Today, many companies manage an inventory of several hundred applications that were developed in-house and evolved over time to include new functionality or were integrated into an existing application landscape with the acquisition of a new company. These applications are used in parallel, sometimes containing the same or similar functionality. In many cases, different applications with the same functionality are used in different regions and countries.
Identifying these areas of overlap is a starting point – and a challenge – for application optimization. Slicing applications into smaller building blocks and defining microservices would solve the problem, but this is already a major project on its own, and many enterprises don’t have the capacity and budget to transform applications in this way. As a prerequisite for the development of microservices, companies must define the business processes that are global. This requires the involvement of the entire organization and strong backing from management to get to the necessary results – especially in a siloed organization.
At the same time, cloud- and low- or no-code solutions are being purchased directly by business departments as SaaS or PaaS solutions, and transferring management of these applications to IT. These decentralized purchases may also lead to overlap or duplication in functionality and can cause considerable redundancy and cost. It becomes particularly challenging for a CIO when acquisitions of applications executed in the business create a shadow IT in the business units. This happens when solutions are purchased and not handed over to IT.
All these scenarios generate high costs in terms of maintenance, support and operation of the application landscape, as well as for the ongoing development. They also create a greater number of interfaces that must be maintained to ensure data integrity.
This ISG white paper Application Optimization: Begin with a Strategic Make-or-Buy Decision explores how enterprises can optimize their application portfolio to save costs, manage security and improve operations.
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About the authors
Peter Linke is responsible for the development of sourcing contracts with the clients to ensure provider delivery for application management and transformation. He is a thought leader for application management and is a certified Product Owner and Scrum Master.
Peter has more than 30 years of experience in application management and sourcing. He has worked on provider side and has delivered large outsourcing contracts and was responsible for the solution design for large outsourcing contracts. Peter works with ISG clients to find their best sourcing solution to optimize their application landscape while improving IT to deliver high quality business requirements.
Tobias works in application sourcing, guiding clients to prepare, and run sourcing initiatives. He is an application services contracting expert and is a certified Scrum Master.
Tobias has more than 20 years of experience in application management and sourcing. Before joining ISG more than six years ago, he worked for a Tier-1 provider, shaping large outsourcing contracts. He focuses on the interaction and orchestration of all involved parties during sourcing initiatives, striving for the best-fit outcome.