Legacy Modernization - A different perspective

I have been reading about Legacy issues and plans of organizations towards modernizing their legacy applications/portfolio. For sure, most of these modernization plans and business cases come with promises that yield result in 2-3 years with investments of the order of 10-20 million depending on your portfolio. Key point to note is, the 2-3 years payback time is post implementation, which itself takes close to 2 years.
Given this context, it is apt to understand such programs as big investment plans with change effort and naturally, a long evaluation cycle, good amount of resistance and approvals very well linked to how well industry and organization is performing in market (you need to have money to spend when planning for it). In current economic environment, if IT organization gets a go ahead for such big plan, then I will have to say their case was very well presented. Ground reality is - such plans are not finding their way to implementation in current economic scenario. Hence, there is a need to take a step back and relook the legacy problem
In the last one year I have worked with 3 clients facing similar issues, and have suggested them to approach the modernization solution a little differently than they did done in past. I call this approach Step-by-Step modernization. And in this approach, key levers of improvement are Business Processes, Organization Policy, Applications (technology), Operating environment (includes ways of working). While Application (technology) modernization comes with a good price tag, other levers can yield result with a short lag time. Though, it is not appropriate for me to suggest as to what comes first process/policy/apps, it is essential to understand that this approach does provide you with options with varied payback time and different risks and investment. In two of the three organizations that I worked last year, this has been the fallback options (after getting the big buck plan rejected), though the third organization has found its way towards a 20 million investment in complete change in IT.
I will detail the Step-by-Step modernization approach in my subsequent posts. In the meantime, if you have experiences to share from your organization or clients then it would be a real value. I invite your comments/suggestion/opinions

Enhancing the Business value of IT

Web2.0 initiatives on which you invested some 3 million dollars, or may be that legacy modernization initiative which you promised would deliver or server virtualization initiative that gulped millions need to show and deliver value. You made the business spend lot of money on retaining and generating information, but never took that last step towards monetizing the information. This is the time to look back and spend extra effort to evaluate the effectiveness of such initiatives and realize value through them. Hence, IT leaders should now focus on measuring and aligning IT goals with business.

But, the question is - what was missing while IT delivered all these projects, and business was satisfied with just the customary 2-3% of revenues as IT spend reflected in its annual report card. IT would not substantiate business benefit, and business too based on its previous experience did not expect the same from IT. While it had been reiterated many times since 80’s, the need was to have solutions prescribing – Business value of IT. Over years organizations struggled to measure value of IT spends through various prescriptive frameworks (like Val IT, GVM). While the value being delivered could now be quantified, after the solution was implemented and put to use; the need of the day now is to have solutions and efforts that deliver value right from onset, rather than having to measure value post IT spend. The challenge ahead is how to achieve solutions that deliver business value, right from inception.

Answer to this is – Get the strategies correct, than introducing some more fancy IT solutions. Focus on alignment and control. Some of the steps that can help in this regard can be:

• SLAs b/w IT and biz that don’t just guarantee uptime, but also promote alignment through use of business metrics
• Adoption of ITIL – service orientation attuned to improving business performance
• IT policies and directions with end customer in mind
• IT Strategic Oversight committee to prioritize the IT spend plan. Focus of such committee should be on strategic projects, that have the capacity to deliver direct business benefit
• Infrastructure, application and architecture strategies that drive business value, such as Green IT, SaaS drive, establishing COBIT controls

"Cloud Computing" - Who stands to gain in the value-chain?

"The conventional wisdom is that cloud computing is about the delivery of IT services over Internet pipes at dramatically lower cost, with massive elasticity and scalability. Software as a Service, open source, Web 2.0, the consumerization of technology, globalization -- yesteryear's buzzwords -- are a piece of the story, but cloud computing is bigger than the sum of its pieces"- Gartner
Google, MS and yahoo are investing more than 5 billion USD, IBM is playing big with close to a billion dollar DC investments, and smaller vendors/service providers jumping in with their PoVs on how cloud computing can help, it would be interesting to understand as to what is in store for customers, mediators and hosting giants.

CIOs action plan for 2009-10

It started with real estate, moved to finance and now it is impacting the business sentiment in auto and retail. Amidst the global turmoil with more bad news round the corner, corporate round the world are focused on surviving this lean period. Given this scenario, when top line management is dependent on market conditions than organization strategy, the only lever for organizations is the cost.
As our focus in this blog is toward IT and related impact of IT and business, it pertinent to understand what CIO’s action plan is for 2010. Based on my understanding of what I see around at my clientele, following seem to be some relevant directives:

• Cut cost – Lean IT


• Make IT more efficient – Deliver more value with same or smaller investment


• Move to a utility based model to provide flexibility – Lower fixed cost


• Increase the visibility of business value provided by IT – Retain IT as a strategic asset


• Increase IT effective –Connect IT success with business

What is your opinion about these? Any additions or modifications to the list are welcome