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As you sow, so shall you reap: Effective Application Portfolio with 'Cloud Inclusivity'

On July 1, 2010 -  i had put forth a blog titled - Defining the Application Portfolio using the "EXIST" framework  which looked at a 'holistic' approach to choosing the 'right' applications for the enterprise. There were several comments and offline discussions which led me to post a follow up blog on the topic. Before going into this blog in detail you may want to check the original blog on this subject. And needless to say, i would look forward to your thoughts and opinions as this subject in itself is a lot debated one and there are no 'correct' answers as yet.

Before going any furthur, as a refresher, i would again like to define the "EXIST" framework - the 'EXIST' framework simply classifies the application needs on the basis of 'purpose' of the application. This helps in laying down some standard decision making criteria while choosing the application types for varying business needs.

The idea of this framework is NOT to advocate multiple applications; but to assess 'cloudability'  based on Business need, ROI horizon and Sponsorship. In the process it also breaks some myths that are prevalent in the IT circles.

MYTH 1: Cloud application sell to Business Leaders but not to CIO/IT team
REALITY:
As per the Cloud Computing Survey 2010 by Sandhill Group; in 57% of the surveyed organizations (70% were sub-billion dollar in revenues), it is CIO or the IT department which is driving the adoption of cloud computing in business while only in 14% of cases, the heads of business units are doing the same. The reason is simple, CIO are not separate from business and need to respond to the need for Business Agility, Cost Efficiency while attempting to free IT resources to focus on innovation.

MYTH 2: Application Consolidation is order of the day.
REALITY:
As per the same survey, 60% of the respondents mentioned that they use or plan to use cloud computing in the next 3 years. More than half the companies have been experimenting or piloting while a third have started deploying non-critical applications on the cloud. Interestingly, 20% have even started deploying mission-critical applications on the cloud. A consolidation in a deployment model is true but not across deployment models. There are few thoughts around need to plan the cloud strategy  to build out your next generation IT systems published by Kamesh Pemmaraju blog here . There is  a wonderful blog by Kevin Fogarty on CIO.com - Which Apps Should You Move to the Cloud? 5 Guidelines which outlines a few more necessary steps to take before deciding to move from a traditional app to a Web-based one.

Some of the "counter arguments" which were given to this concept of "EXIST" framework in my last blog are listed below. I would be more than happy to see a counter point for a mutualy rewarding discussion. Few feedbacks and my current thoughts are as below -

  1. The market is looking at application portfolio consolidation as cost of managing disparate application is very high
    My Thought - In an on-premise model this is true; but in a model cutting across On premise and Cloud; it is not the case (as per the Myth 2 above)
  2. ERP are one stop solution to meet all needs - either out of box or through customizations
    My Thought - While this is true to some extent; it is the business imperative and availability of "Cloudable" applications that have altered this thought process. A recent example is Royal Mail  - Royal Mail Group Limited, the national postal service of the United Kingdom,  has moved services for personal and small or medium business customers, and high-quality, innovative parcel delivery services to meet the needs of the UK's boom in online shopping onto the cloud. This "IT-on-demand" aims to transform its business and consumer online services, help to reduce its annual website IT costs and support expansion and diversification into a wide range of new web-based business opportunities without the delays and expense of traditional IT. These features can be achieved in "Collaboration" pieces of ERP as well; but then the time to return may be longer.
  3. A consistent technology stack is something every IT leader thrives today to reduce TCO
    My Thought - This can't be denied; but then again some of the "cloud" applications have actually removed the headache of managing an application 'technically'. Of course this has led to difficulties around integrating the portfolio of application together. This is an area which is being focussed upon by number of players as focus moves from Application, B2B, Data and Event integration to Cloud Integration and focus on built-in web services framework for cloud applications.
  4. The end users are pretty familiar with the application running for years any change in that will pose serious issues with their day to day operations efficiency.
    My Thought - Here, the basic premise is that the users are same across applications. However, in real business situations; we have seen cloud applications being used by front-ending staff, service personnel, client relationship personnel and liasoning teams while typical LOB applications (ERP) are managed by internal staff for financial accouting, order processing and manufacturing. Having said that, i think this aspect should always be considered at time to finanlizing the application strategy.

This is an exciting area and i am sure you too would have your thoughts. Please share the same. I would look forward to listening on this from peers, practioners and clients whom i am sure would be jostling with few of these questions themselves.

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