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6 Steps to Data-Driven IT Planning and Budgeting


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With a passion for replacing intuition with fact-based, objective insight the experts at CAST have published an e-book, “6 Steps to Data-Driven IT Planning and Budgeting,” to help senior leaders challenge the status quo.

Through the power of software analysis and measurement, our cloud-based Application Portfolio Analysis (APA) solution CAST HIGHLIGHT automates the discovery of technical risk within an organization's portfolio. CAST HIGHLIGHT quickly surfaces systems that are difficult to maintain, excessively complex or likely to experience production failures – crucial indicators that inform budgeting decisions and unveil cost reduction opportunities.

Read the eBook to learn how a research-based, automated APA solution can support the critical IT planning and budgeting process at your organization

Published in: Technology, Economy & Finance
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6 Steps to Data-Driven IT Planning and Budgeting

  2. 2. Controlling costs requires understanding the sources of complexity. IT has become cluttered with obsolete systems that no longer deliver full value to the business. What’s worse is the obsolete process by which these systems continue to secure funding – gut feel, allocation and squeaking wheels. The size and complexity of the IT landscape are increasing, yet we lack the fundamental insight into what to do about it. As a result, myopic, subjective processes displace a methodical, fact-based approach to effective IT planning and budgeting. "67% of IT budget is spent keeping the lights on, 19% supports growth of current business … only 14% is allocated to genuine transformational IT." Dave Aron, Gartner Jim Duggan, Gartner
  3. 3. Fractious planning is ineffective and erodes trust between business and IT. Source: Capgemini 2011 Application Landscape Report Successful planning replaces gut feel with objective, fact based analysis. CAST HIGHLIGHT transforms IT budgeting and planning by automating the technical discovery process and creating insight needed to make better decisions. Using code analysis, CAST HIGHLIGHT derives application measures (size and complexity) as well as maintainability and the potential for production failures. When combined with your company’s subject matter expertise, this data forms the insight needed to develop and implement an effective IT plan and budget. "Our business is rapidly changing and it’s fair to say that our application landscape – both in terms of its complexity and its lack of flexibility – is now more an inhibitor to innovation than a driver of it.” Capgemini 2014 Application Landscape Report
  4. 4. 1. Establish a Baseline Quantified assessment of the technical quality and vulnerabilities of the application portfolio is the foundation for effective decision making. Yet a typical IT budgeting process is subjective, manual and fraught with bias. CAST HIGHLIGHT’s cloud platform enables around the clock analysis of applications, accelerating time-to-value, reducing burden and delivering fact-based data such as key performance indicators and industry benchmarks. IT PORTFOLIO TREND ANALYSIS Establishing a baseline of key performance indicators is a foundation for early detection of troubled systems, automated health monitoring and objective performance measurement.
  5. 5. 2. Rationalize the Process, Then the Portfolio Use a disciplined approach to identifying and eliminating low-value applications. The promise of reducing the size of a portfolio and consolidating redundant applications is rarely realized, since there is typically a lack of reliable data that allows for objective side-by-side comparison of applications. CAST HIGHLIGHT provides a standard classification and industry benchmarks that enable objective comparison of technical risk and maintainability. When combined with your subject matter expertise, this data creates the insight needed to support rational application decisions. APPLICATION RATIONALIZATION Side by side comparison of applications by key performance indicators and business value supported by industry benchmarks.
  6. 6. 3. Level the Playing Field IT ecosystems include outsourced and dispersed development teams, vendor managed applications and third-party packaged solutions. A cloud service, CAST HIGHLIGHT provides a consistent, repeatable approach for stakeholders to create fair and credible assessments across all applications within a single ecosystem. All application owners contribute to the analysis without intellectual property risk and there is no burden on limited resources—maximizing participation and creating the objectivity and facts needed to disarm bias and break through fiefdoms. BUSINESS VALUE AT RISK By combining automated code analysis with subject matter expertise, CAST HIGHLIGHT identifies the technical risk of your applications to enable true alignment between business needs and IT resourcing and planning.
