The future may look green, but the world we live in is brown. At least for IT where our biggest challenge is brown field.
Reduce Costs and Optimize Your Portfolio
The legacy portfolio and the technical debt it carries at best hampers our ability to innovate at a rate commensurate with what business demands. Put simply, digital transformation is imperative to survival and cannot succeed without ITs’ increasing speed and agility and achieved at least in part through decreasing cost and complexity.
No One Said It Would Be Easy!
Transformation is not easy. Broad-based change, as we all know, is met with fear, uncertainty and doubt. Digital transformation must be enabled through infrastructure and operating model changes and significant disruption to people, processes and technology. And we all know that “people” change is the most challenging of these three. But when managed holistically, a transformational program to optimize the application portfolio can be successful and yield significant financial benefit to the enterprise and, in doing so, enable greater investment in innovation for digital transformation.
Where to Begin?
Getting started is easy because the answers may be found in the business, the vision of the enterprise’s executives, and the realities of the current application portfolio. Understanding the vision is the first challenge but you only need to look across your industry, at what competitors are doing and who is succeeding and why to get a sense of direction. Further to this, executive vision establishes the priorities for which to shoot. The greater challenge is getting your arms around the application portfolio and determining how best to optimize it in terms of risk (technology and business), spend (OPEX and CAPEX), and agility.
Understanding the application portfolio begins with an inventory – in and of itself this may be elusive. Then answering questions like how important is each application, how is it used and what, if any, critical functions does it perform? Are there opportunities for consolidation? And fundamentally what is the appropriate investment strategy for each application? As the portfolio is better understood, the future state comes into focus and other questions are answered like is cloud right for my applications, what apps should be modernized and how, how to migrate applications at scale, how to identify and eliminate low value applications, how to effectively manage end-to-end optimization across organizational boundaries and others help to frame a strategic vision for the application portfolio and requirements for the supporting infrastructure and operating model.
Portfolio analysis can provide an effective blueprint to the future and identify how the portfolio may be optimized to achieve IT and business goals. As a result, backlogs of applications suitable for retirement, replatforming to cloud and modernization are identified as are prevalent design patterns. Design patterns then provide the pathways required for transformation which can be implemented and executed.
Where to Find ROI?
Each of these primary transformational pathways – retirement and archive, migration, and modernization – offers benefits and paints a different but important piece of the future canvas of IT. While it may be sensible to start small with a pilot or proof of concept, the quicker each is embraced as an ongoing transformational service and taken out of the lab, the more rapidly the transformational journey may progress.
Retirement and archive represents the low hanging fruit of portfolio optimization. With TCO reductions of better than 90% and the removal of risk from both IT and the business, it should be pursued aggressively, developed “as a service” and included in the life cycle management of applications.
Migration to cloud to decrease cost, improve service levels, and/or reliability, is challenging because it has the potential to decrease TCO for a portfolio by as much as 70-90%. When executed poorly, however, we have seen examples of companies spending 5X in the public cloud over their prior in-house TCO. There are many factors influencing this. But suffice to say, with proper tuning, management of cloud services and brokering, and careful design in terms of data egress/ingress, potential savings can be significant.
Modernization includes a number of pathways as well as technologies that needs to be considered. Again the portfolio will guide you. Platform as a Service provides a great opportunity to enable modern application development as well as introduce a reduced cost operating platform to reduce infrastructure TCO associated with applications. The benefits are many and fall into three areas: operational, quality/reliability, and opportunity. For most, the greatest of these is the last, as “opportunity” through modern application development is in fact a primary enabler of digital transformation when executed correctly. The opportunity is for direct meaningful impact to the business while realizing 26-28% reduced TCO.
Across the three primary transformation pathways there are savings opportunities ranging from 26-96% on a per application basis and depending on which pathway is realized. Across a large enterprise this could represent 100’s of millions of dollars per year in savings. What’s critical is to get started, pilot change, build a transformation program and use today’s application portfolio as a starting point for understanding the future state.