Ebusiness Infrastucture

Judging from the Impact of recent outages In some of the Industry leading e-business providers - and from the concerns expressed by leading Close and Cots in e-business - the risk of infrastructure problems continues to grow. " 1 Few technologies have revolutionized business more than the advent of the Internet. Since the mid-nineties, companies all over the world have been quick to realize that the Internet's true value is not in people's ability to browse the Web or send e-mail, but rather, in the new opportunities it creates for enhancing business processes, reducing costs and Increasing profits.

However, e-business Is not simply defined as e-commerce transactions; It Is about using technology to redefine old business models in order to maximize customer value. With the relentless evolution of e-business technology, non e-business models and organizational structures will be faced with increasing pressures. Competition will exploit Internet technology as much as possible.

New competitors will emerge out of nowhere using new business models and an enhanced customer experience to take away market share and mind share. In order to compete - some might even say survive - In this new economic era, a company just be able to react quickly to challenges - constantly innovating their processes to stay in step with technology and ahead of competition.

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To accomplish this, it is mandatory for a company to build an information technology (IT) infrastructure flexible enough to absorb new technologies quickly and alter the scope and functionality of applications as needed, to support changes in the business model. This white paper will Investigate the requirements e-business Imposes on IT Infrastructures, and provide guidelines for creating an Infrastructure that offers the legibility and reliability necessary to support the constant evolution of business processes in the e-business world. -business infrastructure Page 3 For most companies, becoming an e-business and making visible progress in the e- business space requires a great deal of planning, and often much trial and error. A research study by The McKenna Group (see Figure 1) shows 4 major phases companies go through as they become more involved with e-business: Figure 1: e- business adoption process 2nd generation e-business e-business Web publishing Security chasm Business value chasm Stage of adoption Awareness Presence Pilot

Adoption Process investment Cross process integration Value network creation Focus Use the Internet internally Establish a Web site Allow access to core systems (read only) Allow transactions on core systems Improve core business process(sees) Redefine core process(sees) Integrate core and redefined processors with partners and customers Source: The McKenna Group Interviews and Analysis Most traditional companies will begin their transition towards e-business by publishing information about themselves or their products on the Web.

They will use the Internet as simply another way of reaching customers with information. Quite often, companies will create a Web-based marketing campaign by utilizing print or broadcast media to drive customers to their Web sites. While it was originally thought that there was minimal risk involved in leveraging the Internet as a marketing channel, companies have begun to realize that their Web presence can have both a positive and a negative impact on their brand image. In two highly visible cases, Web sites were unable to handle the increased activity resulting from an expensive TV advertising campaign.

This not only resulted in disappointed visitors but also in an onslaught of negative publicity. -business infrastructure Page 4 Utilizing the Web for marketing purposes certainly has its benefits; however, they may not have a big effect on the company's bottom line. A more direct result in terms of increased revenue or reduced costs can be achieved by moving to the next phase of e-business: allowing customers to access a company's core IT systems to request of a bank account, or actually performing transactions online such as making payments or buying merchandise through an e-commerce application.

Since these transactions involve sensitive data such as bank accounts or credit cards, it becomes mandatory that companies build a secure environment in which to run their e- business applications. In some industries, including the financial sector, providing customers with direct access to core IT systems has resulted in substantial savings. Quite often, portions of these savings have been passed on to the customer, which in turn has enticed more customers to use these services. In many cases, this has produced a very successful e-business initiative.

However successful the initiatives are in this phase of e-business adoption, they are the result of taking existing business processes and reconfiguring them to an electronic format. Some companies are taking e-business to the next level. Not only are they adjusting their business processes to align with new technologies; they are fundamentally changing the entire organization to be completely customariness and customer-satisfaction focused. Customers can order products or services online, check availability of the products, and follow their orders through the entire production process.

A good example is the tracking capabilities built into some major shipping companies' online services. Originally, these companies' Web sites were only able to verify receipt of a package. This has evolved into a complete shipment-tracking capability, which enables a customer to follow a shipment's entire Journey and retrieve both the exact e-business infrastructure Page 5 time of delivery and the name of the person who signed for it. These types of e- business applications require more than a Web front-end to existing applications; they necessitate end-to-end integration and complete transparency of all the processes within the organization.

Providing end-to-end process integration is not easy. A major effort is required to develop an integrated back-end application set hat allows processes to flow seamlessly. Most companies do not have such an environment. Until the advent of e-business, the resulting inefficiencies, inaccuracies and inflexibility's didn't matter; customers had few options and all competitors were on the same footing. Since customers now have more choices, they will be looking for the company with the most efficient - and integrated - service offering.

