Listen to Derek
Mark Schroeder: How much of the old system do you need to save when you start planning?

Derek Britton: The basic question is where do you stand today? Where is your business? And what you need to do because of it? The economy is shrinking if the organization is struggling, you’re IT is also gonna be suffering too. In the case of the gravity of that situation will dictate very very clearly what your strategy needs to look like. And it’s probably about saving money.

Mark Schroeder: Right. So, the first part you have to do in the whole modernization process is determine where you are at right now.

Derek Britton: Yeah, determine the level of risk that you’re facing and also look at the books today. Not look at IT, just look at your books and say where is our spend going, what’s it yielding. You consider that 80% of all IT expenditure in just lights on business. Not pushing forward, not innovating, not doing anything new, just keep the thing running. And you know, that’s a fairly constant statistic across the industry, no matter what size, no matter what vertical. So, if four out of five bucks are being spent in keeping the lights on, you know if you need to save money, dramatically. You know that could potentially hurt you, so you need to think about how you’re going to be very very clever about your investment.
Mark Schroeder: And when you’re looking at your system and trying to decide how to move over or modernize, why don’t you start over and development new system versus looking to some other options?

Derek Britton: It’s very easy and is perhaps a natural reaction to think about throwing old stuff away. In the blaming of design, of the system, or technical choices, or even a previous incumbent for the horrible cost that you face. But think about the cost of any overhaul or any rewrite or replacement, and that’s a significant investments. And think about where that gets you, does it actually improve operations significantly? Well not really, what we actually doing is moving pretty fast to stand still. Your not, actually getting a net game, you just replacing old with new. So, does that introduce risk? I’m afraid it does because how do you know the new system is going to do everything the old one did. And of course the uses will be affected. Will they be delighted? It’s unlikely that the old be throwing a party because of the change. It’s unlikely but the replacement is gonna do anything profoundly valuable to your business. And for sure, the cost will definitely be significant. So, you’re investing massively in the hope that maybe some return down line betting in the future again. Of course the option to doing nothing also exists. So, we have to be clear on that. But in this DNH, it is acceptable for your organization to bury tail in the sand and say “no, we’ll save this problem tomorrow”.

Mark Schroeder: In order to make your IT organization pay off and be successful for your company, what are the real options that you can look at?

Derek Britton: Well, there are number of options that you need to consider. And making IT pays is as it would suggest. It’s all about looking at getting the most instantaneous return on your investment. I thought previously about the inherent cost of certain options…the inherent cost of re-writing and replacing. The CIS challenge I think is to find the change programs that we yield an instant return and really need to move in terms of cost and value. So, the start point is the acceptance that there are already tremendous value in the systems you already owned. And from that start point, that’s way you can get some enlighten thinking going forward. These are systems that often times that are built over decades to support other business runs. And as such, they possess the intellectual property or the uniqueness, unique to that organization that is also highly valued. A challenge is how to unlock that goodness, how to unlock that value and exploited. While taking away the unnecessary cost redundancy bottlenecks or inefficiencies that in a frankly, day by day are complain about by your uses or sysprogs , whoever it may be. And we believe that the only true source of true about those systems is the systems themselves. So, by taking a view of what those systems cover, what they contain, what they do for you. Getting a true picture of what needs to happen will start to emerge. So, no matter what your strategy, task one is, is really to look at what’s there. Look at what you currently own, what you currently preside over and look at how that’s bringing you value today. And that will help you focus on what you want to take forward into the future. So, I would look at it like this, if you don’t know where you are, how you do know how to best get where you’re going. And that’s one philosophy we’re going to suggest here.

Mark Schroeder: So, that’s the first step, is figuring out where you are now. Then, ones you sort to have an idea, what are the choices you have to go forward with?

