Companies spent lots of money and almost as many hours transforming their applications for optimal performance. Phew! We’re done! Not so, says Ed Quinn, vice president, applications management, HP Enterprise Services. In his experience, corporations need to keep their newly transformed applications optimized. Senior Editor Beth Ellyn Rosenthal questioned him to find out how to do just that.
BER: Why is the on-going management of an applications transformation so important?
EQ: First, think about an applications transformation experience in its entirety. Let’s face it; it’s not an easy thing to do. It requires a clear roadmap to understand how to get there. But HP has made it easier for our clients to make the journey – transforming their application environments to gain the control they need over aging applications and inflexible processes that govern their responsiveness and pace of change.
With a newly transformed portfolio of applications, enterprises begin to see better alignment between the business and IT with all the results they want:
- Increased agility
- Improved security
- Better business continuity
- The ability to make IT maintenance spend 50 percent or less of the IT budget
So the last thing they want to happen is to lose these transformational results. Enterprises want to continue realizing the full benefits of their modernization efforts; this is where transforming the way they manage their applications comes in.
With a good understanding of the transformation under their belts, companies need to look at how to best manage the application portfolio. The goal of the transformation was to lower the overall cost of maintenance so the client can use the savings to fund innovation. So the first thing they need to do is focus on systematically balancing the newly optimized maintenance-to-innovation (M2i) ratio they’ve achieved thanks to the transformation.
Then they must sustain and continually improve that ratio. Effective management of the transformed applications environment will yield on-going efficiency improvements and opportunities to eliminate unnecessary costs and increase effectiveness well into the future.
BER: This seems easy enough. How are companies doing this?
EQ: That is easier said than done. We have seen many organizations struggle with the management phase following an application transformation because they seem to be stuck in a rut, doing things the same way. They tend to go back to managing and maintaining their applications the way they did before the transformation because they simply do not have the right level of visibility and flexibility to effectively manage them over time. IT still has a tendency to treat all applications as equal – servicing and supporting them at the same level across the portfolio.
In addition, there is a people element. New methods of development and support come with the new apps. Then there’s the impact of the cloud, mobility and rapid releases that IT organizations now have to face.
The on-going management phase following the transformation calls for companies to rethink the way they manage their applications. Why, you may ask? Because without a change, the M2i ratio will almost invariably creep back up on the maintenance side, ultimately diminishing the transformation’s return on investment.
BER: How do clients rethink the way they manage their applications?
EQ: By rethinking the way they maintain performance metrics for each application. They have to use the best sourcing strategy for each application. IT has to continually review and optimize applications based on how they satisfy the business need, how they perform, what their cost levels are, etc. Also, the IT organization needs to challenge the business on keeping custom apps versus developing migration paths to standard or sourced solutions.
BER: What techniques do you suggest?
EQ: We recommend two fundamental techniques to help enterprises successfully transform the way they manage their applications.
The dynamic service delivery approach. This utilizes underlying methods and tools to optimize costs and enable business change through:
- A scalable delivery model
- Services assigned by application based on the value they provide. This method also offers ongoing flexibility to adjust services
- Cost transparency by application so IT and the business units can better understand and control their expenses and investments
The data-driven portfolio management solution. This includes an on-going process for collecting data, analyzing metrics and identifying improvement opportunities. With this solution in place a client can:
- Maintain an inventory of the apps and their individual supportability metrics
- Score and classify each application which provides the necessary structure for analysis
- Monitor the application data and analyze trends so IT can be proactive in the ongoing management activities and identify opportunities for optimization
With this new level of understanding, enterprises have the fact-based insight they need to prepare and strengthen their business cases.
IT also needs to apply these two techniques at both the application and portfolio level. The application (or tactical)-level activities identify, diagnose and develop improvement recommendations that arise from the course of on-going operations. The portfolio (or strategic)-level activities then review those recommendations, using a strategic planning filter to ensure they take the best course of action after considering alternative solutions.
With the consolidated view of the portfolio and individual applications, companies have the insight, flexibility and agility needed to optimize their investments for the greatest business impact.
BER: Can you share a few examples? What value did your clients achieve when they implemented these techniques?
EQ: One client was experiencing significant growth and leadership changes (three CIOs in five years) with no net new IT budget. Our techniques allowed the company to quickly and easily reprioritize dollars to preserve current spending levels without contract renegotiations. This client also improved the quality of service while consistently meeting orexceeding its business service level objectives.
Another client modernized two core business systems by upgrading outdated technologies. The value add? The technology updates, processing simplifications and associated incident reductions produced significant improvements in stability and lowered the classification metrics, resulting in a lower application price for each system.
We supported yet another client that needed to lower its overall costs as a part of the transformation. With our tiered services assigned by application, we helped the company achieve its savings targets by identifying which applications could lower its support services without impacting overall delivery.
BER: What do you recommend to get started?
EQ: First, you need to ask: Have we put into place the right process and governance to systematically balance our applications portfolio? Do we have metrics to monitor continuous improvement and ongoing business alignment of our applications portfolio?.
If the answer is no, then let HP help you explore the options for effectively managing your applications before, during and after the transformation journey.
BER: Let’s discuss this for a minute. What if a client hasn’t gone through a transformation, can they still use these techniques to better manage their applications and achieve good results?
EQ: Absolutely, we have many clients that choose to “manage then transform” their applications. This strategy enables clients to overhaul the management of their existing applications portfolio so they can free up money to shift the M2i ratio. The overall cost saving they receive can be reinvested in a transformation.
Whether you choose to manage then transform or transform then manage, optimal portfolio management is where the rubber meets the road. You want to realize the full benefits of your applications and maintain those benefits. HP’s proven techniques keep the portfolio optimized by systematically balancing the new M2i ratio so clients can sustain it well into the future.