The weight of obsolete applications

Updated on: Apr 24, 2011
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What do you find when you visit a major IT company? Lots of work terminals, server rooms and, of course, many professionals. Obviously, all these are essential for running various business applications that are critical for the company's business.

And, of course, there is a plethora of business applications. But how many of these are relevant in the fast-changing world of technology? This was the question sought to be addressed — perhaps for the first time — by IT major Capgemini in its first annual Application Landscape Report released recently.

Published with HP, the report underscores the immediate need for IT modernisation as organisations carry the burden of unnecessary applications.

Stating that millions of applications within European and American businesses are obsolete and no longer deliver full business value, the reports pleads that rationalisation and retirement of applications is necessary as organisations spend valuable resources needed to drive innovation and future growth on maintaining unnecessary and outdated systems.

Here are the excerpts of an interview with Ron Tolido, Chief Technology Officer, at Capgemini for Application Services, Continental Europe.

What is the cost of maintaining redundant business applications? What could be the approximate savings for a company/industry in general if they are rationalised?

Around 20 per cent of the applications of an average global company is redundant. This does not only imply similar savings of 20 per cent on application management costs (often by far the biggest part of an IT budget), but also significant savings on hardware, software licences and organisational and governance costs.

The figures on redundant applications cited in the survey are interesting. What would be the impact on manpower/HR if all the redundant applications are rationalised? Will it lead to any job loss?

I doubt that seriously, as more IT budget will become available for IT projects that deliver more direct value to the business (redundant applications typically deliver very little value). As a matter of fact, more business value from IT might lead to more enthusiasm for IT, which would lead to job increases rather than job losses.

IT companies involved in the survey must have come from diverse areas. Is it possible to identify the top three verticals/areas where we find more application redundancy?

More application redundancy occurs in organisations that have been through multiple mergers and acquisitions. This is particularly the case not only in financial services, but also in the telecommunications, manufacturing and retail sectors.

Furthermore, very large, fragmented organisations tend to create more redundant applications, as is very apparent in the public sector.

How does the life-cycle of applications work? Is it possible to explain with some examples?

The strange thing is that despite Capgemini's work in this area, within the industry most IT experts still don't think in terms of an applications lifecycle.

At universities they are just taught how to create new applications from scratch, in a supposedly green field that actually does not exist in real life.

In practice, IT experts learn how to manage and maintain applications once they have been developed.

While this has less interest from universities, by far the biggest part of the IT budget is absorbed by applications maintenance.

Furthermore, nobody seems to mind about a third, crucial aspect of the lifecycle of an application: its decommissioning.

Companies need to do much more research in the field of terminating applications once they are redundant or of little use to the business.

Managing the entire lifecycle of an application, from its inception through its design, and build all the way via servicing and maintaining it until its retirement, would be a sign of a maturing industry — much as Product Lifecycle Management is already a well-established concept in the manufacturing industry for a long time.

We need to think ‘cradle to cradle' for our applications across the board, which would provide a real breakthrough in the IT industry.

What are the new trends in application development?

Clearly, there is a strong interest in application rationalisation as it delivers a lot of value to organisations, not only in terms of cost savings, but also in terms of speed-to-market and business innovation.

Obviously, there is a trend towards developing for the cloud, and even more: developing with services that are delivered from the cloud.

Furthermore, I still see a very strong movement towards replacing existing, custom-built software by standard, packaged applications. There is also a new tendency towards agile development.

Last, but not least, I think there will be a fast breakthrough towards developing light-weight applications for mobile devices such as smartphones and tablets. This has long been a promise in the market, now it is actually happening.

And soon, innovations in mobile development will dwarf what we do for desktops and laptops.

What are the suggested methods of rationalising business applications?

This can be done by multiple ways. Regularly assess your IT applications portfolio to determine whether it's still aligned with the needs of the business and your strategic objectives.

Use analysis and metrics tools to support you in understanding the defining attributes of your applications and their inter-relationships.

One can only focus on simplifying business applications rather than just stabilising and maintaining the existing portfolio.

You need to consider retirement as a serious part of your application's lifecycle, applying a “cradle to cradle” approach — application retirement nowadays poses bigger challenges than application development, but it has many potential rewards.

Key findings

85 per cent of IT leaders say their application portfolios need to be rationalised. Almost 60 per cent enterprise companies support ‘more’ or ‘far more’ applications than are necessary to run their business.

About 61 per cent say they keep all data beyond its expiration date to be used ‘justin case’.

Half of the participants in the survey agree that up to 50 per cent of their application portfolio needs to be retired. More than half of applications of large companies and enterprises are custombuilt, increasing the technical complexity of required platforms and technologies.

Only 13 per cent say their application development and maintenance teams are aligned. And half (48 per cent) say their teams are only in synch for 50 per cent of the time or even less.


Published on April 24, 2011

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