Introduction

About This MaxFacts Guidebook

IBM has embarked on a sweeping, company-wide strategy called "e-business on demand" that consists of three elements: Business Transformation, Operating Environment, and Flexible Financial and Delivery Methods. This MaxFacts Guidebook starts with an overall look at the on demand strategy and what it means to businesses today and tomorrow. It will then focus in on the "Operating Environment" element of that strategy to help you see how to leverage your current information technology (IT) investment and gain the benefits associated with becoming an on demand business. Finally, we will take a look at the roadmaps that will guide the future of on demand computing.

About the "More On The Web" Boxes

Throughout this MaxFacts Guidebook you will see inset boxes labeled "More On The Web." These boxes tell you about some of the links that are provided on the companion Web site for this book. To see how to access these links and the rest of the companion Web site resources, see the "Your 'Members Only' Web Site" section below. The URLs for the links are also listed in Appendix A.

Your "Members Only" Web Site

The on demand world changes every day. That's why there is a companion Web site associated with this book. On the site you will find the latest on demand news, links to expanded information referenced in the "More On The Web" boxes found in this book, and other related resources. However, you have to be a member of the "Insiders Club" to gain access to this site. When you purchased this book, you automatically became a member (in fact, that's the only way to join), so you now have full privileges.

To get into the "Members Only" section of the companion Web site, go to the Maximum Press Web site ( www.maxpress.com ) and follow the links to the Building an On Demand Computing Environment with IBM companion Web site. When you try to enter, you will be asked for a user ID and password. Type in the following:

For your user ID, enter: ondemandoe
For your password, enter: smoky

You will then be granted full access to the "Members Only" area. Visit the site often and enjoy the updates and resources with our compliments—and thanks again for buying the book. We ask that you not share the user ID and password for this site with anyone else.

Reader Feedback

We welcome your feedback on any aspect of this publication, so please e-mail us at < moreinfo@maxpress.com >. To see our full line of Exploring IBM books, we invite you to visit our Web site at www.maxpress.com .

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From all of us at Maximum Press, thank you for your interest in our MaxFacts Guidebooks .

Chapter 1: The on Demand Journey

In this chapter, we will take an overall look at IBM's company-wide vision for the future of business and information technology, namely, "e-business on demand." This will provide an overall context for our subsequent discussions, which will focus on the "operating environment" component of the on demand strategy.

What Is An On Demand Business?

IBM has been laser focused on a strategy called e-business on demand (or simply on demand) ever since its introduction in October of 2002. You can already see the results of this focus in many of today's IBM products and services. And the $10 billion IBM is committing to the on demand philosophy means that this strategy will increasingly manifest itself in all business consulting activities, computer hardware, software, and IT services over time. Many companies in many different industries have already started on demand initiatives.

At its core , on demand refers to the ability of a business to effectively respond to change. In the words of IBM Chairman and CEO Sam Palmisano, an on demand enterprise is one "...whose business processes-integrated end-to-end across the company and with key partners , suppliers and customers can respond with flexibility and speed to any customer demand, market opportunity, or external threat." While the typical business organizational structures, processes, and underlying infrastructures in place today meet current needs (to a varying degree), they are not prepared to efficiently support a highly dynamic, responsive , and integrated business environment—which is exactly where business is headed.

IBM will be the first to tell you that they did not invent the on demand concept. Rather, it is an outgrowth of what the business community told IBM they needed to be successful in today's fast changing world, namely, the ability to be more dynamic. And this is a burning desire within businesses of all sizes and in all industries. IBM's competitors are also beginning to forward concepts similar to those embodied in the IBM on demand vision. However, no other company has the breadth of products, services (both business and technical), and experience being offered by IBM. Timing is everything... and this enviable position comes at a time when businesses are in need of solutions with broader scope than ever before.

Any meaningful discussion of the on demand concept must start at the business level rather than with technology. That is, the business goals must be the driving force behind the transformation to an on demand model. So let's start by forgetting about technology for a moment and focusing on the four attributes of an on demand business. According to IBM, an on demand business must be:

Responsive

An on demand business has the ability to sense and respond in real time to a dynamic marketplace . Doing this effectively requires a clear and integrated view of customers, employees , suppliers, partners, and competitors.

Variable

An on demand business has flexible and adaptive cost structures and business processes. This requires a migration from fixed cost structures to variable cost structures that can scale with business volume, thereby reducing risk, improving productivity, and optimizing business performance.

Focused

An on demand business concentrates on its core competencies and the value it provides to its customers. It focuses on constantly improving in ways that help differentiate the business from its competitors. Distractions are avoided by building strategic relationships with qualified business partners that manage selected tasks ranging from manufacturing, logistics, and fulfillment to HR and financial operations.

Resilient

An on demand business is prepared to detect and respond to unexpected threats or changes in the marketplace. This readiness is achieved through the implementation of a flexible operating environment that continuously evolves toward ever-improving availability, security, and privacy.