format for presentaiton APR 25Feb09 (2003 format).ppt

Application Portfolio
Rationalization
February 25, 2009

© 2009 BearingPoint, Inc. 2
Application Portfolio Rationalization
Discussion Topics
1. Aligning Application Portfolio Rationalization with the IT Strategy and
Transformation
2. Planning and executing a tactical Application Portfolio Rationalization (APR)
initiative for focused and quick returns
3. Institutionalizing Application Portfolio Management (APM) for a sustainable
advantage
4. Case Studies
(Tactical Initiative)
IT Operations
(Sustainable)
IT Strategy and Transformation (Architecture, Governance)
Demand &
Portfolio Mgmt
plan execute execute
plan
execute
execute
Application Portfolio Management
Business System Integration / SDLC
Information Management

Applications are a critical component in the
evolving mission of IT
Strategy Tactical APR Sustainable APM Case Studies
Business complexity, broader technology
adoption and increasing expectations
have forced a shift in application needs
and the role of IT.
In the past, CIOs were focused on
efficiency – managing applications
legacy with optimal operational
performance.
Now CIOs are also expected to advance
the business – developing new
capabilities to increase effectiveness,
enabling the business to grow with new
and composite applications.
And there is an increasing expectation to
drive innovation – adopting new
technologies to differentiate the
business.
Business Process
Application Data
Technology
IT excellence is achieved when all three
ingredients are maintained in the proper
proportions for your organization as
business priorities evolve

To manage your application portfolio and achieve IT
excellence, begin by synchronizing visions
Alignment points to your destination of IT excellence. Synchronization proactively readjusts
it. With it, you can define and communicate strategic goals that support your evolving vision
and maintain the right portfolio of applications for your organization.
Application
Portfolio
Rationalization
Application
Portfolio
Management

Portfolio Management is one of the key elements
in executing an IT Excellence vision
Application
Portfolio
Management
Achieving the right ratio requires
a business-driven strategic plan
and the necessary resources and
approach to help you transform
the IT organization.
A clearly defined target
architecture and governance
framework are required to keep
you on track.
You need timely and accurate
information to manage your
portfolios and monitor the
results.
And agility helps you continually
readjust the balance for
sustainable business advantage.
has interdependencies with all
these elements of IT Strategy and
Transformation.

Decision Process
Scope
Objectives
Application
Clusters
Criteria
Application
Health
Alternatives
Analyze
Focus Formalize
Data
Synchronization of Objectives,
Scope, and Approach
Iterative analysis focusing on
developing consensus
Development of an Actionable
Plan with clear Business Value
Factory

Framing the initiative – Aligning Objectives to
the Mission of IT
Efficiency
 Reduce cost of ownership and support
 Increase infrastructure utilization
 Improve application performance and
customer experience
 Reduce risk
 Manage demand
 Outsource / off-shore application
development, monitoring, support,
maintenance
 Chargeback
 Software and license management
 Manage changes, releases, upgrades,
and inter-dependencies
 DR/BCP
Innovation
 Leverage new technologies
Effectiveness
 Develop / maintain the enterprise
architecture
 Reduce complexity, harmonize and
standardize the enterprise
architecture
 Increase applications integration
 Support business process optimization
 Reduce data redundancy and increase
data quality
 Focus resources on highest-value
applications
 Facilitate M&A
Strategy and Transformation
 Provide input into and align the IT and
business strategies
 Support the governance process
 Prioritize investments

Framing the initiative – Scope
 What applications?
─ Business Process
─ Business Units
─ Geography
 Future Applications?
 What data centers?
 Desktop applications?
 What type of applications
(transactional, infrastructure,
integration, data base, ..)
 What software?
 What infrastructure platforms?
 Data?
 Desired alternatives (retirement,
replacement, consolidation, re-
engineering, outsourcing / off-
shoring,..)
Business Process
Application Data
Infrastructure
Data

