Application Overhaul – Top Ten Best Practices for Cutting Your IT Debt




Top-down application portfolio evaluation: There are quick wins to be had

It’s practically impossible to differentiate between business processes and the applications that automate them, your business and its application portfolio have become so closely intertwined. It is imperative that IT managers maintain a firm control over the applications, but rising complexity in the application portfolio threatens to undermine both the systems and your control of them. They are expensive, inflexible, and unstable, and that means they don’t provide the business value they should.

Application portfolios contain complex relationships between hardware, software, people, and processes that have been adapted over many years. For instance, a Java-based order management system may relay data to a call center’s COBOL application, which relies in turn on a PL/I order fulfillment system on the mainframe.

Over time these systems only grow more complex. New requirements arrive, markets change, business needs emerge, hardware is modified, new programming languages emerge, and architectural standards erode. Portfolios become overloaded with duplicate, redundant, undocumented, and fragile systems that don’t support the business. This rising complexity has significantly negative impacts on the IT organization:

  • Development costs rise as previously simple changes require senior development effort
  • Development risks increase as changes can disrupt the portfolio in unforeseen ways
  • Infrastructure costs rise as operations cannot shut off the hardware that supports inefficient or redundant applications
  • Business users can’t get new capabilities because development is busy just trying to keep the lights on

Even more pressing is that the applications are no longer supporting the business.  Resources aren’t available to adapt these systems to support new requirements.  That has to change.

Naturally, IT managers want to focus resources on producing new business services, and not on maintaining existing ones, but the sheer complexity of their portfolio means resources can’t be spared. Even if they could, it’s hard to know where to start. And so, the IT debt continues to accumulate.  It’s also no surprise that Application Overhaul activities are delayed.  It’s tough to decide where to focus effort.  So, where do we go from here?  Let’s get some “quick wins” under our belts so we can reinvest in modernization activities that continue to boost flexibility and cut costs.

Application Portfolio Management (APM) offers a path. It is a best practice that helps users intelligently prioritize development and modernization initiatives. APM works by measuring key performance indicators about your portfolio. This data shows IT management where they should focus effort to get the most return for the business.  Collecting data from top-level surveys of key stakeholders can provide this quick win.  Understanding the value, cost, and risk of applications via browser-based surveys helps you quickly spot unneeded and costly applications.  Rationalization of unnecessary business processes and applications can quickly free up significant budget.  You can progressively enhance insight into your applications as you focus modernization initiatives on key applications.  

But what metrics should we collect? First, take a step back and start with the goals that you want to achieve for IT and business. What metrics you’ll need will come naturally when you take a goal / question / metric approach to understanding the portfolio. These goals come from interplay between IT and business stakeholders in the organization and will likely tie to the most pressing pains you feel now.

Eliminate business processes that are not needed: This goal is straightforward.  There are significant numbers of applications that have been developed for business goals that are no longer relevant.  Determining who “owns” a business process and gauging its current need helps you identify and correct waste.

Choose IT projects that are supported by business requirements: This goal looks at a strategic planning approach and how to ensure that new activities are weighted by their relevance to the business.

Shift development focus from maintenance to innovation: This goal aims to reduce the cost of supporting existing applications – for instance, through the removal of redundant systems.

Cut the risk of business process failure or performance loss: This goal looks at cutting the complexity of a given set of applications. This is often achieved through architectural improvements and refactoring.

Lower the cost of completing a business requirement: This goal aims to reduce the effort needed to move a work item through development. This is often addressed by enabling lower cost resources to work on a change.

Lower the cost of IT infrastructure: This goal looks at ways to cut ongoing costs for hardware and software support costs. In addition to removing redundancy, this goal may aim to move applications to better supported and more economical architectures.

Naturally, your own goals will depend on the specifics of your organization. Collaboration across these various facets of your organization will help to ensure that goal determination is synchronized and sufficiently complete.

In the second of the top ten tips, we’ll be examining the importance of securing senior sponsorship to effect real business and application efficiency to reduce the IT debt. Revisit the blog regularly for updated articles.

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