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Using IT Portfolio Analysis to Enhance IT Agility. July, 2008. Agenda. Introductions About Virtusa Current State of the Industry & Overall Trends Portfolio Scoring & Analysis—an Innovative Approach Case Study—Verizon Business Summary Questions. "You can't manage what you can't measure…”

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agenda
Agenda
  • Introductions
  • About Virtusa
  • Current State of the Industry & Overall Trends
  • Portfolio Scoring & Analysis—an Innovative Approach
  • Case Study—Verizon Business
  • Summary
  • Questions

"You can't manage what you can't measure…”

- Judy Spitz, senior vice president and chief information office for Verizon Business

introductions
Introductions
  • Michele PelinoSenior AnalystForrester Research
  • Alan MottDirector Systems Planning & Enterprise ArchitectureInformation TechnologyVerizon Business
  • George BerelsonDirector, Business ConsultingVirtusa Corporation
slide5
US-based corporation:

Headquartered in Westborough, MA

Locations in US, Europe and Asia

Technology Centers in U.S., U.K., India & Sri Lanka

Over 4,200 world-class professionals

57 current clients

Listed on NASDAQ (VRTU)

Rapidly growing & profitable

FY 2008 Revenue: $165.2 million

Operating income: $19.4 million

5-year compound annual growth rate: 46%

Numerous awards and certifications

Virtusa is a next-generation IT services provider with a strong 12-year track record

Global IT Services Provider

Revenue Growth

$ 165.2M

46% CAGR

$25M

ISO 27001

Awards and Certifications

22%

39%

38%

slide6

We have a great balance in our business, as demonstrated by our revenue distribution

Industry

Geography

Media,Information &Other

Europe

31%

22%

Communications & Technology

40%

69%

38%

Service Offerings

Banking, Financial Services& Insurance

North America

IT Consulting& ImplementationServices

29%

71%

Outsourcing

Period shown: Q3 FY2008

slide7

We provide a broad range of IT services to our clients

IT Consulting

Technology Implementation

Outsourcing

  • Assessment and planning services
  • Architecture and design
  • Governance services
  • Application and platform engineering
  • Systems rationalization
  • Systems integration
  • Business Process Mgt
  • Data warehousing and business intelligence
  • Application and platform management
  • Infrastructure management
  • Quality assurance management

End-to-end capabilities

All services are enhanced by our unique Platforming approach and client-centric consulting model

slide8

Client Delight

Industry Accolades

We are highly recognized by our clients and industry for innovation…

World

Innovation

Quality Day

Awards

Corporate Excellence Award 2008

Quality Award for Open Reach product (2006)

Finalist for BT Supplier Innovation Award (2007) & Best Customer Experience Innovation

(2005 & 2007)

Global Services Top 100 Most Innovative Service Providers (2008, 2006)

“Best Offshore Development Team” & “Best Application of BT’s Agile Practices”

(2007)

FinTech 100 (2007)

Ranked #252 in the VARBusiness 500 List (2008)

Ranked #1 IT Systems Outsourcing Vendor in Wealth Management Industry (2007)

Agile

Awards

IBM Partner Award (2007)

Listed in NASSCOM's 

100 IT Innovators (2007)

Pegasystems’ Partner Innovation Award for Engineering Excellence (2007)

Ranked 388 in the Deloitte Technology Fast 500 (2007)

Aetna Enterprise Innovation Award (2007)

Gold Award at Sri Lanka’s National HRM Awards (2007)

slide9

…and also by analysts

“Virtusa’s strong suit is more modern customer-facing front-office systems development and support…”

  • “Differentiatorsinclude:
  • A commitment to evolving rather than just maintaining systems under its care… Virtusa encourages its enterprise clients to think of these existing systems the same way a software vendor thinks of its products. Every cycle brings a new release or improved functionality—making them valuable and relevant that much longer.
  • Low ratio of on-site to offshore staff… Virtusa has one of the lowest, if not the lowest, ratio of on-site to offshore staff…Virtusa has also intentionally oriented its processes, client training, and staff to be effective in this model.
  • Focus on business analysts… Virtusa has invested more than most Indian providers on business analysts (BAs). This staff effectively bridges the gap between Virtusa and the client, as well as the gap between the on-site and offshore delivery teams.”

