

This vision is certainly alluring but also appropriate in order to tear down decades of legacy data silos. However, the first task CIOs face in realizing this vision is addressing data governance issues. Specifically, organizations must determine who defines the customer and standard product description; who knows of the correct relationship between customer and organization; who resolves the conflicts among these data sources, and more importantly, who owns the data? With all these considerations, it is not surprising that settling data governance policies and practices is an enormous, corporate-wide undertaking that has the potential for political strife.
Ironically, the critical assumption underlying the MDM debate today is that IT can manage master data. This implies that IT can anticipate, define, and standardize on a complete MDM technology stack in advance of the negotiated outcome of data governance issues between business and IT. The assumption is flawed and may prove to be fatal for the entire master data management category. Realistically, it could take three to five years at most organizations for the critical data governance issues and organizational priorities to be fully resolved, and for data governance policies and processes to be implemented.

Enter the Business Master

Consequently, it is mandatory for IT to work with business units to identify who the customer is, what the product is, and how products and customers are related—since business owners are the subject matter experts of business entity data. Moreover, if poor data has a negative impact on the business process, it is the business that needs to solve the problem and subsequently, the business that benefits from improvements in master data. This brings to light the new reality—business has to be the master of master data management. After all, who is more suited to answer these and other related questions such as: who is the customer that placed the order; is this employee authorized to approve the order; what product did we promise to ship; and what is the correct shipping location?

Without business enrollment in the MDM initiative, the project is often doomed from the start. Unlike other IT issues related to data management, master data and its management is not merely infrastructure. The business impact of master data is direct and its monetary benefits are measurable with ROI metrics. Given that the language of business is not the language of master data—the challenge lies in translating business issues and benefits into master data issues and MDM solutions.
For the business executive, improvements in master data are all about improving business performance, enhancing customer experience, reducing operational costs, and ensuring regulatory compliance. Consider for example, a Vice President of Sales Operations challenged by lead assignments, commission payments, and order management processes. Using an MDM solution, customer data can be accurately identified with different accounts and products, and based on assignment rules can be synchronized across CRM and ERP systems to reduce operational costs and improve sales productivity. Another example is a senior executive in the Financial Services Wealth Management sector tasked with freeing up Financial Analyst’s time spent on data administration and new account opening processes to focus on advising clients. An MDM solution can address the management of customer profile and account information to allow Financial Analysts to better manage their customer relationships while saving millions of dollars from streamlined account administration processes. Finally, consider a Chief Compliance Officer at a pharmaceutical company who needs to ensure all physician information is accurately tracked in order to comply with pharmaceutical marketing regulations—as the business executive is accountable for compliance, not the CIO’s office.

Start Small and Build on Proven Success

Recognizing and engaging with business units and encouraging them to serve as the sponsor of the MDM initiative has several implications for how the MDM vision may be achieved and the extent of its success. To start with, predicting the entire set of requirements across all critical business processes is no longer necessary. It is more important to select one functional area with high business impact and demonstrable ROI—by allowing the organization to start small with a MDM project that can be realistically deployed within three to nine months. After all, business units will not have the patience or appetite for long-term deployments. Secondly, it is necessary to select a MDM technology platform that easily integrates with existing heterogeneous IT infrastructure in order to reduce the required investments. Finally, an MDM platform should be fully extensible and able to evolve into an enterprise-wide MDM platform that is capable of spanning across multiple MDM projects as they are deployed and integrated across business divisions and geographies.

In summary, while the seductive vision of MDM is currently being sold to the CIO office—it is presented under the flawed assumption that IT can manage master data. For MDM initiatives to succeed, it is critical to enroll business owners as the sponsor—or the true masters of master data. Remember, business units require an immediate ROI on such projects rather than a future vision of an enterprise-wide MDM platform—even when promised by a mega-vendor. A more prudent approach is to start small with a MDM technology that delivers rapid ROI for defined business sponsored projects. More importantly, the MDM platform should be able to evolve along with the emerging consensus on corporate data governance policies without constraining the business. After all, your business success does not reside solely with the efforts of IT professionals, so neither should your master data management efforts

About the Author
Anurag Wadehra is Vice President of Marketing and Product Management at Siperian, Inc., developers of an award-winning platform for adaptive master data management. For further information, contact the author at This e-mail address is being protected from spambots, you need JavaScript enabled to view it or visit the company’s website at http://www.siperian.com

Customer Data Integration

While researching, I found an old article that talks about putting a business case for customer data integration and establishing an MDM track. For those who are looking for such answers, this is a good one to read.

Technology expenditures are viewed with a critical, if not jaundiced, eye these days so creating enterprise-wide alignment around the business benefits to be obtained is a critical part of the process. Nowhere is that need more evident than in enterprise software deployments like CDI. One of the most valuable tools for creating that alignment is the ROI analysis.

