Application Portfolio Rationalization for a Financial Services Provider
The client is a privately held financial services conglomerate, offering mutual funds, life insurance and investment management services. The client manages a multitude of funds for millions of customers worldwide. It employs more than 30,000 professionals and has offices in 70 US cities and in about 20 other countries.
The client was working with an inventory of over 300 applications. However, there was no clear mapping between a business function and the technology applications that supported it. Even the technology spending for each business function was not known. This had led to a complete lack of clarity on Total Cost of Ownership (TCO) for these applications.
Each business unit wanted better data availability and lower cost of maintaining IT infrastructure. But in the absence of application rationalization, which helps to reduce application diversity, the client found itself dealing with rising costs of supporting diverse, disparate and even obsolete applications. In addition, application data management became a burdensome task.
The client clearly needed to make some strategic decisions about its inventory - which applications were worth enhancing, which needed to be decommissioned and which ones should be put on life-support. Unfortunately, this decision making was hampered by the lack of clear and quantifiable financial information. To rectify this situation, the client decided to partner with Infosys on an application rationalization exercise that would help it align its application portfolio to its strategic IT objectives.
- One of the primary challenges the Infosys team faced was to obtain existing TCO data, including information on maintenance and infrastructure allocations. The team needed this data to build business case for decommissioning
- To support the necessary decision making process, the team needed key details on application characteristics, functionality etc.
- The team had to get most of its information via interviews with application owners. This was a painstaking and time-consuming process and involved a lot of data cleansing, consolidation and an analysis of Infosys' role
Infosys approached this crucial exercise in four phases. First, it developed a business architecture and mapped this back to the existing applications. Next, it worked to identify costs for each application. It used the data gathered through interviews to allocate appropriate costs to each business function. To do this, the team used existing financial data to identify the client's current costs for each application. The third step was to study each application in depth and identify key characteristics and functionality details, based on which the final evaluation and prioritization of the entire applications set would be made. Finally, the team built and delivered a portfolio rationalization strategy for the client. The team provided a rationalization roadmap, clearly identifying the applications to be retained and to be decommissioned. It also provided an action plan for the retained applications. It also helped the client to prioritize the decommissioning exercise and helped to put it on the agenda at 'top management' level.
- The rationalization strategy, if implemented, would generate an estimated annual savings of over US$ 26 million
- The team created an application TCO wizard to help the client's program managers and financial groups. This tool provided executives with the quick and easy access to total cost of an application, thereby streamlining the IT management process
- The entire exercise was completed in just eight weeks, enabling the client to benefit from the recommended strategy without undue delay