Welcome!

Microservices Expo Authors: Elizabeth White, Roger Strukhoff, Pat Romanski, Dana Gardner, Ruxit Blog

Related Topics: Containers Expo Blog, Java IoT, Industrial IoT, Microservices Expo, Agile Computing, @CloudExpo

Containers Expo Blog: Article

Shift in Culture Delivers Better Results

McKesson redirects IT to become a services provider that delivers fuller business solutions

The next edition of the HP Discover Performance podcast series highlights how pharmaceuticals distributor and healthcare information technology services provider McKesson has transformed the very notion of IT. We will see how a shift in culture and an emphasis on being a services provider has allowed McKesson to not only deliver better results, but elevate the role of IT into the strategic fabric of the company.

To learn more about how McKesson has recast the role of IT and remade its impact in a positive way, join Andy Smith, Vice President of Applications Hosting Services at McKesson. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Here are some excerpts:

Gardner: Let me start with this notion of IT transformation. What allowed you to convince others that this was worth doing?

Smith: What we did, and this started several years ago, was to focus on what our competition was doing, not the competition to McKesson -- but the competition to IT. In other words, who was the outsourcer or who were the other data-center providers. From that, we were able to focus on our cost, quality, and availability and come up with a set of metrics that covered it all, so that we could know the areas we needed to transform and the areas where we were okay.

Gardner: So, in a sense, you had to redefine yourself as a services provider, because that's who you saw as your competition?

Smith: Exactly, and that's who our customers are talking to -- our competition. When they came to us for a service, they had already talked to third-party providers. And so we realized very quickly that our competition was the outside world, so we had to model ourselves to be more like them and less like an internal IT department.

Gardner: That, of course, cuts across not only technology, but culture and the whole idea of being accountable, and to whom. So let's start at that higher level. How did you begin to define what the new culture for IT should be?

Balanced scorecard

Smith: We started out with a balanced scorecard. It really came down to whether the employees and the customers were satisfied. Did we do what we said – were we accountable -- and were the financials right?

So when we started setting up that balance scorecard, that on its own started to change the culture. Suddenly, customer satisfaction mattered, and suddenly, system availability mattered, because the customer cared, and we had to keep the employees trained, so that they were satisfied.

Over time, that really changed the culture, because we're looking at all four parts of the scorecard to make sure we're moving forward.

When we were just an internal IT department, we spent more time saying, "The customer gave us an order, we hit the checkbox and finished that order, we're done." We were always asking, "Did we do it, and did we do it on time?"

What we really focused in on were the real drivers. A lot of the measures are more trailing indicators. Even money tended to be a trailing indicator.

That's not really what the customer was looking for. The customer was looking for. "Did you deliver what I needed, which may be different than what I asked for. Did you deliver it at a good price? Did you deliver it at a good quality." So it did switch from being measuring the ins and the outs of an order taker, to whether we are delivering the solution at the right price.

Gardner: As we've seen in a number of companies, when they’ve gone to more measurement using metrics, key performance indicators (KPIs), and working towards service-level agreements (SLAs), sometimes that can become daunting. Sometimes, there is too much, and you lose track of your goal. Is there a way that you work towards a triage or a management approach for those metrics, those KPIs, that allowed you to stay focused on these customer issues?

Smith: What we really focused in on were the real drivers. A lot of the measures are more trailing indicators. Even money tended to be a trailing indicator.

So we went into what's really driving our quality, what's really driving our cost. We got down to four or five that we are the ones that mattered. "Is the system up and running. Are changes causing outages. Are data protection services reliable. Are our events being handled quickly and almost like a first call resolution. Are they being resolved by the first person that gets the event?"

The focus was prevent the outage and shorten up the mean time to restore, because in the end, all of that will drop the cost. It worked, but it was focusing on a handful, rather than dozens.

Pulling down cost

It truly did bring down our cost within McKesson. Each year we pull down our cost several million dollars. So every year my budget gets smaller, but every year my quality gets higher, my employee satisfaction gets higher, and my customer satisfaction gets higher.

It can really get both. You don't have to sacrifice quality to reduce cost. The trick was saying that I no longer needed a person to do this commodity factory work. I could use a machine to do that, which freed up the worker from being a reactive commodity person to being a proactive value-add person. It allowed the employee to be more valuable, because they weren't doing the busy work anymore. So it really did work.

Gardner: For those in our audience who might not be familiar with McKesson, tell us a little bit more about the company. Specifically, tell us about the scale of your IT organization to put those millions of dollars into some perspective in the total equation?

Smith: McKesson IT is roughly 1,000 employees. The company is roughly 45,000 employees. So percentage-wise, we're not that big. My personal budget to run the IT infrastructure is about a $100 million a year.

So pulling out a few million dollars a year may be only a few percent, but it's still a pretty significant endeavor. We've managed to pull that cost out, both through the typical things like maintenance contracts and improved equipment, but also by not having to grow the full-time employee (FTE) base. I haven't had to let any FTEs go, but what we've discovered was that, as we did these things, I needed fewer employees.