Not The Usual Suspects Part II: Cost, Quality, And

Client Service Benefits From Mid-tier Providers -- April 14, 2008

by Stephanie Moore, Forrester Research

current state of the industry overall trends

Current State of the Industry & Overall Trends

Michele PelinoSenior AnalystForrester Research

cios must evaluate and prioritize many different business and applications issues
CIOs must evaluate and prioritize many different business and applications issues

Assessing the value and performance of the portfolio - knowing what you have, where to invest, what to retire

Using and adjusting the portfolio to quickly meet business and market demands

Understanding if the resources, efforts, value and performance are aligned with business objectives and strategy

Asset classification applied to OSS/BSS is usually non-existent or inaccurate

Massive number of applications and duplicate functionality, especially with acquisitions and the retention of legacy systems

Realization that applications are business assets comprising a “portfolio”

slide12

Telecommunications service providers face a variety of overall challenges

Increased competition

Declining revenues

  • Cable company competition
  • Displacement of fixed voice service with VoIP
  • Declining ARPUs from mobile services and applications
  • New entrants (e.g., Google, Vonage) compete for voice and applications revenue

Service provider challenges

Network convergence

Organizational impacts

  • Fixed and mobile network convergence
  • Technology decisions impact organization
  • NGN architecture deployment
  • Need stronger communication between IT, network, marketing, and strategy teams
  • Network consolidation (mergers, acquisitions)
in addition telecommunications service providers must address particular business challenges
In addition, telecommunications service providers must address particular business challenges
however implementing these it initiatives is difficult
However, implementing these IT initiatives is difficult…

Address technical issues

Rationalize equipment, processes and resources

Assess IT initiatives in a structured, objective and logical manner

Consider ongoing support and maintenance requirements

Document individual knowledge for reuse

Leverage industry-accepted standards and frameworks

Recognize that standards are now “Darwinistic” or evolutionary

Facilitate the transition from in-house development to standard off-the-shelf products

Use standard frameworks to guide the transition process (e.g., TMForum standards such as the eTOM and SID frameworks)

and establishing organizational support and metrics are critical requirements for success
…and establishing organizational support and metrics are critical requirements for success

Organizational issues

Identify a senior level “champion” in the organization

Obtain agreement from various individuals on shared equipment, processes and functions

Requires employees to work together in new ways

Establishing metrics for success

Expanded revenues from new applications and services

Efficient infrastructure (e.g., server and application consolidation)

Improved customer satisfaction and retention rates

Increased ability to quickly adapt to dynamic market changes

IT professionals need processes, tools and solutions to help them identify, prioritize and address these IT challenges and issues

portfolio scoring analysis an innovative approach

Portfolio Scoring & Analysis—an Innovative Approach

George Berelson Director, Business ConsultingVirtusa Corporation

there is a wide spectrum of maturity in the management of application portfolios
There is a wide spectrum of maturity in the management of application portfolios

Who has the

experience?

What do our users or

developers think?

Do you know

what the pieces are

or where they are

located?

Do you know

what you have?

What business

value does

it bring?

How well do you know your applications?

Level of Maturity

slide18
Typical approaches to decision-making are not ideal, and there is significant opportunity for improvement
  • Decisions are often made not through rational, objective analysis and evaluation, but instead through:
    • Politics
    • Habits
    • Rules
    • Guesses
    • Emotions
    • The latest airline magazine business article…

…leading to ineffective decisions and outcomes

An approach to solving this is to use our foundational tools (TMF or other standards) to build a model for understanding and decision making

once we understand the application portfolio we can make decisions rationally and objectively
Once we understand the application portfolio, we can make decisions rationally and objectively
  • Treat our “portfolio” as any business should treat its important assets, investments and capital
  • Classify applications, figure out where they stand, what they do, how they perform
  • Understand how to take actions to optimize the portfolio’s performance and quickly meet changing business and market requirements—the business agility imperative
slide20
What can we achieve with an innovative approach?Enhance business agility and support better IT decisions

Gain a better understanding of IT assets/application portfolio

Breadth of assets

Learn “what you don’t know”

Increase organizational awareness of IT asset characteristics

Business value provided

Efficiency and effectiveness

Related revenue and costs

Improve decision-making capability for IT asset actions

IT changes to meet business needs

Sunsetting, consolidation, further investment

Technology rationalization, platforming opportunities

Outsourcing, maintenance

Aligning assets and investments with business objectives

create and apply an innovative business focused scoring analysis model to your it portfolio
Create and apply an innovative, business-focused scoring & analysis model to your IT portfolio

Build Model Hierarchy

Identify Important Metrics

Dimensions isolate the important comparative elements for assessment and decision-making

Metrics are aligned to the concepts and definitions of the organization and to the lines of business and business strategy

define a scoring weighting model that reflects both business and technology goals and priorities
Define a scoring & weighting model that reflects both business and technology goals and priorities

IT Metrics

Metrics have weights 1,3 & 5

to signify their importance

to the Focus Area

Focus Areas have weights

from 1 to 10 to signify

their relative importance

to the Strategic Indicator

Data Points

Data Points have weights

1, 3 & 5 to signify their

importance to the Metric

Scoring and weighting reflect the organization’s strategy, goals, direction and relative view of importance

put it into a manageable achievable action plan
Scope and objectives for portfolio analysis