This drive for increased integration of services will only become stronger. Already companies are considering forming partnerships to provide a totally integrated experience for their customers. An example is an automotive dotcom enterprise that has created a partnership with multiple car dealers, car manufacturers and a major bank to provide its customers with a one-stop shopping experience. This experience includes online car research and selection, pricing of the selected vehicle, choosing the payment scheme and agreement on a delivery date.

These types of partnerships allow companies to be aligned with customers' most important priorities: variety, quality, a competitive price 2 and fast delivery. Rarely can a single company provide all of these services; a network of companies together increase the value to the customer. Such business models will require a high degree of integration, with the e-business infrastructure Page 6 For some companies, the e-business adoption process will move slowly. For others, such as dot comes, certain phases will be omitted, enabling them to go directly to market with new and innovative business models.

Whether a company adopts e- business slowly or rapidly, there are three rules of thumb that will always apply: Innovation is key to success in e-business. Innovation stems from spotting a trend - new business models or new technology - before anybody else does, then implementing the necessary IT systems and applications to support that trend. Integration increases customer value. Successful e-businesses have the ability to improve the efficiency of business processes and enhance them with innovative business models or technologies. Without a flexible, scalable, reliable and secure IT infrastructure, integration and continuous innovation are impossible to achieve. Ultimately, success in e-business comes down to the quality of the e-business applications that enable all processes, and the reliability and adaptability of the IT environment that supports them. E-business infrastructure Page 7 The impact of e-business on today's IT environment While maintaining the traditional role of increasing organizational efficiency and effectiveness, IT departments are often required to lead the business into new industry structures and markets.

In fact, a recent study conducted by The Economist Intelligence Unit called "Assessing the strategic value of information technology: Planning perspectives for senior executives" (February, 1999) indicates that an increasing number of business executives plan to leverage their IT investments and lance their IT goals toward technology investments aimed at reaching new markets or changing industry and market practices.

Because IT systems are an integral part of e-business, the design and construction of a reliable e-business infrastructure is considered no longer solely an IT issue - it is a vital business management issue that is generating a great deal of interest from Coos and Close alike. The performance - in every sense of the word-of the IT infrastructure has unprecedented visibility and impact on the success of a company's e-business initiatives.

If IT fails, the e-business ails, as represented by the following list of IT failure-related consequences:3 Poor return on investment: The IT infrastructure fails to meet the business objectives Forfeited revenue: Customers can't find products Lost customers: Up to 40 percent of customers don't return after encountering incomplete content or poor service Eroded brand image: Visitors share poor experiences, which the media exploits. E-business infrastructure Page 8 To be successful in e-business, companies need to create an IT infrastructure that is optimized to support its e-business requirements; in other words an e-business

While the tools required to support a business process can vary from company to company, an e-business infrastructure is generally consistent, and comprises the following components: Network infrastructure Security infrastructure Application server environment Data and content management tools Application development tools Hardware and operating systems Systems management platform It is important to note that these components must be complemented by operational procedures and people who install, launch, operate and maintain them in order to alp ensure the service levels required to operate a successful e-business.

The following section will describe the key design considerations for an e-business infrastructure, providing a blueprint for companies to help ensure their e-business infrastructure meets the demands of e-business. E-business infrastructure Page 9 Design criteria for an e-business infrastructure "Companies planning to deploy Internet-based e-business and e-commerce applications face the enormous task of redesigning and integrating their server, network and application infrastructures to support on-demand networked nationality - and most organizations lack the internal expertise to do so. 4 Successful e-businesses rely on an e-business infrastructure that meets the following three criteria: Flexibility - for rapidly evolving e-business models through the addition of new application functionality and the integration of systems and applications with customers, business partners and suppliers. Scalability - for accommodating unpredictable fluctuations in customer demand and user workload. Reliability - to help ensure secure, continuous operation and availability of the e- business applications to end-users.

Flexibility e-business adoption is an evolving process. (Refer to figure 1 - McKenna Group study). Companies typically start with simpler implementations, growing more complex as the business model becomes more integrated with the Internet. To remain successful in this business model evolution, it is mandatory for a company to create a flexible e-business infrastructure. To start, the following list of e-business infrastructure characteristics might be included: Universal connectivity through the use of open standards.

In an e-business environment, companies must allow customers, business partners, suppliers, and influences to have access to systems and applications with a variety of access devices available. It is key that a company utilize an open standards approach using Internet Standards such as Transmission Control Protocol/ Internet Protocol (TCP/IP) and Secure Socket Layers (SSL) for communications and HTML/Java-enabled thin clients. E-business infrastructure Page 10 A component-based approach to application development.

