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Hp software universe im we-1630 tolido-v1.1

Slide deck used for my speech about Applications Retirement at HP Software Universe, December 1, Barcelona.

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Hp software universe im we-1630 tolido-v1.1

  1. 1. Session ID: IM-WE-1630©2010 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice
  2. 2. Application Lifecycle Modernizationand Retirement:Sustaining Business Innovation in the Face ofMounting IT ComplexitySpeaker Name: Ron Tolido,Date: December 1, 2010; 16:30 to 17:15Session ID: IM-WE-1630©2010 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice
  3. 3. Agenda–  Preview of the upcoming Applications Landscape Report–  Continuous rationalization at the heart of the lifecycle–  Spotlight: applications retirement
  4. 4. About the upcoming Applications Landscape ReportObjective: To understand how different companies approach strategies around ITapplications, and to gauge specific knowledge around how applications arestructured, rationalized and retired across different company sizes and geographies USA: 30 quantitative, 2 qualitative interviews Europe: 51 quantitative, 10 qualitative interviews (UK, Germany, Benelux, France, Spain)
  5. 5. CIO’s Top 3 Priorities#1: Create business value#2: Improve business efficiency through IT systems#3: Cut overall costs for the business Other 6% Create value for business 60% Create better business alignment 26% Improve flexibility of IT systems 22% Increase quality of applications 11% Innovate new applications 16% Increase productivity 33%Improve efficiency through IT systems 52% Cut costs of IT 22% Cut overall costs for the business 46% 0% 10% 20% 30% 40% 50% 60% 70%
  6. 6. Most effective way to cut costs and increase value isthrough rationalization of the IT Portfolio–  Today’s application landscapes are perceived as complex and poorly structured–  Mergers and acquisitions result in redundant application functionality–  Custom legacy systems become outdated and create a burden for IT–  Many companies are retaining data beyond its usefulness““The applications state is a mess… because this 300 year old organization has grown through various mergers and acquisitions, each of which brings a new set of applications” “ - CIO UK, Insurance Company
  7. 7. IT Supports Many Redundant Applications and Systems That are Not Business Critical Only 4% of survey respondents say that every IT Half of all large IT organizations carry the burden system in their portfolio is business critical of maintaining more applications than is necessary for the business 40% say that half or more of their IT systems are vital to the business How would you rate the appropriateness of the number of applications across your company? 100%   5  –  severely  lacking  in  the   What percentage of your company’s applications are 90%   number  of  applicaGons  that   considered mission-critical? 80%   the  business  requires   4  –  fewer  applicaGons  than  30% 70%   the  business  requires  25% 60%   50%   3  –  just  the  right  number  of  20% applicaGons   40%  15% 30%   2  –  more  applicaGons  than  10% 20%   the  business  requires  5% 10%   1  –  far  more  applicaGons  0% 0%   than  the  business  requires   100% 71-99% 51-70% 31-50% 11-30% 1 to 10% 0% Small   Medium   Large   Enterprise  
  8. 8. Companies are Losing Control Over Custom-Built Applications What percentage of your company’s applications are custom-developed?–  Before the recession, companies invested heavily in 35% custom systems to support unique business needs 30% 25%–  As a result, nearly half of all IT applications now are 20% Large 15% Enterprise custom-built, especially in large companies 10%–  With constricted budgets and smaller IT staff, it is 5% 0% expensive to maintain custom apps–  Old legacy systems are becoming a burden on IT “ Our biggest challenge is to get off the old, flaky, unsupported legacy applications and migrate the business onto a much smaller number of strategic applications. “ - CIO, UK, Insurance Company HP Confidential
