Legacy Systems Modernization Lessons Learned

Legacy

Systems

Modernization

Lessons

Learned

Government Technology Conference

May 9th_{, 2011}

May 9 , 2011

Modernization Agenda

Modernization

Agenda

1. Building. u d g a us ess Case a Business Case

A. To Justify a new Modernization Project

B. To Save existing Projects from Budget Cuts

2. Modernization Options

A. Rip and Replace

B. Piece‐meal Approaches

C. COTS Software vs. Custom Development Solutions

h l f i i

3. The Value of Enterprise Integration

A. Multi‐Channel Integration

B Paperless Workflow Integration B. Paperless Workflow Integration

Building a Business Case

Building

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}

Burning Platform

Burning

Platform

• ObsolescenceObso esce ce acto s Factors

– 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

Sustainability Defined

Sustainability

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

OLTP Evolution

OLTP

Evolution

• CPUC U Innovationo at o

– Moore’s Law

– Commoditization – Wintel & Lintel

– Application Virtualization

– Processing as a Service (pay as you go)

• Storage Innovation

– Commoditization – Solid State Disks D t Vi t li ti

– Data Virtualization

– Storage as a Service (pay as you go)

• Data Center “in a box” grid computing

Business Alignment

Business

Alignment

• EE Government‐Government Strategy Strategy

• Paperless Office – Document Imaging

d kfl

• _{Automated Workflows}

• _{Responsive to Legislative Changes}

• _{Integrated Services}

• _{BusinessBusiness to Government‐to‐Government (B (B to G)‐to‐G) trends trends}

Government Modernization

Government

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 t

the‐Art Systems

• “Do More with Less” Mandate

• Enterprise Systems – Enterprise Architecture

Taking IT to the next level Srini Madala President/CEO

Modernization

Alternatives

Alternatives

Agenda

Agenda

• Modernization FactorsModernization Factors

• Deciding Among Modernization Alternatives

“ i i h l ”

• _{“Doing More with less”}

• _{Case Studies}

Modernization Factors

Modernization

Factors

Modernization Options

Modernization

Options

budget Significant_Enhancements  Auto Migration Rehost Rehost Industry Standard COTS y

“Doing

More

with

Less”

Modernization in Current Times

Modernization in Current Times

Millennials

Millennials The new generation

Modernization 

Initiatives

Resources

Budget

CDB/COMET Auto Migration

CDB/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 

R it f C M t S t

Rewrite of Case Management System

Challenge Solution/Results Challenge

• 30 Yr mainframe COBOL

• Lacking critical functionality

Solution/Results

• Complete web‐based self‐

service options Lacking critical functionality 

• Limited Accessibility • Seamless integration with  DMV

h bl

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 cleansing}

U t i i

• User training

• Latest technology need not be the most 

i t appropriate

Summary

Summary

• Challenge? Opportunity?Challenge? Opportunity?

• Many alternatives

S Ch i

• _{Smart Choices}

May 9th_,2011

Legacy Modernization

y ,

egacy

ode

a o

Lessons Learned

Presented by Brian Sway

Government Technology Conference - West

© CGI GROUP INC. All rights reserved

Keep Focused On the Core Objective:

How Best to Support Your Business Needs How Best to Support Your Business Needs

Search for combination of measures to rationalize

your application portfolio to reduce cost increase your application portfolio to reduce cost, increase efficiency, and effectiveness

As-is Portfolio To-Be Portfolio

2

“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, immediate

Long-term savings

Find near term, immediate expense reductions 29%

• Lay the foundation for future

competitiveness 39% savings Short-term expense competitiveness 39% cuts Strategic Change

Source: CGI Website Poll, 5/1/2009, 499 replies

21

Modernization is a Process of Portfolio Rationalization

Rationalization

Not a one-size fits all question

• Retain current applications

Renovate the applications

Renovate Retain

• Renovate the applications

• Replace or retire the applications

• Re-engineer

ic

a

l Condition

Techn

Replace or Retire Re-engineer

Business Value

22

Use a Disciplined Approach to Determine an Appropriate Strategy

Appropriate Strategy

Application Portfolio Rationalization Assessment

Catalog / Inventory Categorize Business Case Evaluate / Recommend Cost & Roadmap Prep & Planning

Collaborative Process With Diverse Expertise

Detailed Outcomes Diverse Expertise

• Business Domain Knowledge • Business Engineering

• Technology

Current State Application Portfolio

• Enterprise Information View

• Application Inventory • Governance • Change Management pp y Rationalization Roadmap • Business Case

Cost / Benefit Analysis

• Payback

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What does Portfolio Rationalization Translate into?

into?

• We typically identify 10 to 30% savings in an organization’s

IT maintenance budget IT maintenance budget

• Enables organizations to spend less on maintenance &

support, realigning expenses with reduced revenue levels, and/or reallocating IT dollars for business critical initiatives and/or reallocating IT dollars for business-critical initiatives

Example of

Decreases in Maintenance &

IT Budget: $150M

Maintenance as % of Budget: x 73%

Support Annual Budgets

Maintenance as % of Budget: x 73% Application Maintenance & Support: $110M Maintenance & Support Savings %: x 20%

Savings $ $22M

New Maintenance & Support Budget $88M New Maintenance & Support Budget $88M

New IT Budget: $128M

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Managing the Risk of Restructuring a Legacy Portfolio

Portfolio

• Disciplined portfolio rationalization assessment

helps helps

• 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

HR Best Practices/Workforce in Transition

Much more than crunching numbers and data Much more than crunching numbers and data

• Address the needs of your dedicated and valued employees

who are the keepers of organizational knowledgeable who 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 it

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A Comprehensive Rationalization Program

Resource R ll i /

Due Wind Down

Reallocation/ 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

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