Bank of Ireland Reduces IT Cost and Complexity Through Application Portfolio Management

“The power of Apptio in terms of giving us that granular level of financial detail that feeds into how roadmaps are actually funded, what the return on investment is — that's been hugely beneficial.”

Founded in 1783, Bank of Ireland is a traditional, relationship-driven retail and commercial bank with over 8,000 employees and €3.7 billion in revenue. It is the largest bank in Ireland, and one of two pillar banks in the country. Headquartered in Dublin, Bank of Ireland represents approximately 35% of the Irish banking landscape, making the organization strategically important to the overall Irish economy.

Application portfolio management leads to TBM

As a full-service financial institution, Bank of Ireland offers a broad range of products and services from retail and corporate markets to treasury and international banking. Although more regional than some of their global counterparts, the challenges they face are very similar.

In 2020, one of the goals at Bank of Ireland was to deliver a more functional and usable version of application portfolio management (APM). Given the complexity of its business and the changing technology landscape, the company’s IT leaders needed a better way to manage costs for its entire estate. They saw APM as the answer.

“We had proprietary approaches to assessing and managing costs, planning, tracking of budgets and actuals, and also identification of technology lifecycle management and technical debt,” said Ronan Hughes, principal architect for Core Banking and Group Manufacturing at Bank of Ireland. “Everything was done in an ad-hoc manner. The relevant stakeholders got together, and the debate was much more emotive rather than factual.”

The company’s leaders wanted a more objective, streamlined approach that was obvious and transparent. As a result, they planned to implement APM across the enterprise. This required a detailed assessment of their applications.

“We needed to identify each of the applications on our estate and to determine the total cost of ownership of each of those applications,” said Hughes. “And that’s what led us to Apptio.”

The IT team explored several products looking for the one that best solved their problems and offered the most value for the organization.

“Apptio was proactive,” Hughes said. “They delivered a proof of concept in four weeks that showed what we could achieve. We created some basic raw data from what we had available at the time and went, ‘This is amazing. This is brilliant. This is transformative.’”

Bank of Ireland adopted Apptio and began implementation in March 2021. In just over a year, according to Hughes, five primary elements of APM have been enabled through Apptio delivery:

1. Cost and efficiency management

According to Hughes, Apptio provided horizontal- and vertical-level TCO views across services, applications, cost towers, and value streams.

“Cost and efficiency management were apparent from what we were doing in terms of the total cost of ownership,” he said.

2. Portfolio investment strategy

Apptio provided a full lifecycle view of each portfolio down to the application level, with costs broken down into fundamental categories such as software, hardware, labor, vendors, and more. According to Hughes, this enabled them to evaluate their investment strategy because they now knew how much they were spending on each application, and that helped them decide where they needed to expand in the future.

3. Transformation roadmap

The transformation roadmap element of APM is the ability to create roadmaps using confirmed data on costs, lifecycle management, and investment information and align them with an organization’s strategic objectives.

Hughes said, “We built three- and five-year strategic investment roadmaps for each of our core business areas. This meant that the existing TCO that we had today could fade into those to make it much more realistic and tangible.”

4. Sourcing strategy

For organizations to optimize their sourcing options, they need to be able to view TCO budgets and actuals broken down by vendor across all applications and services. Apptio provided this information, Hughes said, and that enabled them to make better decisions about their sourcing strategy.

“Whenever we were coming to the end of contracts, it was very easy to get information from Apptio,” he said. “How much does that cost us today? What are we getting from it? Who’s using it, and where’s it being deployed within the estate? And if we needed to negotiate a new contract, do we want to keep it where it is, expand it, or reduce it? And for many of them, we wondered why we were still paying for them at all.”

For example, Apptio helped them reduce the number of licenses for one application from 5,000 to 400, resulting in substantial savings to the company.

5. Technology strategy

Bank of Ireland used Apptio to help find efficiencies in the operation of its technology estate by asking and answering revealing questions. And that directly affected the organization’s technology strategy.

Hughes said, “We were able to determine opportunities for cost saving and for heritage elimination (decommissioning older applications) as well, which fed into our technology strategy to reduce complexity within the estate.”

According to Hughes, Apptio has helped Bank of Ireland reduce its application portfolio by 15% in the first year with further rationalization planned.

In total, across all these cost savings initiatives, Hughes said Apptio helped Bank of Ireland save €2.5 million in year one, with a similar amount forecast for subsequent years.

Of this total, approximately €1.4 million was through renegotiating contracts, reduced support, vendor licensing, and associated infrastructure reduction, something that will deliver ongoing benefits and cost reduction in years to come through further focus in this area.

Bank of Ireland was pleased that Apptio helped enable these five elements of APM. But according to Hughes, Apptio delivered much more than they had originally expected.

“What we hadn’t intended as part of the journey when we initially signed up for Apptio was that the other elements of our application portfolio management strategy would start to come to life as a result of the outcome,” he said. “These were sort of secondary elements that were being driven by seeing the outcomes from deploying a successful TCO model that people could interrogate.”

These secondary elements included the following:

1. Informing business strategy

Analyzing data in Apptio, Hughes said, had a direct effect on the organization’s business strategy.

He said, “People in retail and corporate would look at the data and say, ‘This (function or capability) is costing us a lot of money. Maybe we should look at doing something different there?’ Or, they’d say, ‘I thought that was much more expensive, and we’re actually making a lot of money from it. We should concentrate on that. We should focus on that and expand it.’”

One example was the use of payment systems. Since certain payment systems need only be available during banking hours, Bank of Ireland was able lower its costs by reducing support hours for these systems during non-banking hours.

2. Risk reduction

“From a risk management perspective, Apptio was helpful because we had formal risks that we had to present to the regulators and track ourselves on, and there was always a cost element to them,” Hughes said. “And if we can reduce that cost number, we can also help to reduce an element of our operational risk profile. That’s something we’re looking at now at an enterprise level.”

3. Strategic allocation of labor

According to Hughes, data from Apptio provides important information that helps Bank of Ireland make decisions about the company’s organizational strategy.

“By working with Apptio, we knew where we were using our people, where we were using third-party providers, how expensive they were, and what value we were getting from that investment,” he said. “This helped drive more conversations around where we deploy our own people and where we hire in people to help us on our estate. Is it worth doing? What are we using them for? If it’s really expensive and we’re not getting a lot of value there, then could we get rid of that and use those people elsewhere?”

While Apptio was originally intended for use primarily by IT, other Bank of Ireland divisions such as Finance and Procurement are now users and make decisions based on the insights delivered from Apptio.

Clear visibility that enables data-driven decisions

Bank of Ireland selected Apptio to help the company implement a more formal, transparent application portfolio management process. But what the company’s leaders received, according to Hughes, was much more than that. Apptio provided clear visibility of application stability, maintainability, lifecycle, and costs and enabled both strategic and operational decisioning on IT investments.

“When we started looking at Apptio, it was primarily just from an application portfolio management perspective,” Hughes said. “But now, we have many different business and use cases that we’re using Apptio for. The power of Apptio in terms of giving us that granular level of financial detail that feeds into how roadmaps are actually funded, what the return on investment is — that’s been hugely beneficial.”

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