  9. 9. Most Companies Keep Application Data Beyond itsUsefulness Which of the following statements best fits your company’s experience of data retirement or archiving? 70%–  Most companies have data 60% retirement policies in place, 50% 40% but follow them less that 50% 30% of the time 20% 10%–  Companies tend to avoid 0% deleting any data – mostly for “We keep all data “We keep just the right “We lose data beyond its expiration amount of data to frequently and it seems compliance reasons date or usefulness, just support both business like we have a data in case” and regulatory black hole in our requirements” company”
  10. 10. Reasons Why Applications Are Difficult to Maintain–  A mismatch between what has been developed and how it fits in with the wider organization.–  Insufficient testing for compatibility with existing systems.–  “Over-engineered” solutions that lead to extreme complexity and issues with maintenance–  Applications Management teams spread too thin with too many simultaneous projects Which of the following best describes how the Application Development teams create maintainable solutions? 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 5% 47% 40% 8% 0% “Application “Application “Application “Application Development teams Development teams Development teams Development teams always create solutions generally create create solutions that are generally create that are easy to solutions that are easy a mix between easy and solutions that are maintain” to maintain” difficult to maintain” difficult to maintain” 10 Footer goes here
  11. 11. Key Application Rationalization StrategiesStandardizationConsolidation Other 7%Migration Embed 7% Consolidation 44% Cloud Computing 25% Standardising 59% Simplifying 33% Retaining 9% Replacement 36% Decommission 19% Renewal 30% Migration 40% 0% 10% 20% 30% 40% 50% 60% 70%
  12. 12. Nearly Half of All Applications Can be RetiredAlmost half of surveyed IT executives estimate that up to 50% of their applications can be retiredMain reason for retirement – applications no longer support business needsWhat percentage of your company’s applications could What is the top reason for retiring applications?be retired?60% The cost of development is too high50% The cost of maintenance is too high40% There is a lack of qualified developers to continue maintaining the30% Large Applications no longer link with other Enterprise applications effectively20% Applications are no longer business critical10% Applications cannot support business needs0% 0% 10% 20% 30% 40% 50% 60% 51-100% 21-50% 11-20% 6-10% 0-5%
  13. 13. The Barriers to Retiring Redundant Applications “–  Cost of rationalization initiatives – especially in difficult economic times We’ve had limited success in decommissioning old legacy systems because of complexity and cost “ - CIO UK, Insurance Company–  Lack of immediate ROI – time horizons for investment decisions are often short-term 70%–  Company culture and behavior - resistance to 60% change 61% 50%–  Differences between regions 40%–  Lack of qualified developers to migrate retired 30% application data and functions – especially for 20% custom-designed systems 10% 18% 9% 7%–  Some companies do not consider retirement a 0% 5% Lack of Incomplete Missing Inconsistent or Cost of priority business buy-inbusiness cases architectural unreliable retirement alignment applications services intelligence
  14. 14. Savings made from application rationalization andretirement projects are used for innovationDevelopment of innovative applications helps companies be more creative,drive down costs and become more efficient Where would you spend money saved from application rationalization and retirement projects? Direct it back to owners/shareholders of company Distribute as bonus to IT staff Transformational projects for IT Development of innovative applications Productisation and standardization of applications 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
  15. 15. Continuous rationalization at the heartof the applications lifecycle
  16. 16. So how to put continuous rationalization at the heart of theapplications lifecycle..?
  17. 17. … how to build a new city in the old city…?
