The Computerworld Honors Program
Honoring those who use Information Technology to benefit society
LOCATION:
New York, NY, United States

YEAR:
2008

STATUS:
Laureate

CATEGORY:
Business and Related Services

NOMINATING COMPANY:
Morgan Stanley

ORGANIZATION:
Accretive Technologies, Inc.

PROJECT NAME:
X-Act Platform



Introductory Overview

IT has contributed certainly in automating lots of businesses to deliver better, faster and over time, much wider capabilities. Initially, however, IT was a tool, complementary and peripheral rather than essential and fundamental to business. However, the role of IT has evolved to become an essential component to business in gaining competitive advantage and in serving as a channel to delivering more goods and services.

IT has to balance and continually address three opposing forces: inflation in complexity, a crucial need for low latency, and above all, the cost of delivering end to end service. Inflation in complexity is a fact of life. Therefore risk mitigation, cost management and achieving optimal economies must be predicted and diagnosed as an end-to-end service. Delivering technology that addresses these forces and optimizes IT has been an exceedingly technically difficult challenge. Historically, IT systems were built through an accretion process in which layers of implementations, technologies and continuous flow of requirements stacked-up through architectures that ignored the dynamic behaviors of each constituent. The absence of such class of global complexity tooling has prevented a serious predictive analysis, efficient causal management and consequently viable risk mitigation for IT and business.

Accretive Technology delivers on this need. Accretive Technologies is a leading provider of corporate performance management solutions that uniquely model business systems in order to perform impact analysis and outcome prediction of corporate-level business initiatives. Through deterministic mathematics X-Act analytically represent the service process complexity: as deep as the full stack, all constituents, and as wide as all service processes with the associated business processes, logic and physics. With X-Act, all components are explicitly represented in a highly accurate mathematical set of equations. Through this transformation of definitions and characteristics, the dynamics are computed and validated providing an accurate determination of the relationship between the three areas (quantity, quality and cost) and the different impacts of any on the others. This solves the above dilemma of opposing forces. X-Act is a decision device that allows: determination of operational limits under a variety of conditions, identification of preventive actions and risk mitigation options and optimization and transformation alternatives prior to engaging any investment.

“Tens of millions of Dollars were gained in using X-Act technology at First Data Corp.” – Charlie Fote former Chairman CEO, First Data Corp

Ultimately, as our technology possesses large libraries of pre-computed dynamics, X-Act becomes the fundamental tool for the conception, architecture and design of the new generation of business service systems along the lines of CAD (Computer-Aided-Design) tools played in the advances in automotive and production industries. In fact, today X-Act possesses more than 7500 subassembly, dynamically emulated components including the most well-known definitions and practices of service processes, business processes, logic implementations, and different infrastructure solutions (operating platforms, relational databases, Web solutions, messaging, etc). Determining the limits and identifying potential problems within any infrastructure is risky, costly and potentially inaccurate. X-Act is the only analytical apparatus able to deliver clear understanding and viable justification for improvement actions, transformation options and beneficial innovation.

“Using X-Act technology allowed the unemployment French organization to reduce the data centers number from 13 to 2.” – Patrick Dailhe CIO – 2001

Accretive has an international large list of customers that includes: Reuters, First Data Corporation, US Cellular, McDonald’s, ADP, London Stock Exchange, Italian Stock Exchange, BT, and Renault Cars, Soc Gen, IBM, AIRBUS etc




The Importance of Technology
How did the technology you used contribute to this project and why was it important?
Systemic Enterprise Management through X-Act Technology
Currently, IT lacks the common framework, tools, and process most other industries enjoy. The disjoint between business and information technology is enormous and the only dynamics we typically observe are those related to IT system dynamics and not how they relate to the dynamics of the business. The difference is fundamental and consequences are considerable:
• Shorter life time of IT systems than the duration of business cycles
• Inability to anticipate the business evolution and be ready on time and within cost
• Obsolescence of solutions and fast aging of systems due to business imperatives and natural evolution
• Inadequate value/cost relationship under different business conditions
• Difficulty to express all requirements from the outset and to translate them from natural language to logic and physics prior to engaging investments
• Availability of only partial, segmented and unstable views of capacity, quality of service and cost for a new business demand within a particular environment.

see Appendix 1

Considerable investments, propositions, and experimentation for new concepts and strategies have occurred over the last five years, but Accretive still observes the gap between developed IT systems and business systemic imperatives represented through its dynamic drivers and evolution. Over time, this causes increased complexity, leading to premature aging, inefficiency and obsolescence of IT systems.

