While they may be the last to admit to it, many organizations have an app problem. They may not think so, but it's true. The fact is, as many large companies grow, merge and acquire other organizations, they end up accumulating an excessive number of applications. Like a hoarder who won't throw anything away, large corporations often find themselves in possession of more software than they need and paying licensing costs for software they don't use. And the problem isn't just financial; compatibility issues often emerge on the desktop, as legacy software clutters up the app portfolio. But how does an organization recognize the problem, and how do they know when it's time to clean the closet of all of the dusty shelf-ware?
Are you thinking that your organization might be suffering from software overload? Ask the following questions to gain insight into the problem:
- How many apps does your enterprise have in its portfolio?
- When is the last time IT did a full inventory?
- How much money (and time) does your company spend on maintaining this software each year?
- How many of these applications does your organization really use -- and why do you use them?
- Is everyone in your organization using the same set of apps for the same processes or is there overlap in the functions of your applications?
- Are all these apps around because they are useful, or do you keep some around because of how much money has been sunk into them?
- What is the business value in dollars and cents that each application brings to your business?
- Which ones have the highest value?
- Are these the ones your organization is spending most of its money on?
If your organization is getting ready to squabble over the budget for yet another "wish list" of applications, it's time to take a step back and rethink the approach. Examine your app portfolio now -- before the organization goes on another spending spree.
Timely advice from Gartner
The truth is that there's never enough money to do everything you want to do with your applications. But incremental changes aren't going to cut it. Your organization needs to think about the long term and assess the application portfolio as a whole. Bill Swanton, a vice president and distinguished analyst at Gartner, says organizations must learn to change the conversation around how they manage and upgrade their applications. "It can't be about sequencing a set of projects based on budget. It has to be about determining what business capabilities are being delivered to make the enterprise more successful."
This entails digging deeper to clarify exactly what you want your portfolio to accomplish from a business perspective. In some cases, you may need to entertain the idea of delivering capabilities in new ways. Swanton urges enterprises to step back from the knee jerk desire for what they are asking for to see what they really need. For example, just because a specific function has always been packaged in a specific application doesn't mean that's the only way it can be delivered.
How do you decide what must go and what should stay? According to Swanton, "commodity" ERP applications in particular tend to suck up money, provide redundant capabilities and add unnecessary complexity to workflows. The key to transforming the business with portfolio management is to lock those applications down, cut out the dead wood and reduce areas of overlap. Then, use your available budget to develop and improve marketplace applications that provide a competitive advantage. With holistic portfolio planning and IT spending that actually leads to greater profitability, you'll take control of your application problem at last.