Derek Britton: Ok, well, I have already mentioned a couple of them. Well, I want just to reiterate so that absolutely clear. I think there are really four choices. I’m gonna start probably with the one that you can describe readily, that is doing nothing. Now is the time to do nothing. Now is the time to be proactive, get ahead of the way, and figure out how you gonna solve a really major operational challenge that you have today. Solve it, once and for all. The economy and your share holders or your business owners and demand that you’re able to think about why. So, let us talk about the three possibilities. Any modernization of any major system, you know, any overhaul requires significant change. And each of these three are significant changes. The first one is, let us talk about replacing the system in its entirety. It maybe the system was an off the shelf package, it maybe homegrown. But either way you can replace it with a fresh package that purports to replicate or supersede the functionality that your old system had. There are a number of potential obstacles to that. And the big question is, do you know what this new package is actually going to do and perhaps more worryingly and less clearly define, do you know what your current package does in terms of functionality. You may think you know but can you actually list all the functions it provides and can you perform the gap analysis between old and new so that your satisfied that the new system will do what you need. I’m afraid to say, 80% of the time, yes it’s fine. But that remaining 20% of functionality that you’ve missed that you’ve overlooked, that’s where the cost lies and to tell or to write or spoke updates to any new package is a hugely costly exercise. And the organizations who really built the success on being a packages that they need to be tailored by consultants ones they’ve been implemented. Similarly, the rewrite option presents a number of challenges. Probably, the best way to articulate the challenges is to talk about the chaos report which is also by the Standish group which talk about the number of rewrite projects that’s arrived late over budget or just outright failures, never delivered. And the statistics is staggeringly high. What I am basically saying is, you know, at any given point however many projects are running up to half of them are never going to be delivered or never going to achieve their business goal. And so, rewrite doesn’t exactly feel anyone with confidence. You’re introducing far too much risk into business when like I said earlier, extensively you’re actually not getting any value, and you’re just replacing one system with another one. So, the fourth option is the concept of re-install, the concept of re-plat forming so that you’re taking the system to a new environment and taking the cost out of that environment as part of that move. So, you’re not replacing, you’re not re-writing, you’re not reaping anything out, all you’re doing is eradicating the cost burden of the existing infrastructure. And it’s simple as that. The basic premise is very very simple thing to do. Our technology allows that to happen but importantly, the concept is a very straightforward one. Take your existing system and move it to a place where it’s cheaper to run.

Mark Schroeder: So, you’re talking about basically using your same system and then having a new way to run it and the new front end basically to, is that correct?

Derek Britton: It’s not just the new front-end. Mark, you may will be looking at replacing the front end because you have the option to do so. But more importantly this is where the cost really lies. The physical production environment of your new existing system where it’s running today on a high end server environment such as a main frame, that’s why the costs are, your annual lease cost, your annual software cost, your annual hardware cost if different from a lease, that’s where all of your IT expenditure goes, that’s the big buck items. And what I am basically saying various, you don’t need that infrastructure. You don’t need a main frame to run a main frame application and you can run that application on the pc on your desk will happily run many main frame applications. We’re able to say that because many vendors in the market and Micro Focus included, provide capability and technology that allow you to take main frame applications largely untouched and run them in a distributed environment. It’s actually the production system that you’re re-hosting, not just the front end.

Mark Schroeder: So now, in the whole process of moving from one, your old system to a newer system, how does rationalization fit in to that, in your process?

Derek Britton: Well, it’s an important thing to introduce at this stage because what we suggested there is one of the options of modernization is about rehosting. And of course that’s a very very strong candidate. The thing that we want to introduce here, at this stage, it may be the first thing you have to do, once you’ve understood what your systems are doing for you is to look small selectively at those individual applications, that those individual systems and decide which of them you need to take forward. Decide which of them you need to rationalize by which we mean, what’s fit the purpose, what’s giving you the best bank for your back. But what conversely needs to be considered as alternative process or what we look at as possible candidate for retirement. Not all systems are as good as each other and not all applications are suitable to be taken forward into your brave new world. So, what we’re saying here, before you re-host everything, before you take everything down to a new environment, before you consider a whole scale migration, let’s look keenly and an insightfully on what the systems doing for you today. And maybe look to actually, you know, rationalizing, filtering down the amount of infrastructure that you want to take forward and that’s really no more than that.

