Continuing our series of the Top Ten best practices for cutting IT debt, Richard Pegden, Head of Product Marketing explores the importance of effective portfolio management within companies whose greatest source of innovation lies within their existing assets.
There are two main considerations to explore in this debate: what are the applications that matter most to your business, and what business components or services offer most business value. While sounding similar, they are important considerations in their own right.
Examining the first, what are the applications that matter to your business? gives you insight into your real business differentiators. These applications have been developed, usually over time, to perform functions and operations that are unique to you. In this way they give a good indication of your unique way of working.
A military engine support management tool developed by Avio Group, a world leader in the aerospace sector, is a good example of this in action. Following a migration process, this was the last functioning program left on the mainframe – business critical software designed for military engine maintenance, an area in which Avio Group is highly proficient and had fine-tuned over many years. The company was faced with a dilemma: the application was perfect for its specific job and they didn’t want to change it. However, it would not be possible to replace it with a commercial package and IT management could not justify the maintenance of a mainframe for just one program. The company realized the value to the entire business of this single application and took the decision to re-host it.
It’s a bit like deciding what possessions you’d rescue from your burning house — understanding the applications that you would take with you when you expand or move business reminds you how important they are. The ones you wouldn’t think of leaving behind are the ones that set you apart from your competition.
The first article in this series (Top-down application portfolio evaluation: There are quick wins to be had) highlighted the opportunities for rapidly reducing IT debt by removing the applications that duplicate functionality or that aren’t used anymore or offer little return on investment. Looking at what cannot be spared gives you better insight into what adds real value to your business, and therefore needs preserving and investing in. This means that you protect and improve important business processes and ensure they continue to add unique value to the business.
The second component involves drilling down further into understanding what business components or services offer business value. This aspect of identifying your IP is much the same as the first, but operating at another level down. Stepping inside your applications will reveal a whole heap of code doing things that were once thought really important – but time moves on and not necessarily all of them return anything like the value they used to. Just as at the higher, portfolio level there is value in some of it, and elsewhere there are opportunities to remove other parts. Some code simply no longer gets called…at anytime, by anything. It makes sense to get rid of it. Some code may get called, but is doing nothing special – again, question its value and remove it if it isn’t earning its keep. However, at the other end of the business value spectrum, some code not only gets called, but is at the heart of what makes your business successful. It’s important not just to identify this code, but to cherish it and protect it from slash ‘n’ burn rewrite or package replacement initiatives, or from the ravages of misinformed spaghetti coding.
When you are able to identify the unique intellectual property that lies beneath your business applications, you can develop and extend the value it contains. The truth really is in there.