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Legacy Systems ModernizationLessons Learned
Government Technology Conference
May 9th, 2011May 9 , 2011Dale Jablonsky – CalPERS
Modernization AgendaModernization Agenda
1. Building a Business Case. u d g a us ess CaseA. To Justify a new Modernization ProjectB. To Save existing Projects from Budget Cuts
2. Modernization OptionsA. Rip and ReplaceB. Piece‐meal ApproachesC. COTS Software vs. Custom Development Solutions
h l f i i3. The Value of Enterprise IntegrationA. Multi‐Channel IntegrationB Paperless Workflow IntegrationB. Paperless Workflow IntegrationC. Government‐to‐Government Integration
Building a Business CaseBuilding a Business Case
• Legacy Systems – a “Burning Platform”Legacy Systems a Burning Platform
• The Definition of Sustainability
i i l i• Transaction Processing evolution– CPU evolution
– Storage evolution
• Business Alignment and emerging Strategies
• Government Modernization
Burning PlatformBurning Platform
• Obsolescence FactorsObso esce ce acto s– Readily Trained Staff availability– Lack of Documentation – Succession Planning– Ease vs. Difficultly of Integration– Maintainability (n‐tiered vs. monolithic)– Shared Environment = Shared Costs (you do not want to be the last one standing)
• Cost Factors – Time and Money• Cost Factors – Time and Money• Mission Criticality• Business Agility• Business Agility
Sustainability DefinedSustainability Defined
• Aligned with Industry Trends (EA)Aligned with Industry Trends (EA)
• Increasing Platform Innovation opportunities
i & O i S ff dil• Maintenance & Operation Staff are readily trained and available
• Engineering & Development Staff are readily trained and available
• Total Cost of Ownership is decreasing
• Return on Investment is steadyReturn on Investment is steady
OLTP EvolutionOLTP Evolution
• CPU InnovationC U o at o– Moore’s Law– Commoditization – Wintel & Lintel– Application Virtualization– Processing as a Service (pay as you go)
• Storage Innovation– Commoditization – Solid State DisksD t Vi t li ti– Data Virtualization
– Storage as a Service (pay as you go)
• Data Center “in a box” grid computing• Data Center in‐a‐box – grid computing
Business AlignmentBusiness Alignment
• E‐Government StrategyE Government Strategy
• Paperless Office – Document Imaging
d kfl• Automated Workflows
• Responsive to Legislative Changes
• Integrated Services
• Business‐to‐Government (B‐to‐G) trendsBusiness to Government (B to G) trends
• Government‐to‐Government (G‐to‐G) trends
Government ModernizationGovernment Modernization
• California GovernmentCalifornia Government– World’s 7th Largest Economy
Volumes and Complexity– Volumes and Complexity
• State‐of‐the‐Art Government needs State‐of‐th A t S tthe‐Art Systems
• “Do More with Less” Mandate
• Enterprise Systems – Enterprise Architecture
• Private Sector CompetitionPrivate Sector Competition
Taking IT to the next level
Srini MadalaPresident/CEO
Modernization Alternatives
SoftSol Technologies
GTC West
9
Alternatives SacramentoMay 9, 2011
AgendaAgenda
• Modernization FactorsModernization Factors
• Deciding Among Modernization Alternatives
“ i i h l ”• “Doing More with less”
• Case Studies
• Lessons Learned
Modernization FactorsModernization Factors
Legacy Application Features
Target Considerations
Service Goals Better ServiceCollaborationTransparency
Organizational Factors
External FactorsFactors
Modernization OptionsModernization OptionsHighly Customized
COTS
Rewrite
Auto‐MigrationRewriteMigration (Auto/Manual)
R h tLow budget
Significant Enhancements
Auto Migration
Rehost
Rehost
Industry Standard
COTS
y
“Doing More with Less”Modernization in Current TimesModernization in Current Times
Millennials
Millennials The new generation
Modernization Initiatives
ResourcesBudget
Budgets Resources
CDB/COMET Auto MigrationCDB/COMET Auto‐Migration
Challenge
• Obsolete platform
Solution/Results
• Completed with no impact
• 30,000 transactions per hour
• Mission Critical Application
to business
• Low cost and reliable
• Risk mitigated for larger• Mission Critical Application • Risk mitigated for larger modernization initiative
R it f C M t S tRewrite of Case Management System
Challenge Solution/ResultsChallenge
• 30 Yr mainframe COBOL
• Lacking critical functionality
Solution/Results
• Complete web‐based self‐service optionsLacking critical functionality
• Limited Accessibility • Seamless integration with DMV
h bl• Better services to the public
Modernization Lessons Learned
• Support of Top ManagementSupport of Top Management• Customer acceptance• Lack of test cases/test assets• Lack of test cases/test assets• Data cleansingU t i i• User training
• Latest technology need not be the most i tappropriate
• Crafting the right methodology
SummarySummary
• Challenge? Opportunity?Challenge? Opportunity?
• Many alternatives
S Ch i• Smart Choices
THANK YOU
May 9th ,2011
Legacy Modernization
y ,
egacy ode a oLessons Learned
Presented by Brian SwayGovernment Technology Conference - West
© CGI GROUP INC. All rights reserved
_experience the commitment TM
Keep Focused On the Core Objective:How Best to Support Your Business NeedsHow Best to Support Your Business Needs
Search for combination of measures to rationalizeyour application portfolio to reduce cost increaseyour application portfolio to reduce cost, increase efficiency, and effectiveness
As-is Portfolio To-Be Portfolio
2© CGI GROUP INC. All rights reserved
“Yes Modernization is Attractive, but …”
• Am I seeing the world differently than other organizations?organizations?
• What change is appropriate, how I prioritize?How can I justify a BCP in an “all cuts” environment?• How can I justify a BCP in an all cuts environment?
• How can I manage the risks associated with a modernization project?modernization project?
• Will I have the people and needed skills to support the transition and future state?
20© CGI GROUP INC. All rights reserved
Motivations for Application Portfolio Programs
Change Drivers CGI Poll• Consolidate the portfolio for
long-term savings 32%
• Find near-term, immediateLong-term savingsFind near term, immediate
expense reductions 29%
• Lay the foundation for future competitiveness 39%
savings
Short-term expense competitiveness 39% cutsStrategic Change
Source: CGI Website Poll, 5/1/2009, 499 replies21
© CGI GROUP INC. All rights reserved
Modernization is a Process of Portfolio RationalizationRationalization
Not a one-size fits all question• Retain current applications
Renovate the applicationsRenovateRetain
• Renovate the applications• Replace or retire the applications • Re-engineer
ical
Con
ditio
nTe
chn
Replace or Retire Re-engineer
Business Value
22© CGI GROUP INC. All rights reserved
Use a Disciplined Approach to Determine an Appropriate StrategyAppropriate Strategy
Application Portfolio Rationalization Assessment
Catalog /Inventory Categorize Business
CaseEvaluate /
RecommendCost &
RoadmapPrep &
Planning
Collaborative Process With Diverse Expertise
Detailed OutcomesDiverse Expertise
• Business Domain Knowledge• Business Engineering • Technology
Current State Application Portfolio• Enterprise Information View• Application Inventory
• Governance • Change Management
pp yRationalization Roadmap
• Business CaseCost / Benefit Analysis• Payback
23© CGI GROUP INC. All rights reserved
What does Portfolio Rationalization Translate into?into?• We typically identify 10 to 30% savings in an organization’s
IT maintenance budgetIT maintenance budget• Enables organizations to spend less on maintenance &
support, realigning expenses with reduced revenue levels, and/or reallocating IT dollars for business critical initiativesand/or reallocating IT dollars for business-critical initiatives
Example of Decreases in Maintenance &
IT Budget: $150MMaintenance as % of Budget: x 73%
Support Annual Budgets
Maintenance as % of Budget: x 73%Application Maintenance & Support: $110MMaintenance & Support Savings %: x 20%
Savings $ $22MNew Maintenance & Support Budget $88MNew Maintenance & Support Budget $88MNew IT Budget: $128M
24© CGI GROUP INC. All rights reserved
Managing the Risk of Restructuring a Legacy PortfolioPortfolio
• Disciplined portfolio rationalization assessment helpshelps• Provide measureable and meaningful criteria to manage
program• Prioritize initiatives• Avoid projects that don’t measure up • Identify needed business process adjustment• Identify change management requirements
Provide concrete road map for optimizing efficiency &• Provide concrete road map for optimizing efficiency & scale, while reducing complexity & operational risk
25© CGI GROUP INC. All rights reserved
HR Best Practices/Workforce in TransitionMuch more than crunching numbers and dataMuch more than crunching numbers and data
• Address the needs of your dedicated and valued employees who are the keepers of organizational knowledgeablewho are the keepers of organizational knowledgeable
• Employee engagement & support• Effective communication• InclusionInclusion
• Change management • Skills assessment
C t i i / R t i i• Cross training / Retaining• Provide career growth opportunities• Reassignment
• Leadership• Senior management must keep employees informed about the change process
following through on actions• Middle management must facilitate change and help their employees
understand the reasons for the change and adapt to it26
© CGI GROUP INC. All rights reserved
A Comprehensive Rationalization Program
Resource R ll i /
Due Wind DownReallocation/Modernization
Diligence/Analysis Transition/
Rationalization
• Catalog/Inventory• Categorize• Evaluate/Recommend• Roadmap• Business Case
• Change management/ retraining/ retaining staff• Acquire/Transfer knowledge• Deploy/Operate• Manage operational risk• IP monetization
• Re-deploy freed-up resources
• Provide career growth opportunities
• Positioned for the • Business Case • IP monetization• Decommission applications and transactions future
27© CGI GROUP INC. All rights reserved
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