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Application Portfolio Analysis

and Application Roadmap

Jochem Harteveld
Senior Managing Consultant
March 13th, 2013

2013 IBM Corporation


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This presentation contains trade-marked IBM products and


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2013 IBM Corporation


Many companies today face significant challenges in
unlocking business value from their application portfolios
Applications landscapes evolve to a complex mix of technologies, applications,
and versions with high fixed costs
Living with existing applications is a core challenge for organisations, while they
juggle cost reduction and business transformation demand
Optimising existing applications is critical to meet these demands and deliver IT
value of new opportunities, for example:
Increasing business value while reducing on-going costs constrained
by untouchable applications as knowledge and skills reduce
Leveraging enterprise value of cloud-computing constrained by inflexible
applications which resist change
Delivering mobile business functionality constrained by data
accessibility and application architecture
New business and application architectures constrained by integration
rules and complexity

2013 IBM Corporation


Legacy application portfolios can be barriers to business
flexibility and reuse
Business Launch new and Shorter change Integrate acquisitions
Pressures innovative products cycles and new markets

Agents
Employees

Customers Suppliers

Resellers 3rd Party


Providers

IT Complex processes Complex applications High % IT budget spent


Constraints and systems and interfaces on maintenance

2013 IBM Corporation


Application Portfolio Management
Solving key business and technical problems
Application Portfolio Management provides technology and industry expertise and
innovative business solutions that address key goals of our clients

Reduce fixed IT costs to Migrate to strategic


manage existing environments, e.g. cloud
applications computing
Radical simplification of the
Identify gaps and issues applications and data
in application and architecture
information architecture
Create a Roadmap setting out
Align IT investments to recommendations to reduce
critical business cost, rationalise, modernise,
objectives improve or decommission
applications
Shorten time to realise
business value through Enable integration with key
improved flexibility and emerging business
technology solutions, e.g.
Cost and risk efficient social and mobile computing
alternative to replace

2013 IBM Corporation


Applications Portfolio Assessment (APA)
A proven approach to identify the cost saving and transformation
opportunities available within the current application asset base
Client Development
-IT Vision and Strategy
Rationalisation
-Business Strategy Prioritised
- Enterprise Architecture Recommendations Legacy
Transformation

Portfolio Assessment

Potential Benefits to Clients Planning


Data Collection Data Opportunity
and
and Verification Analysis Identification
Discovery
Reduces fixed costs to operate the
current portfolio
Removes duplication, risk, and complexity
Portfolio
Framework
Reduces resistance to change Management
for Governance
Transforms existing legacy applications
Focuses resources on core activities and Continuous Alignment and Improvement
applications
Establishes a clear, common language for value
ranking of the portfolio, based on key business and
IT characteristics
Provides the crucial information required to drive
out opportunities for transformation and
improvement, including a focus on retiring low
business value applications
2013 IBM Corporation
APA Definition of an application
Defining the boundaries of an application is necessary in order to compare
apples with apples
An Applications Portfolio Assessment is based on an application inventory.
For each application specific information is gathered in order to perform
analysis including comparisons;
In order to ensure that apples will be compared with apples a clear
definition of the application boundaries is required:
Interfaces:
Who owns an interface?
Middleware:
Is the use of middleware seen as part of the application?
If so, does this include any application specifics?
Data:
What is a data Master or Owner?
What is Reference data?
There is no standard definition for an application.
Important is that there is a common agreed on definition.
2013 IBM Corporation
APA Approach
Includes four major process steps, each of which is tailored to your specific
requirements

Data collection & Opportunity


Phase Planning & discovery Data Analysis
verification identification

Identify applications in Review business and Review and assess Identify a prioritised set
scope application strategies compiled application of application
Gather materials Gather application data information opportunities that
Review business and via questionnaires, Score applications address key business
Objective application strategies interviews, and within consistent objectives
Activities documents enterprise-wide view Prioritise and qualify
Map application portfolio Draft initial set of benefits of high value
inventory issues and opportunities
Validate and reconcile improvement
data hypotheses

Project plan and Populated Applications profiled Executive application


timeline Application Portfolio by their business and portfolio summary
Milestones and Inventory IT characteristics report
Outputs
dependencies Portfolio Assessment Prioritised, sequenced
Briefing and kickoff findings recommendations
meetings

9 2013 IBM Corporation


APA Lifecycle
How to put the process steps to work
Data Collection Component Business Application
Model (CBM) Analysis Target State ROI / business case
Business
workshops, L in c o ln C B M A n a ly s is