Mark Schroeder: So now, you’re sort of decided, you need to do something, you think re-hosting might be a good option in order some other options out there, what are the different options that you can look up for your modernization of your application?

Derek Britton: And I think, this is where the rubber really hits the road. This is where the key decision point is reached. And it’s important to go back to first principle which is, why we in this position in the first place. Why we looking to make these draconian changes? What forces us to think this way? And really for us, it’s a case of, what why the business’ challenges that we were facing, why did the board get together and say that we need to cut cost or we need to do something different. And that shapes your view in the world and that gives you, usually a guiding like towards what you preferred modernization option will be. And really, there are two clear options. You either want to be able to perform or undertake a dramatic, what we call a transformation or improvement. A sudden big bang quick win exercise that will machete the unnecessary cost out of your business as quickly as possible and will allow you to move forward and innovate in to the future. Or you are able to allow yourself a more considered evolutionary approach that we will call continuous evolution which is like a programmatic view of incremental changes that each will add value to the business as you move forward. And I think they are two sides of the same coin, you do want to move forward quickly. The fundamental question is, how much money can you put up straight away to invest in those changes and how much money you need to save instantly. And so, it’s really a question of operating budget. It’s really a question of the emphasis and the size of the change that you want to make and what steps. So, that’s the question you ask yourself.

Mark Schroeder: So, as you do your transformation or evolution of your system, where does the user experience fit in? I mean, you want to make sure your users are comfortable with the system.

Derek Britton: That’s right, absolutely. And they are often forgotten in big system changes and I think it’s a mistake not to have the user group as one of the key stake holders in the decision making process. And we would always be conscience of that. So, the question about the user experience really, is another thing that may shape your modernization approach. And so, we’re talking here about, you know, question marking whether the evolution you want to take forward is about people or is it about processes. And again, your existing sort of challenges, your operational challenges may shed a light on exactly what the causes of your challenges maybe. So, let us take a look at that. So, many problems manifest themselves in the eyes of the user community first. So, there are not system down time. They are not necessarily performance bench marks that you’re running. These things that are just rank for users are witnessing and before your system dies out. So, poor operational processes, maybe user interfaces. Maybe be just different applications presenting themselves differently to different users which make them difficult to use and they all create the opportunity for error and for the delay. I mean a question to the audience, how many of us have been put on hold in the call center where the operator clicks furiously, you know, you can hear them bashing their mice on the desk on the other end of the phone to access some unrelated functions that you asked them to find. The sad fact of life is these improvements easily implemented, in most cases. And the opportunity for improvement is vast, provided that you are able to take the right perspectives and the right view in changing other user experience. We have a customer called Wells Fargo and took this approach and process a third more claims per day. Thanks that to a fix that took less than a month to implement. And you know, for the company that size, a third more claims processed a day is a very welcome addition to the bottom line. So, by looking really of the user experience and saying, so how can we make their lives easier? We can align technology to really improve the way they work and make significant improvement as part of the evolution.

Mark Schroeder: The user is so important and often, like you said, they are left out. And it’s the IT people setting up there and making decisions on what is needed. Does it always work if you do that?
Derek Britton: It doesn’t work well, you’re right.

Mark Schroeder: You’re starting on a project now, can you explain to me how the analysis maybe different or what are the items you’re trying to analyze in a modernization project?

