Hi, my name is Christopher Lochead and I'm the chiefmarketing officer at Mercury. What we're going to talk about today is arguablythe number one issue in IT, which is Business Technology Optimization. The bigtrend today is how do we run IT like a business? How do we optimize thebusiness value of IT?
Now, why has this become such a hot topic? Well, first ofall, according to the US Department of Commerce, 50% of capital spending isactually spent on IT. So, IT has become a major part of most companies. As amatter of fact, I would assert, there isn't a meaningful governmentorganization or enterprise in the world that can hire a new employee, that cantake an order or that can close its books at the end of a quarter without theuse of software and technology. Now, Gartner tells us that 50% of capitalspending as much as 20% is wasted and that's why today, the business value ofIT is critical.
So, how are people addressing this? They're really lookingat two critical questions. The first one is, is IT strategically working on theright things and that's called IT governance. That's about optimizing thedemand, the resources, the projects and ultimately the portfolio of everythingthat IT is working on to make sure it's delivering business value.
The next is, today, almost 90% of business processes areautomated in applications and so the way you might think about it is theapplications are the business. And so once you realize that, what you realizeis the quality, performance and availability of applications is the quality,performance and availability of the business and at Mercury, we think of theapplications as the output or what IT delivers back to the business.
And so the question is, how do we optimize them? The firstpiece that we need to deal with is quality. After 40 years of softwaredevelopment, people have finally realized that it's not worth developing if itdoesn't work. The next is performance. How do we make sure that applicationsthat we build actually scale, that we can produce 250,000 transactions an hourand then once we move into production availability, how do we make sure thatwhat the end user sees with an application is what the end user wants, thatit's easy for them to place an order, that it's easy for them to hire a newemployee, etc.
Another sort of interesting thing that's going on, theapplication environment is really changing. Today, we have CRM systems, ERPsystems and now we're moving to Service-Oriented Architectures and so the levelof complexity is increasing and we need the ability to make sure that qualityperformance and availability are high. As a matter of fact, today about 80% ofapplications are put into production with no quality and performance testingdone to them and I can tell you, as a guy who travels about 300,000 air miles ayear, I'm really glad that's not the way Boeing builds planes and so if youthink about kind of BTO as a lifecycle, what you really get is the ability totie together the strategic part of running IT and optimizing the qualityperformance and availability of the applications to deliver results back to thebusiness and that's why running IT like a business has become such a top priority.
