© 2014 Alsbridge Inc. All Rights Reserved.

Autonomics: the Next Game-ChangerImplications for Enterprises and Service Providers

Jeff Augustin, Managing Director, Alsbridge, Inc.

ContributorsKatharine Rudd - Managing DirectorHoward Davies - Managing Director

Brian Thompson - Director

This white paper is sponsored by IPsoft. While the observations and conclusions are based on Alsbridge’s independent research and analysis, the topical scope of the project was included in the sponsorship agreement, and the assessment of vendor

capabilities focuses primarily on IPsoft.

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Executive SummaryBroadly defined as intelligent machines that learn from experience and adapt to changing conditions, autonomics represents a step-change in the evolution of automation tools. Emerging as arguably the single most important game-changer since cloud solutions, autonomics is positioned to transform the technology services marketplace. In January 2014, CIO magazine cited “the rise of the machines” as the year’s number one IT outsourcing trend. Four months earlier, Gartner published a paper titled, “The Disruptive Era of Smart Machines is Upon Us.”

Some software providers and outsourcing service providers predict that autonomics can ultimately generate savings of 45 percent for IT services and up to 60 percent for managed service solutions, as well as drive staff reductions of up to 45 percent for customer care centers. To date, Alsbridge has observed some IT outsourcing providers use autonomics to reduce pricing bids by 25 percent to 30 percent. While these early signs suggest the potential for significant cost savings, the ultimate Total Economic Impact on the business remains unknown. Similar uncertainty surrounds the full impact on outsourcing providers and their armies of FTEs, whose jobs may become obsolete or dramatically redefined.

This whitepaper examines the basic characteristics of autonomics and its potential impacts on pricing and operational performance as well as service delivery and business models. Challenges and opportunities for both enterprises and service providers are assessed, and IPsoft, a leading autonomics provider, is profiled.

Alsbridge Recommendations

1) Assess recent innovations and the state of the marketplace: Our research shows that many companies that have implemented some automation tools lack awareness of new developments related to autonomics, and thereby miss potential opportunities to benefit from recent innovations.

2) Take new contractual terms and conditions into account. Incorporating autonomics in a sourcing deal requires significant changes to the RFP, SLAs, contract terms, ARCs/RRCs and other agreement elements.

3) Consider pilot projects. A test case approach can provide insight into how peers and competitors are deploying autonomics and gauge potential benefits.

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Overview

Autonomics refers to the ability of systems to make decisions using high-level policies, self-learning, optimization and automatic adaptation to changing conditions. In the context of IT operations, autonomics is the “use of technology to manage the technology,” and the business driver is the opportunity for IT professionals and knowledge workers to focus on higher-value tasks rather than mundane operational functions.

While many IT professionals equate autonomics with automation, they are fundamentally different. Automation in the traditional sense works best in relatively static environments, which seldom reflect the real world of business operations, business processes and the IT that supports them. In today’s dynamic world, scripted automation is difficult to maintain without significant support resources (which negates the whole point of automating in the first place).

Autonomics, meanwhile, is a dynamic approach to automating in a dynamic world. The self-learning and adaptation capabilities described earlier mean that a true autonomics system can “watch” an engineer solve a problem or execute a process. The system can take that learning and convert it into an autonomic process that can be executed repeatedly exactly the same way every time. At the same time, in response to a change in the environment for that process, the system adapts and learns the new way.

As Gartner states: “…the difference between automation and autonomics is that automation reduces labor hours by

repetitive execution of mundane tasks, and autonomics completely eliminates head count through cognitive learning and executing tasks without the need for labor.”

Put more bluntly: “automation is like giving a mechanic a better wrench, while autonomics means replacing the mechanic.”

Early automation solutions were scripted programs that helped engineers solve specific tasks that required human intervention. Figure 1 shows the progression of autonomics from a scripted approach, to orchestration, to expert systems with the capability to learn.

Impact on Enterprises

Benefits

Autonomics solutions can be applied to numerous areas of the business to enhance existing or needed processes or initiatives. For example:

Launching a New Service

A telecommunications provider launching a new service faces increasing labor costs and scalability issues. Autonomics can streamline IT service management to support the launch and drive a new level of operational efficiency to support services revenue generation.