  18. 18. Introducing WARP 1 … ENGINE AMBI •  Application Context, or ‘ambiance’ STREAM PATH •  Vision, Architecture and Solutions STREAM BIZZ •  Business Analysis STREAM CASE •  Business Case, Financial and Value STREAM PLAN •  Change Scenario’s and Roadmap ENGINE APPS •  Application Portfolio PLOT SCAN CRAFT SOLVE
  19. 19. … delivering 3 key deliverables to kick-off anyrationalization initiative …
  20. 20. Both ‘engines’ apply situational Lenses to validate thehypothesis… Spider Chart Application Portfolio Views High Risks of Implementation Sunset Current Performance Sales App Assessment Automate Test Workflows in and Tune Finance App Implement STATS Merge CRM Rational PACK For Oracle DB & HR Monitoring Implement Conduct RAS on CLARITY for CRM & HR Implement Major Incident Project Tracking Internationalize Management CRM UI Process Automate SOA enable For APAC ERP Expense Reporting Automate Code ReviewWith Within Finance Low Revamp HR User Manual PMD Low High Business Benefits Solution Matrix Baseline Portfolio Analysis Productivity Flexibility SOA enable Internationalize ERP CRM UI For APAC Merge CRM & HR Sunset Current Performance Sales App Assessment Automate and Tune Expense Automate Finance App Reporting Impactful Revamp HR Code Review Within Finance Conduct RAS on User Manual With Implement CRM & HR Implement PMD Major Incident STATSPACK Automate Test Management Implement Workflows in For Oracle DB CLARITY for Process Monitoring Rational Project Tracking First 6 months Next 12 months Next 24 months Transformation Roadmap Portfolio Rationalization Design
  21. 21. and 4 streams address critical success factors… ENGINE AMBI •  Application Context, or ‘ambiance’ STREAM PATH •  Vision, Architecture and Solutions STREAM BIZZ •  Business Analysis STREAM CASE •  Business Case, Financial and Value STREAM PLAN •  Change Scenario’s and Roadmap ENGINE APPS •  Application Portfolio PLOT SCAN CRAFT SOLVE
  22. 22. … with many different lenses possible (examples) …
  23. 23. Spotlight: Applications Retirement,applying database archiving andrecords management
  24. 24. Decommissioning skills are sadly underrated in theapplications lifecycle …
  25. 25. … although growth depends on the rightfoundation …
  26. 26. The case for application retirement using dataarchiving and records management PLAN Preserve access to the data for compliance and reporting The complete RUN applications Reduce the amount of historical lifecycle data and control application growth rate DELIVER RETIRE Merge and consolidate redundant systems
  27. 27. Retiring application data … Typically a result of acquisition: Duplicate systems that have no user population but cannot be retired Large applications with old transaction history growing up to 5%/ month Merge APPLICATION 2 APPLICATION 1 (from acquisition) Extract records that Archive regularly to are beyond keep growth retention point balance •  Remove historical data that’s beyond required retention period before pushing records into the new system •  Build regular archiving practices to keep application growth in balance •  Archive up to double the rate of growth
  28. 28. … and retiring an entire application If the application is outdated, not being used to support a current business process and its data is not growing by any significant means Retired Application SRMD Extract records into Structured records a database Application shut down preserved for audit and complianceRemove the need to support obsolete systems (up to 20% annual savings)Free up 50-90% of IT personnel and redirect them to more strategic projects
  29. 29. Using WARP 1 to validate the Retirement hypothesis ENGINE AMBI •  Application Context, or ‘ambiance’ STREAM PATH •  Vision, Architecture and Solutions STREAM BIZZ •  Business Analysis STREAM CASE •  Business Case, Financial and Value STREAM PLAN •  Change Scenario’s and Roadmap ENGINE APPS •  Application Portfolio PLOT SCAN CRAFT SOLVE
  30. 30. Discovery & Dependency Mapping : know yourassets ...
  31. 31. Project & portfolio management: understand yourassets ...
  32. 32. Best Practices & Conclusions •  Be BOLD in your hypotheses •  Trust but Verify: no improvement without deep insight •  Business alignment is key, not the Heat Map •  Retirement skills are sadly underrated •  Apply true Landscape and Lifecycle perspectives •  Remember how Haussmann did it…
  33. 33. Come visit the Capgemini Booth right after this session forseveral exciting events:
  34. 34. Didier Grimaldi Didier GrimaldiApplication Lifecycle Services Application Lifecycle ServicesCapgemini Spain Capgemini SpainTel : +34 91 732 8461 Tél : +34 91 732 8461Mob : +34 609 720 440 Mob : +34 609 720 didier.grimaldi@capgemini.comRon TolidoApplication Lifecycle ServicesCapgeminiTel : +31 6 54 360