Derek Britton: Yes. Once we’ve decided that’s our users can be satisfied with a couple of changes as what we’ve just discussed. We are looking more about, less about the people side, more about the process and how systems are taken to market and how systems are delivered by our organization. And before we sort of trying to focus in any particular area that we want to improve, we need to look again, fairly holistically at the overall process, the overall develop life cycle if you will. And analysis is the place to do that. So, if the issue is less about users more about systems, it’s tempting to jump in with a, Oh I know what to do about this I know what we need to do this. So much of the current portfolio is consumed an existing processes. So, it may be dangerous to make too many assumptions before you know the full story. So, we advocate taking stock, just as you did before you came up with your modernization strategy. Take an inventory of those systems. Start to build the true picture of your landscape. And our friend Phil Murphy, the analyst at Forester, he called system’s code a single source of truth for the application. The only thing that will tell you what the application does is the application itself. And by managing your portfolio through a more detailed examination, a line by line examination, you can identify bottlenecks, redundancies, duplication, errors but also those systems that you want to continue to invest in and support. Those with true value and real potential. Another of our client, the international bank HSBC. They used the concept that we refer to as application portfolio management to move from the point whether it is spending a staggering 90% of their IT expenditure on lights on project, just keeping the business running and only 10% on innovation. They were able to change that statistics to point where they were innovating to the tune of 40% of their investments. Just by more effectively managing the systems they own and choosing more selectively the projects they undertook. And it’s a staggering improvement, 300% improvement in innovation. Again, that’s a real opportunity to reach out to new customers in new markets through new products. Remember in financial services, the IT is effectively the product because it’s how user interfaces with the bank. So, that was a significant achievement in a very short space of time.

Mark Schroeder: Then, after the analysis, obviously we come to the development phase. Are there differences you look at in development of modernization project?

Derek Britton: Sure. It may will be that the problems that identified clearly within the realms of, you know, the process of how the systems are built. So, have their developed. We would refer to that as the software develop life cycle. Typically, that will vary from shop to shop , it will follow a standard, practice a standard, project management kind of discipline. And of course the product in this case is a piece of working or tested software. However, what we do find is that, once again processes are not streamlined not as smooth as it could be. And some of the tooling used to facilitate these processes is antiquated or not fit for purpose or just doesn’t integrate well. So, improvements in the appropriate tooling provide better unit testing, better quality, even faster compilations can yield in excess of 33% improvements. There or there about. We have another banking client, The Royal Bank of Scotland, here in the UK. They invested in process improvement in there SDLC. They were able to gain 30% productivity benefits. And to make that figure more real, they measured it, as each coder. So, every single guy in the program of the team was more productive to the tune of 30 days a year. So, that’s 6 weeks. So, imagine if everyone could work 6 weeks smarter per year and that’s the improvement they realize. And there are number of other clients who yielded much the same kind of benefit and that really adds a significant benefit on how their building IT.

Mark Schroeder: And then finally, we come to testing and you mention about new tooling for testing, I’m sure that the modernization project affecting pretty much the whole systems. Somehow, you gonna test that all.

Derek Britton: Oh, you bet. And there will be no self respecting client would ever go ahead on such, you know, a huge undertaking as a system wide modernization when I’m being clear on what test strategy was going to be. The testing is how you mitigate risk. Testing is how you gain confidence. Testing is how you achieve user acceptance at the end of the day. So, it’s absolutely vital that we have a clear and well defined testing process that’s rigorous and comprehensive. That all said, the testing cycle is often either overlooked or misunderstood in an organization. There are times to turn with a huge typically back end investment of resources consumed in testing the systems prior to go live. That’s often what we find is the testing process, you know, they throw as many people as they can in testing immediately prior to the release of the system. And that’s not necessarily, the smartest way to do it. Many of these processes that are involved , they’re manual, sporadic, their unscientific. The test data is inappropriate and perhaps not even compliant with security and procedure. So, we believe improvements can be made to more holistic view which starts with requirements. It doesn’t stop with the test plan. It starts with understanding the requirements of the change. And the modernization project, obviously, we are talking about fairly, wide ranging, and comprehensive set of requirements. And it’s our belief that they need to be managed and controlled right from the word go. So, the project planning phase is where the testing starts because that’s where the requirements are truly captured. And in this way, there is a measurable, auditable, and quantifiable process from start to finish to support testing. So, what was saying there is that, ones the requirements are defined, they can then effectively be used and develop use cases or usage scenarios which then can be developed towards test cases and then automated in a way that they can be fed in to the final back end testing process. And because of the automation and because of the control and the visibility, the end of cycle back log, another huge investment of the back end can be reduced. Because we know what test cases we need to run and can be automated and scientifically controlled and therefore, more predictability in the test cycles, things get done quicker, and the real test cases that were baked into to the whole design process are used as the bases for acceptance testing and user signoff. And it sounds almost too good to be true when we talk about it so simplistically. Our figures tell us this is true. Lucent Technologies, the software guys, they saved 98%, I say it again 98% of the testing effort. And it actually improved the quality of the product that they release by using the MicroFocus process. And it really as straightforward as say that if you define your requirements upfront you can build test cases from that and that will fuel, that will fund your testing process. And no longer do you have to frantically scramble as I think they were using as a turn they were franctically scrambling to get testing done, simply because they didn’t know what testing have to be run.

