Reducing RTB Costs: The Modern Day CIO Challenge
IT enablement of business processes over the last decade has resulted in enterprises maintaining bloated portfolios with silos, overlaps, redundancies, and complex integrations costing an enormous amount of money. In today’s world of rapidly changing and evolving business scenarios, CIOs with squeezed IT budgets are figuring out ways to reduce costs by optimizing existing resources to support business transformation and growth.
Portfolio Assessment & Rationalization is an approach for examining portfolios and determining its complexity and health. It re-organizes portfolios, aligning them with up to date business strategy and help organizations derives more business value with reduced maintenance and Run The Business (RTB) costs. This gives CIOs a top down analytical view of the application landscape, provides insights into the portfolio and enables better decision making for strategic investments, functional and/or technical consolidations, migrations, and retiring applications.
A typical assessment of an IT Portfolio involves:
- Define the nature of applications to be included for assessment
- Prepare questionnaire for interviews with stakeholders
- Collect data inventory
- Current State Analysis
- Dimensional Scoring
Portfolio Analysis helps CIOs understand different aspects of the portfolio including technology profiling, business criticality, cost distribution, usage, overlaps, etc. Dimensional Scoring evaluates applications against various dimensions such as business and technology, which are then combined with financial and risks qualities to provide a complete health analysis of the portfolio. Analysis dashboards and matrices enable CIOs to take corrective actions through the identified rationalization opportunities, which could fall into any of the following categories:
- Functional/Technology Consolidation
- Cloud Enablement (Hardware Rationalization)
- COTS Migration
- Productization Opportunities (Possible SaaS offering within the enterprise/LOB)
Business case, cost benefit analysis of the rationalization opportunities is performed to better understand potential savings that could be achieved over a period of time from a few months to quarters. A short, medium, and long term implementation roadmap explaining how opportunities would be realized is prepared, highlighting savings in the RTB at each stage. Every penny saved through portfolio overhauling can help CIOs increase the ‘Change the Business Budget’ and invest the savings more on strategically.
Enterprise Architecture Practice at Persistent Systems have designed an RPM (Rationalize Productize and Monetize) offering to restructure the IT Portfolio capable of being reused across the enterprise to unlock the value by monetizing suitable applications and solutions outside the enterprise.