A Practical Guide for Legacy Application Retirement WHITE PAPER

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1 A Practical Guide for Legacy Application Retirement WHITE PAPER

2 This document contains Confi dential, Proprietary and Trade Secret Information ( Confi dential Information ) of Informatica Corporation and may not be copied, distributed, duplicated, or otherwise reproduced in any manner without the prior written consent of Informatica. While every attempt has been made to ensure that the information in this document is accurate and complete, some typographical errors or technical inaccuracies may exist. Informatica does not accept responsibility for any kind of loss resulting from the use of information contained in this document. The information contained in this document is subject to change without notice. The incorporation of the product attributes discussed in these materials into any release or upgrade of any Informatica software product as well as the timing of any such release or upgrade is at the sole discretion of Informatica. Protected by one or more of the following U.S. Patents: 6,032,158; 5,794,246; 6,014,670; 6,339,775; 6,044,374; 6,208,990; 6,208,990; 6,850,947; 6,895,471; or by the following pending U.S. Patents: 09/644,280; 10/966,046; 10/727,700. This edition published June 2009

3 White Paper Table of Contents Overview of Application Retirement Business Drivers for Application Retirement Reducing Costs Consolidating Applications Upgrading from a Legacy System to an Off-the-Shelf ERP Solution Regulatory Compliance A Framework for Determining Whether an Application Is Eligible for Retirement The Business Value of a Legacy Application The Cost of a Legacy Application Strategies for Retiring Applications Prioritizing Applications Eligible for Retirement Retire All Data or Just the Data Required for Business Needs and Regulatory Compliance Handling Applications for Which There Is Little to No Understanding of the Application or the Data Model Seven Steps to Successfully Retire an Application Create a Cross-Functional Team Understand the Legacy Application and the Data That Needs to Be Retired Preserve the Business Context of the Application Data Access to Retired Data Secure Retired Data Set Retention Policies on Retired Data Select a Vendor for Application Retirement How Does Informatica Address Application Retirement? Classify and Extract Business Records Provide Seamless, Secure Access to Retired Data Comply with Data Retention and Privacy Regulations Implement Tiered Storage Strategies A Practical Guide for Retiring Legacy Applications 1

4 Overview of Application Retirement As businesses grow, information technology (IT) departments are continuously challenged to look for new applications that address unmet business needs, drive effi ciencies, and reduce costs. As an organization adapts to change and leverages the latest technology to deliver more value to customers, the corresponding change is refl ected in the application portfolio. It is not uncommon for companies that have been in business for a decade to have hundreds of legacy applications that deliver marginal value to the business yet represent a signifi cant operational and maintenance cost. According to Forrester Research, Streamlining the existing application portfolio is a necessary step for organizations that have been in existence for a decade or more, especially if those organizations intend to evolve to SOA why carry all that baggage forward to the next computing paradigm? Only some legacy applications will be reusable, and some aren t fi t for anything but retirement but how can you tell which is which? Why waste money maintaining applications that aren t worth keeping? Why not redirect that money to where it will benefi t the organization? 1 Application retirement addresses these challenges by removing the legacy application and the supporting software and hardware stack while keeping the application data accessible for reporting, regulatory compliance, and regular business needs. Organizations across the board spend upwards of 75 percent of their software budgets on ongoing operations and maintenance. 2 With just 25 percent available for new projects, IT departments are challenged to fund projects that can have signifi cant impact. Budget savvy CIOs appreciate the cost savings realized when legacy applications are retired. Many forward-thinking organizations have already established best practices and methodologies to review application portfolios at regular intervals and determine whether an application should be retired, replaced, modernized, or left as is. 3 1 Phil Murphy, Got Legacy? Four fates awaits your applications, Trends, Forrester Research, January 10, 2006, p Ibid., p Ibid., p. 5. 2

