The way in which IT departments operate has changed out of all recognition over the last 20 years. Back in those less-enlightened times, the IT department was often a dusty room, kept out of the way of the rest of the staff; a black box into which money was poured. Times have changed – they’ve had to.
Back then the IT department wasn’t seen as having a key role in a business – nor was it adding value. The first signs of change came during the run up to the year 2000, and all the changes that entailed. It was around this time that Chief Information Officers (CIO) discovered the complexities of their applications. All of a sudden, CEOs were switched onto the fact that investing in IT departments could lead to a healthier bottom line at the end of the financial year, and a revolution in enterprise architecture was unleashed.
The challenge ahead
What drives change in this fast moving sector? According to leading IT professionals, the top priorities facing CIOs today include:
- Improving collaboration (internally as well as across the supply chain)
- Prepping for the post-PC era mobile computing environment
- Improving business and IT alignment
- Harnessing “BIG Data”
- Preparing for the cloud
- Shifting away from maintaining IT into supporting growth initiatives
This last point is vital during times of economic strife. Traditionally, the IT team does not have the command of every part of a business. It may want to help to fulfil a role, but that has, in the past, been the end of the story. In the days of IT outsourcing, an IT department, more than ever, needs to justify its costs.
Following recent briefings with leading analyst Gartner, many organisations today report that they are ill-equipped to successfully tackle these priorities. It is clear that many CIOs still have issues with:
- Gaining the support they need from high-level management
- Providing transparency to the business, and demonstrating the business value of IT
- Streamlining IT operations to do more with less, given tighter budgets
- Having limited line of sight into their applications, as well as the rest of their IT and business “ecosystem”
- To make consistent dozens of systems of records, which often means having no “single source of truth”
All of this adds up to an unholy mess, which means a business lacks meaningful or accurate data, as well as the ability to collect this data in an efficient manner. Ultimately, this stops the organisation from being agile and cost-effective. It increases risk and doesn’t allow IT to respond rapidly to ever-shifting business goals, which occur due to fluid market and economic conditions. Furthermore, lack of accurate data can be disastrous for a company and can lead to the inability to make informed decisions. Quite simply, your company won’t be optimised.
Application Portfolio Management (APM) is a solution which gives decision-makers better control of their application portfolios, enables technology rationalisation and aligns IT infrastructure with organisational needs. It is not uncommon to find businesses or organisations which have more than one system to carry out the same function.
There are various reasons for this duplication, including the rather antiquated function of departmental computing, application silos of the 1970s and 80s, an increase in corporate mergers and acquisitions, and stuttering attempts to adopt new technology. In what amounts to a huge waste of time and money, each application is separately maintained and upgraded, increasingly the likelihood of an ever more muddled system which can hike cost.
APM is nothing new; it was around in the 1990s, but the challenges faced by IT professionals in the run up to the Millennium advanced its usefulness beyond all recognition. CEOs and CIOs identified that it could add real value to their business by identifying how many applications they were using, and how to streamline them.
During the early part of the 2000s the financial services sector was under pressure to modernise and become more efficient. Quite naturally, it turned to APM. By doing this it stabilised the maintenance cost of its IT departments, where before Capex was being used for Opex and a full budget was being used just to keep systems running. APM stepped in to save the day.
What did these economic powerhouses recognise in APM to make the leap? They realised that APM could save them money by removing obsolete applications and technologies that simply weren’t needed. They also saw that efficiencies could be achieved by reducing the complexity of their IT supply chain to a standard set of technologies.
Transparency is key. The ability of all management to be able to access the current inventory of applications and resource consumption is of paramount importance and is where APM excels. APM also improves the transparency of changes made to IT systems, aligning the rest of the business to the IT department, who are then included in supporting the business’s goals.
Transparency also helps strategic planning efforts and negates any confusion or conflict that could arise when business rubs up against IT. It’s obvious to those now using APM, that when management can understand how applications aid the day-to-day running of their business, the agenda can move on from how to blame outdated IT functions, towards how best to sweat existing assets and channel precious funds.
Finally, and just as crucially, APM helped these financial institutions (as well as other organisations) understand where technology support was lacking across business functions and processes, whilst staying one step ahead of the game, by allowing them to solve business problems – even before the business realised the problem existed.
The way forward
Senior managers need to make quick decisions within their businesses and require reliable and accurate data in order to achieve this. An APM solution improves effective decision-making and leads to successful business planning, based on a better understanding of current circumstances. Removing obsolete applications and associated technologies will ultimately save our customers money.
My advice to those looking to best utilise APM is not to rush through the process, or its initial conclusions. APM is a very powerful tool, and CEOs and CIOs alike should take their time into looking at the potential – or lack thereof – of every single application within their business, thus creating the maximum value.
In 2012, it goes without saying that winning IT organisations must find ways to address the leading challenges that their CIOs and CEOs care about: improving their bottom lines. Specifically they must remove obsolete technologies, leverage existing assets, remove IT bottlenecks and support improved decision-making. In doing so, they will be well-positioned to be seen as a key partner to the business and be agile enough to address any changes in future business strategy and direction.