CSC Smart Business UK Edition April - Edge ahead
Applications drive business performance
Industry estimates suggest that more than half of all application development and support budgets are spent maintaining existing application software.
That is fine, of course, if those applications are aligned and delivering on the company's strategy for growth. However, all too often they are not and companies are wasting budget running and maintaining a legacy environment which is under-performing. The reasons can be complex and difficult to manage. Competing demands and unplanned events shape the evolution of an organisation's application portfolio and all too often they come at short notice. For example, mergers, acquisitions and divestitures all dynamically create new companies with a patchwork of legacy systems. Business units looking for a quick fix or to gain a brief competitive advantage are given to purchase applications and then look to IT to implement and manage them often without first considering the impact on the underlying IT architecture, interoperability of the systems and the maintenance costs.
With so many disparate systems having evolved there is a real danger that a company's software suites are incompatible and not fit for purpose. This can affect productivity, because processes have to be manually supported, work is often duplicated and data is seemingly never quite in the right place to answer the question of the moment, preventing a company from collating and analysing data across its departments and markets and then acting on conclusions quickly.
Hence Mike Williams, VP Applications at CSC, says many clients are asking how they can transform their applications landscape by reducing the large costs of maintaining legacy systems, freeing up investment for a planned applications portfolio that offers a 360 degree view of the business, its customers and the market.
This has prompted CSC to launch its new application modernisation framework, FuturEdge. The framework which draws on CSC's best practice experiences with its long time clients and alliance partners across multiple industries helps clients transform their portfolio of applications. The aim is to better enable CIOs to meet the challenges of delivering an optimised applications portfolio which is aligned to the board's strategy for growth.
Williams believes that to rise to this challenge, organisations need to face up to the harsh reality that supporting legacy systems is not only expensive; it could be holding them back from growing too.
"CEOs are always challenging CIOs to do better with less" he says. "They expect CIOs to deliver on business objectives, improve agility, leverage mobility, guarantee security and drive operational improvements, yet in reality the CIO has limited options when as much as 70% of their budget is being spent on maintaining the legacy systems. The good news is that with our FuturEdge modernisation framework along with our deep industry expertise and industrialised global delivery capability we can help CIOs make these things happen."
Emphasising the need for deep knowledge of the clients along with a close partnership when modernising their applications portfolio, Williams recommends an iterative lifecycle approach where the focus is on strategic alignment and rapid return on investment providing clients with distinct shape, transform and manage expertise for their applications portfolio, "What's neat about the FuturEdge framework is that because of its modular design, clients can choose whether to run through an end to end engagement, focus on strategy alignment, dive straight in to a specific transformation treatment or move an existing piece of the portfolio over to a managed service. This flexibility allows clients to choose to deal with the burning issues of today before addressing the strategic needs of tomorrow by adopting the full benefits of FuturEdge."
Savings and innovation
Williams estimates that by adopting a FuturEdge approach to modernisation companies could achieve IT budget savings from 20% to 60% whilst enjoying greater productivity from a suite of software applications both better suited to the business' current needs and with the agility to respond to tomorrow's business challenges.
"We can look at three dimensions of value with our clients," he explains. "First the alignment of applications investment with the differentiation that comes from the business processes they support, second the pragmatic use of innovation in areas such as cloud and mobility to optimise the service mix of crafted, industrialised and on demand solutions, and third the optimisation of performance in nine operational areas ranging from data quality to service reliability and cost management."
Realising client benefits
There are several logical steps to delivering client benefits Williams explains, "We map target applications to a unique target ‘landing zone' for each client, identifying which applications best support the client with differentiation, control, choice and agility," he says. "Then we use statistical analysis to help prioritise the transformation and build the business cases and finally apply portfolio life-cycle governance to realise the improvements. We are looking for areas where we can achieve rapid return on investment, driving down the operating costs and freeing up budget for investment in the next cycle of innovation projects. The goal of the programme should be to self-fund the improvement cycle providing more value for less cost."
Williams believes there are opportunities across the portfolio and cites some examples. "In Supply Chain and Finance for example there are opportunities to simplify the architecture and bring the Enterprise Resource Planning (ERP) system back to a standard build, leverage managed services and use different consumption models like output and outcome based pricing. Around the fringes of the ERP in the areas of customer relationship management or Partner Relationship Management and in the productivity areas such as e-mail and collaboration. As a Service offerings are becoming well established and introducing our clients to utility-based consumption models.
Even in the business areas where custom applications are enabling business differentiation of supporting critical operations, there are still often opportunities to consider updating outmoded programming languages. These include leveraging private cloud based Platform as a Service solutions and multi-tenant delivery formats for shared applications. Increasingly clients will look to niche Software as a Service and Business Process as a Service solutions to provide cloud-based agility solutions which can be selected, integrated, used and then swapped out for a better aligned solution in real time."
So, organisations can save a lot of money replacing expensive legacy systems with new applications. However they need help not only to imagine what can be achieved but also to successfully complete both the business and the technology transformation required through each phase of the FuturEdge shape, transform and manage life-cycle.
Business engagement is a critical and often forgotten piece in solving the modernisation puzzle Williams concludes, "A purely technology led transformation rarely delivers on its promises or realises its full potential. It's critical that the applications portfolio is business owned and the modernisation agenda business led, that the key business stakeholders are fully engaged throughout, and that the business users are expertly trained and can see how the modernised applications portfolio is supporting them in doing their jobs. We are looking for full-bodied adoption end-to-end across our client's application portfolio."
For more information on FuturEdge: Please visit www.csc.com/futuredge
Learn more about CSC’s work in: FuturEdge