Identify IT metrics to provide meaningful insights on asset portfolio

Business/IT priorities

Virtusa experience

Industry best practices

Identify and plan IT asset portfolio inventory/repository

Develop scoring and analysis model to evaluate assets based on metrics

Pilot phase for limited set of IT assets

Interviews and surveys

Prove out concept

Adjust based on feedback and results

Phased approach for remainder of IT assets

Primary focus on surveys

Increased automation for continued assessment

Put it into a manageable, achievable action plan

Build tailored portfolio analysis model

Create portfolio analysis roadmap

Execute roadmap

  • Collect metric data for IT assets, per scoring and analysis model
    • Pilot
    • Remainder
  • Analyze, evaluate, and compare IT assets along various dimensions
    • Rankings
    • Graphs
    • Recommendations
what s needed to do this
What’s needed to do this?
  • Application inventory
    • Knowing what applications you have and which you need to score and compare
    • What components they contain or use
  • Data about the applications—financial, demographic, etc.
    • Business processes they address or provide
    • Business constituencies served—business unit, lines of service, product lines, customer lines
    • Revenue contributions, costs, risks
  • The knowledge in people’s heads…
    • How well-constructed is the application?
    • How easy is it to use/work with?
    • Is it in compliance with company best practices and architectural standards?
    • How easily is it supported and maintained?
  • Known business imperatives and vision, as applied to IT applications
    • Strategic initiatives, such as improved agility, customer experience, growth, satisfaction, new markets, new regulations, etc.
case study verizon business

Case Study—Verizon Business

Alan MottDirector Systems Planning & Enterprise ArchitectureInformation TechnologyVerizon Business

we had a good start at attacking the problem
We had a good start at attacking the problem…
  • Through several mergers & acquisitions, Verizon had developed processes and tools for capturing the application portfolio, but were limited in analysis capabilities
  • Hardware & software specifics via scans
  • eTOM & SID used as taxonomy
  • Costs captured through financial processes
  • Product and customer relationship captured
  • for Profitability Reporting
  • Ad-hoc collection
  • Surveys/questionnaires
  • Occasional deep-dive trade studies
  • Corporate compliance attestations
  • Spin-off knowledge from development & design
  • Accuracy via Financial
  • Management processes
  • Property Accounting
  • recognition of assets
  • No funding released without
  • a properly identified application

Intuition

but we wanted to take it to the next level
… but we wanted to take it to the next level
  • Good inventory and attributes revealed areas of opportunity
    • Redundancies readily apparent
    • Non-standard technologies identified
    • High cost areas revealed
  • No lack of knowledge or opinion…
    • Had the knowledge power of 30,000 people
    • Intuition and experiences told us where to look and what to do
  • However, we did need:
    • Objective way to challenge or substantiate the intuition
    • A method to capture and normalize the knowledge
    • A clear link to how decisions contribute to business value
    • A way to continually assess the portfolio
we added analysis capabilities to our application portfolio
We added analysis capabilities to our Application Portfolio
  • Application Scoring Tool
    • Takes into account the intrinsic value of applications in eTOM business processes
    • Validates IT Roadmap decisions
    • Used in prioritization method to optimize & plan
      • End of service life
      • Technology upgrades or changes
      • Business continuity planning
    • Continual grooming of the Application Portfolio
      • Keeps pace with business and technology changes
    • Links operations and security to business understanding
  • Processes and procedures to validate or challenge expenditures on applications
  • Continual harvesting and audit of Application Portfolio data
    • One version of the truth
    • Avoids data stagnation
application scoring tool
Application Scoring Tool

Business Value & Efficiency RankingsRelative Strengths, with Underlying Indicators

we addressed each aspect of the challenges
We addressed each aspect of the challenges
  • More agile IT
  • Evolution of IT portfolio toward software platforms
  • Business value ranking resonates extremely well in the organization, providing an accessible means of making decisions
  • IT modernization roadmap
  • Reusable solution to evaluate new inventory (i.e., mergers & acquisitions or additional business units)
  • Improved quality of service
  • Improved responsiveness to customer needs and wants

We met our objectives and plan to calibrate and improve the model through continued use in Financial and Asset Management, Strategic and Enterprise Planning, Enterprise Risk Management, and Enterprise Effectiveness Management

summary32
Summary
  • Companies face the challenges of broad, overlapping applications in their portfolios that constrain the business agility imperative
  • They may be starting at different places on the continuum
    • Some, like Verizon, are further along
    • Others, maybe not so far
  • Can all benefit from improved visibility and decision capability
    • Systematic, consistent, objective
    • Helping to better align IT with the business

“By continually capturing more than 100 data-points for each asset, we are able to monitor and analyze the business value and IT efficiency dimensions across our entire application portfolio. This new level of visibility strengthens our roadmap planning for optimal investment in our strategic systems.”

- Judy Spitz, senior vice president and chief information office for Verizon Business.

slide34

For more information, contact:Dan KielarSenior Vice President, VirtusaDKielar@virtusa.com508-389-7208