Creating Internal Alignment

Getting alignment means addressing three separate issues that any proponent of an enterprise technology investment needs to keep in mind:

Creating the support network.

CDI is a "community good"; everyone benefits from having clean and consistent customer data even if they do not directly invest in the project. Even departments who are not touched by the mastered customer data benefit from improved reputation in the marketplace, better customer retention, better branding, and a higher stock price. In such an environment, it can be hard to find an individual executive sponsor. If, for example, each of 10 departments would have a realizable benefit through cost savings or new revenue of $1,000,000 over the first year, then funding a project of $2,000,000 would seem to be a slam dunk with a 500% ROI during year one. But no individual department has a large enough benefit to willingly step up and sponsor the project, so you have three options:

Secure a C-level sponsor who can envision the benefits from the enterprise level to drive the initiative (best),
Create a Coalition of business owners who will benefit from the initiative (second best), or
Drive the Initiative out of the IT Department (generally not an easy or particularly effective thing to do).

Even when a C-level sponsor for the project is secured, having a support network of business owners throughout the organization who understand and believe in the initiative will make implementation much faster and more effective. In practice, creating the coalition of LOB managers is often a prerequisite to getting C-level attention. CEOs, COOs and CFOs don't have much bandwidth for abstract ideas and proposals, however meritorious. If, however, a significant number of their key management personnel are all talking about and demanding a solution to one particular problem - i.e. a single view of the customer - they will listen and respond.

Creating alignment around common goals.

CDI projects are like the three blind men and the elephant: what it looks like depends on where you grab hold of it. CDI projects encompass a wide range of potential benefits, and that's a very positive thing. But when key business owners are describing the project in completely different terms to other executives within your enterprise (like, say, the CFO), this can create a impression of an ill-conceived and poorly planned initiative.

It is important that the group share a vision for the project, the key deliverables and the necessary phasing of the project over time. It is even worth your time to craft an "elevator pitch" that you can use internally to describe the initiative. Creating the shared vision also creates accountability in and between the group members for delivering on key elements of the project. Thus the credit card division understands that if they don't get their documentation of requirements completed by the end of the month, they will delay critical work for mortgage processing.

Building the financial case for CDI investment.

With benefits distributed throughout the organization, the financial returns for enterprise software are difficult to quantify. Without hard numbers to plug into the ROI analysis the project is unlikely to go forward. And today's typical CFO is going to be looking for key participants to "sign up" for revenue improvements or cost reductions from the project. Those participants, however, are not going to bet their careers on fuzzy concepts like "better customer data" or "customer lifecycle management". The analysis has to go one or more levels deeper, and LOB owners need to be involved in the process of defining requirements and quantifying the expected benefits.

The ROI Model

There are as many ROI models as there are projects. These models do, however, tend to share some common characteristics and have some common requirements. Our goal here is to push the ROI away from "art" and more toward "science" by detailing some of those common elements and the methodology for evaluating them.

From a high level, a typical company has a "hurdle rate" for new investment, particularly for enterprise technology investments. In simplistic cases that hurdle rate is usually dependent upon the company's target operating margin plus some cost overrun allocation. If, for example, a company has a 20% margin and is targeting 25%, any project that has an expected ROI higher than 25% moves them closer to the goal, and higher ROIs move them there more quickly. The time horizon is also a factor - if the goal is 25% margins in 2006 and the proposed project will not yield any benefits until 2007, that's a non-starter.

More common is a budget-based ROI hurdle. The typical company, especially in financial services, has a wide range of potential investments that they are considering, all of which meet or exceed margin-based targets. The company, however, has a limited IT budget and therefore needs to establish an internal benchmark rate that is designed to act as a filter ensuring that only the highest ROI projects move forward.

It is important to understand that CDI needs to be evaluated just as any other prospective IT investment. Despite the fact that CDI is an emerging technology and as such is grossly underutilized in corporations worldwide, our purpose is not to justify the CDI decision but to evaluate it. Failure to adopt this impartial approach risks contaminating the results, and CDI is, as we shall see, a strong enough initiative to stand on its own.

It is a good idea to discuss the ROI analysis process with the CFO or his representative at the earliest opportunity. Often the Finance department has sophisticated multi-factor ROI models already in use and is going to want to plug your numbers into that model for evaluation. You can save a lot of time and effort by understanding the model and the required data points at the beginning of the evaluation rather than trying to retrofit and revisit at the end.

ROI Benefits - Creating the List

The first step in any ROI analysis is documenting the expected benefits. This can be a daunting task, because customer data touches so many operations, divisions, applications, and delivery channels. Moreover, there are various ways to classify and organize the benefits.