DATA TYPES
(Representative)
Data – Identifying the right type and level of
data and practical collection mechanisms
Business
Requirements
Customer Base
User Base
Application Data
Business Impact
Cost
License
Development
Hardware
Operations
Support / Maintenance
People
Resources
Skills
Capacity
Organization
Applications
Inventory
Size, Usage
Performance / Quality
Functionality
Enhancements requests
Integration
Operations
Service Level Agreements
Problems
Configuration
Capacity Plans
DR / Availability Plans
Service Providers
Technology
Asset Inventory
Architecture / Standards
Integration
Infrastructure
SDLC
DATA GATHERING,
VERIFICATION, STORAGE
Surveys
• User Satisfaction
• Functional Coverage and
performance criteria
• Project initiative impact
Questionnaires/Forms
• Financials
• Technical Quality
• Skills uniqueness
Workshops
• Application Coverage
• Peer review, SME input
Interviews
• Application Inventory
• Overall model of business functions
Data bases
• CMDB
• Assets
• Help desk
• Financial / Budget
Discovery
• Network
• Interfaces / interdependencies
Project Documents
• Status
• Budget / Actual

Application Health Assessment
Identify assessment criteria
based on objectives
Identify and collect metrics /
data for each criteria
Mapping applications on a grid
 Objectively identifying
applications that require
attention
 Assessing opportunities for
improvement
 Comparing applications
across operating units
 Communicating relative
price performance to the
business
 Applications that map well to business
requirements and support current standards
should be targeted for further investment.
 Applications valuable to the business but
supported with outdated architecture will
benefit from Technical reengineering to
improve costs.
 Applications that conform well to
architectural standards but do not
necessarily support many business functions
should be tolerated, enhanced or
consolidated with similar applications.
 Applications that do not conform to
architectural standards and do not support
many business functions are candidates for
retirement.

Additional Application Health
Assessment Criteria
Additional criteria can be use to
further analyze or validate the
alternative
 Mapping Application Costs /
Efficiency vs. Application
Performance / Effectiveness
highlights applications with
potential poor cost to
performance ratios.
 Comparing Functional Quality /
Capability with Future Business
Requirements can indicate
business critical applications in
need of functional enhancement.
 Application Cost / Efficiency vs.
Utilization will point out
expensive, underutilized
applications.
 Regulatory Impact vs.
Technology Risk can point out
business critical applications
endangered by factors such as
lack of DR planning, vendor
support or security concerns.
Business
Quality
Low High
High
High Attention Zone
– Both Business
and Technical
Risks
Safe Zone
Warning Zone – Not
Making Best Use of
In-Place Technology
to Meet Business Needs
Warning Zone –
High Technical
Risks
Technical Quality

Cluster Analysis
1. Campaign
Management
2. Sales Funnel
3. Contract
Management
4. SFA
5. Order
Management
6. E-Commerce
Area
Functionality

Lead
Identification
Lead
Qualification
Order
Management
Account
Management
Contact
Management
Contract
Management
E-Commerce
Marketing Sales Service

 


 


 


Low High
Business Quality
Technical
Quality
Low
High
1
2
3
4, 1, & 2
5 & 6
3
Business & Technical Quality
6
5
Consolidate
Applications
Remove Duplicate
Functionality
Remove Duplicate
Application
Add New
Functionality
Cluster Analysis is used to identify functional
overlaps and consolidation patterns. Patterns
thus identified are further analyzed in the
subsequent stages.
Applications are identified for potential simplification and consolidation based
on functional capability and redundancy