Labor-Intensive Functions

Traditionally labor intensive areas such as service desks and customer care centers present opportunities

Figure 1

Generation One Scripts Generation Two Orchestration Generation Three Expert Systems• Scripts written by programmers and/ or scripting experts to perform specific tasks formerly done by humans• Require human intervention and management • Do not have the capability to “learn” from other scripts executing similar tasks • Cannot “call on” other scripts to solve more complex problems• “Blind” execution of tasks as scripted without the ability or “intelligence” to learn by pattern recognition

• Ability to execute scripts in parallel • Requires less human intervention but still requires script writing and script association • Allow engineers to work with programmers and scripting specialists to script multi-level interactive scripts that can recognize patterns based on an engineer’s “learnings” • Still do not have the ability to “manage” an end-to-end problem/solution

• Expert systems that automatically trigger actions and decision making based on learning ability from previous actions and interactions • Pattern recognition that can mimic “what people do” in the same or similar situation (watchful waiting and execution) • Intelligent routing, event correlation, anomaly detection and action, RCAA (Root Cause Analysis Actions) based upon experience (previously seen executions and anomalies detected)

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for autonomics. Although many enterprises have achieved significant cost reductions in these functions, autonomics can produce further cost reductions that will vary depending on the business type. By automating repetitive, commonly encountered situations, level one and level two service desks can shrink in size. Following a reduction in resources, high-level performers can be retrained and redeployed to higher-value services.

IT Operations

Currently, the most intensive use of autonomics is in IT operations, including network, storage, server and application management, database administration, virtual machine provisioning, process orchestration and teleconferencing. Companies are already triaging complex issues, diagnosing issues in milliseconds and supporting a substantially higher number of events per month For example, a recent report from Gigaom Research stated that an IT service provider using IPsoft for network management support (see vendor profile section) automated 30 percent to 100 percent of tasks formerly performed by Level 1 and Level 2 engineers.

Autonomics solutions can be implemented without the traditional challenges of software deployment. For example, autonomics does not require changes in delivery locations or technology platforms, as mainframe, mid-range, UNIX, Linux, and Windows environments can all support autonomics.

Compliance

Autonomics can enhance compliance by automating the end-to-end documentation of processes and actions – as each action performed by the virtual engineer is documented, logged and tracked, as well as enabling business process integration, optimization of core processes and consolidation of process governance.

Additional specific potential operational improvements from autonomics include:

• Better service through faster Mean Time to Repair (MTTR) • Improved incident, problem and change handling

• Improved provisioning times for any number of platforms and cloud solutions

• Improved overall service provider performance in all SLO, SLA and KPI categories

Barriers to Autonomics Adoption

As with any new technology, autonomics involves barriers to adoption. Alsbridge has identified three:

Resistance to Change

Autonomics requires a change in approach and more transparency than many teams are willing to embrace, especially since existing team design will need to change to reap the benefits of deploying “virtual engineers.” Without a clearly communicated path to performing new roles, the fear of redundancy will hamper deployment.

Financial

The financial barrier comprises two aspects: the sunk costs in traditional automation already in place and the ROI expectations that cover software cost and integration costs for enterprises with the assurance that labor costs will actually come out of the enterprise exist. Given the newness of the technology and the lack of comparative context or precedent, assessing autonomics in terms of calculating the ROI and addressing the potential disruptive risk of implementation presents a challenge.

Technical

As a transformative technology, autonomics by definition involves significant change and potential disruption to existing operational environments. However, as autonomics solutions become more widely implemented in both public and private virtual environments, reviews of existing deployments will become increasingly possible and should alleviate many concerns. Furthermore many autonomics tools are now integrated with the full array of ITSM tools used for monitoring, ticketing, CMDB and so on.

Mitigating Risks

Alsbridge has identified three strategies to mitigate risk and overcome barriers.

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Manage the Change

Change Management and Management of Change are two very different things. Change Management is the process by which changes to the environment, including systems, applications, hardware, software, services, power, etc., are implemented into the production environment. Management of Change, on the other hand, needs to be adopted and provisioned as part of the overarching Governance Model and become a part of the way of doing business. Autonomics requires a valid business case built on verifiable efficiencies, a base case ROI and an overall structure for implementation. This is essential to mitigate risks, highlight benefits and expose previously acceptable levels of mediocrity.

