Increasing ROI and Reducing the Risks of Your Application Portfolio

Transcription

1 Increasing ROI and Reducing the Risks An ENTERPRISE MANAGEMENT ASSOCIATES (EMA ) White Paper Prepared for ASG October 2008 IT Management Research, Industry Analysis, and Consulting

2 Table of Contents Introduction...1 Background...3 APM Value Proposition...4 APM, SDM, and the role of ASG-becubic...6 EMA Perspective...8 About ASG:

3 APM solutions help IT executives evaluate the benefits, costs, and risks associated with each application while maximizing the value realized from ongoing software investments. ITIL V3 advocates taking both a lifecycle-based (Software Development Lifecycle or SDLC) and a global approach to managing applications, with the Application Portfolio described as detailing applications in a consistent manner managed and maintained to enable alignment with dynamic business needs. Introduction Leading-edge businesses have come to see their software programs as organizational assets, differentiators that distinguish them from competitors in the never-ending race for market share. Many of these same companies, however, aren t using available resources to full potential because they lack a cross-organizational approach to managing software investments. Application Portfolio Management (APM) is coming into its own as a best practice-based approach to managing applications throughout their lifecycle. APM solutions help IT executives evaluate the benefits, costs, and risks associated with each application while maximizing the value realized from ongoing software investments. They provide executives with the information they need to properly direct investments towards projects that align well with the needs and objectives of the business. APM solutions provide a definitive view of applications, services, and their relationships with the business. The IT Infrastructure Library (ITIL), a well-known compendium of industry best practices, continues to strengthen its support for a portfolio and lifecycle-based approach to application management. Realizing the absolute dependence of most businesses upon Information (and Communications) Technology infrastructure and the quantity, quality and the availability of the information that such an infrastructure provides and supports 1, ITIL s contributors continue to evolve the concept of applications as business services. ITIL V3 stresses this fact with the introduction of Application Management as a function and with acknowledgement that management of the Application Portfolio is essential to a best-practice-based Application Management strategy. ITIL V3 s Service Design book defines an application as the software programs that perform those specific functions that directly support the execution of business processes and/or procedures. ITIL views applications as one element of a business service, which also includes data, hardware, operating systems, and other supporting elements. ITIL V3 advocates taking both a lifecycle-based (Software Development Lifecycle or SDLC) and a global approach to managing applications, with the Application Portfolio described as detailing applications in a consistent manner managed and maintained to enable alignment with dynamic business needs 3. APM becomes part of the overall Application Management function, supported by traditional IT Service Management (ITSM) disciplines, particularly Configuration, Release, and Change Management. 1 IT Service Management, Macfarlane, Ivor, Rudd, Colin, itsmf Ltd., 2001 Service Design, Colin Rudd, section 5.3. Great Britain Office of Government Commerce, published by The Stationery Office, Ibid

4 ASG s new and improved becubic solution is the secret sauce that differentiates ASG from competitors in this space. ASGbecubic provides comprehensive application visibility from dual points of view, including both IT and the business perspectives. ITIL V3 Books ITIL V3 ITIL V3 Functions Service Strategy (SS) Service Desk (from V2) Service Design (SD) Service Transition (ST) Service Operations (SO) Continual Service Improvment (CSI) Figure 1: ITIL V3 Technology Management IT Operations Management Application Management APM investments offer significant opportunities for Return on Investment (ROI), particularly for organizations with strong change and configuration management processes already in place. They include:.improved ROI throughout the application lifecycle based on better control of software assets.improved alignment of the application portfolio with strategic business objectives.better decision-making as to where application-related investments should be allocated to provide maximum value to the business.mitigation of the potential risks of changes and new releases Improved operational efficiency through better configuration and change management.improved impact analysis capabilities.better visibility to applications and data for Governance, Risk, and Compliance (GRC) purposes. Integrated solutions that put these benefits within reach are now available to every IT organization seeking improved strategic and operational efficiency. The remainder of this paper will focus on Allen Software Group s (ASG s) approach to Application Portfolio Management and will detail ASG s tightly integrated offerings across the solution portfolio. ASG becubic and ASG s Business Service Platform (BSP) for Service Dependency Mapping (SDM) are central to this story. ASG s new and improved becubic solution is the secret sauce that differentiates ASG from competitors in this space. ASGbecubic provides comprehensive application visibility from dual points of view, including both IT and the business perspectives. becubic s technology awareness focuses on custom applications and includes multiple languages, databases, schedulers, and interfaces for multiple software configuration management systems. becubic has extensive support for everything from multiple flavors of COBOL to most known distributed languages and 15+ different job schedulers. On the business side, recent enhancements to becubic bring a full-fledged Application Portfolio Management solution to ASG s already extensive solution set.