ELIMINATE
Develop Retirement Strategy
 Determine all inputs/outputs
 Determine all metadata for
reports and analytics
 Document and obtain sign-off
 Functionality accounted for in
other apps, if necessary
 Create communication,
organization and training plan
Develop Retirement Design
 Detailed instructions for
decommissioning, or
 Detailed instructions for migration
 Requirements traceability
document
Project Implementation
 Data Extract/Transform/Load
 Data archive
 Migrate Users
 Sunset Application
REENGINEER
Develop Architectural
Reengineering Strategy
 Gather requirements
 Determine development
strategy (offshore, in-house,
COTS, etc.)
 Determine target state
architecture
 Create communication, release,
training plans
Develop Reengineering Design
 Detailed application design
document
 Install application
 Data ETL
 Post production testing
TOLERATE / LEVERAGE
Develop Enhancement Strategy
 Gather requirements
 Determine functional
enhancement or leave as is
 Determine development
strategy
Develop Enhancement Design
 Detailed application design
document
 Install application
 Data ETL
MAINTAIN/EVOLVE
Develop Maintenance Strategy
 Determine future business
requirements / initiatives
 Determine target state
architecture
 Create communication,
organization and training plan
 Document and obtain sign-off
Develop Maintenance Design
 Detailed designs
 Detailed implementation
instructions
document
 Install application modules
 Data ETL
Developing Migration Plans
Migration plans have to be developed for each application based
on the selected alternative, and business and IT constraints.
Factory Factory Factory Factory

BearingPoint’s approach involves a collaboration between business and IT to mobilize
change through executive leadership:
Collaborative Application Portfolio Rationalization
– Representative Activities and Deliverables
Phase FOCUS ANALYZE FORMALIZE
Key
Activities
Frame the Initiative
Review and confirm business factors
Review current IT strategy and enterprise
architecture
Confirm project scope and objectives
Identify assessment criteria
Align approach, models, metrics, tools
Confirm deliverables
Identify data needs and sources and
define data gathering approach
Review with stakeholders
Mobilize
Identify business and IT stakeholders
Define project governance and
communication model
Develop project plan
Project kick-off
Initiate data gathering
Application Health Assessment
Validate and rationalize data
Conduct analysis based on selected
criteria (demographics, scoring, posturing)
Identify and prioritize opportunities for
improvement
Develop initial recommendations, quick-
hits, and risks
Portfolio Analysis
Map applications to business processes,
business units, databases, master data,
technology
Perform detailed cluster analysis
Identify new technologies and service
models
Develop target state for each cluster
(retirement, replacement, consolidation,
de-duplication, re-engineering)
Identify and prioritize opportunities
Develop recommendations and identify
risks
Roadmap
Identify the initiatives
Develop transition plans
Identify dependencies
Define each plateau
Business Case
Confirm resources and costs
Confirm benefits
Develop risk mitigation plan and
monitoring
Update business case
Develop executive summary
Review with stakeholders and executives
Deliverables
 Project Charter / Kickoff
presentation (objectives, scope,
criteria, approach, data
requirements)
 Project Plan
 Communication Plan
 Assessment and recommendation
report
 Target state definition
 Roadmap
 Migration Plan
 Business Case
 Executive Presentation
Data

Toolbox
Proven methodology and
project organization defines
roles and responsibilities and
lays out activities for project
team members
Project objectives are
integrated into our APR
templates to effectively
communicate project team
responsibilities and activities
Inventory collection templates
allows us to identify and
collect all data items that must
be captured for each
application and project
Matrix templates map applications
against business processes to
assist in understanding business
value and identify potential
consolidation opportunities
Looking at Functional and
Technical Quality, we can
determine if IT is supporting a
large number of diverse
applications limited in functional
and technical quality
By viewing the application
portfolio for a fit towards future
needs, we can see which
applications may need to be
retired, renovated or replaced
Applications with low user
utilization and high maintenance
cost are candidates for
decommissioning or
virtualization
Application review focused on
the business process impact,
ease of deployment, risk and
application categorization can
identify opportunities to
consolidate the portfolio and
drive shared integration
services
Business case model identifies
recommendations with high ROI
and low business risks

From Tactical Rationalization to
Sustainable Management
(Tactical Initiative)
IT Operations
(Sustainable)
IT Strategy and Transformation (Architecture, Governance)
Demand &
Portfolio Mgmt
plan execute execute
plan
execute
execute
Business System Integration
Information Management Portals
Applications Integration
BearingPoint’s approach allows for a tactical application rationalization initiative to
evolve into a sustainable application portfolio management solution