One common dividing line is between "Business Benefits" and "IT Benefits". The advantage in this approach is three fold:

Different parties are clearly responsible - business owners come up with the benefits for their business units, and IT comes up with technology benefits list.
IT benefits tend to be more strategic - the IT organization has to deliver on longer term capabilities like more rapid transaction processing and more rapid product introduction, which are harder to quantify. Without attribution of dollars in cost savings or revenue, having IT benefits as a separate list escalates those strategic initiatives in the ROI presentation.
Each list plays better for specific audiences - the COO and CFO are likely to focus on the customer-related benefits and upside revenue potential from CDI initiatives, which tend to be on the business benefits list. The CIO and CTO are more likely to focus on the strategic technology advantages behind a CDI project, and the improved ability to execute against internal deliverables.

The disadvantage to the "Business Benefits" and "IT Benefits" division is that it is somewhat artificial. Most if not all IT reasons for undertaking a project are, in the final analysis, business reasons. If, for example, IT wants to do the project because it will reduce the amount of exceptions that need to be managed, the reason for undertaking this is to keep costs down and improve profits, which is a business reason. If they want to do it because it moves them closer to a true service-oriented architecture, the economic benefits are in reduced future integration expense and more rapid deployment of new products which drives revenue, i.e. business reasons. Nevertheless, this approach is common because it is clear, simple and companies understand it, and the benefits listed above outweigh the disadvantages.

A second approach is the "Benefits by Department" approach, in which benefits for each business unit, (and often, each delivery channel and constituency) are documented. Example classifications might be:

Departments

Sales
Marketing
Service - Call Center
IT
HR - Employees

Channels

Customers - web
Customers - branch
Partners

Finally, the sheer number of metrics which are affected by CDI projects can be daunting as well. At Siebel, data on over 9,000 metrics from more than 100 implementations is compiled and analyzed on an ongoing basis. All of these will obviously not apply to all CDI projects, but a thorough analysis is a significant undertaking in any substantial company. Fortunately, the focus for an ROI analysis is not on an exhaustive analysis of all potential ROI sources, but on identification and estimation of the top 10-20 Key Performance Indicators (KPIs) that will impact your business.

It is always best to start with your own internally-generated list of CDI benefits. It is simply too easy to rely on vendor-supplied materials or industry studies or articles, which tend to be too high level. A typical stated benefit from those sources might be:

"Increase customer retention"

This is much less useful, and much less convincing, than a targeted and customized benefit statement such as:

"Customer attrition rates in 2005 were 7.8% versus an industry average of 5.5%. Our target for 2006 is one percentage point below the industry average, or 4.5%. This would result in an additional 925,000 customers by year end 2006."

Aside from the benefits of creating your own internally generated list of expected CDI benefits, it is important to check that list against other published materials. This can be an eye-opener, particularly when the CDI initiative is driven by a specific departmental or operational requirement (e.g. Gramm-Leach-Bliley Privacy compliance). Likely sources include industry associations, CDI vendors, systems integrators and market analysts.

For example, The CDI Institute (http://www.the-cdi-institute.com/) published a study in July 2005 entitled, "Customer Data Integration as Foundation for Unified Customer Views: Key Industry Scorecards for 2005-06". In this report the key business and IT drivers for current CDI initiatives in various industries are detailed.

In Financial Services, The CDI Institute compiled polling results from 33 institutions to identify the top five business reasons for major financial institutions to undertake a CDI project:
customer data integration, business challenges, cdi, customer data hub, master data

Source: Customer Data Integration as Foundation for Unified Customer Views: Key Industry Scorecards for 2005-06, A CDI Institute MarketPulse(TM) White Paper, July 2005, used by permission.

I have personally validated these results through several "CDI Workshop" engagements with customers, designed to create the vision and ROI analysis for a CDI initiative.
While having an exhaustive list of KPIs for CDI benefits is not an imperative, it is important that all the major requirements from all affected areas of the company are captured.

Time and again we have seen enormous amounts of time and effort wasted by pursuing the wrong goals. Most commonly, this arises when a company is evaluating build vs. buy in their customer data integration solution. Addressing tactical departmental level concerns such as creating a cross-referencing key or integrating a data quality solution leads to initial evaluations that substantially underestimate the effort.

When the issue is escalated to an enterprise level, new issues emerge such as reconciling the various data models in use across the company, or the sophisticated hierarchy and relationship management requirements in the B2B areas of the company. It is not uncommon to see companies start with initial estimates of 1,000 - 2,000 man-days of engineering effort to build a CDI solution, only to see it expand to over 5,000 days once all the major requirements are captured.

Quantifiable vs. Fuzzy KPIs

The central problem in crafting a credible ROI analysis for CDI initiatives is that many of the benefits are difficult to quantify. If a CDI solution enables a company to consolidate customer feedback and service requests, such that they understand customer needs better and are able to more quickly introduce new products that differentiate them in the marketplace, what is that worth? It may be matter of incremental revenue for one company, and a matter of survival for another.

