4.16.2013 Prj & Port Mgmt SftDev - What is Application Portfolio Management - For Governance & Compliance
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4.16.2013 Prj & Port Mgmt SftDev - What is Application Portfolio Management - For Governance & Compliance

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Series Name: Project and Portfolio Management Software Development ...

Series Name: Project and Portfolio Management Software Development

Webcast Title: What is Application Portfolio Management - For Governance & Compliance

Date: 4.16.2013

Presenter: Per Kroll

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4.16.2013 Prj & Port Mgmt SftDev - What is Application Portfolio Management - For Governance & Compliance 4.16.2013 Prj & Port Mgmt SftDev - What is Application Portfolio Management - For Governance & Compliance Presentation Transcript

  • © 2012 IBM CorporationApplication Portfolio Management (APM)for Governance and CompliancePer KrollChief Solution Architect and Program DirectorPortfolio Strategy & ManagementIBM Software, Rationalpkroll@us.ibm.com
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialWhy APM right now?APM solution architectureHow are customers adopting it?APM in actionFinal thoughtsAgenda2
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM Confidential“A large UK bank initiated its APM effort to take a 90:10 ratio for run-the-bank / grow-the-bank downto a more reasonable 40:60 ratio. Dell shifted its maintenance-to-innovation ratio from 80:20 to 50:50.”– The Application Portfolio Management Landscape — Combine Process And Tools To Tame The BeastPhil Murphy, Forrester Research, Inc. April 15, 20113Problem: Insufficient strategic spend and lacking business agility Cost – 80/20 budget trap– Maintenance and operations consumes asignificant % of a declining IT budget, limitingfunds available for new initiatives Business agility– Brittle and tightly coupled architectures,unwarranted complexity, and technologyproliferation Risk / supportability– Skills erosion, baby boomer retirements, andaging technology Strategic planning– Inability to actively plan strategic initiatives;Cloud, Mobile, Compliance, M&A, andDivestitures3
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialSolving the problems requires a different approachAddressing the problem requires an asset (application) portfolioapproach to complement the traditional project portfolio approachProject Portfolio Management Commonly used in mature companies Provides executives (only)– Control over 20% of this year’s budget– Ability to affect this year’s project proposalsApplication Portfolio Management Used effectively by only a few leaders Provides executives– Multi-year control over 80% of the budget– Ability to generate new projectproposals such as structural changesto address problems“We can’t solve problems by using the same kindof thinking we used when we created them.”– Albert EinsteinMany companies have the 80/20 rule wrong…4
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialAgendaWhy APM right now?APM solution architectureHow are customers adopting it?APM in actionFinal thoughts5
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialIT optimization business outcomesAPM-driven scenariosApplicationInventoryConsolidationDriver M&A, divestitures, silosBenefit CostPayback time ShortCloudDriver Operational cost, fluctuationsBenefit Cost, flexibilityPayback time ShortRight shore / OutsourceDriver Globalization, costBenefit Cost, competencyPayback time ShortComplianceDriver RegulationsBenefit Reduced riskPayback time ShortMobileDriver Customer demandBenefit Business agilityPayback time ShortInvestment ManagementDriver Transparency, efficiencyBenefit Cost, business alignmentPayback time MediumModernizationDriver Brittle architectures, retention, ageBenefit Cost, agility, reduced riskPayback time MediumSLA OptimizationDriver Operational complexity, cost, riskBenefit Operational cost, bus. alignmentPayback time Short6
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialCommon challenges with home grown APM solutions Cumbersome and expensive to maintain and keep current– Often only covers the most critical scenarios– Not always uptodate Difficulties in keeping data current– Limited data entry / integration with source systems– Currency and quality assurance… Can you trust the data? Lack of support for collaborative decision making– Decision not linked to strategic objectives or financial analysis– No support for collaborative decision making– Limited reporting and analytics Limited ability to execute on decisions– Limited support for translating decisions to executable projects– Limited integrations with down stream systems
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialSolution architecture overviewAnalysis, decisions,execution roadmapsImpact analysis,architectural roadmaps,future visioningRationalFocal PointRationalSystemArchitectAPM decisions and plans are executed and tracked in solutionsfor Application Lifecycle Management and Enterprise ModernizationSolution Support Services Quick Starts Best Practices Report Templates ConfigurationsProject executionin collaborative team environmentApplication flexibility, individual and teamproductivity, and system utilizationEnterprise ModernizationSolutionsExecutionroadmapExecutionstatusIntegrated ApplicationLifecycle Management SolutionsExecutionTracked8ArchitecturalContext