Measure Results that Can be Measured

When applied to IT operations, autonomics should be measured in terms of business impact. At a high level, that impact is the reduced labor required when “virtual engineers” replace human engineers to support stacks like servers or networks. More specific metrics that track that impact are the percent of events, incidents, and change requests that are completed successfully without human intervention. In other words, if autonomics results in 40 percent of incidents being remediated without human intervention, that correlates directly to a 40 percent reduction in labor requirements.

Benchmarking

In addition to measuring the IT operational aspects of the implementation, the Total Cost of Ownership (TCO) should be assessed and benchmarked via a defendable, market-based benchmarking approach to validate the cost structures and overall services costs. At present, extensive comparative data is lacking, given that the market is still in early stages. However, as autonomics deals gain traction, Alsbridge anticipates that benchmarks will rapidly become more reliable and robust.

Impact on Outsourcing Service Providers

Autonomics represents a paradigm shift for the outsourcing industry. IT outsourcing was often a pure cost reduction play that leveraged offshore resources. It quickly changed to add value by combining system integration, labor arbitrage, innovation and quality service delivery.

In 2013, following the announcement of their partnership with IPsoft, Infosys told The Times of India, “What robotics did for the auto assembly line, we are now doing for the IT engineering line.” A year earlier, IPsoft’s COO Jonathan Crane was quoted in CIO magazine: “The Indian vendors have thousands of staff doing similar work now with high rates of turnover and rising costs due to inflation. Autonomics are making the offshoring of tasks—so often considered the solution to optimize ITO and BPO tasks—irrelevant.”

Ten Drivers of Automation Adoption by Providers

Alsbridge has identified ten drivers of automation adoption by outsourcing providers.

“By 2017, Gartner reports, managed services providers who apply autonomics and cognitive platforms will permanently remove headcount to drive a 60 percent reduction in the cost of services”

1. Reduce Delivery Costs

By 2017, Gartner reports, managed services providers who apply autonomics and cognitive platforms will permanently remove headcount to drive a 60 percent reduction in the cost of services. In offshore markets based on low-cost human capital, these changes will potentially have global market impacts.

Autonomics also provides an opportunity for mid-tier providers and offshore and near-shore delivery centers to enhance service quality while reducing human capital and increasing throughput.

2. Improve Margins

Delivery cost reductions will not result directly in lower fees dollar-for-dollar. Providers can use some of the lower delivery costs as a means to improve their margins and increase productivity.

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3. Hire Fewer Staff

Autonomics can greatly reduce recruitment and training costs, allowing providers to deliver the same volume of client services with fewer personnel.

4. Differentiate Services (for a little while)

At present, autonomics can still provide a differentiated competitive advantage. Within a few years, however, autonomic capabilities in the delivery model will likely be “table stakes.”

5. Meet Client Innovation Demands

Clients are often disappointed with the level of innovation delivered by their outsourcing providers Autonomics offers the potential for providers to deliver real innovation while simultaneously reducing costs – some or all of which can be shared with the client.

6. Greater Agility

Providers employing traditional offshore FTE models often struggle to effectively respond to their clients’ highly dynamic business requirements. Autonomics presents a breakthrough technology that is adaptive and flexible to accommodate ever-changing needs.

7. Improved Service Quality

Virtual engineers have clear advantages over human engineers in many L1 and L2 processes; they operate consistently at compute speed, 24x7, with no breaks, holidays or sick days. This means fewer errors and faster MTTRs (which will affect SLAs).

8. Lower Transition Risks

Sourcing transitions are a significant source of risk and client dissatisfaction. Autonomics adds speed and predictability to the onboarding process, especially when applied to clearly defined IT operational processes.

9. Faster Provisioning

Cloud computing and the Internet of Things have pushed the pace of change to a point where provisioning times cannot be accommodated by human engineers, regardless of staffing levels. Autonomics enables rapid provisioning of environments.

For example, a large US-based financial company provisions and de-provisions several thousand VMs daily, often spinning up and down the same virtual machine during the same day. While provisioning the VM itself is relatively straightforward, putting that VM into the environment (for monitoring, ticketing, CMDB, etc.) is highly complex. This company could not afford to hire enough people to manage such a high volume of activity. With autonomics, these VMs can be provisioned and installed in a matter of seconds.