5 White Paper Business Drivers for Application Retirement Reducing Costs One of the reasons for an organization to initiate an application retirement project is to save costs. Because application retirement allows the application and the supporting hardware and software stack to be shut down, the organization saves on licensing, maintenance, and administration costs. Also noteworthy are the savings in storage space and power consumption. Consolidating Applications There are several drivers for consolidating applications. Examples include mergers and acquisitions and regional offi ces or departments that run different applications for fi nancials, procurement, projects, and other line-of-business functions. The benefi ts of consolidating applications include simplifying the user experience and cost savings. Upgrading from a Legacy System to an Off-the-Shelf ERP Solution As market leading ERP solutions provide broader and deeper capabilities, more and more organizations are looking to consolidate and standardize on a single application suite. Reasons for upgrading from a legacy system include high costs, withdrawn support from the vendor, limited module support, and diffi culty customizing the solution. Regulatory Compliance Organizations have to comply with several data retention regulations that require data to be retained for extended periods of time. Examples include Sarbanes-Oxley, SEC rule 17a, HIPAA, and FDA regulations. The heightened regulatory environment and the new Federal Rules of Civil Procedure are putting renewed emphasis on ediscovery and information management policies. Legacy applications cannot be simply shut down; information in these applications must be classifi ed, associated with retention policies, and discoverable in the event of an audit or litigation. A Practical Guide for Retiring Legacy Applications 3

6 A Framework for Determining Whether an Application Is Eligible for Retirement Determining whether an application is eligible for retirement is a fundamental trade-off between the business value the application provides and the costs of supporting and maintaining the application. An application is eligible for retirement when the cost of supporting and maintaining the application exceeds the business value it supplies. The Business Value of a Legacy Application Simply stated, the business value of an application is a function of the business problem the application addresses and the value the application provides to its users and the business as a whole. There are several parameters (see table A) that determine the business value of an application. All these parameters must be analyzed together to determine the business value of an application. Table A: Parameters That Determine the Business Value of an Application SERIAL NUMBER PARAMETERS DETERMINING THE BUSINESS VALUE OF AN APPLICATION 1. What is the legacy application being used for? 2. How many employees, partners, or customers use the application? 3. Is the application being accessed regularly by many users or are a handful of users using the application? 4. The date of last usage. Nearly all production control or application inventory monitors record the date of last usage. 5. What is the age of the application? 6. Is new content being actively created in the application or is the application used for reporting purposes? 7. Can other applications in the organization serve the same purpose of the application in question? If so, how many users will have to be trained on the new system and what is the cost of training and customizing the new system? The Cost of a Legacy Application There are several parameters that determine the cost of a legacy application. Examples of some of the parameters include licensing and maintenance costs, administration costs, the complexity of the application, the cost of customizing the application, and the availability of resources to support and customize the legacy application. The cost of a legacy application should include the cost of the entire software and hardware stack that supports the application. 4

7 White Paper Strategies for Retiring Applications When reviewing an organization s application portfolio for the fi rst time, it is not uncommon to fi nd hundreds of applications that are candidates for retirement. When devising your application retirement strategy, it is important to consider the following: Prioritizing Applications Eligible for Retirement The priorities for application retirement can be driven by one or more of the following: Cost Savings - Starting with applications that generate the greatest cost savings showcases the value of the application retirement project by freeing up budget and resources. Knowledge of the Application and the Reporting Requirements of the Retired Data - One of the challenges with application retirement projects is the lack of functional application knowledge. Because legacy applications were deployed years ago, several employees educated on these applications have since left or retired. Additionally, fi nding people with the right skill set is diffi cult when technologies are dated. Starting with legacy applications where there is a good understanding of the application functionality and reporting requirements makes success more likely and helps build the business case to retire other applications. Retire All Data or Just the Data Required for Business Needs and Regulatory Compliance This decision is primarily driven by the knowledge of the application and the data that needs to be retained for reporting, auditing, and regulatory compliance. Retiring only the data required for business needs is the best approach with organizations that have a strong understanding of the application data and the reporting requirements. Retiring all the application data is the best approach when neither the application data model nor the reporting requirements are fully understood. In this situation, retiring all the application data mitigates risk and saves costs. Because all the retired data is accessible, the organization can dedicate resources to analyze the data if and when the need arises versus spending time and resources upfront. A best-in-class application retirement solution gives customers the ability to add relationships between the data and modify reporting at a future date even though the application data has already been retired. Handling Applications for Which There Is Little to No Understanding of the Application or the Data Model In this scenario, application retirement is a sound strategy if the business value of the application is marginal. Retiring the application ensures that all the data is preserved. The organization saves costs by shutting down the legacy application. As stated above, the ability to include additional relationships between the data even though the application data is retired protects the fi rm if this data needs to be accessed later. A Practical Guide for Retiring Legacy Applications 5