Moreover, many of the benefits are particular to one company, or one department, or one application. Context matters in determining benefit. The benefits from being able to centrally manage exceptions and discrepancies in customer data from one central location (data stewardship) depend directly on the degree to which such exceptions and discrepancies occur. It may be a small matter for one department that uses only one core system for processing, but a mission-critical initiative for another running multiple systems or channels (i.e. administering multiple products, or multiple systems resulting from mergers or acquisitions).

If we examine the universe of potential KPI metrics for CDI, we see data types that range from "precisely quantifiable" to "very hard to determine" and from "objective" where hard data is available either internally or from industry statistics to "subjective" where benchmark data is not readily available. Thus a particular KPI can be precisely quantifiable, and yet be subjective if such calculations have not been done before. Or a KPI can be very hard to determine, and yet be objective if sufficient studies or analysis exist to provide confidence in the anticipated outcomes.

It would be nice to divide these up into quadrants and focus on objective, precisely quantifiable metrics, but in reality these KPIS exist along a continuum which is different for every company. Yet clearly, if data is too subjective or too hard to determine, we cannot classify it as measurable.

If we were to attempt to characterize these KPIs in graphical form, it might look like this:
customer data integration kpi

Figure 2: Hard versus fuzzy KPI data

It is therefore highly useful to look at measurable data first. In many cases, the ROI from KPIs that are measurable is sufficiently high to justify moving forward with the CDI project. In fact, this has been the case in all but two of over two dozen CDI projects I have been involved with. If the expected ROI is high enough from the measurable KPIs, simply complete the ROI analysis with those factors and list the others (unmeasurable and partially measurable metrics) in the explanatory text.

If the anticipated returns from measurable KPIs come up short, then it's time to move on to the "somewhat measurable" category. There will be two sets of likely candidates here -

those that are closest to belonging in the measurable category, requiring the least effort to estimate and the most reliable estimates, and
those that are most strategic, providing the larger contributions to anticipated returns and which therefore take priority in analytical efforts.

Finally, in the "unmeasurable" category will be several KPIs for CDI returns that are strategically important, and which should not be left out. Your ROI analysis will typically have a page or more of introductory text in which the project purpose is defined, the various approaches analyzed and the reasons for undertaking it listed. This is the place to include strategic objectives that are very difficult to quantify.

From recent CDI Workshop engagements some of these unmeasurable KPIs that we have encountered have included:

Branding - appearing as "one bank" to customers regardless of channel
Creating a branded service experience across all channels
Increased employee satisfaction
Reduced cost of adding future operational systems to the IT architecture
Reduced average hold time in call center

These types of benefits are real and often substantial, but they are both hard to determine and subjective with regards to the ultimate impact on the bottom line.

As a final note, once the ROI analysis framework is complete, it is worth revisiting the high level strategic documents for your company. Look at the mission and values statements for both the departments and the company as a whole. Reread the chairman's comments in the latest annual report. Couch your ROI proposal in similar language and position it as driving toward those larger corporate objectives. These are the metrics for which the senior management will be accountable to shareholders, and it is language that will resonate in the corner office. Positioning CDI as a feather in their cap in the fight for excellence is a winning proposition.

What is Virtualization?

Virtualization is a proven software technology that is rapidly transforming the IT landscape and fundamentally changing the way that people compute.

Today’s powerful x86 computer hardware was originally designed to run only a single operating system and a single application, but virtualization breaks that bond, making it possible to run multiple operating systems and multiple applications on the same computer at the same time, increasing the utilization and flexibility of hardware.

Virtualization is a technology that can benefit anyone who uses a computer, from IT professionals and Mac enthusiasts to commercial businesses and government organizations. Join the millions of people around the world who use virtualization to save time, money and energy while achieving more with the computer hardware they already own.

Discover what virtualization can do for you.

How Does Virtualization Work?

In essence, virtualization lets you transform hardware into software. Use software such as VMware ESX to transform or “virtualize” the hardware resources of an x86-based computer—including the CPU, RAM, hard disk and network controller—to create a fully functional v irtual machine that can run its own operating system and applications just like a “real” computer.

Multiple virtual machines share hardware resources without interfering with each other so that you can safely run several operating systems and applications at the same time on a single computer.

The VMware Approach to Virtualization

The VMware approach to virtualization inserts a thin layer of software directly on the computer hardware or on a host operating system. This software layer creates virtual machines and contains a virtual machine monitor or “hypervisor” that allocates hardware resources dynamically and transparently so that multiple operating systems can run concurrently on a single physical computer without even knowing it.

However, virtualizing a single physical computer is just the beginning. VMware offers a robust virtualization platform that can scale across hundreds of interconnected physical computers and storage devices to form an entire virtual infrastructure.