10. Better Governance

Engineers rarely record every single action they undertake with complete accuracy. Autonomic execution of a fix or change request generates a full and detailed audit trail so that every step and state is recorded. Moreover, the SLAs are tracked consistently and can be reported in real time, enhancing the efficiency and effectiveness of governance.

How Providers are Applying Autonomics

Most outsourcing providers are using licensing agreements to incorporate autonomics capabilities into their delivery platforms. For example, IPsoft has formed partnerships with the majority of tier 1 service providers, including Accenture, Infosys, BT Cloud Services and NTT.

As advisors, Alsbridge is beginning to incorporate autonomics into RFPs, SLAs and contracts, as well as educating clients on the impact of autonomics.

Some outsourcing providers have formed alliances and partnerships with software solutions providers to benefit clients. Others have chosen to “go it alone” and invest directly rather than as part of a partnership. Either way, the adoption of autonomics within managed services can have a near-term impact, especially where contracts are being renewed or renegotiated. Autonomics savings can be layered into contract renewals almost immediately, helping incumbent providers deliver even higher cost savings and client retention. Autonomics can also help providers win new deals and drive down unit costs to win new customers and increase market share.

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Engagement Opportunities

A company generally has two options to utilize autonomics: • Directly with a provider of these technologies • Through an outsourcing services provider

Some outsourcing providers such as Infosys, IBM, HCL, HP, TCS and Wipro already offer autonomics solutions (also see Players, next section). For example, in a recent sourcing engagement advised by Alsbridge, a service provider leveraged early adoption of autonomics to price their solution millions of dollars lower than competitors. This level of impact suggests the potential for a growing trend of sourcing providers using autonomics to differentiate their market solutions.

Autonomics can also be applied when working directly with software providers that sell their solutions in various forms and suites that include add-on tools to existing solutions, entirely new suites, or operating system enhancements that incorporate autonomics. Regardless of the vehicle, cost benefit analyses will determine the real payback and the ultimate extent of “human capital” savings possible. Although the basic costs and terms are relatively clear, the true long-term benefits of implementing autonomics are not fully captured. The TCO analysis of autonomic implementations is immature and CFOs will need to better understand total cost of implementation and total benefit of cost reduction within the enterprise to get behind autonomic implementations.

Alsbridge constantly works to enhance the capabilities of our ProBenchmark™ benchmarking service and tool. These efforts include incorporating autonomics abilities to help clients assess and determine how to address the ever-present challenge of doing more with less investment in human capital. As such, autonomics can help clients make the right decisions to drive their business and affect positive results.

Vendor Assessment: IPsoft

Company Assessment

IPsoft is a leading autonomics provider, with deployments among some of the world’s largest service providers as well as through direct customer relationships.

As an early market entrant, IPsoft has the opportunity to build and sustain its advantage. With references in several segments, IPsoft has demonstrated cutting edge capabilities within the autonomics market.

Recognizing that this nascent market demands a strong partner ecosystem, IPsoft has invested to develop strategic relationships with leading outsourcers. This dual go-to-market approach makes sense but must also be carefully managed to avoid channel conflict and overwhelming IPsoft’s engineering talent.

Some players, including IBM, HP and Dell, may possess similar capabilities, but have not openly delivered or centered their messaging as directly on the autonomics opportunity. IPsoft, along with others entering this game-changing market, need to step up their communications efforts to educate customers and continue to differentiate themselves.

Two or three players are expected to push the market ahead. In its early, introductory stages, the autonomics market displays a “me too” market situation. By all appearances, vendors who navigate resource hurdles and manage investments to create an innovative edge during this early phase will successfully cross the chasm and be best positioned to capture broader market growth and the revenue gains that market makers typically enjoy throughout the product lifecycle.

Platform

IPsoft’s platform —IPcenter – has aimed to surmount the high cost, complexity, and inflexibility of traditional tools with an innovative approach to IT process automation.Capabilities of the IPcenter platform include:

• Detect, diagnose, remediate, and escalate events • Learn from engineers and their experiences • Assimilate learning into a knowledge library • Dynamically manage workload

According to IPsoft, the IPcenter solution essentially provides a cadre of “virtual engineers” that replicate the work of human engineers, but do so faster, cheaper and with assured quality of output. As do human teams, the virtual engineers communicate and collaborate to resolve complex, dynamic problems. This approach

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compares favorably to traditional automation tools that are essentially just scripts running repetitive, rules-based task sequences.