8 Seven Steps to Successfully Retire an Application To successfully retire an application, follow these seven steps: 1. Create a cross-functional team 2. Understand the legacy application and the data that needs to be retired 3. Preserve the original business context of the data 4. Understand how users will access retired data 5. Secure retired data 6. Set retention policies 7. Select a solution for application retirement 1. Create a Cross-Functional Team Successful application retirement projects are typically staffed by cross-functional teams with representation from compliance, the line-of-business function, and IT. Table B lists some of the typical roles played by the team members. SERIAL NUMBER DEPARTMENT/ FUNCTION TEAM MEMBERS 1. Compliance/Audit Compliance managers, internal auditors, general counsel staff 2. Line-of-business managers 3. Information technology professionals Business analysts, line of business managers IT managers, database administrators, application developers ROLE Determine what data should be retired for compliance purposes, the retention period, and the security access controls that should be associated with the retired data. Describe how the legacy application is being used; defi ne the data that needs to be retained for regular business needs and the type of access and reports that need to run against the retired data. Develop the application retirement strategy, evaluate solutions for application retirement, retire the application, and shut down the legacy application. 6

9 White Paper 2. Understand the Legacy Application and the Data That Needs to Be Retired A good understanding of an application and the underlying data model ensures that data required for normal business needs and regulatory compliance is retired.to get a better understanding of the scenarios in which an application is used and the business benefi ts, conduct interviews with employees, partners, customers, and auditors who use the legacy application. Answering the following questions will develop a better understanding of the legacy application and the data that needs to be retired. What purpose does the application serve today versus when the application was originally deployed? What application modules or functionality are no longer in use? What reports are run against the application? If there are several reports being run, can reports be consolidated? Are there similar applications in the organization that serve the purpose of the legacy application? Should data be migrated to another application? What data needs to be retained for compliance purposes? 3. Preserve the Business Context of the Application Data Once you understand the data that needs to be retained, it is important that the original business context of the data object is preserved. For example, if you are retiring purchase orders from a legacy fi nancial application, all the transactional, referential, and audit information associated with the purchase order must be captured. Transactional information associated with the purchase order includes each item purchased, quantity, price, and shipping details. Referential information includes vendor name, address, and contact information. The audit trail includes details about who approved the purchase order and the user who changed the purchase order. This data is typically stored in several tables in the database. There are complex relationships between the data in the tables and business rules that defi ne additional semantics. Adding to the complexity is the fact that many of these relationships and business rules are defi ned at the application layer and cannot be mined directly from the database. Preserving the original business context of the application data requires application knowledge and sophisticated data modeling techniques that ensure that the relationships between the data and the business rules are not compromised. A Practical Guide for Retiring Legacy Applications 7

10 4. Access to Retired Data Providing quick and effi cient access to retired data is key to the success of your application retirement project. Organizations must have the capability to retrieve historical data on demand. The ability to query, browse, and generate reports allows you to respond to audits and discovery requests. Once the application is shut down, the retirement solution must provide robust application-independent access leveraging such open industry standards as ODBC/JDBC, XML, and SQL and reporting tools such as Crystal Reports and Cognos. Access to retired data should be provided in a manner that does not compromise the user experience. For example, if a legacy insurance policy administration system is retired, the policies should be accessible in its original format. Consider the following when developing a plan that defi nes how retired data will be accessed: How will business users and administrators access data? What format do they need to see retired data in? How will auditors access the data? What reports do auditors typically access? What reporting tools are users and administrators familiar with? How will users search for retired data? 5. Secure Retired Data It is not uncommon for a legacy application to contain privileged information. For example, a policy administration application in an insurance company may contain sensitive personal information while other applications may contain intellectual property that must be protected. When retiring applications, it is important to protect privileged information. Consider the following when developing a plan to secure retired data: Should only administrators and privileged users be entitled to access retired data or should a broader group be allowed to access the retired data? Should the same security policy that controlled access in the legacy application apply or should the security policy be further restricted or relaxed? 6. Set Retention Policies on Retired Data More and more organizations are recognizing the costs and the risks associated with retaining data indefi nitely. Retired data just like the other information in the organization should be managed as defi ned by the enterprise-wide information management policy. An application retirement solution must provide comprehensive policy management features as well as integration with storage platforms that manage retention. 8

