The many applications in use (or not in use) in a bank can be a lot like your cable TV channels at home. When is the last time you took stock of how many channels you have—and which ones you actually watch? Do you really need four stations dedicated to professional bowling? How much could you trim your monthly bill if you eliminated the channels you no longer watch, need or that are near-duplicates of other channels?
One recent report revealed that 75% of IT organizations have minimal portfolio oversight. Another survey found that as much as 20% of the average organization’s applications are redundant, and CIOs believe as many as half of the applications in their portfolios should be retired. Here are a few steps you can follow to get the applications under control at your bank:
Take an application inventory. Think fast: How many applications is your bank IT organization currently supporting? If yours is like most businesses, you may have no idea. It’s a stunning thought when you consider the licensing fees, rollout of updates, and maintenance to support these applications—many of which may have long ago outlived their value to the organization.
The first step to more proactively managing your applications is to conduct a complete inventory. Be sure to include the cost of the application, which projects it supports and the number of resources required for maintenance. Also, note any interdependencies it shares with other applications or projects. Seem overwhelming? Start by taking stock of applications only being used on current projects, then branch out to lesser-used applications from there.
Eliminate redundancies. A good inventory may uncover some glaringly obvious duplication in the functionality of applications. At this stage, in addition to identifying redundancies, this is an opportunity to take an honest look at legacy applications that could be retired. Perhaps the majority of their functionality has been taken over by newer, more efficient applications, yet the licenses have been allowed to linger on. Now’s the time to make the final break. You’ll realize some impressive cost savings for your department, as well as free up budget and resources for new, more productive applications.
Gauge the value of remaining applications. At this stage, you’ll evaluate each application according to one simple question: “What value does this application deliver to the IT organization and to the bank?”
Score each application according to the criteria that make sense for your business’s goals. A suggested matrix might measure value according to 1) Strategic Alignment, 2) Business Process Impact, 3) Architecture, 4) Direct Payback, 5) Risk and 6) Customer Impact/Revenue.
Match resources to applications. Now that you have a leaner application portfolio and a clearer view of the role each application plays in the success of your business, you can more effectively pair people with the work processes needed to support applications. Thanks to eliminating redundant applications, you can now reallocate staff from supporting retired applications, to working on maximizing usage of mission-critical applications. Your efforts will also free up resources to devote to innovating new projects that will drive the bank forward.
Researchers have found that IT departments typically spend 75% of their time, money and resources simply keeping things running on a daily basis, leaving only 25% of efforts dedicated to new strategic initiatives. It’s a sobering fact, especially in today’s world where agility and innovation are essential to survival; yet it’s a scenario that many IT project managers would likely recognize as being familiar. After following the steps above, you will be able to manage your applications more efficiently and to better align them with the needs and priorities of your bank.
Kevin Kern is CEO of Innotas