CIO Leadership, Applications

Enable business functions that matter with the right applications

Applications Rationalization is an engine continously driven by business priorities

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IDG Research recently shared their findings from a survey of IT priorities for 2013 in a research paper. They interviewed me as well. One of their key findings was a paradox: CIOs don't have time for innovation, but CIOs must constantly innovate to add business value — hopefully by delivering cost-effective IT services. So the question remains: What steps can CIOs take to make more time for innovation? This interview of Forrester Analyst Phil Murphy might yield some answers.

Murphy says that rationalization of monolithic, legacy applications simplifies the landscape, which will free up time, and open up more opportunities for innovation. Here is the mantra I took away from this interview: Enable business functions that matter with the right applications.

Applications Rationalization is an engine — an exercise in which IT works with the business to effectively enable the business functions that matter with the right set of applications. 

Let us explore this mantra a little more: "Enable business functions that matter with the right applications"

(Enable) business functions. Murphy says that CIOs need to communicate with the business owners in terms of the business functions they enable, rather than the specific IT initiatives. This would be a more effective approach than trying to demonstrate value out of one-off activities in which IT is engaged. Once the CIO can speak in this language, it becomes a much easier conversation.

(Enable business functions) that matter. Market forces, and the self-educated buyer, can change business functions that matter at any point in time for the enterprise. It’s not different from a portfolio of financial investments that a person needs to constantly tune and refine to maximize value. Therefore, it is important that the business functions that matter get the attention and resources they deserve.

(Enable business function that matter with the) right applications. Applications enabling business functions that matter need to be assessed for their effectiveness and efficiency. For example: Are there alternative technologies that could be leveraged? Is there application redundancy across the enterprise? What is the cost of maintaining these applications? What type of personality is the application exhibiting? They then must examine what an enterprise learns from their customers: What is the enterprise gleaning from social interactions with their customers? What is the customer sentiment in social media channels?

Structured, insightful analysis yields the appropriate modernization strategy for these applications.

Applications that are not effectively enabling these business functions are prime candidates for modernization and in most cases, retirement — especially if they cannot be easily repurposed into the modernized environment. Murphy cautions us about the challenges of retiring an application. The business need to access the underlying data is usually the primary motive for sustaining these applications. Once an alternative access path is provided to the backend data, retirement becomes an academic exercise at best.

CIOs who simplify the landscape open up more innovation opportunities for themselves. After all, they need to take the right steps to innovate the planet by 2020 -- when applications might even parallel park themselves like cars do today!

How about you? How are the engines doing in your Enterprise? Have you identified the business functions that matter? How have you enabled them?

Connect with Nadhan on: Twitter, Facebook, Linkedin and Journey Blog.

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Discussion
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pearl
Pearl Zhu 89 Points | Mon, 02/04/2013 - 16:39

Hi, E.G, enjoy your series of application management blogs, for many legacy organizations, it's crucial to transform their IT, or overall businesses. As many IT organizations are still suffering on high maitenance cost, architecture design debt, as well as resource inefficiency, the right applications will always need consider all factors matter, and make IT a business strategic partner, rather than just supporting function. Thanks. 

enadhan
E.G. Nadhan 241 Points | Thu, 02/07/2013 - 23:02

Pearl,

Thank you for reading my posts and also taking the time to comment on them.  Agree that the applications need to be transformed factoring in a multitude of factors working in partnership with the Business.  However, working with the business partners to identify the functions being enabled focuses the holistic transformation effort in the areas that are likely to have the most impact across the enterprise.

Connect with Nadhan on: Twitter, Facebook, Linkedin and Journey Blog.

Goddardd
Doug Goddard 122 Points | Mon, 02/04/2013 - 15:30

It may be just a case of semantics but in my world the emphasis is on automating business processes, rather than business functions. In fact, most of the work seems to involve integrating various functions together. For example, demand management involves procurement, sales, IT asset, service billing, financial planning and capacity management functions. Much of the discussion in IT Governance and IT Strategy, my main domain, is about process automation; even across LOBs, possibly because services are mapped to the business processes that the organization thinks provides them competitive advantage. One comment that comes up frequently is their customers just want to deal with one entity, even if that entity is composed of multiple business units and hundreds of different functions. The emphasis on functional rationalization seems to be making the situation worse because many of the applications cut off in the rationalization process are actually designed to integrate together disparate functions for a single process or purpose.

enadhan
E.G. Nadhan 241 Points | Thu, 02/07/2013 - 23:12

Doug, I agree it might be semantics.  My reference to business function is more at a macro level enabled by processes.  Automation is certainly a desired goal and a key driver for some of the applications transformation initiatives.  However, automation is not the only driver, either.  We must automate the processes that are being executed right in the first place enabling the functions that matter to the business stakeholders. 

I do agree that addressing the same problem from a process automation perspective would be a value-added exercise for applications that enable the business functions that matter. 

At the end of the day, what gets transformed could be driven by a combination of Business Function prioritization and Business Process Automation.

Connect with Nadhan on: Twitter, Facebook, Linkedin and Journey Blog.

Goddardd
Doug Goddard 122 Points | Fri, 02/08/2013 - 10:44

The key is finding out the best methodology for how to actually determine or measure which applications do "matter" and who it is who ought to make that determination. That seems to be a perennial problem in IT and why we are always wondering what the "value" of IT is. Who makes the decision is very topical at the moment. Your use of the financial portfolio analogy is part of the answer in my mind and the target of the analogy is the service portfolio. The question of who makes the determination is a governance issue. Like a financial portfolio, service portfolios ought to be in a constant optimization life cycle as well, with some services leaving, as new ones are invested in. However, service portfolios are usually built around operational processes and we seem to be caught trying to figure out how to marry them to the world of application projects. The services need to be mapped, somehow, to the business processes that matter, the processes that determine competitive advantage or competitive positioning for the organization, in my mind. The hard part is figuring out how to do that mapping so as to put an actual value on them and time constrained projects, and most organizations are lost in that respect. Those organizations who have figured it out are often weighed down by poor technology decisions, usually involving spreadsheets and islands of data, so they fail to gain the benefit, even if they get the methodology correct.