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The Executive Guide to Application Management

The Executive Guide to Application Management. Andy Kyte. You Need to Know Because …. Applications Are Expensive. Applications Are Important. Applications Rust. Applications Can Help You Win!. You Need to Know Because …. For 21 st Century Executive Managers, a Firm Grasp of the

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The Executive Guide to Application Management

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  1. The Executive Guide to Application Management Andy Kyte

  2. You Need to Know Because … Applications Are Expensive Applications Are Important Applications Rust Applications Can Help You Win!

  3. You Need to Know Because … For 21st Century Executive Managers, a Firm Grasp of the Principles of Application Management Will Be a Critical Career Capability.

  4. 1.What are business applications, and why do business managers need to understand them? 2.How should business executives participate in the process of investing in business applications? Key Issues

  5. Applications Are a Large, Diverse Family ~$100,000 Planned Persistence 1–3 Years Refactor Systems of Innovation $1 million– $10 million Planned Persistence 8–10 Years Systems of Differentiation Refactor $10 million– $100 million+ Planned Persistence 20–25 Years Systems of Record

  6. Application Sourcing:Not Just Buy Versus Build Buy and Customize Build Buy and Configure Subscribe Business Process Outsourcing

  7. An Application Is Part of aComplex Ecosystem

  8. The Industrial Revolution developed accounting standards for fixed assets. Accountants use sophisticated depreciation formulas. Shareholders are protected by a "sinking fund." In the "Information Revolution," accountancy practice is trailing behind asset value delivery. Applications are assets — in many cases, the most-valuable assets an enterprise owns. Shareholders have no mechanisms to value assets — and no "sinking fund." An Application Is an Asset

  9. An Application Is a Liability The Application The Stack • Trained business users • Architectural compliance • Technology skills • Application server • Application integration • Operating system • Data and Information • Tools for management • Tools for testing • … …

  10. Example Range of Go-Live Costs as a Percentage of 15-Year TCO High 16% 6% 8% "Design for Life" Objectives 2% 8% High Low Application Volatility

  11. New Project Project B Maintenance for B New Project Ops Increase for B Maintenance for A Project A Ops Increase for A This Year's CapEx Drives Next Year's OpEx Budget Base Base Current Year Next Year

  12. Requirements: It's Not What You Do — It's the Way You Do It Functionality Reliability Usability Efficiency Maintainability Portability Analyzability Changeability Stability Testability Maintainability Reference: IEC 25010 (Was ISO 9126)

  13. Applications Can and Will Change! Birth Infancy Adolescence Maturity Retirement Positive ROI From Investment in This Phase Moderate ROI Likely Negative ROI

  14. Understanding Application Maintenance The Four True Functions of Maintenance The False Function of Maintenance Corrective Minor Enhancements Adaptive a.k.a. "Back Door Development" Preventive Perfective

  15. The Three Critical Application Attributes Cost High Risk Agility Low 2013 2018 2023

  16. 1.What are business applications, and why do business managers need to understand them? 2.How should business executives participate in the process of investing in business applications? Key Issues

  17. Demand-Side Stakeholders Supply-Side Stakeholders Enterprise Architecture Step Zero:The Application Governance Process Governance of the stakeholders, bythe stakeholders, for the stakeholders Named Owner

  18. Step 1: Monitor Executive Application Portfolio Management Line Item Costs for Each of Your Applications Expected Future Costs Over 10 Years Utilization — Business Units of Work Utilization Trends — Historic and Predicted Technical Risk Analysis — 10-Year Predicted Gap Analysis — Current and Predicted Market Testing — Internal and External

  19. Step 2: Buy/Sell/Hold Invest Tolerate Technical Integrity Migrate Eliminate Business Value

  20. Step 3: Generate Options Option 1: Do Nothing Costs Benefits Risks Option 3: SaaS Costs Benefits Risks Example Always Option 2: Upgrade Costs Benefits Risks Option n: nnnnnnn Costs Benefits Risks Example Example

  21. Allocate time to regular reviews of yourapplication portfolio Lead the culture change management to eliminate bad acquired habits and develop best practices in application value delivery Challenge your team to develop a strategic approach to your application portfolio Implement "One In, One Out" as a minimum standard when acquiring new applications Recommendations

  22. Related Gartner Research For more information, stop by Gartner Solution Central or e-mail us at solutioncentral@gartner.com. • CFO Advisory: Application Portfolio Management Overview Andy Kyte (G00206748) • Guide to Application Essentials, August 2011 UpdateBill Swanton (G00214804) • The 'Seven Deadly Sins' of Application GovernanceMatt Hotle (G00210776) • Recommendations for Improving Project Prioritization D. Stang, D. Fitzgerald, J. Duggan (G00167598) • How to Use Pace Layering to Develop a Modern Application Strategy J. Shepherd, D. Gaughan, Y. Genovese, V. Sribar (G00208964)

  23. The Executive Guide to Application Management Andy Kyte

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