SWOT

Based on in-depth discussions with several clients as well as IPsoft management and technical specialists, Alsbridge has developed the following SWOT analysis:

Key Partnerships

IPsoft has partnerships with leading service providers as listed in Figure 3.

Given IPsoft’s relatively small size, effective partnerships with the tier-one and tier-two sourcing providers are imperative to enhance the breadth and depth of product implementation and market penetration.

Two key partnerships illustrate IPsoft’s strategic approach:

Figure 3

• Infosys: IPsoft uses a train-the-trainer model and claims to have 5,000 Infosys engineers trained at the expert level – a figure reached over a 12-18 month period through hands-on education. IPsoft’s partnership program allows trained partners to deploy and integrate the technology to a client and continue to leverage IPsoft engineering support as needed. Partnership pricing is a shared percentage of the overall engagement.

• Accenture: Accenture has been transparent in stating that IPsoft is central to its future services delivery capabilities. When announcing the partnership, Paul Daugherty, Accenture’s CTO, stated: “Incorporating cognitive autonomic technology from IPsoft into our IT Services delivery drives a degree of innovation and improvement that is not possible with other tools.”

Figure 2

Stre

ngth

s

• High degree of innovation• Proven technology in production in over 550 companies• High level of reinvestment in products and R&D• Strong sales and engineering teams able to explain complex capabilities in an understandable manner• Existing ecosystem partnerships with outsourcing industry leaders• Presence in Fortune 1000 accounts

Wea

knes

ses • Unclear messaging

• Absence of an integrated marketing communications program• Possible resource constraints

Opp

ortu

niti

es • Maintain early mover advantage by targeting industry vertical needs • Investment or acquisition creates opportunity for incremental development

Thre

ats

• Market immaturity requires significant investment in education• Growth outpaces ability to train SMEs for client implementation and support• Displaced entry level workforce impact on unemployment, GNP

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Alsbridge reviewed several other partnerships which required confidentiality, as well as proofs-of-concepts ad pilots underway with several other tier-one outsourcers. Partners differentiate between one another by leveraging their professional services capabilities as part of their autonomics solution.

IPsoft remains focused on research and development in order to protect its technology leadership. A huge proportion of its earnings – 70 cents in every dollar – are reinvested into new development that stretches beyond the current autonomic platform and into fresh areas, including cognitive computing.

Client Base

For a small company IPsoft has an impressive base of customers including, according to the company’s web site, one in 20 of the Fortune 1000.

Alsbridge interviewed a selection of IPsoft customers that confirmed clear improvements in operational performance. A number of published analyst reports, moreover, have validated the claims of cost savings and labor needs reductions. For example, according to Gartner’s January 2014 report “Predicts 2014: Business and IT Services Are Facing the End of Outsourcing as We Know It”:

Gartner verified 10 direct examples of IPsoft client references that all unanimously supported productivity benefits of a much higher magnitude (consistently over 50 percent) than any other managed services offering in the industry. It’s rare to find a unanimous endorsement of this type. One client example had 56 percent of its client incidents resolved without human intervention and a 60 percent reduction in mean time to resolutions for its IT service desk.

Alsbridge recommends that any potential customer contact IPsoft references directly to better understand client effort required to secure clear benefits.

Key Competitors

As a significant disruptive force, autonomics is gaining the attention of top-tier IT companies, managed service providers, academic institutions and niche specialty IT companies seeking to develop and market autonomics solutions.

Top-tier IT companies developing autonomics solutions include Cisco, Google, HP, and IBM. While many players exist, most have not openly delivered or centered their messaging on the autonomics opportunity. Nonetheless, given their large budgets and staff in R&D, sales and marketing and professional services, and strong ecosystem partnerships, several of these companies are positioned to push the market ahead.

Numerous managed service providers are leveraging autonomics through partnerships with innovative developers including Accenture, Dell, IBM, Infosys, IPsoft, TCS and Wipro are some of the early adopters.

In addition to large competitors, IPsoft faces competition from smaller, autonomics-focused player that include the following:

Blue Prism: UK-based with offices in Miami, Blue Prism initially supported financial industry with automation of routine back office tasks, and has since expanded to include IT infrastructure. They have a smaller customer base than IPsoft, but show strong potential.

