iSET Portfolio Rationalization Business Case

1. The Enterprise IT Asset Architecture iSETPortfolio Rationalization Business Case

2. Profiles The Customer Our customer is one of the largest business-to-business financial services groups in the world, doing business in 35 nations and headquartered in the Northeast of the United States. With over US$232 billion in assets, revenues of $37bn and segment income of $5.3bn … this Customer offers businesses of all sizes an array of financial services and products across a wide spectrum of industries, from healthcare, manufacturing, construction to power, infrastructure and equipment finance. These products and services include loans, operating leases, financing programs, commercial insurance and reinsurance, and other services. It has especially large geo-disperse operations in the United States, across Europe and in Japan. The business activities result in significant business acquisitions and divestitures each year. The Opportunity In about 25 to 30 years, IT has gone from what was essentially a back-office function to an expenditure that now, according to the U.S. Department of Commerce, takes up 50 percent of companies’ annual capital budgets in the United States. Over this span of 25 to 30 years, some of our Customer’s technology assets had silently become underutilized or not used at all. "There is more excess capacity today than at any time since the 1970s," reported the Customer CEO in 2003. It was getting much easier to put the business at a cost disadvantage. Recent Customer fiscal IT project budgets had grown to greater than US$100 million. An average project cost was greater than US$50k. Although the execution of project delivery had matured with Six Sigma quality competencies, it was no longer enough to focus on simply completing projects. A strategy was required to quantifiably measure and report the risks, costs and architectures of the existing IT asset portfolio. Optimization of IT assets is not the same as the optimization of IT projects. Nine core Customer business units registered over 1000 known active business applications and/or sub-systems supported by over 1800 known active servers. Still today, the Customer is continuing to identify more-and-more active systems. Several large acquisitions, divestitures and organizational changes compounded the IT portfolio complexity. Resources were unreasonably being expended toward assets with low or no realization of company benefit. Optimization decisions were essential to allow our Customer to make resource allocation decisions that apply more resources to the things they think are going to grow the company for the long term. This will yield the competitive advantage necessary to attract and assure the resources necessary to support investments in the development of new technologies and innovation. The Customer needed a method to register the relationships of their business software assets with the business processes that utilize them and the hardware hosting those assets. Techlogix was engaged to propose a solution for visualizing the organization’s assets and the vulnerabilities.

3. Engagement Business Processes Business Units Applications Servers The Requirements Customer business application and server inventory data was stored in silos mostly within spreadsheets on disparate employees’ hard drives. There was an auspicious need for a centralized repository of business application and server information that is easily accessible by the appropriate individuals. Having this information in a self-service repository would alleviate much pain for application and server operational owners, internal customer liaisons, and Enterprise Architects. The introduction of a single system will drive controllership since application and server owners will be required to adhere to a standard set of mandatory attributes for each record. These attributes will be auditable by appropriate parties to ensure they are kept accurate and up-to-date. Finally, this system will drive simplicity by empowering management to easily identify applications with and across businesses that are satisfying the same need as well as identifying server consolidation opportunities. A Critical-to-Quality (CTQ) requirements list included: • Capture non-physical attributes that must be manually maintained • Provide application-to-server linkages • Enable multi-dimensional mapping of business functions to applications to hosting infrastructure • Identify and maintain DR tier levels and mission criticality for all applications • Capture backup, archiving and offsite storage requirements • Capture DR requirements • Capture security requirements • Track and reconcile application and server maintenance windows • Keep info safe and available during crisis • Push email alerts to security team based on flags/triggers • Drive controllership by securing important inventory information in centralized repository • Drive simplicity by facilitating the identification of application overlap and server consolidation opportunities • Help to facilitate SOX compliance by collecting important SOX details for each application • Assist in outage or crisis by easily identifying downstream application impact tied to each server • Become the system of record for various business and IT stakeholders and functional groups • Current guidance: 2 year payback period and NPV positive over 5 year period • Initiative complements server on-boarding and off-boarding process tracking • Initiative complements application deployment and retirement project tracking

