Last week IT Business Edge colleague Loraine Lawson wrote a terrific post, titled "How Enterprise Architecture Heads off Integration Problems," in which she shared some thoughts from enterprise architect and noted smart guy Todd Biske, who made a compelling case that portfolio management should be a central tenet of good enterprise architecture. He wrote:
Portfolio management isn't a one time application rationalization effort, it's an ongoing discipline that must be integrated into the decision making process for what activities (projects) take place. ... If we do an effective job of this, we better understand the boundaries and dependencies between the capabilities that need to be provided. By better understanding these, the task of integration becomes easier, because it's a forethought rather than an afterthought.
Why Enterprise App Portfolios Get Bloated
Learn more about Forrester's research into application lifecycles - and how to fix them.
I'd argue that nonexistent or sloppy portfolio management practices make it nearly impossible to get a big-picture view of your enterprise architecture. And without that big-picture view, how can you ever be strategic in your future plans for growth?
Still, application portfolios full of redundant, outdated or otherwise unnecessary software are a common problem. And they cost companies real money, as I wrote a few months ago, citing a survey that put the annual costs for some companies as high as $2.8 million.
Does that seem high? If anything, I think it might be a little low, considering that companies with lots of applications also tend to have more technical platforms, more data models, more fixes and upgrades, greater fragmentation of expertise and more duplication of work - all of which reduce agility and increase IT costs.
It's a problem the Veterans Affairs Department is poised to address, according to a Federal News Radio story. It won't be easy. The story's primary source is Roger Baker, the VA's assistant secretary for information and technology and CIO, who says there are more than 64,000 software packages in use across the department. Yes, 64,000.
As a first step, Paul Tibbits, VA's deputy CIO, is developing a technical reference model (TRM), which will attempt to standardize hardware and software versions across the agency. According to Baker, printing out a list of the 64,000 software packages was an interesting exercise that revealed many, many instances of software with only a single copy. Baker estimates the VA should reduce the 64,000 packages to 1,000 or fewer.
The VA must cut costs as its IT budget will likely drop by nearly $700 million in fiscal 2012, to $3.16 billion. Baker mentions one opportunity for cost savings will be migrating little-used applications to the cloud. The story quotes him:
When you start thinking about closing down an application, the first thing you will ask is "Is there a cloud app for that? Can we provide access to some cloud app that 10 people need instead of VA running a particular application?" I think we will start factoring that in and take our low priority applications and look for something in the cloud.
Not a bad idea. But can organizations take more proactive action to avoid bloated application portfolios?
I shared some good, common-sense advice for streamlining application portfolios in a post from last September: When introducing a new asset, be sure to consider retiring any existing ones it might replace and create a plan for doing so. Perform regular inventories of assets, which will not only help target ones that can be eliminated, but may yield other savings opportunities such as reducing the number of software licenses.
I also shared a tip I liked from Steve O'Donnell's The Hot Aisle blog. He said all IT systems should have two owners, one from business and one from IT. (I mentioned the list owners, just like asset inventories, should be kept current and reflect any changes in business roles. If folks leave, are promoted or otherwise switch jobs, new owners must be appointed.) The business owner must be willing to pay the running costs, and the technology owner carries the responsibility of delivering the service, O'Donnell wrote. And, he said:
Just by cataloguing your IT systems and switching off those that don't have owners (of either type) you will reduce costs and improve reliability.
Given the internal politics that will come into play when telling some folks you are taking away their favorite apps, it might be a good idea to enlist a consultant, vendor or other outsider to assist with application consolidation efforts.