Agree KPIs Retain


Application
Retire
Portfolio
Replace
Database
Restructure
Reprioritize
Development foundation
Reallocate
Integration profile
Accessibility of functionality Scalability
Availability Architecture
Usability
Breadth and utility of function



Maintainability
Reusability
Security
Action



Retire
Replace
Restructure
Silver Gold -
Existing
Portfolio View
Reprioritize
Cash Cow Innovation
Architecture
Relocate

Framework mapping Bus


Val iness Func Dat Tec
hni
TCO
Cos
Blue - Bronze -
Rationaliz Improvem
ue tion a cal
al ts
Alignment to new business strategy
Alignment to operational business

ation ent Plan further Execute


objectives and needs
Impact on business value
Accuracy and Quality Operations & Support costs
Efficiency
Accessibility to data Maintenance & Development costs
Revenue
Flexibility Licensing costs
7.
Customer
Maintainability Training costs
R 2. Reprioritize
Leverage points in the organization e
Accounting treatment oth
p er

Value
High l cor 1.
a e R
c app e
Biz e s p

Measurement Value
Functional Data Technical TCO

Framework
4. Restructure
u
s
CUS
and
r
i
o

Prioritize 6. Relocate
e r

Hig
VALUE

Architecture
FUNCTIONAL DATA TECHNICAL

Business r IRSettle i
ISment

h
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- t

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pr
U10
Compliance
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Value

Lo
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(1) U15
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i

rit
w
A8
A20
FOE - Funds OE
CAT - Table Maintenance
4.7
4.5
U7
A21
KRONOS
AS/trade - Query
4.8
4.8
A16
A23
SEG - Omnibus Settlement
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5.0
5.0
U2
U4
ETA - Electronic Ticket Agent
P&L Online
5.0
4.8 8. u z

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pr
U2
(1.25)
ETA - Electronic Ticket Agent 4.5 U11 GDO/Support 4.5 U8 BA - Billing Agreement 5.0 U12 GDO/Basket 4.8

Re 5. e3. Restructure
Ease of Use
U8 BA - Billing Agreement
Ops 4.5 A10 MLC - ML Settlement 4.5 U3 NBFX - F/X Monitor 5.0 U22 IRIS - Client file mgmt 4.8
e

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str
A1 CMS - Commission 4.5 5.0

Availability Complexity Cost Rr KRONOS

rit
A13 PLN - Plans & RSP 4.4 A14 RECON - Reconciliation 4.5 A15 RFC - Referred Client 5.0 U11 GDO/Support 4.5

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uct

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U5
U12
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PCIS - Portfolio Online 4.4
4.3
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4.5
4.5
A8
U19
FOE - Funds OE
Div-TAX - Feuillets Fiscaux
5.0
5.0
U8
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BA - Billing Agreement
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4.3
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ure s
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FO e
Impact U7 KRONOS 4.0 U8 BA - Billing Agreement 4.3 A7 FEE - Fees 5.0 A19 TFR - Transfers 4.3
tb

Target portfolio
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y
(.75)
A7
A21
U19
FEE - Fees
AS/trade - Query
Div-TAX - Feuillets Fiscaux
3.8
3.8
3.6
U5
U3
U9
PCIS - Portfolio Online
NBFX - F/X Monitor
GDI - Electronic Instruction
4.3
4.3
4.3
U14
U12
A10
GDO/DT - (ICARIUS)
GDO/Basket
MLC - ML Settlement
4.8
4.8
4.7
A11
U17
A5
MUT - Fund Processing
DivQI - Conciliation US
DRIP - Dividend Re-Investment
4.3
4.3
4.3
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A3
A12
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OPT - Option Expiry
3.4
3.4
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4.3
4.3
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4.7
4.7
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4.3
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3.4
3.4
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4.0
4.0
U22
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4.7
4.5
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4.0
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3.3
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U17
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4.0
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4.5
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3.3
3.2
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3.8
3.8
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4.3
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CAT - Table Maintenance
3.8
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CanDeal
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TFR - Transfers
3.8
3.8
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4.0
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3.8
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CPL - Compliance
2.8
2.7
A5
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3.8
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UT
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p
Implement selectively
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DRIP - Dividend Re-Investment
2.3
2.2
A2
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3.0
3.0
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CRD - Credit / Margin reporting
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1.8
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A2
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3.0
2.5 Deselect Cs
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M
S
Low High
Implementation Feasibility

