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Fourteen months ago my (new) manager approached me with a unique problem. It was discovered that we did a very poor job of keeping track of the applications (software) that we build and/or install within our enterprise environment. This lack of tracking also included all the associated data related to hosting (hardware, configuration and such). That's not to say that some organizations inside our company weren't doing a great job, however, these pockets of excellence were the exception not the norm.

 

My (now) manager explained that a new group will be forming to help find opportunities to save money in the application and hardware space. His problem for me to solve was that there was no single solution, no one source for data, nor any single location for recording information. As a technical lead with several years of experience in metadata modeling and tracking, he asked me to go off and propose a solution.

 

As I mentioned we had several pockets inside the company that were tracking data as necessary to perform their job functions. After performing an internal environment scan, analysis and in several cases, engaging with the teams and their tools, I was left holding an empty bag.

 

What did I discover? There were 12 different applications (out of vendorprovided and internally custom built) and around 14 additional data sources(spreadsheets and databases). Through engagement, it was determined that of the solutions, many were on aged technology and some had lost their developers to other projects. Additionally, most of the existing inventories had only one small piece of the puzzle. They were only concerned with that one bit of information that solved their business need. This meant that enhancing an existing solution was not going to work.

 

So off to the drawing board I went to try and come up with a quick solution that would enable us to rapidly gather our application inventory, the right way, the first time. My proposal was taken to senior management and four weeks later, three of us had completed the first version of an application which is still in use and the Record of Origin (ROO) for application metadata within our company.

 

How does this all save us money?

Let me give you an example that anyone can relate to. Think of this in terms of an inventory of the food in your cupboards. If you go to the store without any knowledge of what food (canned, packaged, frozen or fresh) you have, how do you know what to buy? One of the kids may know you have some corn, another may know you have a pot roast, however, is the inventory accurate? Until you get into all your cabinets and do an inventory, you'll never know what you have. Additionally, without putting a system in place to maintain that inventory, the next time you make dinner, your list is completely useless.

 

Continuing my food sample, let's say you want to make a lasagna. How do you know if you have the ingredients? How do you know you don't have one already, frozen and ready to heat?

 

This is the problem we found ourselves in (applications not food). We had no idea if we had overlapping functionality. Our capabilities were meeting our (internal) customer demands, however, were we meeting that need at a higher cost than necessary? Were we asking people to use a tool that was outdated (technically speaking) when a newer, faster, cheaper solution existed in the room next door?

 

These are some of the problems that we looked to solve. And with this, we have some pretty interesting plans on how to save money. I will cover that in my next entry.

 

Have you had similar issues at your company? Do you currently have this challenge before you? I'm curious to hear some of those challenges and potential solutions.



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Feb 7, 2008 9:22 AM Guest Erik Hammer  says:

Great post, John!

 

Having a single source application inventory solution should be mandatory at every company -- not only to know what you've got, but also to define how each application supports a specific business process and the costs associated with the investment.

 

Saving money by understanding if you have it in the cupboard (so to speak) is a great first step toward calculating value of an application inventory. Next steps could be:

 

If a business process has a bloated application suite, disinvestment of applications should be considered in the next budget cycle. This creates a qualitative argument toward how well apps are supporting business process.

 

Capturing usage statistics for each application either through web log analysis, database reads, or bandwidth from servers hosting the app. This provides a quantitative argument to how much utilization you are getting for your investment and a comparitive argument to the costs associated.

 

These together provide a qualitative and quantitative argument for the existence of an app at your company. If an app is barely being used or is one of a dozen apps doing similar things inside a business process, your opportunity to save a lot of money can be realized.

Feb 7, 2008 9:22 AM Jose Nunez Jose Nunez    says:

Big organizations with high innovative orientation show a trend to reinvent the same wheel several times in different flavors and colors. This has two main cost problems: 1) The cost of reinventing what is already there and 2) the lost opportunity for learning through reuse and advance.

 

While such innovation capability is priceless, it must be accompanied with some efficient way for ensuring proper use, reuse and disposition.

 

I think what you describe here has a lot to do with being able to identify the different ingredients available for use and reuse as well as their disposition over time. Disposition includes natural attrition end of life as well as combination/consolidation actions.

 

Such ingredients list should as well describe the cost-related information of each ingredient, such as how much does it cost to keep them in stands, how much does it cost to operate and reuse them and how much will it cost to dispose them.

 

Also, an important piece of the puzzle is the ability to find existing ingredients; whether they are searched by dissimilar names such as “Tomato Sauce” or just “Ketchup”. This means implementing a good naming convention and aliases capabilitt as well as a correlation method so that when you want to make Lasagna you are able to find the proper ingredients, identify their cost, lifespan and their relationships.

 

In conclusion: I agree Applications Inventory is a means for cost savings, especially if such inventory contemplates costing information as well as find/reuse facilities and disposition facilities.

Nov 7, 2008 9:49 AM Guest Aishwarya Rajamani  says in response to Jose Nunez:

I can recollect an incident which could be one of the potential causes of managing too many applications within a company. Few months ago I attended a meeting to decide if my company should purchase a customized reporting tool to cater to the needs of one of its sales offices. The tool as expected is expensive and there already is a reporting tool used by many other departments and offices. But the main instance of this existing reporting tool runs in the company's headquarters which makes it way too slow and nearly impossible to work with. The only question I had in mind was why not invest on ways to improve the usability of the existing tool rather than invest on a completely new tool that would be used by just one sales office. Using existing applications are tremendous cost savers taking into consideration the licensing fees, training and maintenance costs that would be incurred while buying a new tool.

 

In the current scenario, companies going for mergers and acquisitions end up with boat load of applications from each company. Except for few large systems everything else tends to get drowned. Application inventory is a great idea to reduce the cost of maintenance and support of polymorphic applications. It is also a way of introducing enterprise wide standardization and control. Capturing usage statistics is a good idea. But in this example it would not work out too well. The sales office down here serves one of my company's biggest customers. Though the proposed new tool is to be used by just 25 to 30 people, if used would definitely give us a strategic advantage over other vendors. In this case one other factor that could be considered apart from utilization is to determine how much value a tool adds to the company.

Nov 7, 2008 9:47 AM John E. Simpson John E. Simpson    says in response to Aishwarya Rajamani:

Super comment Aishwarya.

One aspect of what we do, which we have not had the opportunity to expose yet, is the ability to compare merger inventories and look at gains which can be leveraged there. Right now we are looking at a potential expansion into the area of license management, as a method for helping to minimize purchases and utilize what we already have (versus buying new). It also has would give us the ability to understand where it is globally used and help us in future negotiations for support/licensing since it would be on an Enterprise level instead of individual departments.