1.1 On demand

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What does IBM mean by on demand?

A totally new kind of transformation—or, more specifically, new levels of integration—of processes and applications inside the business, of suppliers and distributors at either end of the business, of customers outside the enterprise, of employees inside it.

e-business on demand is the name we use to describe a new movement in business and computing, one that is changing the way technology is deployed and used in business. The dynamics of the market are changing, and that requires a new way of thinking about business processes and the information technology infrastructure that supports them. We are entering the next phase of e-business, where companies move beyond simply integrating their various processes to a world in which they need to be able to sense and respond to fluctuating market conditions in real time. IBM is leading the way toward the on demand world, and has the business insight and technology expertise to help our customers become on demand businesses.

Definition:

On demand business—an enterprise 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 threat.

What is e-business on demand™?

See "Just what is e-business on demand?" on page 261.
What does an on demand business look like?

An on demand business is an enterprise whose business processes—integrated end-to-end across the company and with key partners, suppliers, and customers—can respond with agility and speed to any customer demand, market opportunity, or external threat. An on demand business:
1. Is responsive—Responding almost intuitively to dynamic, unpredictable changes in demand, supply, pricing, labor, competitors' moves, capital markets, and the needs of all its constituencies—customers, partners, suppliers, and employees.
2. Uses variable cost structures and adapts processes flexibly. This flexibility will enable it to reduce risk and to do business at high levels of productivity, cost control, capital efficiency, and financial predictability.
3. Is focused on its core competencies—its differentiating tasks and assets—while tightly integrated strategic partners manage selected tasks (everything from manufacturing, logistics, and fulfillment, to HR (Human Resources) and financial operations).
4. Is resilient enough to manage changes and threats—from computer viruses to earthquakes to spikes in usage—with consistent availability and security.
An on demand business enables its leaders to see and manage the company as an integrated whole, even if important parts of its business are handled by others.

Business characteristics of an on demand environment

See "Business characteristics of an on demand environment" on page 263.
What kind of technology infrastructure is needed to support on demand capabilities?

To become on demand businesses, companies must deploy IT (Information Technology) to create an on demand operating environment. This has four essential characteristics:
1. It is integrated—Systems are seamlessly linked across the enterprise and across its entire range of customers, partners, and suppliers.
2. It uses open standards—So different systems can work together and link with devices and applications across organizational and geographic boundaries.
3. It is virtualized—To make the best use of technology resources and minimize complexity for users, it uses grids to make the collective power of the computing resources in the grid available to anyone there who needs them.
4. It has self-healing, autonomic capabilities—so it can respond automatically and work around problems, security threats, and system failures.
On demand businesses need reliable, scalable, and secure infrastructures that will be used by customers, employees, suppliers, and contractors. These infrastructures will be the foundation of all business processes—supply chains, HR systems, customer fulfillment, financial applications—and will handle billions of dollars worth of transactions and vital communications.

Businesses must meet usage demands regardless of technology or affordability issues. These businesses will need to upgrade and improve continuously to become more flexible and resilient. This new environment will create tremendous opportunity for IBM software, hardware, and services, as well as for new applications provided by IBM's market-leading Solution Developer partners.

Employees will need pervasive access to interact with information in whatever mode is appropriate for the context, whether text, voice, or some combination of modes—desk-bound or mobile.

The on demand operating environment has four essential characteristics—integrated, open, virtualized, and autonomic.

Technical characteristics of an on demand environment

See "Technical characteristics of an on demand environment" on page 264.
Why should our customers want to become on demand businesses?

Customers of every size and in every industry are looking for ways to make their businesses more resilient and agile in the face of change and uncertainty. The reality is that in today's environment, they must be able to make faster and better decisions, reduce risk, leverage their core competencies, and increase their return on investment. Becoming an on demand business is about changing the way you operate as well as reducing costs, serving your customers better, reducing risks, and improving speed and agility in the marketplace. A business can only meet these needs if it has on demand capabilities, and those that develop them early will gain considerable competitive advantages. IBM has the business expertise and technology resources and experience to help our customers become on demand businesses.
Why now?