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialAPM with Rational Focal PointMake collaborative, objective decisions that deliver business value Focus decisions on what matters most in drivingbusiness results Capture goals, plans and track actuals Capture inputs consistently and with increasedobjectivity Perform trade-off analyses to make informedinvestment decisions Repeatable, role-based workflows and views Identify and sequence activities and deliverablesby objective measures of value Quickly align and adjust roadmaps to changingmarket needs and business value Monitor progress and impact with dashboards andanalytics Integrations into enterprise architecture andexecution environments Fully web-based architecture9 An integrated solution for Application Portfolio Management
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialComponent Overview – Rational System ArchitectRational System Architect Capture your enterprise, including strategy, processes,organization, applications, technologies Understand current state and relationships betweenelements, leveraging diagrams, heat maps, and othervisualizations Assess gaps and analyze impact of changes acrossthe enterprise Visualize architectural roadmaps and options for futurestate Make enterprise architecture actionable throughintegration with delivery management, applicationlifecycle environments, and enterprise modernizationenvironments Support for multiple frameworks and modelingstandards Windows and web-based clientsEnterprise blueprinting for better business outcomes10 An integrated solution for Application Portfolio Management
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialWhy APM right now?APM solution architectureHow are customers adopting it?APM in actionFinal thoughtsAgenda11
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialMeasuring the Total Economic ImpactBenefits Improved process efficiency — business and IT. Reduced time and effort to collect, manage,and report on the application environment. Reduced risk/improved allocation of capital. Improved transparency around the application environment,increasing the likelihood that mission-critical applications are adequately funded. Improved Time-To-Delivery On Application Initiatives. Reduced time to decide on, and implementrequired changes. Reduced cost. Lower maintenance and operations cost through consolidation and rationalization.(Not quantified in report, nor included in the above model.)Forrester Consulting interviewed four customers to establish a financial model(3-year, risk-adjusted ROI) for a representative organization using the IBMRational Integrated Solution for Application Portfolio Management.12Source: Measuring The Total Economic Impact Of IBM Rational Integrated Solution for Application Portfolio Management, a commissioned studyconducted by Forrester Consulting on behalf of IBM, January 2012.
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialChallengeCost Too much moneyspent onmaintenance andoperationSimplify IT to improve business agilityA global conglomerateSolution Established application inventoryin first month Assessed business value versuscost and risk Reduced number of local andnon-strategic applicationsSolution Established demand managementprocess Used tools for improved business andIT collaboration Re-invested savings from keepinglights on into innovation► Read the full case studyResultsReduced number of applicationsby 45% in 18 monthsReduced money spent on keepinglights on from 85% to 50%ResultsReduced response time to businesschange request from 200 to 14 daysImproved trust between Business and ITIT is now viewed as an enabler ofinnovation, rather than as a cost centerChallengeBusiness agility IT not reactiveto business needs Business had lowconfidence in IT’sability to add value13
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialChallengeComplexity Unclear whatapplications existsand their valueRationalize and optimize to align with the businessFinancial institution in North AmericaSolution Built application inventory intwo months, replacing previouslyscattered information Enabled portfolio managementand EA teams to collaborateSolution Assigned appropriate SLA levelbased on needs Streamlined organization to alignwith simplified SLA levels and smallerapplication portfolioResultsReduced number of applicationsby 75% in 18 monthResultsReduced number of SLA levelsfrom 17 to 4Double digit reduction in operations costChallengeBusinessalignment SLA’s and applicationsupport costs notdriven by businessjustification andpriorities14► Read the full case study
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialWhy APM right now?APM solution architectureHow are customers adopting it?APM in actionFinal thoughtsAgenda15
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialApplication Portfolio Assessment: Simplified workflowCreateapplicationinventoryYesNoProvideapplication informationReview /ApproveAnalyze applicationsand determine whichto further investigateProvide detailedapplication informationExecutePortfolioAnalystEnterpriseArchitectApplicationBusiness OwnerSteeringCommitteeProject Mgmt.OfficeApplicationArchitectDeveloprecommendationsfor rationalization initiatives16
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialCreate initial application inventory Rapidly import inventoryfrom existingspreadsheets Optionally leveragerole-based Webinterface for additionalinformation entryPortfolioAnalystEnterpriseArchitect17
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialLeverage extended team to providea single source of truth Web-based entry throughrole-based views Provide filters to make dataentry trivial Increase data quality throughchoice selections and built inquality assurance stepsApplicationBusiness OwnerApplicationArchitect18
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialApplication improvement potentialIdentify candidate applications to be decommissionedor modernizedDiscontinue =>Low businessscore +low IT scoreReduce cost throughIT simplificationModernize =>High businessscore + low ITscoreIncrease businessagility throughmodernization19PortfolioAnalystEnterpriseArchitect