Automation Anywhere: This Silicon Valley-based firm focuses on automation of complex business and IT work across a range of processes including procure-to-pay, quote-to-cash, HR administration, claims processing, and thousands of other front and back office processes. Gen E Resolve: Targeted to network and IT operations organizations, Irvine-based Resolve Systems offers process automation for improving incident resolution.

Arago: A German company that, so far, has focused on quietly building a reputation in Europe. Arago got its start in the data center automation arena and is working to bring autonomics to all the IT towers. Although not active in the US market today, Arago could definitely become a notable autonomics contestant in the near future.

Alsbridge believes that IPsoft has effectively communicated its value proposition and cost/pricing methodology to uniquely position the firm against larger competitors. This can help IPsoft succeed in the long term. Maintaining the first mover advantage also requires continuing the high level of innovation ingrained in the company culture.

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Financial Business Case

The “AIM” Tool for Pricing and Business Case Scenario Analysis

IPsoft has developed an “Autonomics Impact Model” (AIM) to test different pricing and automation level assumptions. The tool computes a number of metrics, such as cost/CI, FTE/CI, run rate, and cumulative costs, etc. The AIM tool is designed to help clients gauge potential future value. A portion of the executive summary output of AIM is shown at right.

IPsoft also offers a unique level of transparency and simplicity of pricing. The AIM tool produces a simple and clear pricing sheet that defines fees, any discounts, and basis for fees. Pricing models of most software vendors that provide complex technologies to large customers defy explanation and fail to clearly define what a client is actually going to be charged.

Investment Metrics

The two critical metrics to develop the IPcenter business case are:

1) Net Labor Benefits: The difference between forecasted FTEs and associated labor costs that would be incurred continuing the as-is services delivery approach, versus the labor costs for FTEs required after IPcenter is operational (the “IPcenter Model”). In other words, how much will IPcenter reduce labor costs, compared to the as-is model.

2) Net IPcenter Investment: The total IPcenter costs (license fees, services, etc.) less costs of current tools, if any, that can be eliminated or discontinued.

The Net IPcenter Investment is compared to the Net Labor Benefits on a run rate basis to determine breakeven point, on a cumulative basis to assess total value and on a net present value (NPV) basis to directly measure the ROI. Since the analysis is focused on labor requirements, non-labor costs are excluded for the analysis (e.g., facilities, equipment, etc.).

How IPsoft Prices IPcenter

IPcenter is priced based on the number of configuration items (CIs) that are being managed by the platform (e.g., number of servers, network devices, databases, etc.). The fee per CI varies depending on type of CI, but the general principle is to scale the fees commensurate with the scale of support. The same CI-based pricing approach is used for both RIM clients (i.e., IPsoft’s managed service) and for an IPcenter platform license.

One unique component of IPcenter pricing is the Continual Service Improvement (CSI) fee. This is the fee clients pay for support of their specific autonomics needs, as well as support of the library of over 12,000 (and continually growing) automatas that enhance automation value, or as IPsoft calls it, “out of the box automation.” IPsoft claims that the initial wave of automation, using the existing library, will achieve about 30 percent autonomic remediation of events and change requests in most IT operations.

The fee for CSI support can be based on sharing the pool of automation specialists (fee set based on number of CIs) or through a dedicated, named resource to support a specific client.

Product Profile and Assessment: IPcenter

As IPsoft’s flagship product that has been in production for nearly 15 years, IPcenter is a full-featured, ITIL-aligned ITSM platform with all the expected functionality, e.g. monitoring, ticketing and CMDB, as well as more advanced features such as event correlation, intelligent real-time event routing and knowledge management.

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All 36 IPcenter modules have been developed by IPsoft within a single unified architecture. The full breadth of ITSM tools were necessary to support IPsoft’s RIM operations, which are fully supported by IPcenter with no other tools. A list of these modules and a one-line descriptor is at the end of this section in Figure 4.

Despite the fact that IPcenter has end-to-end ITSM functionality, clients do not need to “rip and replace” their current ITSM tools. IPsoft’s strategy in its architectural approach was to make it easy to use a client’s existing tools. In fact, IPcenter integrates relatively easy with virtually all monitoring, ticketing and CMDB tools. This means clients can use their existing tools now and, if desired, rationalize and consolidate them in the future.