In business terms, this gap can prevent serious planning for time-to-market, cost control and competitive manageability. In IT terms, this can mean continuous aging, cost inflation and a loss of effectiveness to the business over the long term. Economically, this gap can result in a deviation from a serious activity-based cost and return on investment projections to ill-controlled and unpredictable financials. This analysis has been confirmed by recent executive interviews from IBM, Forrester, McKenzie and Standish on predictive analysis of legacy business systems and/or first deployments of SOA based ones.

X-Act addresses this urgent, indispensable and decision-oriented need by businesses. By emulating business service systems, top-down and end-to-end at every stage of the development life cycle, Accretive is able to experiment, test, plan and monitor the construction and the operation processes along the lines of most other industries. X-Act developed a new generation method by which the dynamics of business services and its supporting IT infrastructure can be understood, improved and transformed. (Appendix 3)

Accretive’s aim is to bridge the ‘Business IT Gap’ so that the practitioners who design and operate the IT systems and vice-versa understand the dynamics of business operations.

X-Act covers the full stack; business through infrastructure and corporate-wide on any platform or architecture. X-Act is the only emulator that covers end-to-end service processes (involving any infrastructure, any operating environment and solution). X-Act is a unique technology that explicitly represents and predicts, through rich sets of scenarios, all non-functional requirements and contributes to building optimal architecture from the outset. Finally, X-Act delivers a set of patented metrics that support improvement, transformation and innovation goals of corporations and provides a roadmap for selection, justification and monitoring.

Accretive does this through the applications of advanced mathematical modeling that is encapsulated in a tool-set. X-Act relies upon a set of observed industry metrics to insure that systems are efficient and optimal (in terms of quality of service, cost and ability to evolve without degradation).

X-Act aims to bring better understanding of the effects of changes to all parties involved in the operation of a business and thereby reduce the risks of failures of these changes due to unforeseen system performance effects.

“We realized a 35% productivity improvement for our brokerage settlement and clearing package using X-Act.” – ADP Wilco - Tom Carey COO – 2003”




Benefits
Has your project helped those it was designed to help?   Yes

Has your project fundamentally changed how tasks are performed?   Yes

What new advantage or opportunity does your project provide to people?
X-Act supports building, supplying, managing and monitoring business services for one order of magnitude less expensive with one order of magnitude better quality. Ultimately, a full understanding and manageability is needed to differentiate between common and widely adopted business systems and standards (candidates for computing clouds) from those particular and competitive components (that will always represent advantages for a particular corporation). The economies of the first group are different from the second. This closely resembles what happened to mechanical power a hundred years ago when we moved from private - one for each power generation - to electric current generated in distant power plants and fed over networks of wires. What made that possible was a series of scientific and engineering breakthroughs (Nicolas Carr – the Big Switch).

Let’s take a closer look. Today, there are hundreds of billions of software lines of code with only a fraction with unique functionality. In other words, there is a huge diseconomy of scale in terms of redundant efforts and energy wasted for no particular value. Out of the useful fraction, there is an even smaller fraction that represents competitive value. Over the last four years, X-Act has prepared for the next revolution in computing methods and economics. Large number of service processes, tens of associated business processes and a greater number of implantation patterns, were modeled and emulated in characteristics and dynamics by X-Act. Along the way, Accretive has discovered implementations that may become industry benchmarks and best practices in terms of definition, efficient dynamics and cost. This learning has become an integrated part of X-Act libraries, representing candidates for industry-wide adoption through utility computing.

X-Act is disruptive to most current practices and available methods. Instead of partial and segmented views of layers of the corporate stack (Line of Business, Service Process Human Resources, and Infrastructure), X-Act deals with the stack in full and computes the impact of any component in any layer on all others. Through the most accurate mathematical representation in the industry today, X-Act is able to identify limits and determines the points of non-linear service behavior or unacceptable quality or cost.

