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10/22/2015

EightStepstoRevitalizeYourITCostOptimizationInitiativeWithApplicationRationalization

EightStepstoRevitalizeYourITCost
OptimizationInitiativeWithApplication
Rationalization

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20July2015G00277893

Analyst(s):StefanVanDerZijden|MatthewHotle|John
P.Roberts

Summary
ITcostoptimizationinitiativescandecelerateafter
opportunitiestosavemoneyinITinfrastructure,software
platformsandITserviceshavebeenexhausted.IT
leadersoftenturntoapplicationrationalizationforpotential
newcostsavings,butthisrequiresaradicalchangein
approach.

Overview
KeyChallenges
TheapplicationportfoliorepresentsalargepartoftheITbudgetandamajoropportunityforcost
savingsbyloweringredundancy,diversityandcomplexityhowever,applicationrationalizationoffers
noquickwins.
ApplicationrationalizationisnotanITinitiativeanddemandsstrongbusinessleadership.
MovinganITcostoptimizationprogramfromearlycostefficiencystagestoreducingapplication
portfoliocomplexityrequiresatotallydifferentapproach.

Recommendations
Obeythekeyruleforsuccessinapplicationrationalization,whichsaysthatchangesintheapplication
portfoliomustbeledbyabusinessinitiativetochange,standardizeorsimplifythebusinessprocesses.
ReorganizeandrefocustheITcostoptimizationinitiativeforapplicationportfoliorationalization,and
involveallapplicationstakeholders.
FollowtheeightstepsoutlinedinthisdocumenttomoveyourITcostoptimizationinitiativeinto
applicationportfoliorationalization.

TableofContents
Introduction
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ITCostOptimization

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ApplicationSupportCosts
Analysis
ObeytheKeyRuleforSuccessinApplication
Rationalization
Reorganize,RefocusandInvolveAllApplication
Stakeholders
TheEightStepstoApplicationRationalization
Step1SelecttheTargetDomains
Step2CreateanApplicationGovernanceTeamfor
EachSelectedDomain
Step3AssessApplicationPortfoliosWithFitnessand
ValueReviews
Step4GetDetailedDataonApplicationRunning
Costs
Step5IdentifyOpportunitiesforCostSavings
Step6SetTargets,MeasureResultsandCelebrate
Success
Step7InitiateApplicationMigrationorConsolidation
Projects
Step8DecommissionApplications
BePreparedfortheLongHaulandReadytoInvest
CaseStudy
GartnerRecommendedReading

Tables
Table1.AverageSplitBetweenApplicationSupport
Activities

Figures
Figure1.GartnerITCostOptimizationFramework
Figure2.The"PilingOn"EffectofProjectsonFuture
OperationalExpenses
Figure3.CompositionofanApplicationGovernance
Team

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Introduction
ITCostOptimization
GartnerdefinesITcostoptimization(oftenknownasITCO)as"adisciplinethatincludesthepractices,
capabilitiesandbehaviorsofreducingspending,reducingcosts,managingservicelevelsandshowingthe
businessvalueofIT."
Itisnotjusta"oneoff"costcuttinground,itisanongoingactivity,implementedintheorganizationwith
propergovernanceandcontrols.ItfocusesonoptimizingITspendingtoprovidethehighestreturnand
valueforthebusiness(see"ITCostOptimizationShouldBeanOngoingDiscipline").
TheGartnerITcostoptimizationframeworkdefinesfourlevels(asseeninFigure1):
Level1ITProcurement:Identifyopportunitiestoreducespendwithinexistingvendorcontracts
andservicedeliverymodels.
Level2CostSavingsWithinIT:Evaluatechangestoservicedeliveryacrossmajordomains
lookingforconsolidation,streamlining,orselectiveoutsourcingopportunities.
Level3JointBusinessandITCostSavings:Seekoutopportunitiestoeliminate/reduce
applicationfootprint(andwithit,theinfrastructuresupportingtheseapplications)whilealsoevaluating
underperformingprojectsinflight.
Level4EnableInnovationandBusinessRestructuring:Reimaginebusinessservicedelivery
withtechnology(byimprovingcustomerexperience,orintroducingnewpaymentmodels,for
example).
ThesefourlevelsillustratehowcostoptimizationevolvesfromaninternalfocusonITperformance,toa
focusonoptimizingIT'scontributionstobusinesssuccess(seeFigure1).
Thelevelscovercostcutting(Levels1and2),costoptimization(Levels1,2and3)andincreasing
businessvalueofIT(Levels3and4).Eachhigherlevelrequiresmoreeffortbutyieldsgreaterresults.
Level1andLevel2initiativesareITdrivenbyandfullywithinthescopeoftheITdepartment.Level3and
Level4initiatives,however,willimpactthebusinessandrequireajointapproachbetweentheITand
businessunits.

