An eye-opening survey on enterprise software portfolios has just been released by Fujitsu Software. Indeed, for all those still committed to the idea that on-premise operations is the best, and possibly only, solution for large enterprises it gives some serious pointers to why the Cloud , and SaaS in particular is a far better option than they would believe.
Some of the survey’s findings prompted the following as the opening question in a briefing with Andrew Brabban, Fujitsu Software’s Chief Technology Officer.
Brabban’s answer was short and to the point:
He did, to be fair, follow that up with what is in the end a reasonable qualifier, pointing out that the CIOs do in fact have a good handle on the usually small number of key applications that constituted the core business critical operations of a company.The problem that the survey shows up is that they then tend to have a pretty poor idea of all the other applications that are in their portfolio and of which they have little knowledge.
For example, the survey of 200 CIOs and IT Directors has shown that two thirds of those surveyed felt that their applications portfolio was either only partially aligned with the business strategy – or not aligned at all. Over half of them acknowledged that they could not demonstrate to their business managements that they had a clear view of their portfolio.
Nearly half of them said they did not have the resources required to extract the full value of the portfolio for the business, while just under two thirds of them could not be certain they could identify the true cost of running the applications.
Another major problem identified in the survey is the level of applications duplication that now exists. This can be caused by a number of factors, ranging from the integration of merged businesses to business units insisting on continued use of existing applications when upgraded versions are installed.
A third cause is what is called `major application scope creep’, where an application bought to provide business functions A, B and C is then used for function D as well. Brabban agreed that this could be for a number of reasons, ranging from being unaware that an existing application was available in the portfolio, to the opposite case, where someone insists that the major application should perform the task because it can, regardless of whether there is something else in the portfolio that can do it better.
He suggested that these situations normally arise for a number of reasons, ranging from the IT management being unable to fully control all their infrastructure, through to departmental heads purchasing and installing new applications without reference to IT. There is also the problem of duplication that comes as a consequence of mergers and acquisitions. The cost of supporting all these applications can be large, and Brabban pointed out:
Fujitsu’s answer to this dilemma is two-fold. Firstly it offers a portfolio assessment service, the Application Value Assessment, which provides a full audit of what is in the software portfolio, and assesses the values that each application brings to the business. This includes measuring factors such as an applications contribution to direct revenue generation, its support for collection of revenue, whether it is transacting business, or its comparison with the value of applications supporting back office functions.
The second element is its outsourcing services, which stretch from the traditional forms of taking over and running an on-premise installation or running the applications on Fujitsu’s own datacenters, through taking existing applications, or building new implementations of the required processes, that are then managed and delivered as SaaS services. The assessment service provides the chance for CIOs to identify where they can make savings in their operations without having to find the time to do it themselves.
This service could prove to be of particular value to operations in the public service, where some 60% of Fujitsu Software’s business is already to be found.
The survey results point to significant amounts of money being wasted by on-premise installations, purely because the long they exist, and the bigger they get, the more chance there is for applications become overlooked and irrelevant, while still absorbing resources in the form of support, maintenance and systems on which to run them.
The more of that applications infrastructure which can be outsourced, particularly into the Cloud , the easier it becomes to identify which applications are making the best contributions to the overall value of the business and, more importantly, which are not and are just a drain on the budget.
And the more those identified applications can be shut down the greater the savings can be. There may still be licence costs to pay till the end of a contract period but using Cloud delivery service wherever possible, will allow the commitment of resources to be cut. No hardware to be powered and maintained, no staff needing training to support them, and no services desk generating tickets on jobs that can be ignored.