5 Many IT organizations are struggling to emerge from the dark ages of application management, in which the entire lifecycle relied heavily on human knowledge and manual processes. SDM is the glue that builds the holistic view of the entire application portfolio both custom and packaged applications that underlies ASG s APM solution. The result is an impressive set of capabilities that position ASG as one of a handful of vendors offering APM support for both custom and packaged applications. This combination of capabilities, building on ASG s award winning MetaCMDB, provides a depth of analysis and breadth of coverage that puts ASG among the industry leaders in this space. Background Recent EMA research found that 30% of companies surveyed were supporting more than 50 business applications 14% were supporting more than % were supporting Service Oriented Architecture (SOA) or Web-services-based applications, and 55% integrations with partners, providers, or other outside entities. Nearly 80% reported support for custom applications, which were the most common application type. While it has always been true that application systems are the lifeblood of large companies, it is now becoming increasingly clear that managing them has become a monumental undertaking. Software deployments are increasingly complex, distributed and integrated. For many enterprises, the result is a growing gap in visibility and control of these systems. These gaps are driving costs and inefficiency. Research consistently reports that the costs of maintaining the IT status quo administration, physical plant, and management is consuming a disproportionate portion of IT budgets. At the same time, EMA research is showing that IT is becoming less efficient at managing these systems. In June of 2008, IT professionals reported that 54% of application-related problems were reported by endusers. This percentage is trending upward, and has increased by 10% over the past two years. This means that IT has actually become less proactive, and all indications are that IT is losing ground to growing complexity. In too many cases, the result is that the business loses confidence in IT s ability to be a trusted partner. All the while, business applications have also become more complex. SOA and Web Servicesbased applications are now mainstream, and are creating new management challenges. To accommodate SOA architectures, legacy applications are sub-divided into component parts and reassembled as new composite services. This creates further confusion, along with high rates of change within the portfolio of business services. In addition, applications from an earlier era are being transformed into the loosely coupled business services of the present, adding to the challenge of managing availability, performance, and change. The growth of virtualization has added complexity as well, resulting in business services composed of complex collections of physical and logical resources that are driving even higher rates of change. In the midst of this evolution, many IT organizations are struggling to emerge from the dark ages of application management, in which the entire lifecycle relied heavily on human knowledge and manual processes. IT s attempts to manage this complexity with headcount have driven administration costs to between 60% and 80% of budget, depending on the company.