Figure1.GartnerITCostOptimizationFramework

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SOURCE:GARTNER(J ULY2015)

TheneedtocontrolITcostsandoptimizeITinvestmentsremainsunchanged.Inrecentpast,manyIT
organizationsoptimizedcostsbyfocusingonloweringthecostsoflineitems,ITcomponentsandservices
(Level1),andmovingtodifferentdeliverymodelsincludingoutsourcingandcloud(Level2).Atsome
point,thecostoptimizationopportunitiesinLevel1andLevel2willbeexhausted.ITleaderswillneedto
lookforotherareastoreducecostandwillstartlookingattheinitiativesinLevel3containingjoint
businessandITcostsavings.

ApplicationSupportCosts
ThecostofapplicationsupportistypicallythenextsteponceITinfrastructure,softwareplatformsandIT
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serviceshavebeenoptimized.Theapplicationportfoliocanrepresentalargepartofacompany'sIT

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budgetandpresentsamajoropportunityforcostsavingsbyloweringredundancy,diversityand
complexity.Inmanyorganizations,thecostofapplicationsupporthasbeengrowingandgrowingsilently.
AsITprojectsdelivernewcapabilities,incrementalmaintenanceandsupportloadsarecreated,typically
addingasmuchas10%to25%tothetotalprojectbudget.Theseincrementaloperationalexpensesare
increasingthebasecostsofapplicationsupportyearoveryear(seeFigure2).Becausemost
organizationsdonotactivelyoptimizeorrationalizethesecosts,thisrepresentsamajoropportunityfor
savings(see"ApplicationLeaders:StopEatingProfitsandCapitalWithUnnecessaryOperational
Expenses").

Figure2.The"PilingOn"EffectofProjectsonFutureOperationalExpenses

Ops=operations
SOURCE:GARTNER(J ULY2015)

Gartner'sITKeyMetricsData(see"HowtoManagetheITBudgetWiselyThroughCostandValue
Optimization")illustratestheopportunityforreductionsinapplicationsupportcosts.AnnualITapplication
developmentandsupportinvestmentisroughly34%oftotalITspending,and51%ofthatinvestmentisfor
newdevelopmentprojects.Theremaining49%isformaintenanceofexistingsystems.Thesefiguresare
averagesacrosseverysizeofbusinessandeveryindustrysector,buttheydoillustratethatapplication
supportcostsaccountforabigportionoftheITbudget.
Gartner'sITKeyMetricsDataalsoshowsbigdifferenceamongorganizationsintheeffectivenessofthis
spend:a44%differenceinapplicationsupportcostsperfunctionpointbetweenaverageandlowestcost,
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withtheaveragebeing$62perfunctionpointin2014andthemiddlequartilesrangingfrom$38to$84

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EightStepstoRevitalizeYourITCostOptimizationInitiativeWithApplicationRationalization

(see"ITKeyMetricsData2015:KeyApplicationsMeasures:ApplicationSupport:CurrentYear").
BasedonthedataourclientsreportedintheKeyMetricsData,theaveragesplitbetweenapplication
supportactivitiesisshowninTable1.