4. Implementation The Technology Solution The solution needed to be more than a registry of IT assets or a configuration management database (CMDB). CMDB solutions provide visibility into how teams are creating and using software assets to ensure compliance with enterprise architectural mandates and prevent development reinvention. These solutions can be very data rich. However, CMDB solutions fail at rationalizing an existing portfolio of business applications while keeping up with the pace of innovation. The Techlogix IT Governance consulting team proposed the customization and deployment of the iSET product as the ‘Enterprise Asset System’. iSET achieved a level of visualization showing the Customer the risks and costs in their IT portfolio. It provides the insight into how an enterprise is leveraging assets over time to meet business objectives. • A quick, elegant and comprehensive view of the asset landscape • Combines financial, technical and operational data • Enables best practices for optimizing asset utilization The Customer could now execute on the best portfolio mix because IT leadership can visualize the portfolio investments as they relate to all elements of the business processes. The Process Solution To make asset decisions, the Customer had to understand the systems. To understand the systems requires data … usually, lots of data. The Customer’s IT teams and systems are expansive and geographically distributed; further impacting knowledge management. iSET is maximum control with minimum information. Working with the Customer, the business application view focused on ~200 data elements. The server view focused on ~50 data elements. This assured data manageability by only requiring the specific data necessary to make qualified portfolio decisions. The Customer launched the Inventory System Process (ISP) as a standard process for the maintenance and accuracy of the information maintained in iSET. This process is a Business Review performed to ensure accurate information is in the asset system. The process was developed and deployed with the role out of the phase I Asset System. ISP provides the entire Customer IT community a single process to follow. The Phased Solution The Customer did not have all their asset data in place or their business process mapping completed in order to get immediate value from iSET. They had been working on those things for some time, but there was still a way to go. iSET allowed them – easily and conveniently – to start to take the next step immediately. iSET is not just a decision-support tool for the IT Leaders. It was the linchpin that started the process of maturing their IT asset strategy. Techlogix worked with the Customer to do an incremental implementation that met some immediate needs and allowed for future expansion.

5. Benefits The Intangible Benefits After eighteen months since the original deployment of iSET, the Customer has realized some notable benefits. The intangible benefits as reported by the Customer include: • A single method and central location for maintaining and controlling the IT portfolio • Track the evolution of assets over time; enabling business opportunity planning for future optimization • Single source of business application outage management information ensuring information is safe and available during crisis • Predict business-process impacts from potential technology disruptions • Visualization of IT asset alignment with business strategies • Transparency to know what SOX compliant access controls must be applied on servers respective to the hosted applications • Accurate tally of servers and applications. One business unit discovered they maintained over 700 servers when they thought it was only 400. • Complete elimination of spreadsheet silos The most significant inherent quality of the iSET product deployment may not be any of those mentioned above. For the Customer IT leaders defining, managing and optimizing the IT portfolio, the ultimate intrinsic values may just be the ability to: • Measure by business function • Manage by strategic decisions For the Customer, iSET is the comprehensive tool to provide the right data to make the right decision at the right time. The Tangible Benefits Portfolio rationalization decisions are never easy to reach. They require hard decisions to be made regarding the IT assets. But the product of this work has been real monetary benefits for the Customer. These benefits have been derived from: • Portfolio simplification of functional application redundancy • Reduced system costs for those exceeding the norm as reported in other business units • Optimized infrastructure efficiencies from server consolidation opportunities • Service management cost savings from a streamlined IT portfolio • Increased productivity through greater standardization and less complexity By due course of business for the Customer in the last 18 months, 10 percent of the identified business systems have been retired for a reported annualized costs savings of US$1.85 million. Another 28 percent have been identified to be retired for an additional US$3.93mn of annualized cost savings.

6. About About Techlogix, Inc. Techlogix is internally structured as a set of technology practices. Each practice is driven by Practice Leads and a Practice Delivery team based in the US. This structure requires a high degree of knowledge, skill and experience of the practice leadership and is reflected in the quality of the resources we deploy in these engagements. The Practice Centric model allows us to combine the best elements of the approach traditionally used by US based consulting firms (deep business and technical knowledge, the immediacy and insight derived from an onsite presence, the fluid communication channels) with the cost effectiveness and appropriate resource alignment of the global delivery model. Our natural mode of operation is to align the bulk of the development effort offshore. Our offshore competitors, with their Factory Centric Model of largely undifferentiated resource pools, are not able to provide the high level of business and technical leadership that is especially required in challenging practice areas. Techlogix has the unique combination of intellectual capacity and technical know how to assist clients in translating business strategy into actionable tactics and develop the technology infrastructure and applications to support today’s real time enterprise. Learn more at http://www.techlogix.com/governance_solutions.htm.