Rapid application development and the ability to reuse parts of existing applications will greatly accelerate the time it takes a company to create new e-business applications with the investigate application development tools that allow applications to be created from smaller building blocks (commonly referred to as "application components"), or at least tailored to the individual requirements of the company's e-business model. A component based approach to infrastructure design.

The e-business infrastructure may need to evolve with the business model. By adhering to open standards in the selection of infrastructure elements, the elements can be treated as individual components, without Jeopardizing interoperability. This approach allows companies o evolve their e-business infrastructure gradually - adding hardware or software components, upgrading existing servers or removing elements of the infrastructure as needed. Integration with internal and external services.

Interoperability - sharing or communicating with mixed technologies across and beyond the enterprise - is an important success factor in e-business. By integrating business applications and data among customers, suppliers, partners and employees, companies can achieve a more effective and efficient e-business model. Enabling integration is accomplished by sing open standards-based infrastructure elements in conjunction with an integration, which allows existing application functionality to be integrated with the new application logic.

By following a component-based approach to application development and infrastructure design, providing integration between various systems and applications, and enabling universal access to applications (with open standards as the catalyst to make it all work together) companies can create a flexible e-business infrastructure that can evolve in support of their business requirements. E-business infrastructure Page 1 1 Scalability One of the biggest challenges in building a reliable e-business infrastructure is predicting the customer demand that it will need to support.

This is especially true for companies that interface directly with the end customer, the number of users that simultaneously access systems, plus the workload they will create can be very hard to predict. If an e-business initiative is successful, the customer base can grow rapidly into hundreds of thousands of users in a relatively short timeshare. Even with a static customer base, and depending on when customers can access the Web applications, demand can fluctuate tremendously ring a week - or even a single day - as illustrated by Figure 2.

A scalable e- business infrastructure should be capable of handling increasing workloads while maintaining high availability and good response times - without adding significant complexity or corresponding headcount. Scalability is important, because it helps create growth of the IT capability in proportion to business growth, without long periods of excess capacity. An effective, scalable e-business infrastructure should have easily configurable components and management characteristics that remain true as the infrastructure expands.

Some claim their systems are scalable, but all too often they require the other attendant processes and people to grow at the same rate as the technical components - which can be a costly proposition. For example, a common technical approach to increase server capacity is to run multiple Web servers in parallel. While this may be a sound initial approach to meet increased workload or more complex application types. With this approach, as the need for server processing power continues to grow, companies could be forced to continue adding servers.

This can add significant time and expense to maintain the servers ND to make all applications consistent across these machines. E-business infrastructure Page 12 Figure 2: Some typical Web site loads over a 24-hour periods 250 200 Hits per hour (thousands) 150 50 01234567891011 12131415161718192021 222324 Hours Company A Company B Company C Company D Alternative approaches that can enhance scalability are: Developing applications on non-proprietary systems to accommodate added server capacity without dramatically increasing the number of servers and corresponding IT staff.

Applications built around a non-proprietary architecture can be moved from one river platform to a more powerful and scalable one without the need to rewrite the applications. Built in load balancing, which allows companies to treat multiple servers as a single logical system, where the failure, removal or addition of a single machine does not require changes to the existing environment. These options, when considered proactively, can help avoid the need to replace components or change processes with each new business advance or requirement. -business infrastructure Page 13 Reliability When combined, flexibility and scalability contribute to the third e- business success criteria, reliability/availability. Reliability is the outward-facing feature of e-business - the part that customers see, expect and depend upon. When e-business infrastructures become hindered - unreliable and unavailable due to slowdowns or security breaches - the business case is threatened. It is only through adequate flexibility and scalability planning that reliability and availability can be created.

The blueprint for an e-business infrastructure In order for an IT environment to provide the flexibility, scalability and reliability required of e-business, companies need to develop a new kind of IT infrastructure. This infrastructure should consist of open interfaces that allow new applications and services to easily connect. It can also allow individual treatment and management of the elements within the infrastructure, including management of the overall environment. A blueprint of successful e-business infrastructures is shown in Figure 3.

The blueprint consists of five logical functions: Web Application Servers Directory and Security Services Edge Servers Data & Transaction Servers Storage Management Although these five functions could be implemented on either a single river or on multiple servers, separating the functions can present a company to implement infrastructure changes more rapidly - enhancing a single function without losing the interoperability of the other pieces within the e-business infrastructure. -business infrastructure Page 15 Figure 3: The blueprint for an e-business infrastructure Computers Edge servers Business partners Suppliers Employees Directory and security servers Transaction servers Web presentation servers Web application servers Data servers Storage Web Application Servers At the heart of e-business infrastructures are the Web application servers. Consisting of server hardware, a server operating system and application server software, the Web application servers "run" a company's e- business application logic and manage the user interactions.

