Standish Group has recently issued a report describing the risk of failure of major IT projects, citing the dangers of rewriting core business applications or replacing them with generic packages. In 2011, there were well-documented ERP and other software project horror stories, including the RIM and Amazon outages, highlighting the challenges and business-critical nature of having the right IT infrastructure in place.
As 2012 progresses and the ramifications of the new economic world in 2012 become clear, it is important to look back and learn from the mistakes made in 2011. Gartner predicts in its recent Forecast Alert that IT spend will decline to 3.7 percent in 2012, the challenge for CIOs remains to implement software projects that demonstrate value, return on investment and provide guarantees of future success.
I argue that modernisation is the key, assessing existing IT infrastructure and re-using as much as possible as you modernise applications and systems. 2012 is the year of modernisation and re-use for core business systems technology. Grand plans to totally overhaul IT operations using major ERP implementations or massive system rewrites come with significant risk. Improving overall operational efficiency and supporting new business initiatives is really IT’s raison d’etre.
But businesses need to be careful not to introduce risk or unknown cost into the operation. There has never been a worse time to take uncalculated business risks – major organisations are guarding against unnecessary risk-taking. Modernisation is paramount.
By helping organizations re-use what they already have – proven and valuable IT assets – the modernisation approach removes risk from IT change, enabling improvements in operational efficiency, time to market and business alignment. Here are 4 practical tips on how to approach this:
1. Look at the entire IT application landscape and determine key metrics around cost, value, complexity and risk. If the IT department has the ability to understand its current application portfolio, the business can be confident the strategy for modernisation proposed by the IT team is accurate.
2. Once the application portfolio has been mapped, review which applications can be exploited to provide additional future value. All applications should be plotted onto a Business Value versus Operational Cost chart. This will prioritise which applications should be modernized. The applications with the highest business value and highest cost have the highest impact and could provide the best business cases. These applications should be first to be modernised because the cost of these applications must be reduced.
3. Determine the appropriate supporting technology to modernise your chosen application subset(s). The use of technology will be driven by the issues discovered during your application portfolio assessment and the modernisation activities proposed.
- Taking development off the mainframe and onto Windows, for example, can dramatically expand CPU capacity for each developer, eliminating resource contention and improving delivery times.
- Moving application testing off the mainframe can break down capacity barriers, helping developers meet schedules on time and in budget.
- Moving application workload deployment off the mainframe onto a lower-cost platform can provide very rapid cost savings in terms of mainframe MIPS or software costs, as well as provide much-needed flexibility for the remainder of the mainframe environment.
4. Review and revisit your list of modernisation priorities in a regular cycle. As you change elements of your estate, revisiting the portfolio assessment and re-measuring key metrics will be an important facet of IT’s continuous improvement.
Cost savings and improvements in capacity through modernization will free up time and resources for IT innovations, such as meeting new mobile demands and giving customers or employees the ability to access business applications via the latest smartphone or tablet consumer device. Ultimately, modernising IT systems are helping many businesses worldwide, including household names like Bentley and Tesco, maintain their competitive edge.