To get people to stop thinking about the technology and start thinking about the business solution is a slow transition, because it's a real mind-shift.

As employees resigned, I didn't have to replace them. My staff base has been shrinking, but I haven't had anybody lose a job. So that's been also very reassuring for the employees, because they kept waiting for that big shoe to drop, waiting for us to say, "We're going to outsource you," but we've never had to do it.

Gardner: When you compete against the outsourcers better, then you are going to retain those jobs and keep that skill set going. There is a cliché that you're able to take people from firefighting and put them into innovation. Is there a truth to that in what you've done?

Smith: That really is truth. It took time, and we’re not done, but to get people to stop thinking about the technology and start thinking about the business solution is a slow transition, because it's a real mind-shift. In a lot of ways, these employees see the reactive work as the bread and butter work that puts the paycheck on the table. That lets them be a firefighter and a hero, and if you take that away, the motivators are different.

It takes time to get people comfortable with the fact that your brain is worth a lot more doing value-add work than it was just doing the firefighting. We're still going through that cultural shift. In some ways, it's easier for the older employees, because if you go back a few decades, IT was that. It was programmer analyst, system analyst, and business analyst. For me, "analyst" disappeared from all my job titles.

In the last couple of decades, for some reason, we erased analyst, and now you're just a programmer or an operator. In my mind, we're bringing the analyst back, which for the older employees, is easy, because they used to do it. For the younger employees, we've got to teach them how to be consultants. We've got to teach them how to be analyst. In some cases, it's a totally different, scary place to go, because you actually have to come out of the back office and talk to somebody, and they're not used to that.

Cultural shift

Gardner: Maybe there are methodologies that work here that you could discuss, services-oriented architecture (SOA) comes to mind and also ITIL. Have you been using ITIL approaches and SOA to help make those transitions? Is there a technology track is a cultural shift?

Smith: Yes, we went down the ITIL road, because we were manual before. Everybody was doing it with tribal knowledge. The way I did it today might be different than the way I'd do it tomorrow, because it's all manual, and it's all in people's heads.

We did go into ITIL version 3 and push it very hard to give that consistency, because the consistency really mattered. Then, we could really measure the quality. We could be ensured that no matter who did it or when it was done, it was done the same way, and that reliability mattered a lot.

We also got away from custom technology, and we got to where everything is going to be a certain type of machine. It's going to look the same. All the tools are going to be fully integrated and no longer be best-of-breed point solutions. Driving that standardization made a big difference. You don’t have to remember that machine on the left you reboot it this way, and that machine on the right you reboot it a different way. You don’t have to remember anymore, because they're all the same.

We made the equipment and tools standard and more of a commodity so that the people didn’t have to be that anymore. The people could be thought leaders. All those things really did work to drive out the cost and increase the quality, but it's a lot of different pieces. You can't do it with just one golden arrow. You have to hit it from every angle.

We had to increase the transparency to say we’re doing a good job or we’re doing a bad job.

We had to change the technology, the people, and the processes. We had to increase the transparency to say we’re doing a good job or we’re doing a bad job. It was just, "Expose everything you’re doing."

That's scary at first, but in the end, we found out we really are competing with the competitors and we can continue to do it, and do it better. We understand healthcare, we understand McKesson, and we’re an internal group, so we don’t have a profit margin. All those things combined can make us a better IT solution than a third party could be.

What really matters is the business solution you’re trying to solve. We’re stepping even farther back, saying that the service is order to cash, or the service is payroll, or the service is whatever. We’re stepping back farther, so we can look at the service from the standpoint of the customer. What does the customer want? The customer doesn’t want Unix. The customer wants order to cash. The customer doesn’t want Windows. The customer wants payroll.

Thinking about cloud

Stepping back has now allowed us to start thinking about that cloud. All the equipment underneath is commoditized, and so I can now sit back and say that the customer wants this business solution and ask who is the best person to give me the components underneath?

Some of them, for security reasons, we’re going to do on our internal cloud. Some of them, because of no security issues, we’re going to have a broker with an external provider, because they may be better, cheaper, or faster, and they may have that ability to burst up and burst down, if we’re doing R&D kind of work.

So it's brought us back to thinking like a business person. What does the business need and who is the best provider? It might not be me, but we’ll make that decision and broker it out. This year we're probably going to pull off our internal cloud and our external cloud and really have a hybrid solution, which we’ve been talking about for a couple of years. I think it will really happen this year.