D
E
M
A
N
D
R
E
Q
U
I
R
E
M
E
N
T
S
Customers
&
Users
IT Supply
Chain
IT Planning
& Design
IT Portfolio
Management
IT Financial
Planning
IT Supply Chain
 Forecast and analyze the
business demand for IT
resources
 Reduce lead times to
provision IT services
 Maintain optimal capacity
IT Financial Planning
 Cost recovery, budgeting and pricing
of IT Services
 Quantifies value of IT resources
 Total cost of ownership
IT Portfolio Management
· Monitor cost vs. business value
· Enforce Standards & Governance
· Optimize and prioritize IT resource allocation
(hardware, software and labor)
· Manage risk
IT Planning & Design
 Understand Business
Requirement and Criteria
for business value
 Maintain, plan and
improve IT services and
capabilities in line with
business direction &
agreed costs
IT Factory
Service Support
Service Delivery
IT
Services
The
Business
Enterprise Demand and Portfolio
Management

Leveraging Enterprise Demand and Portfolio
Management for Application Portfolio Management
IT Planning & Design
Management
IT Financial Planning IT Supply Chain
Business Requirement
& Objectives
Business Strategies, Objectives
Service inventory
Project inventory
Application inventory
Input EDPM Capabilities Output
SLAs
Business
Strategy &
Objectives
Business
Requirements
& Demands
IT Service
Support
IT Service
Delivery
Technology
Management
Optimization
Capacity Plan
Demand Forecast
Rationalized and
Prioritized portfolio
of Application,
Services and Projects
IT Service
Support
IT Service
Delivery
External I/O
Other Offerings Capabilities
Legend
Business Strategies, Objectives, IT Governance Policies
Application Costs
SLAs
Technology Standards
Demand
Forecast

APM – Critical Success Factors
 Executive Buy-in
 Clearly established business objectives
 Business objectives translated to business value criteria
 Establish architecture/technology standards and governance
framework
 Capability to capture costs and determine total cost of ownership
 Understanding of existing resource capacity (hardware, software,
labor)
 Ability to map applications to specific business functions and
activities
 Availability of critical application data (technical components,
version, owner, integration, etc.)
 Awareness and Understanding of changing business needs

© 2002 BearingPoint,
Inc.
Qualifications and Case Studies
Case Example Description
Application
Portfolio
Rationalization
and Development
Offshoring for a
Global
Pharmaceutical
Company
OBJECTIVE
The client’s technology organization needed to achieve significant operational cost savings in response to
declining revenue stream. The client’s extensive portfolio of applications consisted of redundant an
inconsistent applications, development resources, architectures and support environments. The client
engaged BearingPoint to help establish and manage two enterprise-wide strategic programs standardizing
application architectures, development and support to achieve key IT budget reductions.
 The objective of the Application Transformation Program was to create, market, manage and track multiple
application portfolio rationalization workstreams that would realize significant one-time and ongoing
costs savings.
 The objective of the Offshoring program was to create a centrally-managed global application support
capability that leveraged skilled off-shore resources offering consistent service levels and significant
reductions in operating costs.
BEARINGPOINT’S APPROACH
 For the Application Transformation Program, BearingPoint defined criteria for Application Business value
vs. Technical Quality and also specified additional information required that should be considered (e.g. any
known plans for application enhancement, retirement or changing business needs).
 BearingPoint worked with client sponsors to establish on offshore application support capability in India
, centrally program-managed by the client and BearingPoint, to transition applications support of higher-
cost, domestically-supported applications.
 The Program Management Offices maintained weekly communications with LOB leaders and provided
status reporting and program guidelines for LOB project managers and IT and business leadership.
RESULTS
 The net outcome of the engagement was the reduction in the total number of applications resulting in a
more integrated and consolidated set of applications that already reduced TCO. Further cost savings were
achieve by outsourcing application development, maintenance and enhancement
 As a result of the Program, the Client reported $20M savings for 2007, $16.5 million for 2008 and an
estimated $60M in identified opportunities
 Successfully created an offshore global support capability and migrated the support of approximately 60%
of the clients US based application portfolio, realizing approximately $6M savings in ongoing support
costs.

