Business isn’t static and neither are the business applications that power it. Over the years the portfolio of business applications inside every organization has not only grown, it has changed to meet economic, commercial and operational challenges, as well as take advantage of technical advances.
With continuing economic uncertainty making many organizations more risk-averse than ever, 2012 is likely to be the year many organizations focus on modernizing rather than replacing their old IT estates. The first step on that journey is to understand the applications that make up your business. Only with that knowledge will you find a way to break through complexity to get to simplicity.
Application portfolio complexity has been caused by time and change. The applications you currently use to run your business processes didn’t all appear fully formed at the same time. They reflect what your business needed at a certain point in time. As time has moved on so the business needs have changed – and the applications you use to address them have moved on too.
Let’s look at what may have changed since your application portfolio was established:
Your market isn’t the same as it was – you have more competition, you need to respond faster to commercial challenges and customer demand, the old ‘reality’ has changed.
Maybe you‘re no longer the business you once were – you’ve merged with another company and your systems need to be aligned, you’ve expanded into new territories with different regulations.
Your customers aren’t the same as they used to be – they want to interact with you online via PCs, tablets and Smartphones.
Your use of technology has shifted – you no longer run everything from the mainframe, you’ve bought systems that run in a distributed environment, some of your systems run in the cloud, and you’ve replaced in-house systems with packaged solutions.
The way you do business has changed – your salespeople use iPhones to manage their calendars and place orders, your supply chain is automated, dealers place orders online.
Your application needs have changed – you need to provide more information and allow more people to access it, you need to interact with third party applications and with supply chain partners’ systems, you need to meet new standards and regulations.
Your people have changed – the new CIO wants a ‘root and branch’ overhaul of IT, the new CEO wants more analytics and shareholder value, the original programmers have retired.
Of course, none of these changes has happened sequentially or in a linear fashion. The changes haven’t stopped happening, and never will. The only constant is change.
As if that wasn’t complex enough, changes to your application portfolio will have been made in the context of budget, business priorities, and available skills. Some applications haven’t kept up, despite needing to, some will no longer be fully supported and some will have been patched up with a quick fix. The result: Rather than a clear, structured environment that is easy to understand and maintain, your application portfolio may be a bit of a jungle.
The increasing complexity of IT demands careful management. In order to define the roadmaps to take your business applications forward you need to understand where you are now, and to synchronize your IT and business priorities.
And that’s the first step towards modernization: getting a clear view of your enterprise applications ecosystem.
Modernization strategies involve hundreds of decisions. Successful modernization projects demand a firm basis for making those decisions, and a way of simplifying the complexity of expanding application portfolios. This is what Application Portfolio Management (APM) delivers: it enables you to determine reliable and repeatable ways of interrogating your IT landscape for vital information regarding cost, value, complexity, risk, customer satisfaction, fitness for purpose and other key metrics. This is at the heart of the value that APM delivers.
Micro Focus has helped global clients discover and act on key business metrics buried in their IT estates, ensuring the right strategic decisions are made at the right time. Accepting the risk of making the wrong strategic decision is simply unthinkable these days.
Having decided that the best way to plan for Modernization is to have a robust understanding of your current situation, the second part of our Modernization blog series introduces how best to approach the activity of detailed planning, avoiding common pitfalls along the way.
We have discussed inevitability of change across business and IT. Change means the world today is a very different place from when your core business applications were originally devised. Businesses diversify, customers evolve, technology shifts, application requirements change and the people who work on these systems have themselves changed, moved on, up, retired.
The first and fundamental activity on your modernization journey is getting a clear view of your enterprise applications ecosystem. Before thinking about how to plan your Modernization project, you should consider the decision you are trying to reach… and why. A large-scale internal IT change program typically supports a business imperative. This could be a cost-driven issue like a system consolidation, platform retirement or replacement. Or new business initiatives like new application provision, or reaching out to clients through new interfaces or devices. The spark could come from compliance or risk-management activities such as upgrades, process improvement, and security activities. While there may be assorted reasons behind the major change, it’s always the case that such change is accompanied by a hypothesis – a view of “what ought to happen” – that has been factored into the original plan.
For the plan to be sound and the risk of IT failure mitigated, the hypothesis needs to be tested against factual information.
What do you need to know? What factors influence your decision? Let’s look at the major attributes – Cost, Value, and Risk – and consider the important information needed
Cost. It’s important to consider all the associated IT and operational costs together. This includes the cost of the application platform, supporting software, including maintenance; the cost of wages and attributed overhead costs (e.g. data centre expense). There are also downstream costs of current systems, e.g. likely system upgrades, leasing renewals, support staff contracts etc. Additionally, any ‘new’ system costs need to have been evaluated for comparison, along the same lines. Usually there is a new hardware CapEx element as well as the purchase of new system software. Additionally, re-training on any new system has to be considered and incorporated.
Value. You need to know how much your incumbent or outgoing systems return. Equally important are the projected new revenues – from a business case rather than from any internal reporting system. “Revenue” is an aggregate of a number of variables – geography, time, product line, etc. However value isn’t restricted to revenue, it includes customer experience – customer satisfaction, measurable through a range of means, is as important in the decision making process.