Application Profile
Application
Inventory

Projects
Project n
Project 2
Entry point Project 1
2013 IBM Corporation
Application Portfolio Measurement Framework
Establishes a baseline for cost reduction, application improvement
initiatives and investment decisions
Operations & Support costs
Development foundation
Maintenance & Development costs
Integration profile Action
Accessibility of functionality Licensing costs
Scalability Retire
Availability Training costs
Maintainability Reduce
Usability Accounting treatment
Reusability Replace
Breadth and utility of function Security Restructure
Existing Reprioritize
Portfolio View Relocate
Retain

Bus
Va l i n e s s Fun Tec TC
ue ct i o Da Arc OC
Alignment to new business strategy nal ta h nic hite os t
a l c ture s
Alignment to operational business
objectives and needs
Impact on business value
Efficiency Accuracy and Quality
Revenue Accessibility to data Architecture
Customer Flexibility Technology platforms
Leverage points in the organization Maintainability Alignment with technology
standards
Technology maturity
2013 IBM Corporation
APA Example work products:
Application inventory and analysis results
Rating (1 to 5) - 1 implies poor, 5 implies excellent
From Business Assessment Sheet From Technical Assessment Sheet From 'Discovery Work'
Value Function Technical Data Cost

App Name Description Q5 Q9 Q10Q11 Q12Avg Q1 Q2 Q3 Q4 Q7 Q8 Avg Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Avg Q10 Q11 Q12 Avg Maint. Hrs. Dollars Key Issues
Strategy

2. Flexibility / Responsiveness
organisation

to Change

4. Functional Coverage

8. Architecture
1. Reliability

3. Useability

7. Data Quality

1. Stability

Quality

3 to 5 yrs; 5 - 5+ yrs
5. Technical Life Expectancy

9. Scalability
5. Dependence

11. Leverage across

Processes

2. Code Quality

7. Adherence to

10. Database Design

12. Data Accessibility


6. Maintenance Skills

11. Data Quality


1 to 2 yrs; 3 - 2 to 3 yrs; 4 -
12. Regulatory Compliance

4. Openness/Accessibility

Standards/Policies
Rating Scale: 1 - > 1 yr; 2 -
9. Alignment to Business

8. Alignment to Business

3. Technical Documentation
10. Business Value and Impact

Component of ACA is a daily batch process that updates a


Medicare datafile with Veteran's Asset and Income information with
is then used by Medicare to determine rebate. The file is routed
Undertakes eligibility through a number of departments such as DVA, Dept. of Health
Aged Care assessment for veterans Centrelink etc.
Assessment requiring Aged Care. 4 4 4 4 4 4 3 1 4 1 4 3.222 4 4 2 3.33 33 $ 17,712.00 -
Was only meant to be an interim solution until the functionality
could be replaced by Curam (does not support all functionality)
- Unique to MRCA legislation - SRCA and VEA legislations are
covered by other systems
- Targeted for migration to Curam (Liability or Incapacity
assessment only)
- Not many people understand it (difficult to get technical resources)
- Incapacity calculator not used, can be turned off
Records disabilties related to - Common parliamentary reports can not be easily produced and
Active Services (MCRA Only). require siginificant manual effort
It then determines rehabaition - Has performance issues - MCE (rules engine) very slow
and Compensation payments - Delphi 6 Support is an Issue (would need to upgrade to Delphi
CADET where applicable 4 1 4 4 4 3.4 3 1 3 2 4 2 2.5 3 3 3 4 3 1 4 3 4 3.111 3 2 1 2 1196 $102,879.75 2008)

Develop, Generate and Produce Energy Acquire and Manage Customers Enable the Business IBM Global Business Services
Generation Asset Generation Asset Generation Asset Customer Meter Data Billing & Strategy, Finance, HR, &
Construction Maintenance Operations
Energy Trading Marketing Sales
Service Management Collections Regulation Administration
Org As applications individually are of reasonable quality; cost and complexity arises
Maintenance
Operations Portfolio Marketing
Billing Strategy
Business
Corporate
from numerous systems, technologies, databases and the way Org A exchanges data
Growth Strategy Strategy Strategy Sales Strategy Strategy
Strategy
Financial
Management
Product
Customer
Regulatory Strat
Governance with external parties
Service Meter Data Strategy and
Price & Load
Direct Production StrategyPlanning Development Standards, Policies and Operational
Strat. &Performance Org As core applications, from both technical
Asset Strategy forecasting Customer Policies, and Standards Billing Policies 5.0
Capital Program Plng Policies and
Asset Strategy Pricing Relationship Procedures and Standards
Management Emergency Deal Planning Media and Public Procedures 4.5
and functional quality perspective, are perceived
Management Technically Good CELS