Modules within IPcenter provide the ability to take in an event or change request, diagnose it, remediate it, and close out the event – all without human intervention. The autonomic capabilities work with all IPcenter modules to completely leverage all functionality.

The “Virtual Engineer” and the learning capabilities of the software both have a direct and integral impact on IPcenter’s autonomics capabilities.

Virtual Engineers (VEs)

A VE is a collection of automatas that work together to execute a process. The VE paradigm is human engineer as shown in the table below.

Human Engineer Virtual EngineerAbility to learn Has the intelligence and capability to absorb

new informationUses artificial intelligence and cognitive capabilities to “learn” from various sources

Past Training Likely has training from classroom work, books, manuals, etc. . . from school and/or previous jobs

Can be “trained” from run books and other information sources about how issues are resolved

Access to information Able to access and use guides, run books, and other knowledge sources

Can access knowledge libraries and other source materials

On-the-Job-Training Learns from seeing new situations and watching others

Can “watch” other engineers and create new automations

Applies the above Can take the experience, knowledge, and training to complete a process

Accesses and uses all knowledge contained in a set of automations in the proper mix and sequence

Learning

The VEs in IPcenter “learn” how to complete processes in different ways, depending on whether it’s a new process being learned, if it’s an adaptation to an existing process, or learning from an existing VE.

• New: If the process has never been automated, the VE “watches” an engineer (or multiple engineers) complete the process. The VE builds its automation by recording what the engineers do. After a QA process by a senior engineer, it can go into production. Alternatively, the automation can be written using IPcenter’s “designer” module, which is a drag-and-drop icon-based automation development tool.

• Adapted: If a VE already exists but an environment change requires the VE to obtain new “knowledge” the VE can be shown how to complete the process much like if it were a new automation.

• Self-Learning: IPcenter VEs can learn by seeing how other VEs behave. For example, IPcenter uses sophisticated intelligent routing of events and change requests, and based on knowledge that VE has acquired over time, will route to the most qualified and available engineer – and often to another VE.

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The learning capabilities of IPcenter are expanding significantly as part of IPsoft’s roadmap for IPcenter (discussed below).

Future technology developments

IPsoft is adding increased capability to its platform in five principal areas:

• Self-generating automations to further advance “learning” capabilities.

• Predictive monitoring and anomaly detection to identify problems before they occur to enable proactive problem solving.

• Autonomic correlation that will greatly extend understanding of problems in the environment by using “dynamic time warping” to discover related events, dynamically infer relationships and augment the CMDB.

• Turn root cause analysis from an art to a science by finding lagging and leading problem indicators. By grouping correlated items by point in time and supplementing with CMDB relationships, IPcenter can identify the root cause

• Big data analytics through an advanced metadata layer that consistently calculates metrics across the environment and supports a variety of data sources, as well as an intuitive user interface for data analysis and reporting.

Separately, IPsoft is bringing to market a cognitive solution - “Amelia” - that can interact with people just like a human. This cognitive agent will understand the meanings and concepts behind words used in order to respond naturally. Amelia will learn both from reading standard manuals as well as through the observation of other human agents and combine this knowledge in order to solve problems. This technology will allow IPsoft to extend its footprint from IT operations into business processes across the enterprise.

Conclusion

Autonomics promises to be a game-changer for IT and business operations, by creating the potential for digitizing a wide variety of tasks currently performed by highly skilled humans. At this point, however, the precise impact of autonomics remains difficult to gauge. For one thing, real-world results and data are limited. Moreover, the impact of autonomics varies significantly by enterprise and by service tower, so that no single formula can be derived to quantify benefits.

Alsbridge has observed some client organizations take advantage of the pricing benefits of autonomics solutions. And while many vendors tout their autonomics capabilities, most have been relatively slow to integrate smart tools into their offerings, although some are beginning to wrap autonomics in their proposals, resulting in significantly reduced rates.

That said, the market is moving rapidly and 2015 should see significant growth. As innovative providers integrate autonomics solutions into their standard offerings and demonstrate successes, buyer confidence will grow and market prices will continue to drop, fueling additional competitive pressure. The confluence of these trends should drive further momentum.