More Stories By Dana Gardner

At Interarbor Solutions, we create the analysis and in-depth podcasts on enterprise software and cloud trends that help fuel the social media revolution. As a veteran IT analyst, Dana Gardner moderates discussions and interviews get to the meat of the hottest technology topics. We define and forecast the business productivity effects of enterprise infrastructure, SOA and cloud advances. Our social media vehicles become conversational platforms, powerfully distributed via the BriefingsDirect Network of online media partners like ZDNet and IT-Director.com. As founder and principal analyst at Interarbor Solutions, Dana Gardner created BriefingsDirect to give online readers and listeners in-depth and direct access to the brightest thought leaders on IT. Our twice-monthly BriefingsDirect Analyst Insights Edition podcasts examine the latest IT news with a panel of analysts and guests. Our sponsored discussions provide a unique, deep-dive focus on specific industry problems and the latest solutions. This podcast equivalent of an analyst briefing session -- made available as a podcast/transcript/blog to any interested viewer and search engine seeker -- breaks the mold on closed knowledge. These informational podcasts jump-start conversational evangelism, drive traffic to lead generation campaigns, and produce strong SEO returns. Interarbor Solutions provides fresh and creative thinking on IT, SOA, cloud and social media strategies based on the power of thoughtful content, made freely and easily available to proactive seekers of insights and information. As a result, marketers and branding professionals can communicate inexpensively with self-qualifiying readers/listeners in discreet market segments. BriefingsDirect podcasts hosted by Dana Gardner: Full turnkey planning, moderatiing, producing, hosting, and distribution via blogs and IT media partners of essential IT knowledge and understanding.

@MicroservicesExpo Stories
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Cloud Expo 2016 New York at the Javits Center New York was characterized by increased attendance and a new focus on operations. These were both encouraging signs for all involved in Cloud Computing and all that it touches. As Conference Chair, I work with the Cloud Expo team to structure three keynotes, numerous general sessions, and more than 150 breakout sessions along 10 tracks. Our job is to balance the state of enterprise IT today with the trends that will be commonplace tomorrow. Mobile...
Akana has announced the availability of version 8 of its API Management solution. The Akana Platform provides an end-to-end API Management solution for designing, implementing, securing, managing, monitoring, and publishing APIs. It is available as a SaaS platform, on-premises, and as a hybrid deployment. Version 8 introduces a lot of new functionality, all aimed at offering customers the richest API Management capabilities in a way that is easier than ever for API and app developers to use.
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
The burgeoning trends around DevOps are translating into new types of IT infrastructure that both developers and operators can take advantage of. The next BriefingsDirect Voice of the Customer thought leadership discussion focuses on the burgeoning trends around DevOps and how that’s translating into new types of IT infrastructure that both developers and operators can take advantage of.
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
This digest provides an overview of good resources that are well worth reading. We’ll be updating this page as new content becomes available, so I suggest you bookmark it. Also, expect more digests to come on different topics that make all of our IT-hearts go boom!
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Sharding has become a popular means of achieving scalability in application architectures in which read/write data separation is not only possible, but desirable to achieve new heights of concurrency. The premise is that by splitting up read and write duties, it is possible to get better overall performance at the cost of a slight delay in consistency. That is, it takes a bit of time to replicate changes initiated by a "write" to the read-only master database. It's eventually consistent, and it'...
To leverage Continuous Delivery, enterprises must consider impacts that span functional silos, as well as applications that touch older, slower moving components. Managing the many dependencies can cause slowdowns. See how to achieve continuous delivery in the enterprise.
Node.js and io.js are increasingly being used to run JavaScript on the server side for many types of applications, such as websites, real-time messaging and controllers for small devices with limited resources. For DevOps it is crucial to monitor the whole application stack and Node.js is rapidly becoming an important part of the stack in many organizations. Sematext has historically had a strong support for monitoring big data applications such as Elastic (aka Elasticsearch), Cassandra, Solr, S...
Thomas Bitman of Gartner wrote a blog post last year about why OpenStack projects fail. In that article, he outlined three particular metrics which together cause 60% of OpenStack projects to fall short of expectations: Wrong people (31% of failures): a successful cloud needs commitment both from the operations team as well as from "anchor" tenants. Wrong processes (19% of failures): a successful cloud automates across silos in the software development lifecycle, not just within silos.
There's a lot of things we do to improve the performance of web and mobile applications. We use caching. We use compression. We offload security (SSL and TLS) to a proxy with greater compute capacity. We apply image optimization and minification to content. We do all that because performance is king. Failure to perform can be, for many businesses, equivalent to an outage with increased abandonment rates and angry customers taking to the Internet to express their extreme displeasure.
Right off the bat, Newman advises that we should "think of microservices as a specific approach for SOA in the same way that XP or Scrum are specific approaches for Agile Software development". These analogies are very interesting because my expectation was that microservices is a pattern. So I might infer that microservices is a set of process techniques as opposed to an architectural approach. Yet in the book, Newman clearly includes some elements of concept model and architecture as well as p...
A company’s collection of online systems is like a delicate ecosystem – all components must integrate with and complement each other, and one single malfunction in any of them can bring the entire system to a screeching halt. That’s why, when monitoring and analyzing the health of your online systems, you need a broad arsenal of different tools for your different needs. In addition to a wide-angle lens that provides a snapshot of the overall health of your system, you must also have precise, ...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Monitoring of Docker environments is challenging. Why? Because each container typically runs a single process, has its own environment, utilizes virtual networks, or has various methods of managing storage. Traditional monitoring solutions take metrics from each server and applications they run. These servers and applications running on them are typically very static, with very long uptimes. Docker deployments are different: a set of containers may run many applications, all sharing the resource...