While a single Web application server may be sufficient for most companies, others may choose to implement multiple servers - either optimized for a specific function or to provide for redundancy and scalability. Increasingly, companies are separating the presentation logic from the application logic on these servers. The server infrastructure can therefore do the processing work in several stages, allowing for the service of static information, or very simple transactions with lightweight dynamic data at the front end. This way, companies don't have to place load on the more complex applications that run at the back end of the system.

In order to enable new e-business processes, the Web application servers should also provide comprehensive integration capability with other systems, connecting with each other and the back-end legacy systems. E-business infrastructure Page 16 function, cost-effective platform. They perform many of the computing functions that reside between a company's internal e-business infrastructure and the external Internet - router management, basic authentication, firewall protection, and transacting - with the ability to support new device types and to render outbound data for the Internet in the format of the device itself.

Edge servers also improve performance in the areas of caching, load balancing and secured communications. This is important, in that transactions currently handled on a private network are moving to virtual private networking over public lines. Traditionally, technology has resided primarily on a company's premises. The current trend is to migrate some of the functions to the network itself. Functions such as data security are likely to remain on the enterprise side of the firewall; more transient services, such as caching, are likely candidates for migration.

For example, telecoms operators and Internet service providers are starting to offer information caching and other services on their infrastructures, while some of the key network infrastructure providers are beginning to build this functionality into the switches that go into the network. Security Security requirements are also changing. Although many companies have implemented basic password authorization, complex e-business systems require a ore sophisticated environment behind the firewall - beyond basic authorization.

This is causing security functions to move from simple passwords to digital security certificates, which not only provide individual user validation but also furnish different levels of validation, depending on the application or data being accesses. E-business infrastructure Page 17 The next step in security is to provide policy-based security management. A policy management server provides single and global sign-on for multiple systems, which can eliminate the need for multiple passwords.

It also can manage security independently from each of the individual applications, with authorization administered and managed at a single location. Through the use of a policy-based security system, companies can create a layered approach to security, offering higher degrees of protection against unauthorized access without the system becoming an unnecessary burden on authorized users. Data and transaction servers Building a flexible and reliable e-business infrastructure requires seamless integration between the Web application servers and the back-end data and transaction servers.

These servers handle processing-intensive and misconstruction workloads. They offer high degrees of security and application integrity, and have the ability to perform complex transactions against large data sets. Scalability on these servers is not achieved by adding additional server hardware; rather, by increasing the capacity of the existing system. Storage management All of the four functions described above can be deployed on a single server system.

However, the need for scalability will quite often drive a company to implement an e-business infrastructure that relies on multiple yester - and possibly multiple server hardware types - to run the e-business application workload. While such an implementation can increase the scalability and making sure that all applications have access to the same set of data. E-business infrastructure Page 18 To meet this challenge, a company can implement a storage management solution. Storage management enables every application within the enterprise to access relevant information - independent of the type of storage the information resides on.

Relevant storage mechanisms in an e-business infrastructure include: Direct attached storage - hard disks directly connected to a server system Network Attached Storage (NAS) - hard disks grouped in a specialized storage server which is attached to the network Storage Area Network (SAN) - storage capacity residing in a special storage network where administrative tasks - such as backup - are separated from the production environment. In addition to addressing this issue of data currency, Storage Area Networks also improve the performance and administration of the overall storage environment. -business infrastructure Page 19 Pervasive computing Until recently, PC's were the Internet access device of choice. However, preferred substitutes, such as cellular phones and personal digital assistants (Pads) are currently outselling PC's three to one. By 2003, the number of cellular phones around the world is expected to exceed 1 billion, with about 80 percent of them with some form of access to the Internet. This rapid proliferation of new network access devices is referred to as pervasive computing - migration of the Web beyond PC's to a new generation of devices that can access any service utilizing both wireless and wired connections.

The advantages of pervasive devices can generally be grouped in two areas: increased productivity and increased reach. Pervasive devices with specialized, easy-to-use functions will greatly increase knowledge worker productivity, according to some estimates by a factor of five. Even traditional desktops and notebooks will be used in ways that raise business issues such as manageability, security and mobility. Although the use of multiple devices per user will increase support costs - by a factor of three according to the same estimates - it should be an attractive return on investment by any measurement.

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