Organizations are looking for ways to drive out cost, better manage their application portfolio, and enable the business through digital and IT transformation. Enterprises that have invested in evaluating and optimizing their application portfolios have realized dramatic financial and business benefits, with a rapid and significant return on investment.
We recently commissioned Forrester to perform a ‘Total Economic Impact Study’, to quantify the financial benefits of evaluating a company’s application portfolio to migrate, modernize, consolidate or retire enterprise applications. Here are our findings.
The Four Key Business and Financial Rewards
IT executives managing portfolios of applications are under constant pressure from the business to support digital business opportunities and the wide array of ways in which businesses are evolving. Understanding the current portfolio and its technical and financial challenges—and mapping a journey to the future state—is a daunting challenge. It requires a comprehensive evaluation of the portfolio and subsequent development of a plan to optimize the placement and architecture of applications in order to reduce costs and improve manageability.
Nonetheless, investing the time and resources into this undertaking has been proven to deliver four key business and financial benefits:
Reduce Cost of Application Enhancement and Maintenance
By gaining greater understanding of application interdependencies and lowering defects and errors, organizations can reduce the number and cost of developers needed to work on application maintenance, while improving developer productivity.
Reduce Cost of Maintaining Retired Applications
Retiring obsolete or unused applications avoids maintenance work and recovers development hours. It also eliminates license fees and decommissioned infrastructure and reduces data center footprint.
Increase Revenue from Customer-Facing Applications
Organizations can increase and accelerate revenue and profit margin by improving functionality and delivery of customer-facing applications—reducing cart abandonment for online purchasing improving customer service, and reducing fraudulent and malicious activity.
Accelerate Revenue by Reaching New Markets
The ability to reach new markets—and shorten time-to-market—delivers revenue faster.
Understanding and Weighing the Requirements, Costs, and Risks
Optimizing your application portfolio is a multi-step process. First, you need to inventory and assess your current applications, determine and reconcile the required business functionality, and assess your current and future technology requirements. Next, you need to outline a non-disruptive path for change that includes migrating applications to lower-cost or more efficient operating platforms, modernizing them, or retiring them, in order to deliver the intended results.
Some organizations have in-house resources who are technically capable of performing this type of project and who have the bandwidth to dedicate to this initiative. Many, however, lack individuals with the necessary time, assessment experience, and knowledge of technology. IT executives have two alternatives: conduct the assessment in-house, or partner with an outside resource.
In a Total ImpactTM (TEI) study commissioned by Dell, Forrester Consulting identified that a fifth major component of the total benefits from an application portfolio optimization initiative is realized by avoiding the costs of conducting the assessment internally. Before getting started, you need to take into consideration the number of employees and associated time, effort, and salary that will be required; the need to put other IT projects on hold; as well as the significant impact on the ability to support regular business operations.
Calculating the Return on Investment
The Forrester Consulting Total ImpactTM study examined the potential return on investment enterprises may realize by investing in application portfolio optimization services instead of undertaking this initiative in-house. Their financial analysis showed that organizations who utilized a partner such as Dell for the initial assessment and the follow-on development effort to implement changes realized benefits of $7.2 million over three years versus costs of $2.4 million—a net present value of $4.8 million and an ROI of 195 percent. And because results were delivered faster, payback was realized in just 12 months.
Evaluate the Potential Financial Impact of Dell Services on Your Organization
Download Forrester’s “The Total Economic ImpactTM of Dell Application Portfolio Optimization” for the detailed, quantified financial and business benefits realized by organizations who utilized these services, and for an independent framework to evaluate the potential cost, risk, and benefits of these services on your organization.
Summary
Evaluating your organization’s application portfolio—with a goal of optimizing the placement and architecture of applications—can reduce costs and improve manageability, delivering significant, quantifiable financial and business results. Engaging a partner with the expertise, methodology and tools can help fast track this transformation and accelerate results and ROI.
Dell uses a proven, field-tested methodology and a decade of experience to systematically optimize organizations’ application portfolios. This approach, combined with our experience in converged infrastructure, cloud platforms, operations, application development, end user experience, cyber security, and business resiliency, helps organizations mitigate risks and save costs when embarking on transformation initiatives.
Contact your Dell Sales Representative to learn more about our Application Portfolio Optimization services and how they can help your organization mitigate risks and accelerate transformation initiatives.
View our recorded webinar
Dean Davison, Forrester Consulting, will lead a conversation about the benefits and costs associated with your investment to help you understand the ROI and NPV your organization can achieve.
Chip Kalfaian, Global Discipline Lead for Dell’s Application Portfolio Optimization, provides additional details about the application-centric, patented methodology for the profiling modernization, migration and retirement dispositions used to optimize your IT environments.
