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June 2009

A Hidden Source of Big Cost Savings, With Added Business Benefits: Application Portfolio Management (APM)

As a result of the global economic slowdown, most public and private organizations have already significantly cut costs, but now they face the need for additional cost cutting measures. Within IT, they must lower costs without compromising the value of their applications or jeopardizing their mission. In addition, most IT portfolios consist of legacy or other systems that are complex, disparate, duplicative, and inefficient. One action can provide a roadmap to big savings as well as large efficiency gains: conducting an Application Portfolio Management (APM) optimisation of your legacy application environment.

The results at a large toy manufacturer were seen almost immediately. It was found that 18% of their applications were not being used, were repetitive, or had been decommissioned, while batch processes were still being run at the data centre.  This resulted in savings of MIPS on the mainframe.  These applications were immediately decommissioned, reducing the cost of a planned re-hosting and allowing the reallocation of resources. Bottom line, reduction of Operating costs, including staff, budget, and MIPS.  In another example, through the implementation of APM, the CIO of a large financial institution was able to reduce maintenance costs by approximately 70%. The CIO was given a view across the whole portfolio so areas using considerable resources could be analyzed, thus reducing their focus and costs. Not only were they able to reduce costs, but productivity of their staff increased by over 20%.

An APM analysis is a continuous assessment across disparate platforms and languages. It provides a clear understanding of the entire organization’s IT portfolio. Through APM, the following information is discovered and utilized:

• Business Value
• Costs
• Technical Quality
• Technical Value
• Risk Profiles
• Business Processes
• Team and Vendor Performance

A Rapid Application Assessment (RAA) can lay the groundwork for a quick launch of a full APM initiative. By providing a starting point, the complex nature of an IT application assessment is reduced dramatically. RAA starts with the assessment of a subset of the application portfolio. The subset includes problematic or unreliable applications discovered during an introductory information gathering session. It is a 4-6 week process providing results almost immediately. If preferred, a full APM initiative can be instituted from the start allowing insight into the entire portfolio.

What you think you know, may not be so!  CIOs will be able to have access to role-based dashboards, allowing them with the knowledge and fact-based data to make and backup their decisions. A clear understanding of low value or duplicative systems is provided. Retirement of these systems offer additional short term results in the form of reduced application costs and staffing constraints. Over time, additional results include:

• Migration Projects Simplified
• Reduced Risk
• Business Alignment
• Staffing Efficiencies
• Portfolio Optimization

For more information on this process, contact Steve Steuart at steve.steuart@modisintl.com, along with referrals to potential providers of the service.