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Unlocking the value in IT application assets

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This article discusses the value which can be unlocked in Information Technology (IT) application assets. It discusses opportunities to reduce total cost of ownership, increase an organisation's …

This article discusses the value which can be unlocked in Information Technology (IT) application assets. It discusses opportunities to reduce total cost of ownership, increase an organisation's productivity, to devote capital expenditure and operational expenditure towards competitive differentiating capabilities, and to help achieve growth. Article Published in 2005

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  • 1. ON Features IBM Application Services – Unlocking the Value in Applications Assets! In the highly competitive and pressured business world, the market rewards value and performance. One of the keys to unlocking value is found in the most commonly overlooked place - your applications portfolio. If you need to reduce your total cost of ownership, increase your organisation’s productivity, or find new ways to achieve growth, look no further. IBM in South Africa has extended and built on the services available from its Business Consulting Services (BCS) and IBM 30 Global Services (IGS) organisations by creating IBM Application Services. This strategic focus gives South African companies access to application services solutions built on IBM’s foundation of best of breed processes, methodologies, intellectual capital, people, and innovation. IBM Application Services is focussed on driving benefits which address companies’ operational strategies; whether they are revenue growth or maximizing efficiency through cost reduction and productivity enhancements. This is according to Evans Munyuki, Application Services executive at IBM South Africa; he adds that his organisation’s offerings are an integral part of IBM’s On Demand Strategy, and they fully align with and help maximise IBM’s Big Plays, namely IT Optimisation, SAP On Demand Workplace (ODW), Linux, , e-Learning and Business Process Transformation Services. Munyuki states that, “Many companies spend a lot of money just to keep the lights on from an applications Evans Munyuki, Application Services Executive, IBM South Africa perspective. That is, the bulk of their applications spend is on maintenance, support, and enhancements which do not He says IBM boasts a large customer base in South Africa differentiate the company as a leader in the marketplace. Our and in other geographies in Africa and around the world, which value proposition is to use innovation and delivery excellence is possessed of various technologies that it manages, supports to help companies lower these fixed IT costs while freeing and enhances. up dollars for applications solutions which are key for their The South African marketplace is ready for the focused competitive advantage. introduction of IBM Application Services, says Munyuki. “The “We are an industry-focussed, technology-agnostic accelerated acceptance of ‘reinvented outsourcing models’ and organisation, which means we focus on providing the right innovative out-tasking (project-based outsourcing of tasks versus software application solutions and services to our customers people) models is very timely as growth in the South Africa IT regardless of vendor,” he continues. services market is presently forecasted at 14% per annum. And Africa Magazine / South African Edition / Issue 06 www.ibm.com/za
  • 2. ON Features with a compelling value proposition linked to the reduction of profitable SAP Manage & Run service models; the Application the costs associated with owning, operating, and manipulating Services value proposition is to manage all of that for its clients business applications assets, this is a value proposition that and shift their risk, while returning cost efficiencies to our resonates well with our clients,” he explains. clients, says Munyuki. “This is what we do. This is what we’re Munyuki describes how the Application Services organisation good at. This is our core competency,” he stresses. conducted extensive market research during the course of “We focus on addressing the key concerns of client 2004, with the strategy of focussing its capabilities and skills on executives, typically at the senior levels such as the CIO, CFO, specific software application solutions tailored and relevant to and the CEO. The CEO typically concerns himself with revenue the local South African (SA) marketplace of today. “We clearly growth, increasing profitability and increasing shareholder wanted to ensure that our service offerings were meeting the value. Meanwhile, the CIO is generally occupied with current market needs and positioned to grow and change with improving responsiveness to business requests, improving the the future SA market trends,” he says. quality of applications service delivery, increasing application As a result, the Application Services organisation is going responsiveness and flexibility and managing and reducing to market with the following key offerings: maintenance costs. His goals include enabling improved productivity and increasing the capacity for business growth, 1. Application Portfolio Management, which ties in well with IBM’s On Demand strategy,” continues 2. Legacy Transformation, Munyuki. 3. Packaged Applications Manage & Run support (e.g. SAP), Likewise, C-level executives (like the CFO) are concerned and Systems Integration which addresses Service Oriented with increasing client retention, decreasing costs, and Architectures [SOA] as it helps companies web-enable increasing revenue, with other C-level executives (such as the and integrate their applications with the benefits of easier VP of Operations) being concerned with increasing resource integration and less expensive design change points (Web utilisation, increasing resource stability, and decreasing costs. Services). “We help with maximising cost efficiency and driving revenue growth via leveraging and rationalising application Munyuki describes IBM’s Application Portfolio Management assets, thereby addressing the concerns of all three types of services as a comprehensive evaluation of a company’s executives.” Munyuki continues. application portfolio – taking into account business, industry and technology priorities to help an organisation thoroughly Applying the Capability Maturity Model and continually understand the value of its applications, and The Software Engineering Institute Capability Maturity Model recommending opportunities to unlock value. Integrated (SEI CMMI) describes the principles and practices In explaining IBM’s Application Legacy Transformation underlying software development and defines associated Services he states, “Most companies have allocated a levels of rigour. Use of CMMI principles and practices helps 31 significant portion of their IT budgets to supporting their legacy software organisations evolve from ad hoc and chaotic software applications. When simultaneously faced with fewer dollars – or development to mature, disciplined processes that yield more Rands - , growing competition, dwindling resources and larger predictable results. expectations, businesses must carefully examine how to reap Presently, the IBM Application Services team is level 2 the most value from these critical assets. Legacy transformation certified in the Software Capability Maturity Model (CMM) thus becomes key to supporting new business initiatives, linking with an on-track plan to become CMMI Level 3 certified IT strategies to business goals, responding to market changes by November 2005. Very few application development and and optimising ROI.” maintenance companies in South Africa have reached this On SAP Manage & Run, Munyuki notes that the IBM/SAP level of accreditation. integration focus is nothing new. “IBM’s BCS SAP Practice has “For our clients, this means we have assessed our been the leading SAP integrator worldwide for many years processes, added best practices into process execution and with thousands of completed SAP implementations worldwide. software development, employed sound project management Specifically, the IBM implementation of SAP projects in South disciplines, and we have engaged in the never ending Africa is nothing new. We’ve been doing this through our IBM journey of institutionalising and optimising our processes BCS SAP Practice and we are industry-recognised experts at and methodologies which means more efficient application this,” he says. development and maintenance, shorter-duration project The key focus, rather, is on post-implementation SAP schedules, improved quality, increased functionality, and money application management. “It’s important to note that many saved,” he says. companies’ SAP Business Cases are compromised during Munyuki stresses that his organisation has a specific focus on ‘life after implementation,’ at which point many companies the Application Services space: “Delivery excellence is a given; (unintentionally) drop the ball in the areas of change we are driven by a renewed and continued focus on innovation. management, governance, procedures, training for delta If we take over a client environment, IBM will actively look for functional updates, employee re-skilling, employee retention, opportunities to transform applications, optimise processes, and a lack of focus on the institutionalisation and acceptance and clean up data while continuing to invest in our people. We of the deployed applications by the operational execution will strive to provide solutions that result in greater efficiencies, teams,” explains Munyuki. a lower cost base, and a more variable approach for the On At times companies also don’t have sustainable and Demand management of client environments.” Africa Magazine / South African Edition / Issue 06