Planning Relations PAHRIS


RAPTOR

4.0 Defcare DVA-Clink


TFN
DOLARS
DOGMA

DDS
to be between average and good, indicating no
Construction Maintenance Operational Service Delivery Billing exception CRS
VHC
MAVIS

acute urgency for change - on this basis alone


CAIRO

Trading Risk Sales management Business 3.5


DRS
Hotspur
ShareMaint.
PARS

Performance Performance Planning Management Meter Data


CMS PIPS
RTCPS

Management Performance Portfolio ACA

Org As high maintenance applications are


VIEW

Management Management Validation Accounts Management 3.0


SI
GUIDE
TAS
DPS Sup Inc
IPS

Maintenance/ Management receivable Management CCPS

Customer Accounting
Card Issue
FLS

Market Research generally also high value. However some require

Functionally Good
Growth Maintenance Construction Deal Service 2.5
CADET DMRS

Financing Planning Planning performance Performance Substitution and Dunning & DVATS

relatively higher maintenance


management Delivery Estimation Collection Business 2.0
Management
Con-
Construction Maintenance Fuel Planning Management Performance Even though the individual applications are
1.5
Management Workforce
struction
Permissions Management Deal Making Customer Meter Cust account reasonable, the multiplicity of systems and the
Control Storage Analytics 1.0
Mgt Information Information information
Regulatory 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
use of variety of technologies (IMS, DB2,
Project Design Inventory Operations Demand-side Retail
Management Management management
Management Trading Compliance Object*, C++, VB, COBOL, Delphi, Oracle) and
and Planning Management management &
Marketing Revenue
Operations Monitoring Market data exchange mechanisms have made Org As
Campaign Contract Forecasting MAVIS

Project Performance Compliance


Defcare CCPS VHC

Procurement Management Emissions & Monitoring and Management Customer legacy application architecture complex
Management Management Exception Credit
connection point
Renewables
management
Management Management Risk
Facilities Hotspur
DOLARS
PIPS SI VIEW
Org A exchanges a large amount of customer
Contractor Contractor Contractor Planning and Management
DVA-Clink

Maintenance Cost
Management Management Management Trading Management Risk
and Maintenance and treatment data with other parties. Org A does
Management TAS CADET
DPS
not have a consistent, standard way of dealing
Customer DRS
Super Inc RAPTOR
DOGMA

Fuel Plan Financial with data exchange either from a business


Deal execution Product Interaction Connection Point Intercompany
Construction Execution Sales Execution Accounting
Execution Management Standing Data data exchange RTCPS PARS
CARD ISSUE
ACA IPS
process or technical/channel perspective. This
Plant Operations Market Customer Event Maintenance Procurement contributes to the cost and effort involved in
Management
Execute Con- Asset
Storage
settlement
Bill creation
Regulatory
Business DVATS CRS PAHRIS CAIRO addressing this inherently complex area
Maintenance Emergency Interaction GUIDE
TFN CELS
DDS

struction CMS FLS

Operations Customer Administration DMRS

Marketing Response
Commissioning Demand-side Enrolment and Unmetered
Execution Payment
Outage management Transfers Customer Field Supplies Workforce Business Value

execution processing Administration


Management Activities
6 DVA Application Portfolio Assessment - Project Report Executive Summary| 15 May 2008 | Copyright IBM Corporation 2008

= No or very low coverage = Poor Health = Reasonable Health = Good Health


2013 IBM Corporation
APA Example work products:
Prioritized application cost reduction / transformation
opportunities
Prioritization Criteria
opportunity
Business Value

1) Business Value

opportunity Prioritization criteria Range minimum Range maximum


Revenue impact Low High
Cost Impact Low High
opportunity Link to business imperatives Low High
Productivity enhancement Low High
Competitive advantage Common Differentiator
Speed of benefit delivery Long term Immediate
Implementation cost/time/risk

ative 2) Implementation Cost


st r
Illu Prioritization criteria Range minimum Range maximum
Project cost Low (<$100,000) High (>$10,000,000)
High business value and low Technology risk Low (proven) High (unproven)
Scope of functions addressed Low High
cost/time/risk opportunities
Implementation duration Short (1-2 months) Long (over 1 year)
Business consensus Accepted Debated
Resource requirement Current team Transformed IT capabilities

2013 IBM Corporation


APA Example work products:
Cost benefit analysis

Tangible Benefits
- IT Related Cost
Savings
Benefit
- Business Related Calculations
Cost Savings
- Revenue Increase
Less Tangible
(Intangible) Project Cost
Benefits Calculations

