Application rationalisation at a large global bank
A two-year engagement: 533 applications retired, $12M a year in licences gone.
- 533applications retired
- $12Ma year in licences removed
- 24xreturn on a $500,000 fee
- $162Mof follow-on savings identified
Situation
The bank ran more than 3,000 applications. Keeping them alive cost about $750M a year, or roughly $250,000 a system. Everyone agreed the portfolio was bloated. Nobody could act on it, because two beliefs stood in the way: that anything unneeded would already have been switched off, and that no application could be retired without a replacement. The Group Head of Technology and Operations put it plainly: "There are too many systems. Surely, even a bank our size doesn't need so many."
What we did
We sorted every application with our T.I.M.E.4 Simplicity framework, an extension of the standard Tolerate, Invest, Migrate, Eliminate method in which Eliminate splits four ways: planned and funded, unplanned and unfunded, elimination challenge, and consolidate. The elimination challenge did most of the work. Each application owner had to state, in cost and usage terms, what their system was worth. One owner said it for everyone: "I never realised how much this system was costing us until I had to explain its value."
Change management ran on the tools the bank already had, Outlook and SharePoint. The process itself exposed how little finance and IT operations knew of each other's numbers. 1,000 applications came out as candidates for elimination or consolidation. The bank wasn't ready for consolidation, so we deferred it to a second engagement.
Result
533 applications decommissioned in two years and $12M a year in licence spend removed, on a $500,000 engagement: 24 times the fee, with more to come as infrastructure and support costs follow the licences. For the first time, more applications were retired than launched. Two follow-on programmes were identified and sized at $162M, and the consolidation programme went on to deliver $102M of confirmed savings.
What it took
Patience with "intuitively obvious truths" that turned out to be wrong. A tracking framework robust enough that savings were booked, not assumed. Finance, IT and operations at one table. And an understanding that the first programme is the groundwork for the larger ones.