  7. 7. 4. Create Visibility True visibility into a portfolio is only possible when all applications, not just the top concerns, are analyzed. Most planning processes do not scale well and therefore focus on “critical” or “highly visible” systems, when in most cases it is the ‘long tail’, the many small applications, that drain budgets and proliferate risk across an organization. CAST HIGHLIGHT enables all applications to be included in the planning process – regardless of size or political visibility. It is through this holistic perspective and robust reporting that CAST’s platform can generate the views needed to quickly identify risks and opportunities for cost reduction. DEVELOPMENT SOURCE VS TECHNICAL RISK CAST HIGHLIGHT provides objective measures of applications’ technical risks by development source.
  8. 8. Technical Debt is the cost of fixing application quality problems that, if left unfixed, put the business at serious risk. Technical Debt is quickly finding its way into ROI discussions and C-level dashboards. It provides a financial value of application quality problems that are highly likely to cause business disruption and will make the application more difficult to enhance over time. CAST HIGHLIGHT measures Technical Debt and benchmarks applications against industry standards. Adding a KPI that puts risk in financial terms helps IT partner with business and broker mutually beneficial plans and funding profiles. TECHNICAL DEBT PROFILE CAST HIGHLIGHT estimates Technical Debt of applications to help form a risk reduction strategy based on severity and impact to the overall portfolio. 5. Shed Technical Debt
  9. 9. SOFTWARE MAINTENANCE ESTIMATE 6. Reduce Maintenance Costs CAST HIGHLIGHT calculates an industry standard effort to maintain each application based on the technical measures derived from the code analysis and drivers from survey answers. This benchmark is compared against current staffing. 67% of IT budget is dedicated to Keeping the Lights On. As applications age, maintenance budgets continue to outpace budget increases and throttle an organization’s ability to proactively pursue strategic initiatives and react to new business opportunities and threats. Imagine the ability to identify applications that are draining budgets and expose the root cause of maintainability issues resulting in understanding which applications may be underfunded and which are consuming excessive resources.
  10. 10. How Rapid Portfolio Analysis Works A code-level analysis of each application calculates technical metrics such as size, type of technology and complexity. The evaluation determines the technical quality of each application based on programming rules and code patterns that lead to production risk, poor adaptability and complexity. The technical assessment is combined with input from application owners to capture information such as staffing profiles, functional purpose, age, development mix and mode. All of these data are compiled at the portfolio level and packaged into customized reports and charts that support critical planning decisions such as resource strategies, application rationalization, outsourcing and portfolio optimization.
  11. 11. 85% of IT executives know their portfolios are in need of rationalization. Knowing you need to rationalize your portfolio is much different than proving you need to do it. Gathering data from disparate sources and time-consuming manual analysis and reporting amounts to suspect insight that is unverifiable when challenged by business leaders. Lack of convincing business cases and unreliable intelligence significantly hinders efforts to bring order to the chaos. This fractious process makes planning ineffective and erodes trust between business and IT. Myopic, subjective, and non-responsive processes are no longer acceptable. Source: Capgemini 2011 Application Landscape Report
  12. 12. The Value of Science: Objective, Insightful & Automated Organizations that use CAST HIGHLIGHT: • Shift IT investments towards business innovation by reducing maintenance cost and operations. • Align IT priorities and investment decisions more effectively with the business. • Replace bias with objective, defendable insight. • Accelerate data collection and analysis while reaching across boundaries to provide a full view of the IT landscape. • Inject facts into assessments of systems – facts that form the basis of credible and defendable IT investment decisions. "CAST HIGHLIGHT is a game-changer! A long awaited dream of CIOs to gain ultra-quick insight into their portfolios in a simple and secure manner.“ Hari Thalapalli - Tech Mahindra
  13. 13. CAST is helping clients across the globe rapidly gain unprecedented insight into their portfolios every day. Whether you are in the middle of a budgeting process or ramping up for one, you can’t afford to make decisions based on limited visibility and gut feel. Try the CAST HIGHLIGHT demo!