History of Virtualization

Virtualization is a proven concept that was first developed in the 1960s to partition large, mainframe hardware. Today, computers based on x86 architecture are faced with the same problems of rigidity and underutilization that mainframes faced in the 1960s. VMware invented virtualization for the x86 platform in the 1990s to address underutilization and other issues, overcoming many challenges in the process.

Today, VMware is the global leader in x86 virtualization and has achieved success that is building momentum for virtualization in all x86 computers.

In the Beginning: Mainframe Virtualization

Virtualization was first implemented more than 30 years ago by IBM as a way to logically partition mainframe computers into separate virtual machines. These partitions allowed mainframes to “multitask”: run multiple applications and processes at the same time. Since mainframes were expensive resources at the time, they were designed for partitioning as a way to fully leverage the investment.

The Need for x86 Virtualization

Virtualization was effectively abandoned during the 1980s and 1990s when client-server applications and inexpensive x86 servers and desktops established the model of distributed computing. Rather than sharing resources centrally in the mainframe model, organizations used the low cost of distributed systems to build up islands of computing capacity. The broad adoption of Windows and the emergence of Linux as server operating systems in the 1990s established x86 servers as the industry standard. The growth in x86 server and desktop deployments has introduced new IT infrastructure and operational challenges. These challenges include:

Low Infrastructure Utilization. Typical x86 server deployments achieve an average utilization of only 10% to 15% of total capacity, according to International Data Corporation (IDC), a market research firm. Organizations typically run one application per server to avoid the risk of vulnerabilities in one application affecting the availability of another application on the same server.
Increasing Physical Infrastructure Costs. The operational costs to support growing physical infrastructure have steadily increased. Most computing infrastructure must remain operational at all times, resulting in power consumption, cooling and facilities costs that do not vary with utilization levels.
Increasing IT Management Costs. As computing environments become more complex, the level of specialized education and experience required for infrastructure management personnel and the associated costs of such personnel have increased. Organizations spend disproportionate time and resources on manual tasks associated with server maintenance, and thus require more personnel to complete these tasks.
Insufficient Failover and Disaster Protection. Organizations are increasingly affected by the downtime of critical server applications and inaccessibility of critical end user desktops. The threat of security attacks, natural disasters, health pandemics and terrorism has elevated the importance of business continuity planning for both desktops and servers.
High Maintenance end-user desktops. Managing and securing enterprise desktops present numerous challenges. Controlling a distributed desktop environment and enforcing management, access and security policies without impairing users’ ability to work effectively is complex and expensive. Numerous patches and upgrades must be continually applied to desktop environments to eliminate security vulnerabilities.

The VMware Solution: Full Virtualization of x86 Hardware

In 1999, VMware introduced virtualization to x86 systems as a means to efficiently address many of these challenges and to transform x86 systems into general purpose, shared hardware infrastructure that offers full isolation, mobility and operating system choice for application environments.

Challenges & Obstacles to x86 Virtualization

Unlike mainframes, x86 machines were not designed to support full virtualization, and VMware had to overcome formidable challenges to create virtual machines out of x86 computers.

The basic function of most CPUs, both in mainframes and in PCs, is to execute a sequence of stored instructions (ie, a software program). In x86 processors, there are 17 specific instructions that create problems when virtualized, causing the operating system to display a warning, terminate the application, or simply crash altogether. As a result, these 17 instructions were a significant obstacle to the initial implementation of virtualization on x86 computers.

To handle the problematic instructions in the x86 architecture, VMware developed an adaptive virtualization technique that “traps” these instructions as they are generated and converts them into safe instructions that can be virtualized, while allowing all other instructions to be executed without intervention. The result is a high-performance virtual machine that matches the host hardware and maintains total software compatibility. VMware pioneered this technique and is today the undisputed leader in virtualization technology.

Discover the Value of Virtualization

Virtualization is a technology that can benefit anyone who uses a computer. Millions of people and thousands of organizations around the world—including all of the Fortune 100—use VMware virtualization solutions to reduce IT costs while increasing the efficiency, utilization and flexibility of their existing computer hardware. Read below to discover how virtualization can benefit your organization.

Top 5 Reasons to Adopt Virtualization Software

Server Consolidation and Infrastructure Optimization: Virtualization makes it possible to achieve significantly higher resource utilization by pooling common infrastructure resources and breaking the legacy “one application to one server” model.
Physical Infrastructure Cost Reduction: With virtualization, you can reduce the number of servers and related IT hardware in the data center. This leads to reductions in real estate, power and cooling requirements, resulting in significantly lower IT costs.
Improved Operational Flexibility & Responsiveness: Virtualization offers a new way of managing IT infrastructure and can help IT administrators spend less time on repetitive tasks such as provisioning, configuration, monitoring and maintenance.
Increased Application Availability & Improved Business Continuity: Eliminate planned downtime and recover quickly from unplanned outages with the ability to securely backup and migrate entire virtual environments with no interruption in service.
Improved Desktop Manageability & Security: Deploy, manage and monitor secure desktop environments that end users can access locally or remotely, with or without a network connection, on almost any standard desktop, laptop or tablet PC

What is ERP?