The pace of business has increased, the networked world has made every company a global competitor, customer expectations are rising, and information technology has only begun to realize its promise to transform business. Companies that begin building their on demand capabilities now have the opportunity to gain significant advantages over their competitors.
What are the phases of e-business on demand?

See "Phases of e-business on demand" on page 262.
How is e-business on demand different from the e-business IBM has been talking about for years?

The early phase of e-business was about communication—having a presence on the Internet, communicating inside and outside your company, and making some information available online. The second phase was about transactions—being able to perform basic transactions online. This next phase is a qualitative shift, going beyond changing a standalone process to seamlessly integrating business processes across the entire range of business activity, from procurement to finance to logistics to customer-facing systems—from customers to partners to suppliers to employees.

Previously, the words, "on demand" were often used in reference to "e-sourcing," or utility-like computing. While utility-like computing can be one of the technology resources that help businesses develop on demand capabilities, this is a much broader idea about the transformation of both business and technology. Companies in the on demand world will have the capacity to sense and respond to fluctuating market conditions in real time and to provide products and services to customers on demand. IBM has been developing services, technologies, and integrated solutions that support on demand capabilities, and we are focused on helping our customers become on demand businesses.
What are the key competitive advantages IBM has to help customers become on demand businesses?

IBM is defining and leading the next big change in business and computing—setting the agenda for the industry. We have been preparing for this for some time, and our products and services already are delivering on demand capabilities and benefits to our customers.

No other company has the breadth and depth of our business and technology experience. We have the experience of running outsourcing, hosting, and application management services. We offer industry-leading e-business solutions and integrated software environments, we support open standards across our product lines, and we have invested in utility computing, Web services, autonomic computing, and grid computing to ensure that we have the right tools, experience, and know-how.

IBM has the IT expertise, strong lineup of products and services that support an on demand operating environment, and deep industry experience to help customers transform their businesses into on demand businesses.
Can I sell the idea of on demand to all my customers?

Any business can become an on demand business—and every business needs to begin building its capabilities today. The advantages of being on demand apply to any business of any size in any industry. The on demand idea is a framework around which to engage customers in conversations about and in planning where they want their businesses to go, and in how IBM technology and services can help them get there. Depending on a customer's business and infrastructure needs and what stage of e-business adoption it's in, there are IBM offerings appropriate to help it develop its on demand capabilities. Companies that develop on demand capabilities first will gain competitive advantage in the marketplace.
Are there differences in on demand offerings for medium and large companies?

IBM has offerings to help businesses of all sizes develop and deploy the business processes and technology infrastructure required to be on demand.
How can you determine if customers are good candidates for on demand?

Different companies are in different stages of e-business, but any company can become an on demand business. Assessment offerings are being developed to help determine where customers are in their adoption of e-business. Most are not yet in the on demand phase. This will set up specific steps they should take to develop on demand capabilities in business processes and technology infrastructure. Until the tools are available, an account planning session with the IBM customer team should help begin assessing where they are, what offerings are appropriate, and what next steps in the discussion with customers should be.
Will on demand offerings be different by industry?

On demand is about transforming the way entire companies and industries do business, so that the range of offerings that can help businesses become on demand companies is broad and deep. IBM currently has many offerings that support on demand capabilities. Some solutions apply across all industries, while others are specialized by industry.

What is grid computing?

See "Grid computing" on page 269.

IBMers can learn more at the following sites:

Developing Grid computing applications (Article)
IBM Grid Toolbox (alphaWorks® download)
Installing and configuring the IBM Grid Toolbox (Free tutorial)

What are autonomic computing systems?

See "Autonomic computing" on page 269.

IBMers can learn more at the following sites:

Autonomic computing overview and resources (Collection of resources)
Autonomic computing (Web site)
Tivoli®: Autonomic computing (Web site)
Administration made easier: Scheduling and automation in DB2 Universal Database (Article, in PDF)

What is utility computing?

