Standardization: Reduce Cost, Simplify Change

MALAYSIA, 29 February 2004

By Nora Denzel

When I first talk about standardization with customers, analysts and the press, there's one question that comes up repeatedly — Why is HP so committed to standardization? After all, it's not a solution or service HP sells. And you won't find an HP product called standardization.

Well, the reason we're so enthusiastic, is that standardization is essential to everything we want to do for our customers. It's is a core-enabling technology for the adaptive enterprise — HP's strategy for helping customers synchronize business and IT to capitalize on change.

Today's CIO must do more with less in an environment of constant change. While change has always been a factor in business, especially in IT, the pace of change seems to be accelerating. And that makes it increasingly difficult to understand and respond effectively to change. It sometimes seems that the only accurate statement we can make about change is that we don't know what it will be or where it will come from. One effective strategy for managing change is to build an IT infrastructure and business processes that are fast and flexible enough to quickly respond to change no matter what it is or where it comes from — either inside or outside the business. The ultimate strategy would be to move beyond simply reacting to change to using change as a major competitive advantage.

An adaptive enterprise dynamically links IT and business strategy so that IT is automatically driven by changing business priorities. As a result, customers gain an IT foundation that is:

Simplified — change is easy to implement when heterogeneous resources work together;

Agile — anticipate and respond, in real-time, to changes in market forces, customer demand and business priorities;

Value-driven — unlock the hidden value from business assets and IT resources, including people, process, and technology.

A pivotal component of the adaptive enterprise is an infrastructure that is highly adaptive — a simplified, standardized, modular,integrated business and IT environment.

To understand the power and potential of standardization, consider the impact it has had on the manufacturing industry. Throughout the past century, standardization revolutionized manufacturing — again and again. From the invention of interchangeable parts to the assembly line; from automation to robotics; from just-in-time inventory to global resourcing — each represents a new wave of standardization that dramatically increased productivity by organizing and utilizing people, process and technology in new ways. Each wave also disrupted entire industries — transforming technology-innovators into new market-leaders, and in many cases, leaving old market-leaders behind. The impact of standardization has been particularly profound in the automotive, consumer electronics, and food distribution industries.

Today standardization is having a similar impact on IT — reducing costs, improving productivity, maximizing ROI, and, this time, disrupting a wide range of technology-driven industries. Jobs, business processes and technology are beginning to be standardized, virtualized and integrated into an IT 'supply chain' that delivers services on demand — where, when and precisely how much the customer requires. This trend means that standardization is relevant to every CIO today.

There are four critical challenges every CIO confronts: maximize returns, mitigate risk, improve performance, and increase business agility. Standardization impacts all four — but specifically, maximizes return by lowering the cost of change and improves agility by enabling a faster response to change.

Until recently, standardization simply meant 'industry standards' — a diverse group of widely deployed architectures that form the basis for the latest communications, networking, security and web-based services. HP's commitment to industry standards is clearly apparent from our active participation on industry boards that develop standards, through collaboration with partners to foster standards and through innovative solutions that are based on standards.

HP also recognizes that industry standards alone are not enough. Simply stated, in order for our customers to truly embrace change and turn it into a competitive advantage, a broader approach to business and IT is needed — one that encompasses industry-standard architectures, reusable components and consistent implementation to reduce cost and simplify change. By taking a holistic approach, standardization has become a major ingredient in our strategy for building the adaptive enterprise.

Industry-standard architectures

Industry standards provide a consistent enterprise-wide approach for deploying IT at the lowest cost. Reducing the diversity of your IT environment drives down the costs of implementing change. Industry standards enable different components in a heterogeneous environment to work together consistently. Today's standards will also help facilitate the integration of tomorrow's standards and solutions. Standards drive efficiencies and economies of scale, increase flexibility and provide greater choice. They lower the cost of computing compared to proprietary offerings and provide the foundation for innovations that enhance functionality and the user experience. Standards also facilitate common training, best practices and the reuse of knowledge. The more pervasive standards are, the more valuable they become.

Reusable components

Reusable components break down silos of IT into modular assets. This building blocks approach applies to system elements, application and infrastructure services and people. The rapid adoption of web services is the result of standard, industry-recognized IT components that address the need to reduce cost, implement new services quickly and efficiently, and scale rapidly.

An IT environment based on reusable components enables you invest in solutions as the business dictates and evolving solutions as needs change. This enables a faster response to change by reconfiguring modular assets rather than starting from scratch each time a new solution is implemented. Operational costs are reduced by eliminating the need for over-provisioning. And the benefits of change are achieved sooner — accelerating time-to-market, improving business agility and reducing the risks associated with change.

Consistent implementation

Consistent implementation provides a standardized approach to the way work is organized, establishing a common framework for business and IT . HP's approach focuses on three distinctive aspects of consistent implementation: consistent application and infrastructure services, consistent business and IT practices, and consistent management.

A consistent approach to implementation increases productivity and enables the rapid redeployment of resources to meet changing business demand and reduces the time required to implement change, improves operational efficiency, and increases flexibility when deploying human resources or changing business processes.

HP has a unique understanding of the power of standardization to help manage change. We invest in standards; we accelerate the adoption of standards; and we deliver standards in our products, services and solutions. That demonstrates HP's focus on standardization.

Our standardization strategy is unique: with a three-part approach that includes industry-standard architectures, reusable components, and consistent implementation, HP has transformed standards into a strategy for capitalizing on change.

Our commitment is unique: HP makes focused investments that support the development and wide adoption of standards in hardware architectures, software interfaces, and interconnects. And then HP invents industry-standard solutions that address the challenges of maximizing returns, improving performance, mitigating risk, and increasing agility.

Our vision of standardization as well as our expertise for implementing total solutions that include hardware, software and services, tied to ISV (Independent Software Vendor) offerings and the industry-specific expertise of Systems Integrators, position HP as the industry-leader in standardization. While many struggle just to keep up with change, HP Adaptive Enterprise offers a strategy for capitalizing on change, making it a significant competitive advantage for our customers.