The Executive Guide to Application Management
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This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Andy Kyte The Executive Guide to Application Management
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The Executive Guide to Application Management. Andy Kyte. You Need to Know Because …. Applications Are Expensive. Applications Are Important. Applications Rust. Applications Can Help You Win!. You Need to Know Because …. For 21 st Century Executive Managers, a Firm Grasp of the - PowerPoint PPT Presentation
Transcript of The Executive Guide to Application Management
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Andy Kyte
The Executive Guide to Application Management
You Need to Know Because …
Applications Are Important
Applications Rust
Applications Can Help You Win!
Applications Are Expensive
You Need to Know Because …
For 21st Century Executive Managers,a Firm Grasp of the
Principles of Application ManagementWill Be a Critical Career Capability.
For 21st Century Executive Managers,a Firm Grasp of the
Principles of Application ManagementWill Be a Critical Career Capability.
Key Issues
1. What are business applications, and why do business managers need to understand them?
2. How should business executives participate in the process of investing in business applications?
Applications Are a Large, Diverse Family
Systems of Record
Systems of Differentiation
Systems of Innovation
Planned Persistence
20–25 Years
Planned Persistence
8–10 Years
Planned Persistence
1–3 Years~$100,000
$1 million–$10 million
Refactor
Refactor
$10 million–$100 million+
Application Sourcing:Not Just Buy Versus Build
SubscribeSubscribe
Business Process Business Process OutsourcingOutsourcing
Buy and ConfigureBuy and Configure
BuildBuild
Buy and CustomizeBuy and Customize
An Application Is Part of aAn Application Is Part of aComplex EcosystemComplex Ecosystem
An Application Is an Asset
• The Industrial Revolution developed accounting standards for fixed assets.
• Accountants use sophisticated depreciation formulas.
• Shareholders are protected by a "sinking fund."
• In the "Information Revolution," accountancy practice is trailing behind asset value delivery.
• Applications are assets — in many cases, the most-valuable assets an enterprise owns.
• Shareholders have no mechanisms to value assets — and no "sinking fund."
An Application Is a Liability
The Application
• Trained business users
• Architectural compliance • Technology skills• Application server• Application integration• Operating system• Data and Information• Tools for management• Tools for testing• … …
The Stack
Example Range of Go-Live Costs as a Percentage of 15-Year TCO
2%
6%
8%
16%
Application VolatilityApplication VolatilityLow High"D
esig
n f
or
Lif
e" O
bje
ctiv
es"D
esig
n f
or
Lif
e" O
bje
ctiv
es
High
8%
This Year's CapEx Drives Next Year's OpEx
Current
Year
Next
Year
Base Base
Ops Increase for A
Maintenance for A
Ops Increase for B
Maintenance for B
ProjectA
ProjectB
NewProject
NewProject
Bu
dg
et
Requirements: It's Not What You Do — It's the Way You Do It
Reference: IEC 25010 (Was ISO 9126)
Functionality
Reliability Usability
Efficiency Maintainability Portability
Analyzability Changeability
Stability Testability Maintainability
Applications Can and Will Change!
Positive ROI
From Investment
in This Phase
Moderate
ROI
Likely Negative
ROI
Birth Adolescence RetirementInfancy Maturity
Understanding Application Maintenance
The Four True Functions of Maintenance
Corrective
Adaptive
Preventive
Perfective
The False Function of Maintenance
MinorEnhancements
a.k.a. "Back Door Development"
Low
High
The Three Critical Application Attributes
2013 2018 2023
Key Issues
1. What are business applications, and why do business managers need to understand them?
2. How should business executives participate in the process of investing in business applications?
Step Zero:The Application Governance Process
Supply-SideStakeholders
EnterpriseArchitecture
Demand-SideStakeholders
Governance of the stakeholders, bythe stakeholders, for the stakeholders
NamedOwner
Step 1: Monitor
1. Line Item Costs for Each of Your Applications
2. Expected Future Costs Over 10 Years
3. Utilization — Business Units of Work
4. Utilization Trends — Historic and Predicted
5. Technical Risk Analysis — 10-Year Predicted
6. Gap Analysis — Current and Predicted
7. Market Testing — Internal and External
Executive Application Portfolio Management
Step 2: Buy/Sell/Hold
Eliminate Migrate
InvestTolerate
Tec
hn
ical
In
teg
rity
Tec
hn
ical
In
teg
rity
Business ValueBusiness Value
Step 3: Generate Options
Option 1: Do Nothing
Costs
Benefits
Risks
Option 2: Upgrade
Costs
Benefits
Risks
Option 3: SaaS
Costs
Benefits
Risks
Option n: nnnnnnn
Costs
Benefits
Risks
Recommendations
Allocate time to regular reviews of yourapplication portfolio
Lead the culture change management to eliminate bad acquired habits and develop best practices in application value delivery
Challenge your team to develop a strategic approach to your application portfolio
Implement "One In, One Out" as a minimum standard when acquiring new applications
Related Gartner Research
CFO Advisory: Application Portfolio Management Overview Andy Kyte (G00206748)
Guide to Application Essentials, August 2011 UpdateBill Swanton (G00214804)
The 'Seven Deadly Sins' of Application GovernanceMatt Hotle (G00210776)
Recommendations for Improving Project Prioritization D. Stang, D. Fitzgerald, J. Duggan (G00167598)
How to Use Pace Layering to Develop a Modern Application Strategy J. Shepherd, D. Gaughan, Y. Genovese, V. Sribar (G00208964)
For more information, stop by Gartner Solution Central or e-mail us at [email protected].
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Andy Kyte
The Executive Guide to Application Management
