New research conducted on behalf of HP reveals that 1 out of every 2 business executives feel their organization is suffering from innovation gridlock. See “HP Research: Breaking the IT Innovation Gridlock,” Coleman Parkes Research Ltd., April 2010.
- Organizations feel blocked from driving new business innovation because the majority of their IT funding is consumed in operating and maintaining the current environment.
- In addition, almost 60 percent of business and technology executives feel that this gridlock is preventing their organizations from keeping up with the competition.
The inability to respond to such a widely recognized problem can be traced to a number of issues.
- Primary among these is economics. With limited budgets IT organizations are fighting to keep the wheels on - and this is where the majority of resources are spent. Spending on new projects is roughly one-third of the IT budget. Two-thirds is devoted to ongoing operations and maintenance. [See Forrester's "A Workable Application Modernization Framework is Job No. 1 Now", Phil Murphy, April 26, 2010).
- A major secondary issue is application portfolio understanding. What do we have, how does it support our critical business processes, and how much is redundant or grossly inefficient? If we decide to eliminate or replace a particular system, what are the ripple effects? Insight into these relations can be hard to come by and difficult to reason about.
- We have all had experience with failed IT projects. The numbers are daunting. Various studies have shown remarkable rates of failure or impairment, with reported success rates as low as 16%. A more moderate report, "IT Myth 5: Most IT projects fail" (August 13, 2004), states that in a study of 13,522 projects in 2003, 34% were an unqualified success, 15% failed, and the rest were "challenged" - which includes cost overruns, time overruns, and incomplete functionality. If we have a working system, even if it seems overly expensive to run or it is lacking in agility, we have an instinctive understanding that the risk of replacement can be sizable.
There are answers for all of these issues.
Improvement in the distribution of resources requires the inauguration of a virtuous cycle, where we identify initial projects with relatively rapid ROI, execute them, and then use the savings to fund further work.
Capturing a model of the portfolio is a crucial element of any long term improvement. As I have noted before, shutting systems off is one rapid road to savings. But without a reasonable model of business / application dependencies, the potential for unexpected consequences often leads to paralysis. HP can help you create these models and roadmaps.
One way to eliminate failure is to take on projects that are similar to ones we have previously completed successfully. This is where the combined experience of our modernization specialists and your application subject matter experts is so important. Having both team members experienced in modernization issues across a wide variety of systems as well as deep application experience significantly reduces the risks of selecting an improper modernization approach or failing to execute the modernization journey.
I know I'm probably the millionth person to use that line in the context of data center modernization. But who doesn’t love Kermit?
A copy of Newsweek showed up this week with a cover story providing an environmental ranking of America's 500 largest corporations. Much to my pleasure, HP was ranked first!
We get a lot of credit for our strong programs to reduce green house gas (GHG) emissions. HP was "the first major IT company to report GHG emissions associated with its supply chain".
But what does Application Modernization have to do with being green? An enormous amount of effort is currently being expended to improve energy efficiency in data centers using techniques that include server consolidation, increased virtualization, and more effective infrastructure design. Part of this involves shutting down older hardware, conditional on a reasonable ROI. If we simply upgrade existing vendor systems the software side of this is straightforward, aside from potential problems with version compatibility. However, there may be cases where a platform change is the best option, for any of a number of the standard application or infrastructure modernization reasons. In that case, you will need to figure out what to do with the applications.
We have our standard approaches to moving apps onto more modern platforms: rehost, rearchitect and replace. In the case where the migration is initiated by a concern over energy optimization, perhaps we need a new category: re-energize, re-power, ... (I'm looking for ideas here, readers). In the extreme case we would consider energy use as part of application modernization and algorithmic efficiency would translate to greener applications. Of course this is done now for many imbedded devices. Googling ‘energy efficient algorithms’ gets nearly two million hits with the first couple of pages devoted to mobile devices and sensor networks.
Getting to this level of detail for normal application development is probably overkill. That being said, an enterprise modernization is a very green effort. It will merge duplicative systems and eliminate redundant ones, thus reducing application count (requiring fewer MIPS and less energy). The new systems will run many applications in virtual containers, reducing server count and increasing utilization of the remaining servers. These servers will be significantly more efficient that those they replace and their management overhead will be subject to increased leverage resulting in few cars in the parking lot per application.
So get to work cleaning up those apps and make the world a greener place!
Modernization can be approached on an application by application basis and it frequently is. This is sub-optimal, but understandable. Individual applications frequently betray their inadequacies in a direct fashion - users complain, maintenance issues are visible, and costs are more easily associated with a single application.
However it would be unfortunate to spend time and resources rewriting an application only to find that the company is in the process of installing an SAP material management module that renders the app redundant. Or to find that other divisions are running five very similar programs, all of which should be collapsed into a single best-of-breed instance.
A larger scale evaluation of the enterprise software portfolio can identify such redundancies. In addition, this kind of broad analysis can spot opportunities for the deployment of shared services across the organization. In a previous blog I wrote about the notion of identifying portions of an application that can be replaced by COTS. The opportunities for increased agility and decreased costs only increase when this evaluation extends across multiple applications. And rather than deploying one instance of a particular COTS product per application, you can determine whether a single instance providing a shared service for many applications would be a better solution.
HP provides a service to support this kind of broad evaluation of sets of applications, Application Portfolio Rationalization. Of course we do much more than identify COTS replacement opportunities. Our consultants produce a Modernization Roadmap that identifies a wide range of opportunities for improvement and lay out the path to implementing such changes in a coordinated fashion.
A natural accompaniment to an Application Rationalization is an infrastructure rationalization driven by our Data Center Modernization Services. The same sort of opportunities for enterprise wide savings present themselves and the two activities are mutually supportive. Part of your Roadmap will often depend on infrastructure changes to support re-engineered applications.
We will delve more deeply into Applications Rationalization in a later post.