Risk / Operational Metrics. Typically plotting “cost” against “value” will give you a pretty decent measure of any system from a business perspective. However there are dangers in ignoring the readily-available and valuable operational data points:
- Rate of Change – number of issues “solved” by the system on average. This gives a good view of the flexibility of any system
- Number of defects – an overall measure of outstanding issues may indicate a level of robustness
- Rates of change – the amount of recorded change made is an important factor
- Application Complexity – a number of scientific measurements can be undertaken against applications to deduce ‘complexity’
- Customer / User views –customer opinion can be determined through help desk systems or surveys
- Strategic Fit – systems conform to an internal architectural blueprint to a lesser or a greater extent and this information is typically recorded in a way that means it can be rated
So, if an application appears to be costly to maintain with modest revenues, at first glance it might seem a good candidate for replacement. Taking into account all the variables above, i.e. learning that the strategic fit is an exact match, and that the application (and supporting skills) is highly flexible, and that the number of defects is low, the idea that the application is deficient turns out to be incorrect.
Understanding the levels of detail required is a laborious exercise to undertake manually. The information collected would, in any case, be a subjective view of information (factual data is difficult to ascertain by purely visual inspection) and prone to error. Also the task of manually-collecting, storing, assessing and reporting on this data is obviously extremely costly.
A smarter move is to exploit enabling technology – Application Portfolio Management (APM) – to inspect data that covers the IT landscape. Being able to interrogate the systems that house this information directly means information can be pulled, stored, assessed and reported on instantaneously. Computer programs, SCM systems, defect systems, help desk systems, financial systems, can feed into a meta-repository to be used as the basis for detailed analysis. For information that is recorded and held outside of systems, such as customer surveys, APM technology can be used to created questionnaires and measure results.
What this leads to is a review of applications on a Business Value versus Operational Cost chart. This is a simplified view as the amount of analysis will vary according to the hypothesis you are trying to test. Reviewing the factual information through the different views APM technology provides you, enables you to prioritize which applications should be modernized according to the key criteria you are considering.
In the next blog we will describe how you can determine the appropriate supporting technology to modernize your chosen application subset(s). Once again, the use of enabling technology will be driven by the issues discovered during your application portfolio assessment and the Application Modernization activities proposed.
We have outlined the journey of IT modernization to align the IT estate closer to business needs, while reducing costs and risk. Earlier blogs focused on the key first steps of looking at the entire IT application landscape and determine key metrics around cost, value, complexity and risk. The reason for this is simply because, if the IT department has the ability to understand its current application portfolio, the business can then be confident that the modernization strategy proposed by the IT team is accurate. This prioritizes the applications to be modernized and in what order.
In this blog post we discuss the enabling technology available to help modernize your chosen application subset(s).
The use of technology will be driven by the issues discovered during your application portfolio assessment and the modernization activities proposed, whether that is accomplished by transforming your development, testing, or application workload deployment strategy and technology.
Modernizing your development practices can dramatically improve throughput of application deliveries as well as saving a lot of operating costs. By exploiting best-in-class IDE technology running under Windows, you can very quickly expand CPU capacity for each developer, eliminating resource contention and improving delivery times. Concerns over skills for COBOL because of the difficulty in attracting new staff to an old development environment can be addressed by using best of breed IDE tech such as Eclipse/Visual Studio. These environments bring a new level of collaboration into the teams, and improve quality of core and composite enterprise applications.
Modernizing your testing practices can break down existing capacity barriers and help QA teams and developers meet schedules on time and in budget. Capacity and throughput is a challenge and quality is a constant concern – moving application testing to a more accessible and cost-effective environment makes it possible to complete testing phases faster and with higher quality because test cycles are not constrained by scarce mainframe processing power. In addition, the test environment can be expanded beyond traditional test teams to include business users and front-end (Java, C#) developers providing an unprecedented level of application assurance.
Modernizing your application workload deployment strategy to embrace the emerging, broader choice platforms, can deliver rapid cost savings in terms of mainframe MIPS or software costs, as well as provide much-needed flexibility for the remainder of the mainframe environment. Price performance of Windows UNIX or Linux, possibly as part of a consolidated zEnterprise system, coupled with significant investment in mainframe support from Micro Focus makes reviewing deployment options a genuine opportunity for improvement, one which is already exploited by hundreds of clients. Tens of thousands of MIPS are already happily running in production on contemporary platforms.
Smart technology choices enable organizations to renew and even improve the value of mainframes and how quickly and cost-effectively systems can be delivered by and for them. Cost savings and improvements in capacity achieved through modernization release time and resources for IT innovations, as they aim to tackle emerging requirements of social, mobile, cloud and big data. By helping organizations re-use what they already have – proven and valuable IT assets – the modernization approach removes the degree of risk caused by IT change and enable improvements in operational efficiency, time to market and business alignment.
Micro Focus supports the evolution of the IBM mainframe and zEnterprise platforms, and the latest Micro Focus Mainframe Solution offerings enable organizations to exploit and harness the real value provided by the new IBM environment, and also provide unprecedented improvements to the processes and technology to maximize the value of the mainframe world.