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Leon Orr
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CIO magazine recently reported a frustration amongst CIOs that the cost of keeping the lights on across portfolios of applications remains stubbornly high. It is also no surprise that the FCA has found that overall technology costs continue to rise, and that over 90% of firms are still weighed down by legacy technology.
So, it is easy to think of total cost of ownership – people, applications and all related infrastructure – as a problem to be solved.
However, in my experience, there is no silver bullet. Rather, TCO optimization will be an ongoing and ever-present element of technology leadership. And there are pragmatic steps which deliver results.
Enterprise wide TCO optimization plans do often represent valiant attempts to boil the ocean. Creating a TCO plan for the, say, 500 applications you are running forces you into a “one size fits all” approach where it is difficult to see the wood for the trees. It is more effective to break the challenge down to smaller ecosystems of applications – for example the 10 to 30 highly interconnected applications that support a single asset class or middle or back-office function.
Whilst it seems obvious to say, but it is often not the case, that it is critical that total cost of ownership is aligned with business goals specific to individual business areas. For example, if you want to create a competitive edge in say, FX, then the total cost of ownership or the applications supporting this asset class would have a different investment profile than if your objective was to be able to offer FX simply as an ancillary product to support other core lines of business.
Finally, make sure you are managing “the edge”. By this, I am not referring to edge computing but, if you think about portfolios of applications as the “foundation” – the foundational components upon which applications are built – and “the platform” – the ecosystem of applications that support a business function, “the edge” is the way in which humans interact with the platform and the way in which the application ecosystems interact with each other. A successful edge strategy incorporates the end to end user experience, avoids unforeseen process friction, smooths technology dependencies and considers full stack support & change as well as application interoperability and scalability.
In the drive to push total cost of ownership down by focusing separately on infrastructure and applications, the implications for “the edge” often get left behind and the resulting organisational and technological friction results in keeping the lights on become inadvertently more and more expensive.
Find out more information on how First Derivative can you help you manage your Total Cost of Ownership.