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Figure 4

Category IPcenter Component Purpose/Description

Process Autonomics IPautomata Autonomics engine for defining and managing Virtual Engineers

Workflow ManagementIPradar Single pane of glass for IT environment management

IPcc Intelligent ticket routing based on “learning” best engineer for specific event

Incident, Event, and Problem Management

IPpm IPim Ticketing and ticket tracking

IPpm Problem lifecycle management

IPclassify Classify events to support intelligent ticket routing

IPescalate Workflow and rules for event escalation

IPdispatch Dispatching escalations

Monitoring

IPmon Monitoring tool

IPmonUI UI for monitoring tool

IPcollector Collects monitoring events from any monitoring tool

Deployment Management IPdeploy Automated service deployment

Change Management IPcm Change management engine

Knowledge Management IPkm Enterprise knowledge management tool

Asset Configuration and Management

IPdiscover Discovers devices in environment

IPcmdb The configuration management DB

IPadmin Support CMDB and monitoring tools

Ongoing Process Improvement

IP6sigma Embedded service delivery best practices

IPitpa Reporting dashboard for IPautomata

IPmerit Engineer performance measurement

IPsurvey Customer feedback

IPuniversity Online training

Reporting

IPreports Canned and custom operating performance reporting

IPmanager Tracks operational state

IPslr Operating service level reporting

Security

IPflow Anomaly detection

IPlocksmith Data and password secure repository

IPscan Penetration and vulnerability testing

IPsec Hold and execute ticket correlation rules

IPsem Security Event Management

Support ModulesIPcal Master calendar for various IT processes

IPproject Project management tool working with MS Project

IPcenter v3 Module Lists

© Copyright 2014, Alsbridge, Inc., All Rights Reserved.

14

Jeffrey Augustin, Managing Director

Jeffrey Augustin has spent more than 28 years in the sourcing industry. He has a wide range of global IT and business operations experience in countries that include Australia, Germany, France, Netherlands, Sweden, Denmark, Spain, Brazil, Russia, China, Jamaica and the UK. Before joining Alsbridge, Jeff held senior executive roles with several service providers, specializing in IT outsourcing with an industry focus on retail services, automotive manufacturing and transportation.

About the Author

www.alsbridge.com

Americas

Corporate Headquarters3535 Travis StreetSuite 105Dallas, TX 75204USATel: +1 (877) 800-6247Email: info@alsbridge.com

CanadaThe Exchange Tower130 King St. West, Suite 1800Toronto, ON M5X 1E3Canada Tel: +1 (416) 842-9005 Email: info@alsbridge.com

EMEA

United Kingdom3000 Hillswood DriveHillswood Business ParkChertseySurrey KT 16 ORSTel: +44 (0) 800 61 25727Email: uk@alsbridge.com

GermanyBahnhofsplatz 356410 MontabaurGermanyTel: +49 (0) 2602 134269 77Email: germany@alsbridge.com

Asia-Pacific

BangaloreAlsbridge Advisory Private Limited3rd Floor Embassy Classic 11 VittalMallya RoadBangalore - 560001IndiaTel: +91-80-6670-4500Email: bangalore@alsbridge.com

2010-14

$11 Billion+

20+

350,000+

>40%

200+

Enterprise spend Alsbridge represents annually across categories

Years of experience as a trusted advisor

Real-time market insight data points

Of the Fortune 500 engage Alsbridge

Advisors globally in US, Canada, EU and APAC

About AlsbridgeAlsbridge is a global management consulting firm that helps companies enable their businesses and reduce costs by optimizing their service provider relationships. As a trusted advisor to over 40% of the Fortune 500 and FTSE 250, we work with over 200 clients a year on over $11b in spend. Our experienced consultants leverage market insight and deep benchmarking databases to help clients align their requirements to the optimal vendor solution, apply best practices, negotiate terms at fair market prices and improve relationship governance. We help clients utilize the most cost-effective and value-added sources globally for IT infrastructure services, network carrier services, hardware and software, application support and development, business processes and cloud services.

The information in this paper is proprietary and confidential property of Alsbridge, Inc. and may not be republished, redistributed, or modified in any way. The contents of this paper are intended solely for the recipient.

To request permission for republishing or redistribution, contact Alsbridge at info@alsbridge.com or call us at 1-877-800-6240.

© Copyright 2014, Alsbridge, Inc., All Rights Reserved.