Application Management for Executives
This master class was delivered by Andy Kyte, (Gartner Fellow and SVP) to an audience of CxOs and senior IT people, and I was immediately struck by his almost counter-intuitive thinking, as well as the pivotal role played by Enterprise Architecture, managing applications in today’s business environments.
Below are some key highlights from the event:
- Many organisations are unrepentant project junkies – project based application acquisition / delivery are often limited to the scope of the project, instead of the portfolio, and therein lies the origin of application slums, ghettos and shanty towns (i.e. no planning) that can be found within many organisations
- Pace layering – Different applications move at different speeds for persistence and cost, e.g. Systems of Record (low velocity / most expensive), Systems of Differentiation (medium velocity / less expensive), Systems of Innovation (high velocity, least expensive)
- Business vs. IT – In the war between Business Services and IT Services, the former usually wins, hence the uptake in BPO and Software-as-a-Service propositions
- Application Sourcing Options – Applications that need to be customised are the road to pain for organisations, according to Andy,” it’s like buying a dog and barking yourself!”
- Assets vs. Liability – An application is both an asset (albeit not handled very well by current accounting practices) and a liability, especially when you consider the stack that sits beneath each application (e.g. software / hardware / data / support / training needs etc.)
- TCO Research – The go-live cost of an application constitutes a mere fraction of its TCO over 15 years. Don’t be fooled by the overly optimistic project estimates for TCO.
- Functionality vs. Behaviour – Functional Requirements are less important than Non-Functional Requirements (e.g. maintainability / changeability etc). The non-functional requirements actually help deliver flexibility and agility, whereas functionality needs are certain to change over time
- 3 Critical Application Attributes – Over a period of time, the costs and risks associated with an application increases whilst agility decreases. To address these we must:
- Ensure good application governance –i.e. done by the stakeholders, for the stakeholders, in conjunction with the Enterprise Architects (aka city planners)
- Introduce executive application portfolio management – CxOs need to know what their applications cost
- Have the ability to make sound decisions to buy, sell, or hold on to existing applications
- Forget application roadmaps, but embrace Options (typically 4 options are optimal for real stakeholder engagement)
The key recommendations are to: review the application portfolio regularly, and always bear in mind that project success does not equate to portfolio success. Overall verdict: another excellent, insightful and value added BCS event, delivered by a true expert, within the chambers of UK’s House of Parliament.