Balancing the twin pressures of how to support the business more effectively and reduce IT costs is a constant challenge in all our lives.
Particularly visible pinch points are business applications — the lifeblood of any organisation, as they underpin its processes.
There’s increasing pressure on the IT department to ensure that applications can change and adapt to support the business strategy and enable the organisation to take advantage of new market opportunities.
But maintaining existing applications can be very expensive — industry research indicates that at least 50 per cent of investment in application development and support is spent just keeping the lights on.
In a climate of static or shrinking IT budgets, that leaves insufficient funds for the higher-value application development activities that help drive the business forward and enable competitive advantage.
And if the IT department can’t deliver quickly enough, impatient users will be increasingly tempted to find their own solutions, by building their own applications or buying services online.
All of which only adds more complications, with applications that can’t be integrated with other systems and are outside the control of the IT team.
So are these challenges addressable, or are they an inevitable consequence of the complexity of any modern business?
Typical problems you may encounter
What happens when your company wants to launch a new product to the market, or open up a new channel to customers?
If too much business-critical functionality, data and logic are locked into ageing legacy systems, it can be difficult and time consuming to make the changes needed to support the new initiative.
In many cases, applications will have been created in what are now legacy programming languages, such as COBOL or C. Many programmers who are fluent in those languages are thinking about retirement.
Once they’ve left the organisation, it may become nigh-on impossible to maintain or upgrade those applications, with the risk that they become increasingly fragile.
And if they haven’t been properly documented, not only can it be time consuming for a newcomer to understand how to work with or update them, but there’s also the risk that they don’t comply with current regulations like Sarbanes-Oxley.
It can be all too easy to lose track of how applications fit together.
This may be the case if applications have been developed in an ad-hoc or unstructured way; or if a company has gone through a series of mergers or acquisitions, leading to duplication and over-complexity in the application portfolio.
It may even be difficult to ascertain exactly what applications the organisation has and which servers they’re held on.
Some organisations I know of have resorted to switching servers off in turn and waiting to see what calls come into the IT helpdesk.
And here’s the killer: most large enterprises could operate equally effectively with half their current applications, but just like the old marketing adage, the issue is, which half?
Where does the real value lie?
Figuring out which applications to retire and where to focus investment budget is a challenge for any organisation that doesn’t know where the value lies in its application estate.
Assessing the significance of each application in terms of how it supports business processes can be a daunting undertaking, and one for which it’s often well worth engaging a specialist provider with the experience, tools and techniques to make it an efficient undertaking.
Typically, up to 80 per cent of an organisation’s business processes are not differentiators.
So the applications and resources that underpin them simply need to be delivered as efficiently as possible.
That could even involve switching from an in-house solution to a third-party delivery option such as business process outsourcing or a business process utility.
Taking steps to modernise
Once the hard work of rationalising your organisation’s application estate is underway, you can use the funds and resources released to better support the 20 per cent of processes that make the difference.
You’ll also be in a good position to work out which applications would benefit from cloud-based delivery for greater flexibility; or which ones could be mobile-enabled to support new ways of working.
You may see an opportunity to upgrade operating systems or introduce more modern technology that lets you meet the expectations of tech-savvy users more easily.
Whatever the opportunities are, it’s critical to align the applications portfolio with the strategic direction of the organisation. Knowing the value of your applications and the predicted demands from the business enables better investment decisions and a better service to your customers.
Liz Benison is vice president and COO for the UK and Ireland region of CSC
Pic: Hans scc2.0