Inc.
Application and
Database
Rationalization
for Military
branch
OBJECTIVE
The Deputy Chief of Operations required a major reduction in IT costs through an objective of
achieving a 51% reduction in the application portfolio. BearingPoint was retained to support
this effort and support seven major task areas within Communication Networks ’s Capability
Analysis and Assessment Division one of which focused on architecture and data strategy.
Through our support to the Functional Area Manager (FAM) Governance branch, BearingPoint
assisted Communication Networks with the development, integration, and implementation of IM/IT
Asset (Application) Portfolio Management processes for the FAM and EII CIO community.
BearingPoint:
 Created an enterprise licensing framework process to consolidate COTS licenses.
 Assisted the team in developing FAM governance procedures to formalize the rules that will
reduce its legacy assets and manage its IT portfolios.
 Supported the creation/modification of change-management procedures to synchronize the
efforts of the department’s FAMs and CIOs.
 Conducted application portfolio analysis, created assessment and recommendations of
software applications, and published roadmaps to provide guidance to the FAM community
for application reduction.
 Handled the logistical support for bi-weekly FAM/EII CIO workgroup meetings to promote
stakeholder awareness and provide assistance required to execute IM/IT portfolio management
at the enterprise and functional levels.
RESULTS
BearingPoint’s efforts in the ES FAM portfolio management discipline have reduced applications by
27%, from 5090 to 3696, and our ongoing support is aimed to meet the objective of lowering
application count by 51% (down to 2494 total apps), which will enable quicker and more efficient
cyber asset reduction and significantly reduce the branch’s IT costs.

Inc.
Application
Portfolio
Rationalization
for a Major
Multinational
Telecom Services
Company
OBJECTIVE
The Client’s rapid growth resulted in an application inventory that included many disparate and overlapping
applications used to support business services. The objective of the project was to help control IT costs by
identifying infrequently used or redundant applications and improve efficiency by implementing a
consistent software inventory management process.
Through its application rationalization toolkit, BearingPoint developed an IT roadmap that met two key
objectives:
 An overall IT investment strategy for the Client’s Latin America operations, and
 A plan for beginning establish integrated governance throughout Latin America by to consolidating its
dispersed regional IT subsidiaries into a single entity.
RESULTS
 By engaging BearingPoint to perform the IT Roadmap and acting upon the detailed recommendations, the
client realized the desired cost control benefits.
 Based on the rationalization methodology, BearingPoint created a consolidation framework that significantly
reduced the 259 current applications in the portfolio.
Application
Portfolio
Rationalization
for a Canadian
Railroad
Company
OBJECTIVE
The primary objective of the engagement was to identify and achieve significant cost savings through
application rationalization
 BearingPoint worked with the Client to define processes to standardize the IT environment based on
recommended practices in software license inventory and license usage tracking.
 We developed a current-state application inventory and mapped the applications to the business and
business functions.
 Analyzed the application portfolio for retirement potential and identified candidates. We quantified potential
for IT expense reduction for retirement candidates and developed a communication plan for approaching the
business units with the retirement recommendations.
RESULTS
 We identified 122 candidate applications for retirement, presented findings, developed communication
plan and materials for business leadership, and completed handoff for retirement execution.

Inc.
Software
Rationalization
for a Major US
Bank
OBJECTIVE
The Client’s application inventory included many disparate and overlapping applications used to support
business services. The Client believed that there were significant opportunities for cost savings in the
rationalization of its application portfolio. The objectives of the project were to contain costs of the
portfolio and develop a consistent application inventory management process.
BearingPoint utilized a mix of the BearingPoint developed tools, leading vendor scanning utilities and the
Client’s own management toolset to assemble an accurate inventory of existing enterprise commercial
software including purpose, cost and utilization. We identified infrequently used or redundant applications
and associated potential cost savings and designed processes for form a basis for a larger program to
regularly rationalize the application portfolio.
RESULTS
BearingPoint analyzed over 2.5M unique installations and identified low/no use software and functional
overlap with a potential savings of $3.9M over a two year period.
Application and
Infrastructure
Assessment for
an International
Bank
OBJECTIVE
During significant growth over a six month period, the Client experienced significant performance
degradation and instability of Internet delivered services. The Client wanted to efficiently support
anticipated future growth. The Client engaged BearingPoint to perform an assessment of current and planned
application and infrastructure architectures.
BearingPoint developed recommendations to address identified issues in the application and infrastructure
architecture and with supporting processes and provided recommendations, timelines and immediate next
steps.
RESULTS
BearingPoint developed twenty detailed application recommendations, ten infrastructure and nine process
including implementation roadmaps and recommended next steps.