6 A new approach is required, one that automates the process of creating the global and SDLC-focused application views detailed in ITIL V3. The basis for this approach lies in linking the application lifecycle with configuration and business information to create a complete view of applications in context with technology and the business. Application Portfolio Management is the foundational capability that builds this holistic big picture. Robust APM requires comprehensive understanding of the interrelationships among business, IT infrastructure, and applications. Modeling these interconnections is the role of ITIL s Configuration Management discipline, and the purpose of the federated Configuration Management Database (CMDB) concept. The CMDB becomes a logical map of the technology and business entities that constitute a business service. A comprehensive CMDB is the basis for efficient performance of basic ITIL functions including Incident, Problem, Change, and Release Management. Application Portfolio Management builds on these basic functions by adding support for business and technology-related decisions about the application portfolio. ASG is particularly well-positioned to deliver on APM because of its long-term focus on adding rich content and powerful functionality to the ASG MetaCMDB and related solutions. The combination of ASG MetaCMDB, becubic, SDM, and APM provides robust support for tactical activities such as change and release management, as well as for more strategic activities such as business and project planning. Change and release Management are so important and risk-prone that ITIL V3 has devoted an entire book to the subject of Service Transition, which includes the introduction of applications into live environments and the management of change. Service Transition points to both configuration management and management of the application portfolio as foundational enablers for Service Transition. APM Value Proposition Application Portfolio Management solutions provide value on the tactical side of the equation as well. APM generates a complete view of an application that includes software and supporting infrastructure, but also information about the business and its requirements, ongoing projects, and project-related software assets. In generating ROI models for configuration management and related projects that improve operational efficiency, EMA has developed three primary value propositions: cost avoidance, risk avoidance and improved IT maturity. From the cost perspective, APM ROI is incremental and multi-dimensional. Cost justification takes multiple factors into account, including the costs involved in developing and maintaining applications within the portfolio, costs of providing ongoing support, and potential cost savings realized by rationalizing applications to directly align with business requirements. Governance and Regulatory Compliance (GRC) activities also generate cost considerations, since meeting regulatory requirements is a source of considerable expense for most IT organizations. Both types of costs are escalating risk factors that can be mitigated with good visibility to the Application Portfolio lifecycle. Risk management is another consideration. Without visibility to the Application Portfolio and an understanding of factors such as which applications touch sensitive data and which servers contain such data, GRC-related risks can be significant. Change management activi-

7 ties also generate risk. EMA research shows that changes to applications and supporting infrastructure drive between 25% and 80% of application-related problems, depending on the level of maturity of a company s change processes. Since collateral research 4 has found that the cost of fixing application problems escalates as they progress along the lifecycle with a 1X cost during the development process translating to a 30X cost post-release it becomes clear that change can generate both expense and risk. The potential ROI of organizational maturity is more difficult to quantify. However, higher levels of maturity introduce multiple opportunities for business impact analysis that support better management and decision-making. In addition to the change management improvements documented above, these include:.improved business alignment: As applications become more complex over time, it becomes more difficult to determine which applications drive true business value and which are simply consuming resources. Visibility to the application portfolio drives better decisions regarding where software investments are best directed to realize maximum business value..better budget decisions: APM directly aligns applications with their business value, driving better budget decisions along with better cost efficiency..improved business decisions: APM improves decision-making by surfacing application redundancy and gaps. Redundant applications can be retired, and gaps areas of business need that the application portfolio does not address can be remedied..protection of existing assets and services: Applications align to both IT and the business. While application infrastructure components align to IT, the business services the applications provide align directly to the business. This creates management challenges, as an activity related to one business service may have unintended consequences on other services which use shared infrastructure. APM links the two sides of the application with a combination of sophisticated service discovery and mapping and deep applications understanding. This mitigates the risks involved in changing either the service or the technology side of the portfolio..improved responsiveness of IT to changing business needs: Targeting budget to the correct software initiatives frees up resources for new projects that provide differentiating business value..application prioritization and rationalization: APM investments surface factors such as usage, users, and overall cost of ownership. This information provides a basis for prioritizing development, acquisition, and support resources and for rationalizing the overall portfolio..legacy modernization/transformation: Many companies are investing in projects that utilize legacy software in new ways, i.e., SOA and/or Web Services. A primary challenge of such projects is determining what to use and what to discard. APM streamlines the process of identifying potential areas for re-purposing and reuse. 4.. Software Errors Cost U.S. Economy $59.5 Billion Annually: NIST Assesses Technical Needs of Industry to Improve Software-Testing, National Institute of Standards and Technology (NIST), 2002, downloaded September 30, 2008 from:

8 .SOA enabler: SOA drives changes across the organization, many of which align to software-related issues. APM introduces controls that streamline the process of bringing SOA to the enterprise, and that support the global view advocated by ITIL V3. Finally, while cost avoidance, risk avoidance, and improved IT maturity are certainly key ROI factors, equally compelling is what EMA calls the cost of doing nothing. In lieu of automation, IT effectiveness is a direct function of headcount EMA research indicates that most IT organizations are growing by 5% or less. However, many companies are growing at a rate of 20% or more. The delta between the two represents IT s agility, the ability to respond to new business objectives. For rapidly growing businesses, IT becomes the bottleneck preventing business growth, and it becomes clear that complex environments are unmanageable without the addition of either automation or headcount. The alternative is continued loss of efficiency. One option, increasingly popular, is outsourcing but this carries risks. Outside workers are not familiar with a company s infrastructure and applications, which makes an application knowledge base even more important. The value proposition, while tangible, differs for each organization. However, automation enables IT to support the business with nominal investments in additional headcount. As efficiency increases, a state of equilibrium is eventually reached. Figure 2: ASG-becubic APM, SDM, and the role of ASG-becubic ASG-becubic (see Figure 2) is ASG Software s entry into the Application Portfolio Management space. becubic s capabilities focus on custom applications, which are the most common application type in today s enterprises. In generating both the global and the

9 ASG federates information from a variety of discovery sources into its ASG-MetaCMDB, creating a foundation for multiple activities, including Application Portfolio Management, configuration and change management, and related ITSM functions. lifecycle-based application views, ASG leverages a combination of ASG-becubic and ASG-Service Discovery and Dependency Mapping (SDM) 5 products. ASG federates information from a variety of discovery sources into its ASG-MetaCMDB, creating a foundation for multiple activities, including Application Portfolio Management, configuration and change management, and related ITSM functions. The technology behind these products is complex, since they are required to understand potentially hundreds of thousands 6 of business-related artifacts and concepts, including software, hardware, networks, processes and process models, application metadata, databases, and many other information types. SDM combines information from multiple sources to create a broad and deep understanding of the configurations and characteristics of the application portfolio and its relationships with the business. SDM and its value proposition are described in detail in the paper referenced above. A comprehensive APM solution requires that application-related information be collected from multiple vantage points, then analyzed and compiled into a comprehensive, application-focused view. Within the ASG portfolio, ASG-becubic is an application auto-discovery tool. It analyzes code within source code repositories to extract identifying details about applications and stores this information in an application repository. This provides the basis for a logical map of an organization s software assets. Discovery of packaged applications is done via partners such as Tideway, ensuring that packaged applications across the entire infrastructure are accounted for as well. SDM reconciles information collected by both becubic and packaged application discovery products and stores it in ASG s central data/metadata repository, ASG MetaCMDB. ASG-becubic s visibility into custom applications is a true differentiator, and a key value proposition in terms of APM. Most competing offerings have significant weaknesses when it comes to custom applications. Almost all can discover custom applications in production by detecting executables and recording those that are unknown. A handful of vendors and products ASG becubic is one use innovative code analytics to analyze application code and generate a policy-based knowledge base of application assets and relationships based on that analysis. ASG-becubic supplies the understanding required to answer questions such as: Should an application be retired? Can support for the application be outsourced? Is this a core, high priority service or one that is seldom used? How is it performing, and does it require additional resources? What happens if it is moved or changed? Should it be modernized, and if so, will the investment yield acceptable ROI? 5..Functionality detailed in: ASG Service Dependency Mapping: Making the Link Between IT and the Business, EMA and ASG, ASG customers have populated the metacmdb with more than 300,000 Configuration Items (CIs) in some cases. The MetaCMDB is very scalable and efficient, and the theoretical size limit is millions of CIs.

