TIDES-006: Technology Post - The importance of Application Rationalization and System Retirement - Part-1

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Why is Application Archival or System Rationalization Important?

For us, the real goal is to make it so that the software ecosystem is as healthy as possible. - James Gosling - Inventor/Creator of Java Programming Language

Think about the following tidbits

• Legacy systems can cost any organization up to a 15% budget increase every year for maintenance and in some cases, it can far outweigh the benefits delivered?
• $337 Million a year! - That is the Cost of maintaining TEN of the US Government's key legacy systems to operate and maintain. This could be due to a large codebase and complex functionality, lack of available talent, heavy dependency. This makes the organizations need more financial and technical resources just to keep the lights on. Modernization is a complex exercise for these organizations

• What is mind-boggling in the list mentioned above is that some of the systems are more than 50 years old and some have an outdated infrastructure.

In software engineering, we have the term 'technical debt.' When you don't do a job correctly, unaddressed problems become harder and harder to solve. – Brianna Wu (Video Game Programmer)

• It is also said that in 2015, The US Navy has agreed to pay Microsoft at least $9m to help secure computers running Windows XP after it failed to replace the aged OS before support ended. Having a Technical Debt and the need to support an End-of-Life / End-Of-Support system can be very costly.
• Taking up the preceding point, In Nov 2015, A computer glitch in a Windows 3.11 based system brought Paris Orly Airport to a standstill. Points to remember - Window 3.1 launched in 1992, the Retail version was unsupported in Nov 2001, and Windows 3.11 WFW support stopped in Nov 2008. Having a mission-critical system running outdated software is very dangerous indeed!
• WannaCry ransomware attack in May 2017 revealed the vulnerability of outdated systems with no support (EOL/EOS). More than 300,000 machines operating on Windows XP, Windows 8, and Server 2003 were affected across 150 countries due to a lack of security updates!

One of the biggest problems that software developers face is that technology changes rapidly. It is very hard to stay current – Vivek Wadhwa (Late Stanford Prof.)

• The United States also faced a Northeast regional blackout - A programming error and volume / performance issue is identified as the cause of alarm failures and blackout. The root cause reason: The failures occurred when multiple systems trying to access the same information at once got the equivalent of busy signals - Volume Handling Issues!

Indeed, the woes of Software Engineering are not due to lack of tools, or proper management, but largely due to lack of sufficient technical competence. – Niklaus Wirth (Designer of PASCAL programming Language)

As per an article by ModLogix, about $26.25 Trillion (Bigger than many big countries' overall GDP) was spent on Application maintenance - close to 70% of the overall IT Budget - Since 2010.

• Studies by industry trade groups show that Fortune 1000 companies, the spending of 70% for the status quo
• Years of unbridled growth in the application landscape would result in bloating and would need a rationalization plan
• The need to act and retake control of the application landscape is predominant is more important than ever now!

All of these happened in spite of the phenomenal growth in computing power, memory, processing capability, and infrastructure. The need for bigger, better, and more efficient systems is growing at a rapid pace, and the need to have a well-run business-critical system is always getting more complex than ever!

What is Application Rationalization?

Mostly, Application Rationalization is often identified as the solution. Rationalization can take many forms, including the retirement of applications. Application retirement is often identified as one of the most beneficial rationalization actions.

There could be many reasons for System/Application Rationalization

• ?Mergers & Acquisitions Duplications Companies merging may have duplicate applications for the same functions (such as HR, Finance, Procurement, etc.)
• Business Function Closure / Divestiture A part of the function or full business may get terminated or pivoted fully.?
• App Modernization Legacy applications getting replaced with modern apps such as packages, cloud-based SaaS Services, etc.?
• Application Rationalization Business Process Reengineering / Hyper Automation / Workflow Improvements / Application Consolidation

System Rationalization Help address the following challenges?

• Address Business Risks
• Rising Costs
• Compliance Risks / Challenges
• Need to Innovate
• Improve Customer Experience / User Experience
• Better Business Intelligence based executive decisions

Statistically, a key business event that can reduce the operational cost of IT organizations is APPLICATION RETIREMENT. It also helps towards Significant Cost Savings, Waste removal and better employee engagement, Efficient Resource Utilization. Management can leverage the savings for - Strategic Value-adding Initiatives, Investing in Advanced and Futuristic Technology enablement, Innovation focused technology stack, Developing systems that address Technical Debt and Productivity and focus on operational efficiency

Application Rationalization Methodology

Need of Application Rationalization is crucial for any organization to identify those applications that are suitable for consolidation, replacement, or decommissioning through an Application Retirement Methodology.

• Application Consolidation ==> Removing obsolete applications and augmenting more-relevant applications to cover any functionality gap caused by removing the obsolete application also ensuring replication of existing functionality.
• Application Replacement ==> Aims to improve the application landscape by identifying and replacing old applications by augmenting the functionalities of other existing applications in the landscape
• Application Decommissioning ==> Complete removal of applications found to be obsolete and serving no useful purpose, as-well whose removal does not impact the overall functionality of the enterprise

Some of the key activities include

Planning of Retirement Activities

• System Retirement Plan Creation/Review/Approvals ? System Inventory updates (in CMDB and other tools) ? Application Lifecycle Management Updates ? Notification to stakeholders & approvals ? Type of retirement / data archival / data retention & legal hold/ purge / maintenance needs and security planning ? Business Continuity Plans / Approaches

Execution of Retirement Activities

• Execute the activities as per System Retirement Plans ? Data archival and migration activities ? Deactivation and cancellation of contracts/licenses / service agreements/access etc ? Decommission of hardware infrastructure ? Deletion of data / de-installation of system components

Completion of Retirement Activities

• Application archival / migration / legal-hold data verification ? Get stakeholder approvals ? Update System Retirement reports

The Approach may be unique and varying across enterprises depending on the application landscape, technology stack, release methodology, regulatory compliance needs, and in some cases business alignment as well.

Application evaluation and scoring

It is advisable to come up with a questionnaire and a scoring sheet and rank the applications to decide the next course of action. It could be based on business/application value and technology fit, cost, and complexity of apps. Some methods for evaluation and scoring include

• GARTNER’s TIME METHODOLOGY - - Use TIME to Engage the Business for Application and Product Portfolio Triage
• CIO.GOV’s The application matrix

Based on the scoring and decision, one can use a varied velocity approach suiting the business needs and have an "Application Rationalization Roadmap" that can be unique per organization – depending on landscape and business priorities along with associated risks.

Short Term – Implement Quick Wins

• Focus on the retirement of “low-value” / “low impact” applications for quick win implementation

Mid-Term – Consolidation of Apps

• Consolidate multiple apps into one application or version for simplicity?

Long Term – Strategic Enhancements

• Full technology re-write / rearchitecture for relevance

Now let us check on another important aspect - Data. This we shall cover in the next post!

We're entering a new world in which data may be more important than software.

Tim O’Reilly

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