BTO will give CIOs a business approach to IT - Mainframe Markets

Rethink IT, Nov, 2003

The IT industry cannot be happy without a new acronym and this year's hot one is BTO (Business Technology Optimization). In a nutshell, this means running IT like a business and aligning IT strategy and execution with business goals. Just as other departments within an enterprise use IT to optimize performance, integrate business processes and implement best practise, BTO is designed to do this for the IT operation itself and so drive greater value through the whole organization.

The aims of BTO are to prioritize and apply business rules to IT processes and people to drive maximum value and efficiency and to ensure applications meet targets for quality, performance and availability throughout the lifecycle. All this requires running, measuring and assessing IT as a business.

CATCHING ATTENTION

Big names are getting interested in BTO now, notably Computer Associates, Hewlett-Packard, Tivoli, Veritas and BMC, and some smaller software houses are hoping it will propel them into the big league, most significantly Mercury Interactive, the company best known for software testing, which outlined a BTO strategy last year and fleshed it out this summer with the acquisition of specialist supplier Kintana.

Mercury's head of marketing Christopher Lochhead says that BTO will be to the CIO what "ERP was for the CFO and CRM was for the head of sales". The IT director's very own acronym at last....

The market has applauded the shift in strategy from traditional mainframe-oriented tools to this voguish area. Mercury has a market value of about 10 times sales, highly unusual in the current climate for enterprise IT stocks.

It has been on the acquisition trail to create its new strategy and product range. It signed a $15m licensing agreement with Motive Communications earlier this year to use Motives 'ecosystem blueprinting' technology, which identifies and fixes software problems before they escalate. Mercury also bought reporting and analytics technology from Allerez for $1.25m in August, following its $225m purchase of Kintana in June. Kintana specializes in corporate governance software. Before that, Mercury had acquired Performant, a provider of diagnostics software tailored to Java applications.

TRACKING, MEASURING AND ANALYZING

Mercury will provide a series of software products for tracking, measuring and analyzing technologies. The blueprint and roadmap for these products and services, which will roll out over the coming year, are based around four 'centers of excellence' or Optimization Centers, aiming to boost IT efficiency through automation and integration of functions and business processes.

These centers are IT Governance, Quality, Performance and Business Availability. Each includes a set of software, services and 'embedded best practises' for solving common but critical IT problems. To put hard products behind the strategy, Mercury has upgraded 15 of its tools and added four new ones, mainly from Kintana and another 2003 acquisition, Performant.

WORKING ON THE RIGHT STUFF?

Governance focuses on IT priorities and execution and includes Kintana's eight products, which include apps to manage portfolios, program, project, resources, time, finance, change and demand. The question asked at this level is: "Are we working on the right stuff?"

The Performance and Quality Centers deal with enabling the applications and making the right decisions to go live as they are moved into the production environment. Quality includes several Mercury tools including WinRunner and TestDirector, plus a new dashboard based on J2EE and with 25 new performance indicators. Performance adds a new capacity planning tool plus Mercury's existing Loadrunner, Tuning and Diagnostics software. Diagnostics is partially based on Performant's technology.

Finally, Business Availability adds a new Customer Impact module to assign resources based on business criticality, plus the vendor's Topaz Business Process, Service Level Management and End User Management products. "Once systems are live we use the fourth center, the Business Availability Center," says Bruggemen, VP of marketing at Mercury Interactive. "The last three centers answer the questions of how we are progressing and what we are delivering to lines of business."

The company said a range of further products must be added in the coming year to achieve full automation. Such moves will aim to boost Mercury to compete with the likes of BMC and IBM/Tivoli in the business process management sector.

The need for BTO is urgent, say its supporters, especially with CIOs under increasing pressure to demonstrate measurable results from their projects and to increase efficiency and business value through technology.

There are waves of statistics to demonstrate the need for a business approach to IT--90% of projects are late and 30% cancelled, according to research company Aberdeen Group, 50% of projects go over budget and 50% fail to meet stated objectives, says Gartner Group. "If any other functional head had those kinds of results, he would be fired," said Mercury's Lochhead. Many of them are--the average time that a CIO stays in his or her job is now only 14 months in the US, and outsourcing is an increasingly popular option.