10 ASG-becubic has recently been enhanced, and features added in V7 include: Impact analysis capabilities The APM function requires significant configuration management capabilities, and ASG has taken a systematic approach to covering all the territory necessary to build a comprehensive configuration management story. Queries executed as Web Services Improved scalability and performance Application Portfolio Management EMA Perspective Most enterprise management vendors understand the need for insight into business applications and most market on that basis. Few, however, have acted on this knowledge with the vigor that ASG has brought to the process of developing and maintaining configurationrelated information. In doing so, ASG has developed a portfolio that solves the challenge of managing the proliferation of applications in the enterprise. ASG s grasp of the issues related to managing custom applications, in particular, sets the company apart from the competitive pack. And as one of the few remaining privately-owned enterprise management suite vendors, ASG has methodically built out its portfolio with a focus on creating some of the most comprehensive application asset solutions in the industry. These APM capabilities are enhanced by ASG s strong configuration management capabilities that EMA has extensively documented. The APM function requires significant configuration management capabilities, and ASG has taken a systematic approach to covering all the territory necessary to build a comprehensive configuration management story. ASG s focus on heterogeneity and automation of the tasks that other vendors leave to IT specialists to carry out manually (mapping for custom applications) is impressive. They also mean that implementation requires fewer services resources than competing solutions. Equally impressive is the comprehensive approach to integrating technology configurations with organizational metadata and the investments ASG continues to make in enhancements and product upgrades. ASG s challenges are related to its size compared to vendors with comparable solution portfolios, as well as to the fact that it is not yet a household name like Big Four competitors. ASG is, however, coming into its own as a competitive contender and, over the past year in particular, has come a long way in terms of raising its profile. ASG s investments in configuration management, Business Service Management, and now Application Portfolio Management have paid off with a strong solution set geared towards assessing the business impact of application-related problems and activities. Equally relevant to the tactical problem of managing change and the strategic problem of deciding where application-related dollars are best spent, becubic s APM capabilities further add to ASG s differentiation in the market place.

11 With leading-edge configuration management, and now a compelling Application Portfolio Management story, ASG is well-positioned for incremental growth in the near to mid-term. For companies seeking a refreshing and comprehensive approach to managing application portfolios, ASG should be on the short list as well worth consideration. About ASG: ASG provides software solutions to over 85 percent of the world s largest companies. Through its comprehensive Business Service Management (BSM) solution, Business Service Platform, ASG is an established BSM provider with a strong heritage in Content, Metadata, Applications, Operations, Performance, Infrastructure, and Identity Management technologies. ASG enables clients to reduce costs, enhance customer service, meet business objectives, and truly go beyond BSM. Founded in 1986, ASG is a privately held company based in Naples, Florida, USA, with more than 90 offices around the world.

12 About Enterprise Management Associates, Inc. Founded in 1996, Enterprise Management Associates (EMA) is a leading industry analyst and consulting firm dedicated to the IT management market. The firm provides IT vendors and enterprise IT professionals with objective insight into the real-world business value of long-established and emerging technologies, ranging from security, storage and IT Service Management (ITSM) to the Configuration Management Database (CMDB), virtualization and service-oriented architecture (SOA). Even with its rapid growth, EMA has never lost sight of the client, and continues to offer personalized support and convenient access to its analysts. For more information on the firm s extensive library of IT management research, free online IT Management Solutions Center and IT consulting offerings, visit This report in whole or in part may not be duplicated, reproduced, stored in a retrieval system or retransmitted without prior written permission of Enterprise Management Associates, Inc. All opinions and estimates herein constitute our judgement as of this date and are subject to change without notice. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies. EMA, ENTERPRISE MANAGEMENT ASSOCIATES, and the mobius symbol are registered trademarks or common-law trademarks of Enterprise Management Associates, Inc. Corporate Headquarters: 5777 Central Avenue, Suite 105. Boulder, CO Phone: Fax: