Identifying opportunities to consolidate and potentially retire legacy applications and infrastructure.

Our client is one of the biggest Electricity and Gas Suppliers in Australia servicing residential and corporate customers. Having undergone a transformational change, several strategic projects were initiated within the Technology Infrastructure domain. Often the pressure to deploy new technologies can consume the energy and focus of an organisation. There are significant costs that continue to be incurred when obsolete servers, storage, networks and licenses are not turned off. The challenges of understanding data retention requirements and sourcing the analysis expertise required to trace resources to a specific application require a specialist and repeatable methodology. In addition, where a vendor landscape is too vast it becomes difficult to manage and control recurring maintenance spend.

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The Challenges

• large vendor footprint - The client had to manage many different support vendors due to a portfolio of approximately 520 applications supported by approximately 160vendors.
• Out-dated applications - Some applications did not provide functionality to the standard that was required.
• Redundant or semi-redundant applications whose assets had not been removed.
• Insufficient levels of cost detail.
• Reliance on an out-source provider for cost management of their environments.

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The Opportunity

Our client engaged Seisma to identify opportunities to consolidate and where possible retire some legacy applications and infrastructure. The scope further included rationalisation of the vendor base and aggressively challenging for opportunities to reduce the cost of maintenance support. There was opportunity identified in the retirement of unused or predominantly unused applications. These were applications where functionality had been shifted to new systems but the clean-up activities had not been completed. Removing licenses, retiring redundant servers & storage and decommissioning other infrastructure provided significant cost reduction opportunities, especially with the outsourced charging model.

The outcome for the client was significant year on year savings. This was the result of consolidating applications and the renegotiation of support agreements to a smaller number of key vendor partners. In addition, there were significant cost avoidance benefits realised by removing the need to upgrade some of the applications deemed to be no longer required.

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The Solution

The Seisma team assessed all applications, and in consultation with key stakeholders, business users, application support leads and support vendors, identified suitable applications for consolidation/retirement.

The methodology encompassed:

• A detailed analysis of applications inclusive of criticality, support and maintenance costs, opportunities for retirement and consolidation.
• Connecting client infrastructure architects with new and legacy vendor architects. This ensured that the new applications could interface seamlessly with the same applications/databases.
• Applications and vendors were categorised into a criticality/risk matrix, matching the importance of the application against the vendor base available to support it.
• Strategies were developed to deal with the applications in their respective quadrant of this matrix
  • Low criticality with multiple potential support vendors – Focus on application retirement, drive hard on cost negotiation via commercial processes
  • High criticality with multiple potential support vendors – Assess the vendors “partner” fit for the organisation, benchmark for fair market value and present opportunities to selected preferred vendors to reduce costs in return for a greater portfolio share
  • Low criticality, single vendor available – Generally a low priority as spend was low, focused on application retirement, promoted commercial tension by finding other options for support or the migration of application functionality
  • High criticality, single vendor available – Long term plan of a strategic shift to remove reliance, in the immediate term leverage senior executive relationships and application growth potential to maximise commercial advantage

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The team from Seisma drove the execution strategy from both a technical and a commercial perspective from assessment through to execution. Seisma brought significant application and infrastructure knowledge to coordinate the analysis, design, testing, migration and retirement phases. This same expertise coupled with our commercial experience and methodology drove the successful vendor cost reduction outcomes.

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Results and benefits

Seisma developed a transition plan that delivered to our client:

• Reduced risk
• Reduced vendor footprint
• A simplified application landscape
• More efficient utilisation of critical resources
• Significant cost reduction
• Simplification by reducing functional overlap

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Insights

Many organisations are running multiple applications when one would be able to perform the function required. In addition, large amounts of systems assets (licenses, storage, server etc) are actually redundant as a consequence of earlier project deployments. Finally commercial engagements with vendors often take a single point-to-point view rather than placing the relationship in a market place strategic context.

The consequence is waste in terms of asset costs, an excessive support vendor footprint and the loss of commercial negotiation opportunity.

Organisations must reflect on core elements that may disrupt a successful application consolidation before commencing, including varied considerations such as environment configurations, integration requirements, reporting capabilities and licensing.

Experience and methodology developed from the execution of major consolidation programs is critical to success.

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^{*This case study is sourced from acquired company coIB's archives. Exact publish dates are not known.}