Inc.
Technology
Rationalization
for a Major Bank
OBJECTIVE
The Client was seeking to create an efficient and scalable organization through selective implementation and
consolidation of technology-enabled processes. The Client wanted this initiative to help it achieve a
reduction in run rate by year-end and improve customer satisfaction.
 BearingPoint assessed requirements and validated opportunities for consolidation, including an
application inventory and risk analysis.
 We engineered the target consolidated IT environment and identified applications to be consolidated.
We reviewed and analyzed current business applications using industry leading practices and performed a
high-level review of significant applications including: controls, volumes, cost, efficiency and required
resource levels to support the application. We also developed a Risk Plan for mitigating the risks of
consolidating the applications identified.
RESULTS
 BearingPoint successfully delivered a plan with detailed costs on the initiatives for consolidation.
 The engagement resulted in further support of the remaining phases to achieved the Client goal of a $20M
reduction in run rate.
Application
Portfolio
Rationalization
for a Major
Consumer
Products
Company
OBJECTIVE
The Client’s senior IT management was interested in lowering costs and increasing the quality of application
development and maintenance activities. The CIO and senior firm members engaged BearingPoint to evaluate
their application portfolio for alternate sourcing readiness.
BearingPoint evaluated the IT organization, spending and processes to develop a business case addressing
optimization opportunities. Our services also included CMM benchmarking, vendor analysis/selection,
contract negotiation and organization and process design.
RESULTS
BearingPoint identified $4-6M in annual, IT operating savings.

Inc.
Application
Rationalization
for a Global
Aerospace
Manufacturing
Company
OBJECTIVE
 Rationalize over 5,000 applications as a part of a global data center consolidation project
 Minimize risk and disruption to the business
 Inventory all applications including the creation of database-verify inventory with business
 Stratify applications by complexity, type, function, disposition and criticality
RESULTS
 Reduced 2,000 applications from the current portfolio
Application
Portfolio
Rationalization
for a Large State
Agency
OBJECTIVE
 Identify Software Rationalization Targets - elimination, replacement, consolidation, or
renegotiation.
 Inventory all discovered legacy systems, versions, processes and provide general gap resource
and cost statements
 Develop plans and execute for identified targets. This included key process changes impacted by
overall plan.
RESULTS
 Achieved savings of approximately $9M.

Inc.
Rationalization for a
Retail Brokerage of
a Major Investment
Bank
OBJECTIVE
The IT Infrastructure group at the Client desired to develop a group-wide framework from which architectural
discussion could take place. The client asked BearingPoint to produce an architectural framework including
overall vision and design principles. The client also asked BearingPoint to provide initial actionable (logical)
architectures for several specific technology domains.
BearingPoint focused on the portfolio categorization and analysis elements of IT Portfolio management,
developing a Technology Portfolio and Migration Strategy methodology to evaluate existing business and
technology initiatives and to identify investments that would offer long term risk adjusted returns to
shareholders. This process resulted in significant bottom line results, through slowing down or stopping some
planned initiatives and redirecting project funding faster and more effectively.
RESULTS
As a result of the BearingPoint-developed Integration Framework (IF), business applications share a
common infrastructure. The converged services and infrastructure including a singular deployment
platform, standard APIs, standard security services and standard data access points. We decoupled business
applications from 1) their supporting services, 2) non-related business applications and 3) the presentation
tier. Overall, in contrast to the current state, the IF is simpler to develop, deploy and manage which has
resulted in reduced costs.

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