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialRationalAssetAnalyzerSamplefeed Web-based and role basedinformation gathering May optionally be informedby application analysis tools,such as IBM Rational AssetAnalyzer or CAST ApplicationIntelligence Platform May optionally be informedby an Enterprise Architecturetool, such as IBM RationalSystem ArchitectApplicationBusiness OwnerApplicationArchitectProvide detailed application information20RationalSystemArchitectSamplefeed
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialIdentify opportunities for savingsAssess Business Value vs. Strategic Value toguide maintenance spend and dispositionsSilverservicesGoldservicesBlueservicesBronzeservicesApplicationmaintenanceApplicationenhancementsAll errorsSeverity 1 and 2errors onlySeverity 1 errors onlyNo error correctionsAll enhancementsEnhancements whichimpact revenue,profitability, customersatisfaction, or ademonstrable returnon investmentOnly enhancementsbringing significantlongterm valueNo enhancementsApply Portfolio ValueManagement approachApply affordability drivendemand managementIBM ExampleGui-danceBlueservicesSilverservices GoldservicesBronzeservicesDecommission?Strategic ValueBusinessValue
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialMake recommendationsDefine Future State architecture(s)22Current Proposed
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialMake recommendationsRecommend dispositions and associated projectsExpected Cost: $1.4 MExpected Benefits (accrued over 13 months after project completion: $1.9 MNet Present Value (28 months) Propose applicationdispositions Propose andestablish businesscase for resultingrationalization projectsPortfolioAnalystEnterpriseArchitect23
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialEvaluate and prioritize rationalization projects Compare projects side byside using pair-wisecomparison Visualize project prioritybase on defined projectcriteriaSteeringCommitteeProject Mgmt.Office24
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialReview and decideApprove project roadmap? 8 transformation projects to be carried outover next 2 years– Transformation of a total of 12 applicationsdeemed critical within the credit card division Total cost of $6.8M Expected ROI: 34%SteeringCommitteeProject Mgmt.Office25
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialTime To ValueAdopting APM: Shortest Route to ValueIncremental adoption with incremental value deliveryProduce an application inventoryReduce cost / increase innovation through consolidationIdentify rationalization targetsImprove business agility and reduce cost through modernizationValue Identify which applications we have Understand Business value vs. Cost / Risk Reduce cost by implementing consolidation decisions Rightsize investments in maintenance, operations and modernization basedon objective analysis of value vs. cost, risk and improvement potential. Identify applications not used or that can be consolidated Identify applications that can be replaced with Packaged Apps / COTS Identify applications that should be modernized Improve business agility and reduce by modernizing applications Continuously seek new rationalization targets261-3 months 6-9 months 12-18 months 18-24 monthsIn parallel, implementDemand Managementto improve businessagility.In parallel, implementDelivery Managementto reduce executionrisk.
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialWhy APM right now?APM solution architectureHow are customers adopting it?APM in actionFinal thoughtsAgenda27
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM Confidential1-day Proof of Technology1/2-day APM Executive WorkshopNext steps: Two optionsMoving towards increased strategic spend and improved business agility28 What are your desired outcomesfrom the APM effort? What decisions do you need to support? What information and analytics areneeded to support those decisions? What roles are involvedin the information gatheringand decision making? Instructor-led lab exercises Hands-on walkthrough leveragingsample application inventory Walk through several end-to-endApplication Portfolio Managementscenarios
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialIn reviewIncrease in strategic spend Strengthened business and IT collaborationDRIVESGather info, analyze, make decision29
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM ConfidentialResources APM content on ibm.com (ibm.co/apmsolution)– whitepapers, demo, podcast, video etc. APM reference stories: North American Bank , Global Conglomerate APM Forrester Consulting commissioned report on Total Economic Impact of the IBMRational Integrated Solution for APM– Provided on request APM whitepaper: Empowering the CIO APM Content on developerWorks– demos, presentations, User Guides, etc.30
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM Confidentialwww.ibm.com/software/rational31
  • © 2012 IBM CorporationEnabling Product and Service Innovation | RationalIBM Confidential© Copyright IBM Corporation 2012. All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind,express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall havethe effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBMsoftware. References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilitiesreferenced in these materials may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or featureavailability in any way. IBM, the IBM logo, Rational, the Rational logo, Telelogic, the Telelogic logo, and other IBM products and services are trademarks of the International Business MachinesCorporation, in the United States, other countries or both. Other company, product, or service names may be trademarks or service marks of others.www.ibm.com/software/rational32