This is a translated version of an article that I wrote for Software Release Magazine.
Application Lifecycle Management
In the past ten years, the costs of IT projects dropped significantly. In addition, the number of projects that turned out to be successful, rose. Nevertheless, only forty percent of all IT projects succeeds. This means that it takes less time today for a project to fail. Application Lifecycle Management (ALM) may help improve the return on projects. An efficient deployment of ALM requires the right scope and focus.
Today, many organizations regard Application Lifecycle Management (ALM) as one of the answers to their bad performing IT departments. With ALM, they try to get more grip on software development by integrating, coordinating and controlling the various phases of development. ALM guides an organization from software development until software implementation and management. Very often, an organization will limit its focus to optimizing the developer’s work processes and the communication between developers and project managers. An ALM tool is rolled out and its features are used to manage the progress of the project as well as the quality of the code. Deploying an ALM tool in this way is a step in the right direction but in practice it is not a guarantee for success. Without the right focus, software development will remain a stand alone activity without any relation to other parts of the organization, including business and operations. Additionally, research shows that companies spend on average 30 percent of their available IT budget on newly built applications. This means that they neglect an area of 70 percent, where optimization is also possible.
More return by shift in focus
With the right scope and focus ALM has much to offer. Figure 1 shows a schematic view of the lifecycle of an application that is to be developed. In this view de x-axis represents the time and the y-axis the value/cost of the application. In this figure, the extended curve shows the lifecycle of the application from development until end-of-life. The figure provides insight in the different phases of an application’s lifecycle. It also enables for determining the impact of ALM.
Figure 1. The lifecycle of an application
Reduce development costs
The lifecycle of an application starts in the first phase of development. As of the start of the project, costs are made for design, programming and testing. At this time, the application offers no value. All development costs are therefore to be regarded as costs. Often, organizations focus on these costs when deploying ALM and optimizing the software development process. Figure 1 shows however, that the development phase only accounts for a small part for the full lifecycle of the application.
Time to market
The figure also shows that the application will only add value to the organization when it has gone live. This means that the ALM activities need to be focused on getting the application (or a part of it) live as soon as possible. One of the ways to do this is using agile development methods, including iterative delivery. Shortening the time to market not only results in faster added value, it can also provide competitive advantage. In general, organizations that are first in addressing new needs or market changes profit the most from these developments. Organizations that are trend followers profit less; or even worse, they have to invest in order to stay in the market.
It is clear that an application will add value when it has gone live. Many organizations do no recognize this added value. ALM activities should focus on getting as much added value as possible. As the application is developed for the end-users , it is key to involve this group as much as possible in the development process. User involvement, support from the (executive) management, defining clear business goals and optimizing requirements are all equally important.
One of the ways to realize this is to optimize the communication between the user organization and IT and to create a common involvement for all stakeholders. In this way, stakeholders are better geared to state their demands. They are also better able to determine the consequences of their choices and to change priorities and requirements during the project, together with the project team. Here, it is also cost-effective to use short iterations, as changes in scope, priorities and requirements can easily be made. In this way, an organization can address new insights during the project, which may increase the added value of the application further.
When developing the application it is advisable to acknowledge in an early stage the need for application management. By creating consensus on the requirements for the management department, operational management costs of the application can be reduced significantly. The focus on management is paramount in an ALM approach.
Extending the lifecycle
By adding value and reducing costs, a developed application will provide return in the long run. By focusing on the value of an application and by constantly monitoring this aspect, an organization is better capable of determining the moment when value is replaced by costs. This early insight helps in deciding what to do with the application: adjust or phase out?
When an organization decides to abandon an application, the knowledge of the application will lead to less abandoning costs. This is definitely the case when an organization combines this knowledge with the optimizations, provided by ALM in the earlier development phase of the application. An example is the right documentation on the application interface to other systems.
Figure 2. The new lifecycle of an application
The new lifecycle
Figure 2 shows the new lifecycle of the application. This is the result of broadening the ALM focus as described earlier. The green field in the figure depicts the extra return of the application. This is possible by speeding up the go-live process, a longer life of the application and more added value for the user. The red areas in the figure represent the decreased development costs and the costs for abandonment.
Priorities of an organization
Figure 2 shows that the return on ALM increases when an organization not only focuses on the development phase, but also on the other phases of an application’s lifecycle. This optimization obviously pays off, but the question is how to relate this to the goals of today’s organizations. Many organizations focus on cost reduction, compliancy and risk management. How can ALM be related to these three priorities?
A too strong focus on cost reduction may well lead to an imbalance in this area, resulting in a paralyzed organization in terms of productivity. By continuously executing cost reducing measures, tools and communication channels are lost. In the end, this can affect the productivity of employees negatively. By combining cost savings and productivity improvements this issue can be addressed.
A combination of ALM activities with a so-called high-performance workplace can be the answer. The high performance workplace is a physical or virtual environment which is especially designed for knowledge and information workers. It supports them optimally in executing non-routine duties. In these duties, exploring, learning, innovating, collaborating and managing are key.
The current generation of ALM tools already pays attention to optimizing communication and collaboration between stakeholders in an IT project. This shows that the awareness on effective collaboration is growing. It also requires the focus to be placed on the process and the human aspect of collaboration. Important success factors are creating joint goals and making sure there is a shared vision of the truth.
The current compliancy requirements demand a high level of control. In recent years, this control is expressed in continuous process optimization. The need for a process approach led to reduction of flexibility within an organization. It is becoming increasingly difficult to address market changes and needs without losing control. The focus on processes, tools and management also led to a situation in which up to twenty percent of project costs can be allocated to the developed software. The rest of the costs are related to project support and meeting internal and external requirements. The new generation ALM tools and corresponding methods, enable an organization to meet these strict compliancy requirements without affecting flexibility. These tools provide the necessary mechanisms and means of control to link requirements, quality metrics and the solution. This makes it much easier to prove that the solution meets all requirements. The full support of agile methods within the ALM tools ensures the required flexibility.
Experience from the past shows that risk is inherent to projects. However, the higher the risk, the higher the return, as optimists say. It is not necessary for organizations to exclude all risks. They need to assess risks continuously on the return they can provide. The collaboration in a project, the commitment from stakeholders and the combination of business and ICT knowledge enable the right assessment of risks. This may lead to a situation in which a risk that is regarded as unacceptable by individual members, is controllable or even desirable.
ALM is gaining in popularity. Many organizations take their first steps in this area and start to purchase ALM tools. Seemingly without thinking, they focus on the development phase. This is an excellent first step but still they should not stop here. By broadening their focus and incorporating the full lifecycle of an application in their approach, they are able to increase their return on ALM significantly. The broader approach offers more insight in the added value of the application. By combining ALM and a high performance workplace, and by putting the human aspect first, it is possible tot create an environment in which collaboration is optimized. The result is a software development process with predictable results and sufficient flexibility to contribute to the three main priorities of an organization: cost reduction, compliancy and risk management.