APPLICATION PORTFOLIO OPTIMIZATION
The Situation Today
The desire to stay ahead of the competition drives companies to offer new services to customers, and the pressure on price compels them to look for ways to reduce operational costs. Information Technology (IT) departments in companies constantly look for new applications to address those business needs. As businesses evolve dynamically, applications are added to cater to newer requirements, and over time, the company finds itself saddled with a number of disparate applications. It is estimated that organizations that have been in business for just about a decade are likely to have hundreds of legacy applications and spend more than 75% of their IT budget on maintaining them.
One of the goals of Application Portfolio Management (APM) is to align IT with evolving business initiatives.
How HCL Can Help
HCL’s PrizmTM is a hosted Web-based APM tool that creates an inventory of enterprise IT assets based on their number, type and health attributes. Prizm’s in-built financial modeling capabilities facilitate sophisticated Total Cost of Operations (TCO) and ROI analysis of each application in the portfolio for making informed portfolio optimization decisions. Using Prizm, IT departments can maximize the business value of their applications portfolio.
Prizm’s approach to APM focuses on IT objects comprising applications, databases, servers, and the like. IT objects are judged based on their intrinsic characteristics and non-functional attributes, such as scalability and business value.
- Reduced Time for Asset Discovery: Prizm imports information, if available, from excel sheets, CMDB and ITSM solutions to quickly create a baseline. The subsequent capture of information is incremental, and Prizm automates this by linking with the change management process. Making use of available information reduces the time and effort in creating the asset inventory. Inventory creation in Prizm combines automated information gathering with a template-based manual approach. Templates that capture Business Criticality, Technology Complexity, Level of Integration and Complexity of Maintenance can be dynamically created.
- Dependency Mapping: Prizm generates interface diagrams that show inter-dependencies among applications, dependencies on servers, databases, external entities and the like. Knowledge of dependencies helps in understanding the impact of enhancing, migrating or decommissioning applications.
- Business Function to Application Mapping: Prizm captures functional needs and maps them to applications to identify the Functional Quality (FQ) for each application. Duplicated functions are highlighted in the process. This facilitates the decision-making for portfolio rationalization by identifying those applications that need to be retained and those that may be merged or retired, when the enterprise migrates to a standardized application environment.
- Business Process to Asset-level Drill Down: Users can drill down from process to asset level and thereby are equipped to perform end-to-end portfolio health monitoring. Prizm makes it possible to drill down business processes to associated assets such as applications, servers or databases. The enhanced visibility empowers business and IT alike by discovering the correct areas for improvement and attention.
- Portfolio Cost Management: A cluster analysis feature provides a flexible and dynamic breakup of cost based on Business Unit, IT Organization structure, Type of Technology, Location, IT Manager, and the like. IT departments can get a clear picture of support and maintenance cost, enhancement cost, cost of licenses, and so on, to identify the specific cost centers that need attention.
- Asset Lifecycle Management: Prizm integrates with industry-standard Project Portfolio Management (PPM) solutions such as HP-PPM and CA’s Clarity through their Web-services. This feature facilitates end-to-end asset lifecycle management by enabling IT departments to act on identified changes by initiating a change request for evaluation and approval.
What You Can Expect
Companies spend a majority of their IT budget on application maintenance. APM gives them the insight into which applications are providing value, and which ones are expenditure black holes. Therefore, APM tools should be flexible enough to capture the complexity of business and map the maintenance cost of each application to its return.
Prizm has been used by the world’s leading non-asset based supply chain and solutions provider, to identify redundant applications in their portfolio. The supply chain provider was able to optimize its application portfolio by 60% resulting in a reduction in maintenance cost by 20%. Another HCL customer, a large media house in the U.S., used Prizm to discover a 40% reduction in its applications portfolio.
In today’s scenario, most businesses are expanding their operations, either organically or inorganically, through mergers and acquisitions. As the application landscape gets more complex, using the right APM tool, to understand and rationalize the cost of application maintenance in the enterprise could well be the key to survival.