Over the last decade, technology has multiplied the pace of change for enterprises – disrupting existing industries and operating models not only in traditional industries such as financial services, insurance, and commercial, but also in public sector organizations. As expected, this pace of change is increasing exponentially with each passing year. These changes have started putting pressures on IT departments in two ways – first, they need to anticipate and respond to business very quickly, and second, they need to proactively monitor and manage the health of their business applications and infrastructure.
In my opinion, there are 5 major drivers impacting the evolution of application portfolios
- 1Need for Agile business models has started pushing CIOs more than ever to do things faster, better and cheaper, and truly enable other CXOs as businesses try to capture new markets, and customer segments with new products, services and delivery models while retaining the current customer base.
- 2Emergence and adoption of new technologies has actually multiplied the first force by helping industry leaders and entrepreneurs alike by making possible innovative business ideas feasible, removing entry barriers in traditional models, making traditional ones look obsolete. Mobility, Social and Cloud lead the pack in terms of challenging the old order. At the moment, mobility seems to be driving most of enterprise and IT initiatives.
- 3Almost flat and or shrinking IT budgets since 2008 when recession hit global markets have put pressures on CIOs to take a really hard look on where and why they are spending their budget. Critical resources are tied up in “keeping the lights on” while businesses wait for new developments to respond to item 1 above. The problem is always a tightrope walk to balance the two and prioritize based on a strong business case.
- 4New development and support models have, over the last decade, seen action in terms of support models (mix of onshore, near-shore and offshore models) and seem to have stabilized, but new technologies like cloud are now pushing everything towards ‘as-a-service’ model.
- 5Obsolescence of technology platforms and architecture standards is a result of second and fourth items, but has become significant enough to be recognized separately. This is the main source of portfolio risks, strategic and operational challenges and opportunities to run old as and with new technologies.
It is vital to consider your portfolio as a dynamic entity and objectively understand the impact of these forces on the health of your application portfolio – ideally aligned with your strategic planning and budgeting cycles.