X-Act Technology provides powerful “what if” automatic scenarios creation for predictive analysis and preventive monitoring. As Accretive is entirely based on accurate deterministic mathematics, the findings are extremely accurate and provide a guarantee to decision makers for pertinence, accuracy and representativeness. Recent experiences showed unmatched precision and decision robustness, as a necessary condition to build viable architectures, corporate business cases and predictable operations. Typically, in many cases we delivered 30% cost reduction for up to 60% service quality improvement. We helped major corporations, stock exchanges and financial services and institutions to reduce their cost by hundreds of millions, avoid failures and reworks and build integrated platforms with their suppliers.

X-Act builds libraries that represent the most common business service processes, suggesting the optimal implementation and identifies candidates for massive service operations with the target to share cost, reduces energy requirements and provides optimum quality. In the short term, X-Act becomes a diagnostic tool and action promoter to better control efficient monitoring and optimal costing. In the long term, X-Act becomes the reference technology for service billing and service quality monitoring leveraging its predictive capability in real time, fixing and self healing technology, not only for IT services but also for corporate management and operations (M&A, consolidation etc). Over the last few years, Accretive has successfully implemented these functions that differentiate us in managing complexity.

“Tens of millions of savings were realized for McDonald’s and US Cellular through X-Act”. Frank Feagans – Shared Services 2004 and 2006 respectively



If possible, include an example of how the project has benefited a specific individual, enterprise or organization. Please include personal quotes from individuals who have directly benefited from your work.
The London Stock Exchange turns to Accretive to help prepare for growth.

Challenge
As the exchange set record levels of trading activity month to month the question became: “Was there a limit to the LSE’s systems?” Looking at a series of upgrades and system enhancements, the Exchange wanted to know if these would result in a system able to comfortably handle the volumes predicted in the business plan.

Solution
Accretive was asked the specific question: How do we handle the largest trading peaks while still ensuring fairness? Fairness requires that trades on a security are executed in the sequence received. During peaks trade volume can be highly concentrated in small number of securities. Also, modern trading strategies depend upon managing positions across a portfolio of securities. If all trades are not executed immediately, the risk of the position increases.
Accretive built a series of models of the trading system. These showed that just building a larger system e.g. more processors; more memory would not be effective in raising the system ceiling (the maximum processing rate). Instead the models identified issues in the design and core algorithms that were acting as constraints on throughput. (Interestingly, if the system was measured under a load that did not match the pattern of order arrivals in the peak, the measure of throughput and response time would be very misleading.) With Accretive’ models it was possible to study the dynamic system behavior under loads that had not yet been seen in the market.

Results
The insights provided by the X-Act model provided the data needed to target tuning and enhancements to the current system and led to changes in the definition of requirements for the next generation system at the LSE.

Accretive helps ADP Wilco rejuvenate its trading platform and avoid a costly replacement and migration.

Challenge
ADP Wilco’s GLOSS platform, its real-time transaction processing engine that automates the trade processing lifecycle, was approaching its limits in terms of volume and response time. ADP was advised to and had laid plans to replace the entire system. This replacement represented a lengthy and costly process with a very complex migration plan. Accretive was hired to model the GLOSS system and, hopefully, provide alternatives.

Solution
Accretive applied its Model-Based Architecture methodology in conjunction with constructing an X-Act™ model. Key business processes where identified and the model was built and validated against the production system to within 2% accuracy. Specific bottlenecks were found and corrective actions where identified. This initial phase took place in 4 weeks.

Results
The immediate and phased corrective measures ultimately resulted in a 30-fold increase in peak throughput in the GLOSS system. Plans to replace the system where abandoned and the platform had excess capacity for new-business.

Uniqueness for Clients: As a result to the accumulated experience X-Act possesses the most exhaustive set of sub-assembly libraries in the market place covering a wide range of ready-to-use components with pre-modeled dynamic characteristics representing: service solutions, implementation patterns, database solutions, infrastructure components and platforms.

X-Act is only technology that explicitly represents and predicts, through rich sets of scenarios options, all non-functional requirements and contributes to building optimal architectures from the outset.