Enterprise Resource Planning (ERP) tries to integrate all departments and functions across an organization onto a single computer system, which serves all different departments' specific needs. In other words, ERP is a set of software programs that integrate an organization s various business processes like human resource, marketing, finance, sales, manufacturing, logistics, operations etc. This also enables a comprehensive analysis of the data to plan production, predict sales and analyze quality matrix. The term, however, is most commonly perceived as commercial software system.

ERP encompasses organization' s business processes to drive system requirements and capabilities. It supports and facilitates the organization's transformation with the help of best practice deployment. Best practice transformation of companies can be achieved by deploying a Continuous Process Improvement (CPI) approach. CPI strategically develops a culture of continuous development in areas like quality, consumption and productivity. While reducing waste and cycle time, it augments productivity and quality standard.

ERP in India:

Industry analyst ARC Advisory states that the ERP market was $83 million in 2004, and is forecast to be over $250 million in 2009. According to a study from International Data Corporation (IDC), in the next four years the ERP market is expected to touch Rs. 1,550 crore ($341 million). It states, SMB potential in India is expected to be Rs 728 crore ($160 million), which stands at 47% of the total market. ARC Advisory estimates that Indian ERP will be growing at a Compound Annual Growth Rate (CAGR) of 25.2% for over the next 5 years.

Access Market International's (AMI) India Small Business Market Overview and Comprehensive Market Opportunity Assessment (2006-2007) and India Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies (2006-2007)highlight 5 factors that determine the purchasing decision of Indian SMBs. They are: (a) purchase and installation price, (b) ease of implementation and ROI, (c) product flexibility and scalability, (d) functional fit with the SMB's business process, and (e)long-term support.

Advantages of ERP:

*Elimination of manual re-entry of data
*Minimal Paperwork
*Modular and open in nature
*Improved work process
*Increased access to available data for decision making
*Tracking of the product, consignment on move
*Timely and accurate information
*Improved coordination between departments and functions
*Increased customer response time
*Quick response to changing business operations and market conditions resulting in improved competitive advantage
*Integrated address book for customers, vendors and employees

ERP landscape in India:

SAP: To achieve excellence and innovation in business processes, SAP ERP is considered ideal bet for the small, midsize and large organizations across all industries and sectors.

Oracle: ERP services from Oracle on different business verticals (like financials, manufacturing, HR, CRM etc.) are set of application software products specific to the concerned area.

PeopleSoft: Oracle acquired PeopleSoft in June 2005. Oracle's PeopleSoft Enterprise applications address complex business issues and help them perk up performance.

JD Edwards: JD Edwards was bought by PeopleSoft in 2003, and later merged with Oracle. Flexible and scalable, JD Edwards EnterpriseOne is an integrated applications suite of dynamic ERP software that combines business value, standards-based technology, and deep industry experience into a business solution.

The Sage Group: The group has The Sage Accpac (Enterprise Resource Planning) ERP solution for India, an accounting operating system for SMBs.

Microsoft Dynamics: Broadly designed for midsized and large companies, 4 Microsoft Dynamics products for business management and ERP are: (a) Microsoft Dynamics AX, (b) Microsoft Dynamics GP, (c) Microsoft Dynamics (New) and (d) Microsoft Dynamics SL.

SSA Global Technologies: (now Infor Global Solutions):Renowned for ERP solutions for manufacturing industry, the company was acquired by Infor Global Solutions in 2006. The solutions are built on an open, flexible, service-oriented architecture (SOA) with modern, web-based user interfaces. In 2003, SSA Global technologies bought Baan Corporation for US$ 135 million.

Baan: Baan was created in 1979, and over the years became real market threat to SAP. After being acquired and re-acquired a couple of times, now, Baan belongs to Infor Global Solutions. Infor ERP Baan is an advanced ERP solution that supports the critical manufacturing requirements of industrial equipment and machinery, commercial aerospace, component producers, high-tech electronics, shipbuilding and other companies.

IBM: ERP solutions from IBM deliver a roadmap, based on the best industry processes,integrating critical data for a single view of customer information,inventory levels, shipping details and more.

Abas Software: abas ERP/abas Trade is a flexible standard ERP software application,which optimizes business processes - from warehouse management,financial accounting, purchasing and sales to production.

