- Why do we need to consolidate?
- Isn't Systems consolidation more of an IT strategy than a Business strategy?"
Answer for the second question was the universal answer, "it depends". It could be business driven or IT driven. Multiple systems supporting same or similar business processes in an organization could be because of different reasons and need to be understood before a system consolidation strategy is considered. Following are few reasons that I observed in my experience,
- Business Silos: Multiple line of business with similar business processes developed systems in isolation.
- Time-To-Market: Business grew with a very fast pace and new applications were developed for time-to -market reasons for immediate requirements without considering enhancing existing systems or reusing them.
- Autonomy: Business required to have repetition for autonomy and flexibility reasons.
Systems consolidation strategy could be Business driven or IT driven. In the case of a business driven consolidation, a holistic business services analysis can be performed to identify commonalities in the business services/process across multiple line-of-businesses. This top-down approach allows to consolidate systems supporting similar business services. It also considers the organization long-term goals and strategies. However, this requires upfront buy-in and long-term commitment to implement.
IT driven consolidation strategy on the other hand is usually driven to reduce total cost of ownership (TCO) by reducing the number of systems . It is a bottom-up approach and may focus on moving business logic/data from multiple similar systems to a single system. It may not consider long-term organizational goals/stratgies.
At the end of the day, both strategies work, add value, and help organizations to optimize its resourcess.