X-Act technology delivers the most comprehensive set of patented metrics that are able to support improvement, transformation and innovation goals of corporations and provide the roadmap for selection, justification and monitoring.




Originality
Is it the first, the only, the best or the most effective application of its kind?   All of the above

What are the exceptional aspects of your project?
Accretive’s X-Act product is a highly precise mathematical model built using libraries of applications and infrastructure components (Appendix 2). X-Act gives companies the power to ask questions of their business: How can we best consolidate 25 disparate data centers into one? Will our company benefit from buying one large bank, or many small independent banks? Accretive models business systems - including any kind of hard asset and even human capital – and has proven to be accurate on average within 3%. Accretive holds 7 U.S. patents, 3 world patents, and has 4 patents pending.

X-Act technology was developed in three stages: the first stage was an exploration by the founder to find new ways of employing mathematical foundations that could successfully be used in different domains (space mechanics and optimization through deterministic representation) on IT system dynamics.

The originality is based on the fact that we considered that the Service function is continuous and perturbed by a variety of parameters that define the domain. The first experiences occurred at London Stock Exchange when the failure of the big bang was not able to be understood by using the classic queuing models (response failure in over sized environment). The success of the early X-Act technology was an encouragement to examine the applicability of the technology on wider set of domains where during a number of years we were able to validate the pertinence of the technology and deliver remarkable results for more than 250 critical projects.

During this second stage, the team relied on a tool with a rudimentary interface used by specialists to service more than 65 large clients (most of large banks in Europe, Stock Exchanges and automotive industries including Renault, Total Oil and Aerospace).

First Data Corporation adopted the approach, and integrated the modeling technology into the development lifecycle. First Data applied the technology to a variety of problems and business challenges ranging from operational projects for cost reduction, quality and efficiency improvement. The technology quickly became a vector of transformation for building new architectures and help select technologies and justify business cases and finally to be used in strategic decision at the corporate level as catalyst for innovation.

We launched the third stage as Accretive Technologies; started in 2003 the commercialization of the technology as a standalone software license and as utility access built to service users (clients and partners). X-Act addressed an urgent demand in the marketplace for corporations to diagnose, define actions for improvement, and build architectures using a predictive and analytical approach.

X-Act is unique in that it possesses the most accurate mathematical engines in the industry. X-Act engine has the only mathematically-based set of algorithms that emulates the dynamic behavior of schedulers, dispatchers, and optimizer’s dynamics without relying on historical data or simulated averages. In addition, it uses its patented mathematical solution that emulates databases dynamic behavior and performance based on the transformation of database definition and access patterns into resource consumption and latencies. X-Act has a foundation in perturbation theory, enjoys the exact solution it leads to, making use of the mathematical artifacts that were successfully developed over several years (e.g. lead-to-cash service process, billing business process, MQ dynamics algorithm, relational database emulation algorithm, and a variety of operating systems schedulers’ algorithms etc).

The computed metrics are both deterministic but are also able to draw the links to other metrics that fully express the space. As an example a service quality metric is accurately determined and its relationship to cost and throughput are explicated.

Today, X-Act is the only emulator that covers end-to-end service processes (involving any infrastructure, any pattern, any operating environment and solution)

Difficulty
What were the most important obstacles that had to be overcome in order for your work to be successful? Technical problems? Resources? Expertise? Organizational problems?
Since the early 90’s, the Accretive team has identified a number of gaps in the practices, offers, organizations and the way the industry deals with risk, cost and service quality in creating, operating and maintaining business service process. Few examples illustrate the origins that prevent, so far an end-to-end building, managing and planning for such processes:

 The gap between Business and IT, in particular and as simple as how to gather requirements predominantly in natural languages, understand and translate them into IT logic and ensuring at the end that everything will work in physics! In addition, most non-functional requirements are left to the end.
 The wide diffusion of misleading concepts such as: just add more MIPS; the power of chips will compensate the business growth and evolution in quality of service requirements. In fact most of cost and time in service management is outside the processors and in most modern systems they are modestly solicited.
 The organizational structures where physically insulated silos prevent cooperative and efficient architectures to be built and problem solving replaced by denials.
 The race to own IT solutions and the hype that IT is by itself is a competitive advantage and not just the service it delivers or products it allows for.
 The imbalance in service quality and cost equation between what is IT, what is process, human intervention, difficulty to exercise due market or industry factors, make it difficult without an end-to-end approach to manage and predict the outcome.
 The absence of formal education that allows multi-disciplined and problem solving training to be responsible for across divisional corporations, business acquaintances and the necessary to understand the systemic enterprise.