Ramco Systems: Ramco's ERP solution for SMB series is service oriented Architecture (SOA) based and built by using business assets, rather than individual software modules. It can be migrated later to a bigger platform.It also has on-demand ERP solutions for fast growing businesses.

Open source ERP

Open source software application is always good, as it can realize any small organization's ERP dream possible without much investment. Generally, for non-proprietary technologies no license fees have to be paid. Also, organizations can implement only need-based solutions instead of going broad. However, before you decide to implement an open source ERP, please take note of the fact that, during critical circumstances and breakdown moments, you won't be serviced by a battery of qualified and experienced engineers.

ADempiere: ADempiere is a commons-based peer-production of Open Source ERP Applications.

Compiere: The application and source code is provided on the basis of the GNU General Public License version 2. A commercial license, documentation and support contracts are available for a fee.

ERP5: ERP5 is a complete high-end Open Source/Libre Software solution delivered under GPL license, and used for mission critical ERP / CRM / MRP / SCM / PDM applications by industrial organizations and government agencies.

GNU Enterprise: GNU Enterprise (GNUe) is a meta-project and can be regarded as a sub-project of the GNU Project. GNU's goal is to create free enterprise-class data-aware applications.

JFire: JFire is open-source software. It uses the technologies like J2EE 1.4, JDO 2.0, Eclipse RCP 3.3 and is designed to be customizable.

LedgerSMB: It is a free double entry software accounting system. Accounting data is stored in an SQL Database Server and a standard web browser can be used as its user interface.

OpenBlueLab: An open source ERP published as per the model-driven software development (MDSD) paradigm. It is derived from model driven architecture (MDA).

Openbravo: It's an open source web-based ERP business solution for small and medium sized companies. It is released under the Openbravo Public License, based on the Mozilla Public License.

Opentaps: It's is a web based ERP and CRM for small to medium sized businesses. It's functions include eCommerce, Point-of-Sales, inventory, warehouse, order, customer management and general ledger.

Postbooks: PostBooks is a full-featured, well-integrated accounting, ERP, and CRM system. It's based on the OpenMFG ERP Suite.

Tiny ERP: It's an ERP/CRM system with separate client and server components.

SQL-Ledger: SQL-Ledger ERP is a double entry accounting/ERP system.

webERP: webERP is a multi-inventory location, multi-language, multi-currency web based accounting/ERP software.

Industry practice

For different industries ERP deliver different operations and applications. Each industry is dynamically unique in its own way, and deals with enterprise applications services with its share of drawbacks and advantages.

Industries mostly benefited from deployment of ERP are:

Manufacturing:

One of the maximum IT deployments in the manufacturing industry has happened in the enterprise applications. Over last few years, ERP has successfully augmented the efficiency, and quality of manufacturing processes across the world. ERP solutions broadly have eliminated or minimized issues like improper communication, wrong or lack of communication. ERP solutions while coordinating the actions of supply chain, logistics and warehousing deliver robust solutions to these issues.

Industries in manufacturing:

1.Aerospace and Defense: Not SAP, but Oracle is the leader in this space. Top 11 global aerospace and defense organizations run Oracle's integrated enterprise solutions.

2.Automobile: Greater control over automotive sales and distribution, warranty claims, spare parts, accessory stock and supply, productivity of staff, while delivering all these and more, ERP solutions improve efficiency, speed-to-market and product quality for the automobile companies.

3.Chemical: From managing chemical formulas to manufacturing and shipping out the order in accordance with regulatory requirements, ERP solutions enable chemical manufacturers efficiently manage record formulation, customer, quality matrix, production and financial reporting.

4.Consumer Goods: From improving electronic collaboration with distributors and customers to manage product promotions and complex pricing, ERP solutions help FMCG businesses optimize the use of existing assets.

5.Oil & Gas: SAP has select set of ERP functions for this industry enabling the core business processes are most critical to its success. The software provides a solid software foundation and enables a modular approach to deploying additional functions as needed.

6.Electronics: ERP model for this rapidly growing industry can control product design changes, improve collaboration, communication and integration with the supply chain, plan for and manage seasonal demand, monitor safety compliance for hazardous goods disposal etc.

7.Biotechnology/Life Science: Biotech companies deploy heavy duty ERP for better operational efficiencies, procurement procedure, transaction management, full tracking of all scientific processes, real time revenue forecasts and more. It also should speed up regulatory approval process as success in this sector often requires an enormous amount of up-front investment.

8.Food & Beverage: ERP system complies with food safety regulations, manage capacity and different units of measure for al levels of product recipes, ensure quality and traceability of raw materials and manufactured products and more.

9.Plastics: For companies in the plastics industry, ERP provides capabilities that accommodate variable ingredients, recipes and routings, manage volume constrained resources, track lots, batches and work in progress, reduce costs of everyday small production runs and more.