See "Utility computing" on page 270.
How does e-business on demand differ from the idea of outsourcing?

In the outsourcing model—or "utility-like" computing—companies can acquire business processes, services, applications, and infrastructure over a network and pay for what they use as needed. This can be an important component of the on demand operating environment, since it is one way a company can move its computing costs from fixed to variable. But this is only one of many tools a company can use to help it become an on demand business. The on demand idea is about transforming the entire way a company does business, affecting business processes and relationships as well as technology infrastructure.
Will grid computing play a role in the on demand world?

Grid computing can be an important part of the capabilities of an on demand operating environment. Grids can provide the base for a resilient infrastructure, and they can coordinate and hide the complexity of distributed, heterogeneous computing systems. They can reduce costs by pooling technology resources so that any member of the grid can tap into the full computing capabilities of the entire grid as needed, and they can improve the utilization of technology resources by deploying computing resources from across the entire grid to the areas that need them most.
What are the criteria for an on demand offering?

An offerings that either:
1. Helps customers meet one of the key attributes of an on demand business (responsive, focused, variable, and resilient), or
2. Supports one of the capabilities of an on demand operating environment (integrated, open, reliable, and resilient—in other words, utility-like).
Does IBM have specific offerings that make up an on demand package?

Yes. Becoming an on demand company requires profound changes in the way it does business—much more than any one offering can deliver. But there are specific offerings that can help companies build their on demand capabilities. There are offerings designed for specific industries, for small and medium businesses, and for particular information technology needs. You may already be familiar with many of these offerings. We need to make sure that individual offerings are discussed as part of a larger plan with customers to help them transform their companies into on demand businesses.

An on demand business requires a particular type of infrastructure that IBM is uniquely positioned to offer with its depth, breadth, technology, and industry expertise. This on demand operating environment is made up of three components—integration, virtualization, and automation. IBM software offerings play a critical role in each of these areas.

Integration creates business flexibility by connecting people, processes, and information—anywhere, any time, from any device. IBM software offers collaboration, business integration, and information integration solutions for e-business on demand.

Virtualization is the pooling of IT resources for simplified access, improved working capital, and optimized asset utilization. These resources include information and applications (IBM software play) as well as servers, storage, and networks (IBM systems play).

Automation allows cost reduction and increased business responsiveness through policy-based orchestration. IBM software provides solutions in the areas of availability, security, optimization, and provisioning.
What do we have to sell today?

Many of our offerings already meet the needs of on demand businesses. Currently there are more than 30 offerings that make up the on demand portfolio, and there will be more to come in the future. IBMers can click here ^[1] for a complete on demand offering list.
How does this fit into IBM's Industry Value Project?

The Industry Value Project provides us with the line of business relationships that allow us to understand industry issues and respond with the best and most relevant offerings for customers in those industries. Every IVP industry has a solutions portfolio of offerings, many of which can help customers develop their on demand capabilities.
What is the role of Business Partners in on demand?

IBM is putting a tremendous amount of demand generation behind this initiative, and partners are sure to benefit from it as well. We see more opportunities for partners to expand their solutions, services, and software offerings and team with other partners to deliver complete on demand solutions to customers. Specifically, our Solution Developer partners will find more opportunity for their solutions and our consultant and integrator partners will see a demand for their expertise in delivering business insight. Specific on demand offering partners can sell now include:
- JD Edwards 5 w/Blue Stack
- IBM and PeopleSoft Accelerated CRM
- eQ from IBM and QAD
- Start Now Collaboration Solutions
- Start Now Infrastructure Management Solutions
- WebSphere Portal Express
- e-Server Integrated Platform for e-business (Linux)
- Business Continuity and Recovery
- Infrastructure Solutions with Server Management (Server Management Services)

^[1]http://w3.ncs.ibm.com/sitelet.nsf/ondemand/JSHW-5MZUEN?OpenDocument&page=MP

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