11 White Paper 7. Select a Vendor for Application Retirement Because application retirement requires sophisticated data modeling, extraction, and retrieval capabilities, organizations are better served by seeking out a vendor with a proven application retirement solution rather than reinventing the wheel. An application retirement solution must provide the following capabilities: Model the data in the legacy application Create policies that defi ne what data should be retired Extract the data Index the data for effi cient searching Provide application independent access and reporting Every organization has unique requirements with application retirement projects, so there is often a substantial services component involved. Vendors who have extensive experience with archiving large volumes of data from structured applications, proven project management capabilities, and implementation best practices defi nitely have the upper hand. How Does Informatica Address Application Retirement? Informatica provides a family of products that manage the full life cycle of content in database applications. Informatica Application Information Lifecycle Management (ILM) is designed especially to manage the application retirement challenge by providing the following capabilities. Classify and Extract Business Records Sophisticated data modeling techniques allow you to classify and extract related subsets of data that represent the business object. The original context of the business object is preserved in an audit-ready format that is readily accessible for compliance and regular business needs. In the event that retired data needs to be further analyzed at a future date, additional relationships between the data can be created. Provide Seamless, Secure Access to Retired Data Informatica Application ILM supplies several ways to ensure that retired data is appropriately secured and can be accessed on demand during the regular course of business as well as for audits and ediscovery. Informatica furnishes several options for accessing and securing retired data: Retired data can be accessed via standard industry reporting methods such as ODBC/JDBC and SQL and reporting tools such as Crystal Reports. Retired application data can be searched for using the data discovery module available with Informatica Application ILM. A Practical Guide for Retiring Legacy Applications 9

12 Comply with Data Retention and Privacy Regulations Informatica Application ILM provides a comprehensive feature set to ensure that retired data is secured and retained for the period specifi ed by the regulations. A policy manager associates retired data with the appropriate retention periods. Integration with best-in-class storage platforms such as NetApp Enterprise Storage, EMC Centera, IBM Tivoli, and Sun StorageTek guarantees that retired data or the retention period cannot be maliciously altered. Reporting and ediscovery ensure that retired data is accessible in the event of an audit or litigation. Implement Tiered Storage Strategies As retired data is infrequently accessed and typically never modifi ed, it can be stored on an inexpensive storage tier. Organizations save costs and free up high-speed storage for critical business needs. Additionally, once the retired data is stored in several smaller XML/CSV fi les, HSM devices or a tiered storage manager can manage the retired data more effi ciently. An Architecture Diagram of Informatica s Solution for Application Retirement Process Flow Process Flow Content creation Archive Policy & data extraction Indexing & storage Discovery requests Index Collections CRM ERP Digital Asset Apps Custom Apps Archive Object Business Rule Policies Informatica Data Archive Engine Policy based Retention archival and destruction Data, Metadata, Retention, Security Fast Google Dieselport Kazeon ediscovery Gateway Storage Gateway NetApp/EMC/Tivoli/Sun Data Discovery Legal/Audit Production NAS Tape SAN CAS 10

13 White Paper ABOUT INFORMATICA Informatica enables organizations to operate more effi ciently in today s global information economy by empowering them to access, integrate, and trust all their information assets. As the independent data integration leader, Informatica has a proven track record of success helping the world s leading companies leverage all their information assets to grow revenues, improve profi tability, and increase customer loyalty. A Practical Guide for Retiring Legacy Applications 11

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16 Worldwide Headquarters, 100 Cardinal Way, Redwood City, CA 94063, USA phone: fax: toll-free in the US: Informatica Offi ces Around The Globe: Australia Belgium Canada China France Germany Japan Korea the Netherlands Singapore Switzerland United Kingdom USA 2009 Informatica Corporation. All rights reserved. Printed in the U.S.A. Informatica, the Informatica logo, and The Data Integration Company are trademarks or registered trademarks of Informatica Corporation in the United States and in jurisdictions throughout the world. All other company and product names may be trade names or trademarks of their respective owners (08/19/2009)

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