Logistics and Supply Chain

From purchasing to pay roll, ERP can successfully manage end-to-end procurement and logistics business processes, for complete business cycles. From self-service requisition to custom invoicing and ensuring payment while maximizing the flow of materials all are possible through ERP. There are applications that deliver inventory management, material movement and processing, accounting support capabilities, production outflow etc. ERP also helps in tracking down the status of a product on the move. Consumers can check the status of the product on the web. In a nutshell, for logistics and supply chain ERP can manage processes from purchasing to pay roll.

Software

After manufacturing and logistics, it's software industry that reaps most benefits of leveraging ERP. As far as implementation is concerned, compared to other industries, spoilage is less here. It s easier to deploy and run the application, as people are apt with functional and technical expertise. ERP's usage in the software industry has reached a new high in the recent years, because with the software it becomes easy to manage the deadline. ERP software also have been used to coordinate and execute turnkey software projects, at quicker turn around time.

Insurance

Enterprise Resource Planning broadly covers 3 core areas. Firstly, it creates a common platform for insurers and agents, thus making the transaction process easy between both the agents and the insurers. Secondly, it curbs down the procedural delays. Other than analyzing different matrix of the market it also helps in checking out performance of agents, as every product moved by the agent gets placed on the central database. IBM ERP insurance is an ideal example here.

Healthcare

Like Insurance, Healthcare is another hot industry with immense scopes. ERP implementation has made segregating bills and patient records much easier. Database of patient records are kept in a common reservoir, which can be shared by hospitals. A critical patient's records can instantly be checked by a doctor and lives can be saved without much ado.

Retail

Small retail companies deploy ERP software broadly for inventory management and demand forecasting functions, which capture and report POS (Point-of-Sale) data in number of combinations. For bigger players, more advanced integrated ERP applications play an important role in managing every facet of retail operations, from POS solutions, inventory reporting, cashier with integrated accounting billing, product database to back-end inventory management and financials.

Pharmaceuticals

Pharmaceutical is a highly regulated industry, and from time to time receives instructions on how to process and control products. ERP solutions while refining the compliance factors increase the effectiveness, improve efficiency of organization's process and streamlines internal operations. The solution broadly tracks lot numbers based on criteria such as machine, manufacturing date, sequence, prefix, class, repackaging, renumbering etc.

Telecommunication

ERP solutions for telecommunication industries deliver capabilities that support and enhance processes associated with producing and delivering telecommunication products and services. On the basis of requirements, ERP can deliver solutions on contract accounting (receivables and collection capabilities), collections management (handling receivables and prioritizing accounts by risk), dispute management (processing receivable related disputes), partner and vendor management (managing relationships with partners and dealers), regulatory compliance and corporate governance (centralizing documentation of internal controls to help manage compliance) and, data and application integration (for changing business processes and strategies flexibly and quickly). SAP offers plethora of ERP solutions for telecommunication businesses.

ERP implementation models

On-demand model:

1.SAP Business ByDesign
2.NetSuite
3.Ramco OnDemand ERP

Traditional Model:

1.Implementation Tool Kits (with roadmaps and documentation)
2.Packaged, produced services (fixed price, time and scope)
3.Pre-configured systems (tools, documentation, methodology)

ERP functions:

Functions derived from an ERP project can be direct or indirect. Indirect functions are difficult to value, while it is easy to measure direct benefits. From delivering role-based access to crucial data, applications, and analytical tools, a robust ERP can redefine enterprise resource planning for an organization.

1.End user service delivery: Employees get access to critical data and analytical tools to perform everyday functions effectively. Through shared services they can also bring value to other inter-departmental processes.

2.Financial insight: Compliance and predictability of business performance can be attained from a right ERP solution. It not only tightens control of finances, but also gives a deeper financial insight across the organization.

3.Human capital management: It optimizes organization s HR processes. While enabling growth, innovation and elasticity, it can maximize the potential of complete workforce.

4.Performance management: While delivering real time metrics and personalized measurements, an ERP leverages the entire life cycle of performance management.

5.Purchase: Dealing with critical multi-sourcing purchase orders to scheduling, suggestions about stock level etc. are provided by an ERP model.

6.Customer relationship management: Broadly, the CRM module in an average ERP software system gives a hand in generating leads, customer support, and order placement.

7.Sales: Subset of CRM, the ERP software can help trend forecasting, sales development, sales territory management, performance tracking and customer segmentation.

8.Materials management: Protecting cost effective provisioning of the organization.

9.Scheduling: ERP enables adequate material and production capacity to process orders on time.

10.Costing: Product and order related costing for the strict valuation of the operating result.

11.Compliance: Comply with local and international environmental and safety regulations.

12.Manage: Manage large inventories, material yields, distribution, raw material quality, by-products, seasonal demand etc.

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