Cost reductions on the operational baseline were identified by recognizing opportunities to consolidate, harmonize, or decommission. One example from the North America region showed a potential savings of 30 percent by consolidating 15 applications that accounted for more than 25 percent of the annual run costs.
The increase in efficiency extends to processes associated with EA itself. For example, Bayer expects that the next cycle for future IT landscape planning can be accelerated dramatically, with data gathering and analysis reduced by 60 percent to 70 percent.
So much is made of IT-business alignment that it's held up as a kind of nirvana for enterprise architecture teams. First Data, a provider of transaction-processing solutions with more than $10.4 billion in revenue and 24,500 employees in 35 countries, appears to be well on its way to reaching this state of enlightenment.
First Data's global EA function has created a framework for strategic technology programs to coordinate technology adoption and development in a manner that maximizes value. These road maps are pivotal as the company creates go-forward technology stacks with more contemporary, innovative technologies to enable dramatic improvements. Through them, First Data will transform three technology layers: application (SOA, platform rationalization), information (master data management, BI, data warehouse consolidation), and infrastructure (data center consolidation, internal private cloud, provisioning automation).
EA is intertwined with nearly every aspect of First Data's business. Its ability to drive product transformation is critical; this project will rationalize and consolidate product offerings, driving efficiency, simplicity, cost effectiveness, and agility. First Data expects it to become a core function of the company's 16,000-person global operations and technology organization.
As owner of these road maps, EA is responsible for ensuring effective collaboration with development and vendor partners to ensure the benefits of emerging technologies are effectively captured and that the company continues to push the limits of technology in developing internal capabilities and future product offerings. This includes leveraging internal private clouds with provisioning automation, integrating real-time communication services (IM, telepresence, videoconferencing), deploying consumer technologies (iPads), and incorporating IBM's Watson technology to manage 120TB of enterprise data migrating to a consolidated warehouse.
Although this is a long-term process for First Data, the results of alignment and EA initiatives can already be felt. As the company continues its global growth, it is positioned to execute and continue absorbing volume increases and new functionality while holding approximately $2 billion in operating expenses flat year over year.
The latter is critical to the company's goal of adding $1 billion in incremental EBITDA (earnings before interest, taxes, depreciation, and amortization) by 2013. Through a global command center strategy, the company plans to cut the number of outside software vendors, reduce the number of application platforms, and reduce the number of programming languages from 11 to 3. Even as First Data holds the line on operating costs, it plans to add critical functionality, such as a 24/7 view of global payment systems.
Singapore Ministry of Education
The story is familiar: IT expenditures increase, yet uncoordinated expenditures result in a diverse technology landscape ranging from mainframe to web, with widely varying technology expertise. In other words, the Singapore Ministry of Education suffered from a high TCO without a clear ROI. Siloed systems led to redundancies across user groups, limited IT efficiencies, and cumbersome systems that prevented timely responses.