Simplicity: The Requirement That Holds the Key to FCA Resiliency

The Requirement That Holds the Key to FCA Resiliency

Over the last few months, we discussed the responses to the FCA and Bank of England Prudential Regulation Authority’s Statement of Policy on Operational Resilience.

We focused on four aspects of resiliency - Clarity, Agility, Reliability, and Simplicity Although Simplicity comes last in this list, it is equally important as the other points. All four components need one another for the business to succeed and be resilient. 

According to industry figures, enterprises use roughly 1,516 applications. If this wasn’t enough for a call to simplify desktops, on average only 45% of company apps are being used on a regular basis

This is when a spring clean of the business IT applications is needed. Application Rationalization is probably a better term to describe the task of reducing the size of a firm’s application portfolio which can lead to cutting costs and improving efficiency.

Enterprise architecture solutions play a crucial role in rationalizing application portfolios. This is because EA can provide better visibility while reducing the preparation and maintenance time needed to manage and streamline the portfolio. Forrester’s Total Economic Impact ™ study of iServer365 found that customers were able to sunset 20% of applications over 3 years.d. 

Although Gartner estimates IT spend will continue to grow this year, it will do so at a slower pace compared to 2021, so being able to save 20% on IT costs can make a difference to any business. 

The report also highlighted how firms who have used EA have been able to reduce the time of resiliency analysis work needed to meet regulatory requirements by 50%, while also seeing a 95% reduction in strategic decision analysis. This in turn can lead to a potential total ROI of 394%, with a net present value (NPV) of $2.07M and payback in 10 months. 

Notably, EA can provide organizations with the necessary insights to ensure compliance to changing governmental regulations for resiliency – such as the FCA Operational Resilience Statement - avoiding penalty fees.

In addition to clear and quantifiable benefits such as ROI and cost cuts that App Rationalization can bring to organizations, there are also unquantifiable and similarly impactful benefits worth mentioning here such as enabling IT and business to have more meaningful conversations and increased overall employee experience. 

A final consideration is that simplicity shouldn’t be just for now or a short-term fix – after all what is preventing this build-up of applications from occurring again? For a truly successful approach to application rationalization, firms need to apply continuous application portfolio management.