How to leverage existing technology to gain
a competitive advantage
Photography by Matt Greenslade
Mission-critical applications are the lifeblood for most large enterprises, which often rely on mainframes for data and transaction processing. While these systems are crucial for business operations, many organizations perceive them as a costly burden keeping enterprises from innovating and remaining competitive.
Nothing could be further from the truth. Legacy applications contain a wealth of knowledge and logic that can be leveraged to push businesses into surprising new directions. The problem many IT departments face, though, is learning how to do this without breaking the bank.
As Kristof Kloeckner, general manager of IBM Rational* Software, explains, this shouldn’t be an issue. Using the proper tools, techniques and collaborative teamwork, IT can combine existing code and knowledge with newer techniques and technology to speed delivery of new services. The results? Enterprises remain competitive and—somewhat counterintuitively—save money.
Q. Are enterprises able to react quickly to emerging business opportunities while also dealing with internal complexities such as older, existing investments in applications?
A. When you look at phenomena like mobile computing or the consumerization of IT interfaces, there’s a user expectation that IT—based services will be delivered faster, in a very consumable manner and with high quality. But if an enterprise develops applications in a traditional fashion, typically with 18-month cycles, I don’t think what they’re delivering can keep up with customer expectations. The bottom line is, they will lose that competitive edge. When you then take into account that fewer applications are single-system, single-platform applications, but are instead networked with the capabilities of many different systems—and sometimes not even restricted to one enterprise—you can see how complexity can lead to problems. We know, for instance, that more than 50 percent of IT projects are ultimately not successful. Why? Because the complexity of the underlying infrastructure puts a huge strain on development resources. If you put fragmentation on top of that—as related to processes, skills and development environments—you have a very complex mix of issues to deal with. So although, yes, while emerging technologies are a help to the consumer, they can also be extremely challenging for IT to manage.
Q. Is that why companies are increasingly addressing application-modernization issues?
A. Legacy applications represent assets that generations of developers have worked on, and they embody tremendous innovation and investment. One number I’ve seen, from IBM market analysis and estimates based on IT industry consultant and other data reports, is $4.5 trillion in cumulative investment in software from 1995 to 2010 alone. We can’t squander this heritage. But sadly, 70 to 80 percent of the development effort taking place within mature enterprises is actually spent on maintaining existing systems. This preoccupation with “keeping the lights on” prevents them from reacting to new challenges and opportunities in an agile fashion. Reducing the amount of effort spent on maintenance by looking at your application portfolio and deciding what you need to concentrate on is very important. That’s why IBM has a focus on enterprise modernization solutions to help customers adopt a more incremental and continuous approach for modernizing existing software assets, skills and infrastructure. You need to be able to look at the entire portfolio to determine what is and isn’t differentiating. To stay competitive, companies must establish business priorities for IT investments. Our application portfolio management solution gives companies the ability to jump-start this process. Let me provide an example: One of our customers, a large North American bank, conducted a very detailed analysis of its existing applications and was able to reduce the number of applications it had in service from about 600 to 147. That’s significant. You remove redundancy, you remove unnecessary complication, you allow your team to focus, you create critical mass for those applications that really make a difference and provide a competitive advantage—and you save money.
“IBM has a focus on enterprise modernization solutions to help customers adopt a more incremental and continuous approach for modernizing existing software assets, skills and infrastructure.”—Kristof Kloeckner, GM of IBM Rational Software
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Cover Story | How to leverage existing technology to gain
a competitive advantage
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