Table1.AverageSplitBetweenApplicationSupportActivities
Activity

Percentage

Bugfixes

20%

Minorenhancements

20%

Business/operationssupport

40%

Technicalupgrades

15%

Other

5%

SOURCE:GARTNER(J ULY2015)

Applicationrationalizationisakeybestpracticetodrivelongtermcostoptimizationinapplicationsupport
(see"BestPracticestoDriveCostandValueOptimizationinApplicationSupport").
Thegoalofapplicationrationalizationistoreducethecostandcomplexityoftheexistingapplication
portfoliobyeither:
Decommissioningredundantapplications
Consolidatingapplicationsthatsupportsimilarbusinesscapabilities
Modernizingapplicationsthatarebasedonagingtechnology
Simplifyingapplicationsbyremovingcomplexcustomizations
ApplicationrationalizationprovidesamajoropportunityforITleadersthatarelookingattheircurrent
applicationportfolioasthenextfrontiertocontinuetheircostoptimizationprograms.Itmayalsospawn
potentialsavingsfurtherdowntheinfrastructurestackasdecommissioninganapplicationcanalsoleadto
theretirementofservers,storage,databases,middlewareandmostsignificantlythepeoplerequired
tooperatethem.However,applicationrationalizationisaninitiativethatresidesonLevel3oftheITcost
optimizationframework.ItisajointbusinessandITinitiativeandrequiresadifferentapproach,involving
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differentstakeholdersandalongtermfocus.

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EightStepstoRevitalizeYourITCostOptimizationInitiativeWithApplicationRationalization

Analysis
ObeytheKeyRuleforSuccessinApplicationRationalization
Becausechangesintheapplicationportfoliomustbeledbyabusinessinitiativetochange,standardizeor
simplifythebusinessprocesses,applicationrationalizationisoftenwronglyconsideredtobeanIT
responsibility.Applicationdecommissioning,consolidationandmodernizationallseemtobetechnical
activities.WhythenisapplicationrationalizationaLevel3ITcostoptimizationinitiative(withjointbusiness
andITcostsavings)?Thestructuralproblemisthecloserelationshipbetweenbusinessprocesses,
informationneedsandapplications.
Gartnerhasdefinedthefirstlawofapplicationrationalizationas"youhaveexactlytherightnumberof
applicationstodaytorunthebusinessthewaythatyourunthebusinesstoday."Thecorollaryofthislawis
this:Ifyouremoveanapplicationfromtheliveportfolio,youmustsomehowbechanginghowthebusiness
works.Thesechangescouldimpactprocessworkflow,rolesorresponsibilities.Therefore,application
rationalizationstartswithprocessstandardizationandsimplification,allowingequivalentchangestothe
applicationportfolio.
Inmostcases,weneedprocessstandardizationandsimplificationtomakethebusinesscasefor
applicationrationalization.ThepotentialITcostsavingsarenotenoughtooffsettherequiredinvestments,
oratbesttheyhaveafairlylongpaybacktime(betweenfourandsixyears).Theadditionalbusinesscost
savingsandrevenueopportunitiesduetochangedprocessesareessentialforapositivebusinesscase.
AnotherconsequenceofthislawisthatanITledapplicationrationalizationprogramisalmostcertainly
doomedtofailastheITorganizationdoesnothavetheauthoritytodrivemeaningfulchangeinabusiness
process.Anapplicationrationalizationprogrammustbeledandownedbythebusiness(see"In
ApplicationRationalization,theNumberofApplicationsIsIrrelevant").

Reorganize,RefocusandInvolveAllApplicationStakeholders
ManyITcostoptimizationprogramswillstartwiththeLevel1andLevel2activitiesshowninFigure1.
Theycanrunforyearsbeforemajoropportunitiesonthesetwolowerlevelsareexhausted,and
incrementalcostreductionisslowingdown.Level1andLevel2initiativescangenerallybeexecutedwithin
theauthorityoftheITleaderswithverylittlepushbackfrombusinessmanagerssincetheyseelittle
changeinhowtheywork.
WhenanITcostoptimizationprogrammovesuptoLevel3activities(asisthecasewithapplication
rationalization),itmovesintothebusinessorganization.Itwillalsoinvolveandimpactbusinessprocesses,
users,managersandotherobjects.Therefore,theauthorityandthegovernanceoftheprogrammust
changetocoverthebusinessorganizationaswell.ITleadersmustreorganizetheITcostoptimization
programtoincludetheadditionalstakeholdersandrefocustheprogramtolookatopportunitiesfroma
combinedbusinessandITperspective.Thisisespeciallythecasewithapplicationrationalizationasthese
improvementsmustbeledandownedbythebusiness.
Anapplicationhasno"singleowner."Insteadithasmultiplestakeholderswithdifferentinterestsandvalue
perceptions.Applicationgovernanceteamscanbeusedtoengageallstakeholders.Anapplication
governanceteamisavirtualteam(thatis,notalinefunction)thatbringstogethergroupsofstakeholders
onaregularbasistomonitorongoingprojects,evaluateapplications,discussimprovementsandconsider
futureoptions.
Itisnotpracticalforeachapplicationtohaveitsowngovernanceteam.Inmostcases,multiple
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applicationssupportasinglebusinesscapabilityincludeoverlappingandduplicateapplicationsand

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EightStepstoRevitalizeYourITCostOptimizationInitiativeWithApplicationRationalization

shouldbemanagedasa"cluster"ofapplicationsbyonegovernanceteam.Structuretheapplication
clustersaroundbusinesscapabilitiesthathaveacommonsetofdemandsidestakeholders.
Thethreeprimarystakeholdercommunities(asshowninFigure2)thatmustengageinthegovernance
processare:
Demandsidestakeholdersrepresentingthebusiness:Thesearethepeoplewhoconsumethe
servicesdeliveredbytheapplications(theusers).Thedemandsidegroupshouldbeledbythe
businessmanagersresponsibleforthecapabilitiesthatareautomatedandmanagedbythe
application.Akeysuccessfactorforapplicationrationalizationistoassignabusinessprocessowner
(or"czar")thathasamandatetodrivebusinessprocessstandardizationandsimplificationforthe
businessarea.
SupplysidestakeholdersrepresentingtheITorganization:Thesearethepeoplewhodeliverthe
applications.Theyincludeinfrastructureandoperations,applicationdevelopment,supportand
maintenance,andprojectandvendormanagers.
Enterprisearchitectureandprojectmanagementoffice(PMO):Enterprisearchitectsreflectthe
enterprise'sstrategicdirection.ThePMOinformsstakeholdersaboutthestatusofongoingprojects
anddiscussesfutureprojectsandtimelines.

Figure3.CompositionofanApplicationGovernanceTeam

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SOURCE:GARTNER(J ULY2015)

Inordertoformaneffectiveworkingteam,itisnecessarytoidentifyachairpersonforthegovernance
team.Thispersonisresponsibleforbringingthestakeholderstogetherandownsresponsibilityforthe
governanceprocessandcan,therefore,beconsideredtheeffectiveapplicationowner(see"APrimeron
ApplicationOwnership").
ApplicationleadersthatareaskedtocontributetotheITcostoptimizationprogrambyrationalizingthe
applicationportfoliomustensurethatallstakeholdersareengaged,andthatgovernanceisinplacebefore
proceeding.

TheEightStepstoApplicationRationalization
ThefollowingstepswillreadytheITcostoptimizationinitiativeandcreatetherequiredecosystemfora
successfulapplicationrationalization.

Step1SelecttheTargetDomains
Applicationrationalizationrequiresconsiderableeffortandattention.Itisimportanttofocusthatattention
onthosedomainsintheapplicationportfoliothatprovidethebiggestopportunityforrationalization.Select
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adomainthatconsumesaconsiderablepartoftheapplicationsupportbudget,suffersfromhigh

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EightStepstoRevitalizeYourITCostOptimizationInitiativeWithApplicationRationalization

applicationcomplexity,hasduplicationoroverlaps,orhasthehighestchancetobenefitfromprocess
standardizationorsimplification.
Mostorganizationswillfindtheseopportunitiesinbusinesscapabilitiesforcommonnondifferentiating
businessfunctionsthatsufferfromredundantoroverlappingbusinessprocessesacrosstheorganization
(see"WhenApplicationStandardizationWorks,andWhenItDoesn't").

Step2CreateanApplicationGovernanceTeamforEachSelectedDomain
Applicationrationalizationrequiresstrongbusinessengagement,businessleadershipandgovernance.
Createapplicationgovernanceteamscontainingrepresentationfromthethreestakeholdergroupswitha
singlechairperson(seesectionaboveand"APrimeronApplicationOwnership"formoredetails).

Step3AssessApplicationPortfoliosWithFitnessandValueReviews
Anapplicationfitnessandvaluereviewexaminesthebusiness,operationalandtechnicalrobustnessof
eachapplicationtodeterminehowwellitsupportsthecurrentmission,businessprocessandtechnical
requirements.Thedeliverableisa"degreeoffitness"or"stateofhealth"ratingfortheapplication.
Theapplication'sfitnessinformationcanbeamendedwithinformationonthefitnessofthebusiness
processesitsupports,andcanincludemetricsforcomplexity,overlapandduplication.
Acombinationofdataonapplicationfitnessandbusinessprocessfitnesswillprovideimportantinputfor
identificationofopportunitiesforapplicationrationalization(see"HowtoAssessYourCurrentApplications
UsingFitnessandValueReviewProcesses"and"Toolkit:ApplicationFitnessandValueReview").

Step4GetDetailedDataonApplicationRunningCosts
Oneofthemainbarrierstoeffectivecostoptimizationispoortransparencywhenitcomestototalcostof
ownership(TCO).Thiscertainlyappliestoapplicationrationalization.Manyorganizationsstruggleto
provideclearaccountingfortheTCOonaperapplicationbasis,especiallyforapplicationsupportcosts.IT
shouldbeabletomapitsactualspendingtoapplicationtowersandtotheappropriatebusinessareasso
thatthebusinessstakeholderscanunderstandthecostsIThasincurredontheirbehalf.Thisinformation
isvitalforengagingthebusinessstakeholders,creatingasenseofbudgetownership,andmotivating
businessdecisionsthatoptimizeapplicationspending.Thisinformationwillalsoallowdiscussionswithin
thegovernanceteamtoidentifyopportunitiesanddefinetargetresults(see"ImproveBusiness
StakeholderEngagementWithanExecutiveApplicationDashboard").
MostITorganizationstrackandmanageITexpensesusingeasilyidentifiablecategories,suchaspeople,
hardware,softwareandoutsideservices.Thesecategoriescannoteasilybelinkedtoabusinesscontext.
Instead,ITexpensecostsshouldbedistributedandthecostsassociatedwithaparticularapplication
trackedandaggregated.WhatmakesthistaskcomplexinITisthatmanyITresourcesaresharedamong
multipleapplications(see"RunITasaBusinessUsingSixPillarsofEffective
ITFinancialTransparency"and"BusinessApplicationChargeback101"formoreinformationonhowto
providetransparencyinapplicationsupportcosts).

Step5IdentifyOpportunitiesforCostSavings
Theapplicationgovernanceteamreviewstheinformationonapplicationfitness,processfitnessandTCO.
Evaluationoftheaggregatedinformationwilluncoveropportunitiesforapplicationrationalizationanddrive
applicationsupportcostsavings.Theywillhavetolookatthecollectedinformationfrombothan
applicationperspectiveandabusinessprocessperspective.Idealopportunitiesareapplicationswitha
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highoperationalexpense,alowapplicationfitnessand/orsupportinglowfitnessbusinessprocesses.

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Gartnerprovidesanapproachthatusesthefitnessandvaluereviewinformationtoassessandcategorize
applications.ApplicationsareplacedintothecategoriesTolerate,Invest,MigrateandEliminate(TIME).
Seealso"ApplicationPortfolioTriage:TIMEforAPM."
Inaddition,theprocessfitnessinformationcanbeusedtoidentifyopportunitiesforprocess
standardizationorsimplification,whichcanthenleadtoapplicationconsolidationandsimplification.
See"WhenApplicationStandardizationWorks,andWhenItDoesn't"forgoodreasonstostandardize
applications.
Theapplicationgovernanceteamwillselectopportunitiesforfurtherinvestigationandsubsequentlycreate
proposalsforrationalization.Theremaybeseveralopportunitiesandproposals,eachcompetingfor
budgetandtime.The"prospectusapproach"canbeusedtoselectthebestinvestmentopportunities.This
approachisbasedonusingoptiongenerationandevaluationtounderstandthepotentialalternative
solutionsfromtheperspectiveofcosts,benefits,risksanddependencies.Itinvolvesaseriesofrapid
iterationsthatcontinuouslyrefineandnarrowtheavailableoptionsinmovingtowardaselection.Oneof
thechoicesthatiscreatedmustbea"donothing"optiontomakeclearwhatthecostsandrisksarewhen
theapplicationportfolioandbusinessprocessesareleftasis.Seealso"UsetheApplicationProspectus
ProcesstoRevitalizeITInvestmentManagement"and"CapabilityAssessmentToolfor
"RestructuringYourApplicationPortfolio."

Step6SetTargets,MeasureResultsandCelebrateSuccess
Targetsmustbesetforeachinitiativeandshouldbemeasuredtomonitorprogressandsuccess.Thegoal
ofanapplicationrationalizationinitiativeistoreducethecostandcomplexityoftheexistingapplication
portfolio.Reductionofcomplexitywillhaveanindirecteffectonapplicationsupportcosts.
TargetsshouldbesetforITcostreduction.However,thetargetshouldnotbesetasasimpledirectcost
reduction.Thistellsuslittleabouttheeffectivenessoftheinitiative.Themeasureofprogressshouldbe
theextenttowhichtheinitiativeiskeepingtheactualoperationalcostlinetrendingbeneaththepreviously
predictedoperationalcostprojection(asdefinedinStep4).Inotherwords,thetargetshouldbeset
againsttheoperationalcostsinascenariowhereyouhaddonenothing.
Dependingonthebusinesscase,targetscanalsobesetforbusinesscostsavingsandrevenue
opportunitiesduetochangedbusinessprocesses.
Progressandresultsmustbemeasuredandreportedthroughouttheexecutionoftheinitiative.Celebrate
andcommunicatesuccesswithallstakeholdersandothergovernanceteams.Successwillcreatenew
opportunitiesinotherbusinessareas.

Step7InitiateApplicationMigrationorConsolidationProjects
Afterselectingthebestrationalizationopportunity,theimplementationprojectmustbeplanned,funded
andstarted.Applicationrationalizationisabusinessledprojectthatconcurrentlyimprovesbusiness
processesandtheefficiencyoftheapplicationportfolio.Itisvitalthatprojectownershipandgovernance
fullysupportsthatdualnature.
Typicalexamplesare:
Standardizedbusinessprocessesleadingtoconsolidatingapplications
Simplifiedbusinessprocessesleadingtotheremovalofcomplexcustomizations
Highriskorhighapplicationsupportcostsleadingtomodernizationofapplications
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RevisitStep2toensurethatapplicationgovernanceteamsstaycommittedthroughoutthejourneyas
championsoftheinitiatives.

Step8DecommissionApplications
Applicationrationalizationactivitieslikeconsolidation,migrationandmodernizationwillleadtoredundant
applications.Theseapplicationsmustbedecommissionedtolowerthecostandcomplexityofan
applicationportfolio.Thisisthehardesttaskinapplicationrationalization.
Gartnerstronglyadvisesthatyouseparatetheprojectthatwillreplacetheapplicationfromtheprojectthat
decommissionstheapplication.Decommissioningisaspecialisttaskthatincludestheactualfinalremoval
ofalltracesoftheoldapplicationandhandlingthedataretentionfollowingcentralpoliciesandprocesses.
Moreimportantly,takingdecommissioningonasaseparateprojectwilldrasticallyimprovethechances
thatthedecommissioning(andsubsequentcostsavingsandcomplexityreduction)willactuallyhappen.
Thetraditionalapproachtodecommissioningwheretheprojectdeliveringthereplacementapplicationis
alsoresponsiblefordecommissioningtheoldapplicationhasrarelybeeneffectivebecauseproject
focusandresourceshavealwaysbeenoverwhelminglybiasedtowardthereplacementsystem
(see"DecommissioningApplications:TheEmergingRoleoftheApplicationUndertaker").

BePreparedfortheLongHaulandReadytoInvest
Therearenoquickwinsinapplicationrationalization.Realresultswilltaketime,effortandinvestment.
First,ittakesconsiderableefforttomaketherequiredchangestothebusinessprocessesandtothe
applicationportfolio.Carefulplanningisrequiredwithmultiplestakeholderswhileallowingthebusinessto
continuetoworkandminimizingimpactontheexistingITprojectportfolio.Theplanningandexecutionof
arationalizationinitiativeoftentakesoneormoreyearstoachieveitsobjectives.
Secondly,changingbusinessprocessesandapplicationportfoliosrequireeffortandupfrontinvestment.
Projectsthatareexecutedpurelyaspartofanapplicationrationalizationprogrammusthaveabudget.
Ideally,anorganizationcanuseitsexistingITprojectportfoliotodriveapplicationrationalization.Inthis
case,regularprojectswillbeusedasopportunitiestostandardizeorsimplifybusinessprocesses,butthis
willrequireadditionalbudgetaswell.
Insummary,bepreparedforthelonghaul.Achievingrealmeasurableresultsfromanapplication
rationalizationprogramrequiresamultiyearperspectiveandupfrontinvestment.

CaseStudy
In2012,BTInnovate&Designdecidedthat,fromastartingpointof2,500applications,itwouldreducethe
applicationportfolioby10%peryearoverthreeyears(see"BTInnovateandDesignSimplifiesits
ApplicationStrategytoBoostAgilityandInnovation").AshishGupta,presidentglobalservicesportfolio
andservicedesignsaid:"Thisiseasytotalkabout,butquitedifficulttoimplementstructurally.Agreat
manysoftskillsareneededwhenengagingyourbusinesspartnersandconvincingthemthatyouhavean
approachandastrategythatwillgetthemtoabetterplace."

GartnerRecommendedReading
SomedocumentsmaynotbeavailableaspartofyourcurrentGartnersubscription.
"ITCostOptimizationShouldBeanOngoingDiscipline"

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"ApplicationLeaders:StopEatingProfitsandCapitalWithUnnecessaryOperationalExpenses"
"BestPracticestoDriveCostandValueOptimizationinApplicationSupport"
"InApplicationRationalization,theNumberofApplicationsIsIrrelevant"
"APrimeronApplicationOwnership"
"RunITasaBusinessUsingSixPillarsofEffectiveITFinancialTransparency"
"BusinessApplicationChargeback101"
"ApplicationPortfolioTriage:TIMEforAPM"
"DecommissioningApplications:TheEmergingRoleoftheApplicationUndertaker"

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