Andy started by describing the current state of things. He pointed out that today’s core applications do things they weren’t designed to do. That despite all the application consolidation having been done, and budget cuts, there is still a bloated IT portfolio, fitting together in an “accidental architecture”. As Andy said: “please don’t tell me that how your IT landscape looks like, is by design”.
And now comes the hard part. Most of the consolidation that took place was in infrastructure, where no one cares. But now you are touching people’s application… But something has to be done. The life cycle portfolio of applications in most organizations doesn’t look like a neat bell curve. Stuff is still wheeled in all the time, in a disproportionate pace, while there is another large part of applications that are zombies, the living dead. They should’ve been eliminated a long time ago. 50% of all applications in existence today should be eliminated.
Organizations have an IT debt, Andy argues. IT debt is the deferred maintenance on their applications, because of the IT budget cuts of the last years. Gartner estimates the world-wide IT debt to be about $500 billion, and growing to $1 trillion. In the meantime, IT people are in denial, and business people again start to avoid IT, and create their own solutions, running their own applications in the cloud.
How to take control? Money is not the constraint, the real constraint is an organization’s ability to change… and if organization’s don’t improve their ability to change, cost and risk while go up, and the agility will go down even more. And the more combinatorial complexity (system interconnections) there is, the less agility you’ll have.
When you replace a core system, it should be build for the next 30 years again, it is simply too invasive to the organization to switch them out every few years. So design them for the 21st century. Don’t automate the old business process with a more fashionable tool. Andy also hit one of my hobby horses: option-based strategies. He argues that business cases are fairy tales, we don’t really know what will happen. Build for unknown future change.
Lastly Andy describes the need for an Annual Report on Business Applications. He talke about it in terms of portfolio management, but as I have been arguing before in my own research, you can think of this report in a really financial way as well. IT truly is an asset. And the more fluid, like cash, the assets are (= agility), the more people are willing to pay for it. Also, the more fluid they are, the less you need to write off on them.
The most memorable quote (at least for me) in the presentation was: “It is NEVER about application consolidation, it is ALWAYS about business process simplification”.