Often the most innovative projects encounter the greatest resistance when they are originally proposed. If you had to fight for approval or funding, please provide a summary of the objections you faced and how you overcame them.
Accretive’s fast win track record has happened because of large organizations with critical and complex problems to solve. Funding became a less critical issue, as the urgency to solve and quality of our findings were a great compensation. However, as a secondary effect we have had to face another critical problem for our own organization based on the fact that our business model was partially relying on human intervention to augment the client information gathering process therefore a potential problem to scale our business faster and wider without corporate funding. Three directions were taken to consolidate our advance and position ourselves for future growth:  Enhance X-Act technology by a knowledge base system that allows problem identification, automatically launching scenario for solution options with comprehensive dashboard to weigh predictions and preventive actions evaluations.  Build the most complete libraries of subassembly pre-emulated components in the market with components represent service, business processes, logic patterns, and infrastructure.  A web based X-Act services that allow the democratization of practices and problem solving for different level of organizations size and sophistication.

Success
Has your project achieved or exceeded its goals?   Achieved

Is it fully operational?   Yes

How do you see your project's innovation benefiting other applications, organizations, or global communities?
Today, more than 100 organizations have adopted X-Act technology, and up to 360 emulators or models have been constructed, serviced and installed by Accretive Technologies Inc. The success and clients’ appreciation of the value proposition our technology brings to their business and market position is overwhelming. A number of sister service companies are building partnerships or common joint ventures to use our technology for their clients. This trend is ranging from large organizations like IBM, British Telecom, CSC or service delivery organizations such as TORIglobal and Aerial. This trend will continue and we will grow and expand these partnerships. Our objective is to address the market directly or through our partners that cover the globe and that our technology be used by every single corporation.

X-Act will certainly affect the way our partners, competitors and client organizations are delivering and servicing optimization and problem solving. In terms of accuracy necessary to build viable decisions, X-Act brings the most accurate mathematical solution in the industry. In terms of the end-to-end representation, X-Act represents a framework through which suppliers and vendors as well as client representatives should work and cooperate.

X-Act will certainly affect most corporate applications; either directly by improving their efficiency and cost of operations or by help building new ones that are order of magnitude better in both quality and cost.

Other new applications will emerge either as extensions of X-Act technology such as real-time surveillance and fixing, activity based costing and billing, building candidates for utility computing, or in cooperation with other applications such as package builders, architectures, executive systems and those that touch corporate activities such as consolidation, outsourcing, M&A, etc.



How quickly has your targeted audience of users embraced your innovation? Or, how rapidly do you predict they will?
X-Act’s success could be measured by the number of clients that were able through its use to save hundreds of millions of dollars (up to 35% in annual budget for some), reduce, in dramatic proportions their physical configurations, saving energy, space and getting more control and better efficiency. Several client organizations were able to reduce complexity by high proportions that were translated into shorter time to market (typically 50% shorter), faster dynamic ROI and at least one order of magnitude reduction in project failure rate.

Our ambition is to contribute in increasing the capability maturity level of organizations and be able, under variety of operations conditions to deliver the most reliable predictive and preventive capabilities to corporations.


Digital/Visual Materials
The Program welcomes nominees to submit digital and visual images with their Case Study. We are currently only accepting .gif, .jpg and .xls files that are 1MB or smaller. The submission of these materials is not required; however, please note that a maximum of three files will be accepted per nominee. These files will be added to the end of your Case Study and will be labeled as "Appendix 1", "Appendix 2" or "Appendix 3." Finally, feel free to reference these images in the text of your Case Study by specifically referring to them as "Appendix 1", "Appendix 2" or "Appendix 3."

Currently Uploaded Appendices:
Appendix1.gif
Appendix2.gif
Appendix3.gif