5 Lessons Learned from Modernizing a Global Application Portfolio

A friend who recently joined as a VP in a Fortune 500 Pharmaceutical company reached out to discuss about Transformation and Modernization of Global Application Portfolio he was tasked with.?I shared some of my lessons learned in this area as one of customers I worked with had 1000+ applications and know this is a common challenge in many organizations. After our discussion I decided to share the highlights in this article to help others in a similar journey.?

Application portfolio modernization will drive down total cost of ownership, reduce business and technology risk, and infuse agility into technology to more easily support new business strategies and initiatives when done well. But usually the organization is at a point where they are asking typical questions like - Where should we start? What should our strategy be? What can we show our business stakeholders (as quickly as possible)? The following lessons learned could help them get started in the right direction.?

Lesson 1: Build a strong Business Case

Developing the business case involves the following -?

1. Define end-to-end business and technology capabilities to support the mission, objectives, and strategies of the business.?

2. Assess the current state portfolio – determine the extent to which existing applications can support the business direction, and surfacing key gaps which must be addressed. Gain a deeper understanding of the portfolio, identify dependencies, current costs, and risks. ?

3. Analyze and Blueprint – include potential system consolidation, upgrade, retirement, and replacement options to drive new business value and agility and reduce total cost of ownership. Leverage new technologies such as cloud, big data, social and mobile and new delivery models such as SaaS, PaaS, and hybrid solutions to accelerate the deployment of new capabilities for the business.

4. Create a Road map – lay out the program in iterative waves of business value to accelerate time to market and keep tight alignment with the evolving business strategy. ?

5. Calculate the initial cost-benefit results – this serves as a baseline for the measurement of success. This would help project managers, sponsors and other stakeholders to measure, monitor and manage the value a program is creating against the original expectation. Net present value (NPV), Return on investment (ROI) and Internal rate of return (IRR) are common techniques to have a robust analysis in place.

Lesson 2: Assemble the right People, Strategy and Tools

1. People?

Acquire the right talent (in-house and in-sourced) comprised of architects, admins, developers and business analysts to understand user needs to create a cross-functional team. These teams can help in planning budget, staying on schedule, following specifications, meeting the expectations of their customers and remaining aligned with company strategy. The work requires a range of expertise from the team, and therefore choose the shared skills each team member must have to create a well-oiled machine.?

2. Strategy

Rank applications based on the business justification, level of modernization effort required and timing of potential impacts. For those seeking to reduce cost application rationalization, replatforming or retirement are often the ways to go. Those seeking to reduce cycle times need to learn how to enable ITaaS models and modernization using microservices and DevOps. This prioritized ranking from a clean single source of truth allows the team to begin strategic discussions on the path forward. Find key applications with lower risk and less complexity, while still maximizing benefits to the organization and stack them early in the modernization roadmap for quick wins.?

Use lean and agile methodologies, leveraging iterative feedback loops and frequent delivery to validate progress, move faster and produce higher quality, consistent outcomes.

3. Tools?

Application Portfolios are ever-changing and often include in-house custom apps, new apps added through acquisitions, or commercial off-the-shelf software. More than just a growing app landscape, IT teams also face an added layer of complexity when people move between teams or when coworkers leave the company, making it challenging to identify the primary app owner.

Work isn’t always visible and can’t easily be tied back to the strategy for the Project management office (PMO). Core to modern Project Portfolio Management (PPM) is embracing new ways of working and keeping the work aligned back to the portfolio. Prepare with the right Project Portfolio Management Solution for your PMO in place before the transformation journey. Capture team member allocations and capacity in your project portfolio management tools to better understand planned, estimated, and actual effort which translates into financial modeling.?

Lesson 3: Create a Playbook and refine it as you progress and learn

Adopt a Rapid Assessment Approach to get started Vs a detailed Application Portfolio Analysis Approach which could take a lot of time and lead to paralysis by analysis. Instead, by taking a Rapid Assessment Approach you can get started and update your playbook as you progress.?

Modernization approaches typically include tactics such as replacing, retiring, consolidating, or upgrading applications to better meet the needs of the business. Dispositioning an application portfolio against the various hybrid cloud modernization and migration journeys should and can be done quickly. Applications are assessed and assigned to a simple set of dispositions (Refactor, Containerize, Migrate, Leave As-Is) using a minimal number of inputs: operating system platform, programming language, bespoke vs. COTS vs. SaaS apps and mission-critical vs. non-mission-critical apps.

In defining the Rapid Assessment approach, it is helpful to look at the Distributed and Mainframe workloads separately. These platforms typically have different modernization drivers, SLAs and supporting technologies, driving a varying set of criteria for evaluating the portfolio.

Lesson 4: Identify Performance Baselines and KPIs to measure Outcomes.

Evaluate business-fit before you decide on what KPIs to track. Some example are - Application Technical Performance, Application Cost-Business Value, Applications by Business Capability, Application run cost broken down by Business Capability, Portfolio Complexity, Data Quality KPI are all useful KPIs to track. At minimum before and after snapshots should be taken to ensure business value is realized as a result of modernization.?

In addition to above, PMO performance metrics should be customized to provide specific data that helps the PMO explain how their activities bring value to the business, as well as how it is improving and where there may be opportunities for it to deliver even more value. Stakeholder-relevant project portfolio management KPIs, measured over time, provide hard evidence in the role the PMO plays in continually supporting strategic business priorities and helping in application portfolio modernization efforts.

Lesson 5: Sustain the Progress?

Use savings from successfully modernizing applications in the initial phase to make the program financially self-sustaining. The most successful application modernization programs are financially self-sustaining within the first 12-18 months of engagement. System consolidations and retirements generate savings which can be redeployed to upgrade and modernize next wave of system consolidation work. Innovative new technology capabilities enrich existing platforms.

It is imperative to continue application modernization endeavors to realize long-term value. Application modernization improves the overall effectiveness of IT by regularly ensuring that the IT landscape is actively aligning to business goals and objectives.

As in any journey, follow these three tenets for a successful journey which will make your business come back to you for more - enable quick wins, demonstrate business impact and build credibility with business stakeholders.

Thanks for reading and please leave a comment or share this article with your thoughts. I am trying to expand my network and would appreciate it very much if you send me an invite to connect or forward to someone you know would find this article useful.?