- Indirect Cost
Savings
- Revenue
Enhancement
* Financial
Calculations
Financial
Calculations may be
difficult, depending
on availability of
baseline

2013 IBM Corporation


APA Example work products:
Phased plan for implementation
Top page

Action plan

L
PLEE
M
SAAMP
S

2013 IBM Corporation


APA Characteristics
Its Quick, Comprehensive and Pragmatic

Quick - Address an enterprises urgent need to cut costs associated


with providing applications and applications support
Opportunity identification within 4 weeks
Value proposition for selected opportunities within 6 weeks

Comprehensive - Focus on key levers of IT cost reduction:


consolidation, standardization, automation and transformation

Pragmatic - Identify cost saving and transformation options that can


be designed and implemented in a phased approach:
External facilitation to broaden thinking
Value proposition / business case based opportunity selection
Factors in business as usual cost reduction as well as the ability to release
funds into strategic applications investments

2013 IBM Corporation


Application Portfolio Assessment & Management Builds a
foundation & roadmap for cost reduction and modernization

Benefits Realisation
Application Leverage existing assets to new language or
Conversion environments such as cloud and improve
flexibility
Application Consolidate applications and data to enable
Rationalisation
business transformation and optimisation
Application Improve code quality and architecture to remove
Renovation constraints, issues and complexity and reduce IT
costs of support and change
Application Execute full decommissioning including
Retirement requirements for data retention and archival to
release all IT costs for unused applications
Roadmap and Business Case
Application Portfolio Application portfolio level diagnostic - Identify and
Assessment & Management prioritise cost and value improvement options

Application Analysis & Deep application code diagnostic Identify


Roadmap renovation or remediation roadmap and ROI
2013 IBM Corporation
Recommendations
For each application, an assessment results in a recommendation that can
drive specific actions to reach the desired end-state environment
Applications which meet both the Business and IT criteria (may be subject to
Retain different opportunity, e.g. reprioritise

Applications with low business value, potentially high maintenance - move useful
Retire functionality, rules and data migrated to other portions of the application portfolio

Applications important to the business operations, but lacking in functional or


Replace technology quality - move useful functionality, rules and data to existing or new
packages or applications with higher functional and/or technical quality.
Applications with high business value but low non functional or operational
performance. - by re-architecting, re-platforming, application and data architecture
Restructure simplification, integrate with emerging technology solutions (e.g. mobile and social
computing).
Applications with higher than desired maintenance or operations costs - reset
Reprioritise service levels (e.g. criticality or fault severity levels, maintenance or enhancement
request priority) in line with business value.

Applications which could benefit from different sourcing methods - evaluate and
Relocate select alternate sourcing for application hosting, maintenance and/or development
2013 IBM Corporation
Structure and components relevant for the transformation
Roadmap
Life-cycle guidance to optimize the application portfolio (APA result)
Wanted position - Functional mapping & Target solution
Initial high level architecture for the transformation - Technical & Physical
architecture
Service transformation roadmap - Switch service focus and spending to
core and strategic applications
Governance structure (decision mechanism)
Project plan for the transformation phases - Activities are prioritized
based on business drivers
Competence development plan
Business case
Risk analysis
2013 IBM Corporation
Transformation may be done in two dimensions

System A

Function
System B
Functional Dimension

subset 1

Function
subset 2

Function
subset n Electronic Enterprise Business Processes Enterprise New Data store
Channels Services Integration Services

Client Client Enterprise


BPM Enterprise Application Data
Interaction Integration Integration
Transformation Transformation Transformation
Transformation Transformation Transformation

Architecture Dimensions
2013 IBM Corporation
Right prioritization is important

1 Roadmap

2 Governance
System A

Function
3 subset 1 System B

Electronic Enterprise Business Processes Enterprise New Data store


Channels Services Integration Services

Client Enterprise
Data
Integration Integration
Transformation
Transformation Transformation

2013 IBM Corporation


Participate in the System z Expert and
Superhero contest!

Fill in your answer to the question


below on the scorecard and deposit
your card in the box!

Which of the following is NOT part of


the Application Portfolio Measurement
Framework:
a.Impact on Business Value regarding
revenue
b.Functional availabillity
c.Previous investments
d.Technical expertise

2013 IBM Corporation


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Thank You
English

Bedankt Nederlands

Merci
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Obrigado
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Gracias!
Spanish Danke
German
Simplified Chinese

Japanese

23 2013 IBM Corporation

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