APM drives up to 30% off CIO's maintenance budget

17 July 2007

APM drives up to 30% off CIO's maintenance budget


​Phil Murphy of Forrester Research states: "IT management is using APM tools to shave 10% to 30% or more from the maintenance budget, achieving ROI within the first 12 months. These savings provide the opportunity to increase innovation capacity by 30% to 95%."


Phil Murphy of Forrester Research states: "IT management is using APM tools to shave 10% to 30% or more from the maintenance budget, achieving ROI within the first 12 months. These savings provide the opportunity to increase innovation capacity by 30% to 95%."

Better insight into the business value and appropriateness of software assets is being achieved across the corporate world with the advent of a software analysis tool for the CIO known as application portfolio management (APM).

Until Y2K, IT managers had greater freedom in deciding how money was spent. The new focus taking shape over the last decade is the result of the need for more rigorous business justification of IT costs versus business value, according to Joao de Oliveira, a director of MigrationWare, the business development partner and distributor (Africa) for Micro Focus.

"The CIO is expected to demonstrate the value of IT and to align it to the needs of the business. Through APM he can get an invaluable view of the costs, risks and value associated with various applications and can determine and make decisions accordingly about which applications need to be outsourced or re-engineered, retired or extended."

Most corporate applications are the result of years or even decades of heavy investment in systems critical to driving the business. It would be irresponsible to simply throw away such investment without careful analysis and consideration about how these assets could be extended and modernised through, for example, service-oriented architectures (SOA).

Enterprise View, an APM tool launched by Micro Focus, the UK-based legacy modernisation software house, allows an organisation to have a thorough understanding of its existing IT assets.

"APM is the first step to modernisation and it is critical to be able to judge IT on the value it brings to a business. Companies have enormous value locked in their systems and this should be surfaced and exploited into the future.

"Through an automated process, an extensive inventory of application components can be created. This inventory can then be supplemented by explicitly linking these to project information, issues management statistics and to business factors acquired through analysing documents, conducting surveys and so on.

“The CIO now has a fact-based source for making decisions on IT modernisation strategy for these assets, and the means to communicate these to the business," said De Oliveira.

Micro Focus' new APM solution can help drive IT strategy, providing an accurate real-time view across all applications, analysing every platform and focusing on cost reduction, investment protection and value creation.

"For the first time, CIOs have the ability to understand in detail what they have under their management, and how these assets relate to one another based on analysis of the actual assets. In a way, it amounts to reverse-engineered application architecture."

Outsourced management is another one of the areas the product can highlight. "We can get an idea of whether we are getting value for money when we outsource applications - even down to the number of man-days we are expending and what is being provided," said De Oliveira.

Micro Focus customers taking advantage of the benefits of APM include financial services companies HSBC, Banca Intesa, Barclays, UBS, as well as services provider IBM Global Services.

It was used by HSBC when setting up centres of excellence around the world, speeding up the transfer of application knowledge. By implementing APM, the group aims to reduce IT costs by 10% per annum.

Stephen Kelly, Micro Focus CEO, believes organisations that look only at packaged solutions or a re-write are being myopic.

"Core banking systems need to be transformed within the next three to five years. Banks need to modernise their core systems by using existing assets and wrapping them with service-oriented architecture," he said at the Micro Focus World conference held recently in the US.

De Oliveira adds that "in South Africa, the larger financial institutions in particular are beginning to look seriously at APM, but this tool is appropriate for a variety of large business and government organisations".