Of the many CIOs that I have met, few if any lack ideas that would deliver real benefits to their organisation.
Often, the problem lack of budget and it is a problem that has become more acute in a challenging economy.
You will find – without exception – that in every big organisation, a huge proportion of CIOs’ spend is going on managing the complexity of their applications landscape.
Modern businesses run on application portfolios consisting of thousands of applications, piled together after decades of unbridled building, not to mention the aftermath of merger and acquisition activity.
Together, these applications constitute an urban landscape – an old city with narrow congested streets and traffic jams. And it takes the larger share of the budget to just keep the lights on in this old city, stifling funds for modern facilities.
To compete in a globalised economy, business leaders need supply and demand chains of continually increasing sophistication, but IT has difficulty keeping pace.
Last year our own Global CIO Report – based on interviews with 500 CIOs around the world – showed the baleful effects of the problem: low productivity, high total cost of ownership, slow time-to-market, failing point-to-point integration, scattered data and excessive customisation. The following quote from one interviewee is typical:
“We face a highly customised IT landscape, which is inflexible and expensive to manage. Offering new products and services to our customers costs us a fortune – and it takes a long time for us to make changes to those systems. As a business we are undergoing a period of transformation, but IT is potentially becoming a serious barrier to that business transformation. For example, we’ve got a lot of SAP in our landscape – far too many instances of SAP, and they are massively customised.”
However identifying the problems – and griping about them – is as always a whole lot easier than addressing them and producing an effective solution.
Some CIOs have been taking a fresh look at conventional outsourcing options. Others have been busily clueing-up on cloud computing, software-as-a-service and platform-as-a-service. But, their real problem is where to start.
CIOs need a continuous rationalisation programme, requiring a broad array of rationalisation strategies to handle different points of departure and varying business ambitions. The challenge is to build a new city within the old and it must encompass the entire life cycle of the applications landscape, from application conception through design, deployment, service and renewal – to phase-out and disposal.
It’s important to retain the agility and creativity of pure application development while moving away from the escalating costs of hand-crafted IT. It is equally important to realise that the managed decommissioning of old systems is as important as the activation of new functionality.
The good news for many CIOs is that effective solutions to the applications legacy burden are available. A number of global IT partnering organisations have put much effort over the last two years into addressing the issues involved; creating solutions that realistically address the issues, with a focus on cost-containment and rationalisation to deliver short-term and long-term benefits with an absolute minimisation of risk.
These organisations include the known major players in outsourcing, my own included, but the applications-life cycle services now being offered are a far cry from conventional outsourcing.
They don’t put the focus on running existing IT as cheaply and efficiently as possible, they look at what the ideal start-from-scratch solution would be for their client and work out which of the new techniques would work best.
Sometimes the core of the solution will be relatively conventional, such as moving the client from multiple to single-version SAP. But, sometimes more radical approaches will be called for, to the extent of moving an entire business operation (asset management, or procurement say) to a fully-outsourced, as-a-service activity.
To succeed, nothing can be ruled out from the transformation exercise.
And, start small. Focus on a part of the estate, demonstrating quick-wins and then moving on.
There are now enough real-life case studies to show that even major multinationals, however big and complex their business, can solve the applications burden problem.
There really are effective new solutions to this old problem, and they really do work. CIOs do not have to put up with applications anarchy. They need to have the courage to start building a new city within the old.