Mark Schroeder: Ok. Well 98%, that’s outstanding achievement.

Derek Britton: It is quite outstanding. You’re in the realms of, you know, you’re outside the realms of feasibility, actually. It sounds too good to be true.

Mark Schroeder: Right.

Derek Britton: Ask yourself the question, when I test something, how do I test it. Nine times out of ten, the answer isn’t a good one, the answer is usually, well a kind of guess what I might need to test. And because I’m not sure, I’ll test it again and again and again and again. And actually, you’re just duplicating effort, that’s wholly unnecessary.

Mark Schroeder: We have a good chat today talking about, you know, how to decide direction going to modernization project always through how to do analysis and development and testing. What are some of the things that MicroFocus has to help the company with all this stuff?

Derek Britton: Well, as I think a couple of my answers have intimated MicroFocus believe is sites full square in this space. We believe we are uniquely position as the modernization company. We believe we are a better place to help you modernize and transform the assets that run your business today than any other organization. And I guess a couple of things are worth pointing at. First of all, the numbers of customers who basically reinforce our story through the success they have achieved with our technology. To us it suggests that we’re definitely on the right track. One customer I didn’t mention who used many of our modernization tools, throughout a fairly exacting migration, the medical supplies people, Owings and Minor. They netted all this out as a 70% operating cost saving that is a 70% of the entire IT budget was saved using MicroFocus technology which is again almost unfathomably large saving on the bottom line. So, these guys are quite willing to share their experiences with the wider community without prospects and you know, I would hope that for those reasons that MicroFocus worth a second look. My second point, is not only are we dedicated to customer success but also dedicated to applying as much as we can back into investment for our products going forward. And I guess the most recent example of that is that as a result of customer demand, as a result of the growing market. Within the last 12 months, MicroFocus has acquired both the testing division of Conqware and the entire Holland organization. Both of them were, you know, really strong market place and the testing space. So, through those acquisitions, MicroFocus has effectively, automatically emerge as one of the venders in the testing space. And added to our existing modernization capabilities which are largely speaking, unparallel in the market. We now believe that we are the application modernization and management company for the global 2000. And you know, we look forward in working with all non prospects and customers going forward.

Mark Schroeder: And I’m sure that you have capability working with large companies as well as small companies and adjusting you products and process to their needs.

Derek Britton: Absolutely ,yes. I mean, I think I have already mentioned, there is no such thing as a cookie cutter approach, in terms of what the customers are trying to do. Requirements are shaped by scale, by size, by technology footprint, by business requirement. And by the general economy as well. So, no matter who you are or where you are or what are you trying to achieve, the breath of our solution and the robustness of it, we believe we can still have a large part to play in your success.

Mark Schroeder: What’s the best way for someone to contact your organization?

Derek Britton: Well, for no existing MicroFocus customer, please come by to our website www.microfocus.com. You’ll see descriptions of many of those solutions that I have touched on this morning. But there will also be contact information and we have offices in something like 25 countries globally and then we have distributed elsewhere certainly in North America, in Canada, and the whole of Western Europe. And we local, regional offices and one of our people will get in touch and take the conversation forward.
Mark Schroeder: Well, thank you very much for your time today. Is there anything you’d like to say before we’ve to close and wrap-up for the day?

Derek Britton: Well, just thanks for the opportunity to speak today Mark. Thank you very much indeed. And of course if there’s any feedback to this interview, then I’m happily to take follow up questions through your websites.

Mark Schroeder: Alright Derek, I appreciate your time.