In this post, let’s review how banking capabilities drive application portfolio rationalization. Banking capabilities are the foundation of an effective business architecture. As banking business architecture practitioners know, the value of a business capability model extends beyond the core usage scenarios. One of the critical areas that a bank can use a banking capability model is application portfolio rationalization.
Banking is a business where companies have gone through a generational shift in technologies and systems, leaving a legacy environment that is complex. This complexity applies in particular to banks that have passed through a series of mergers and acquisitions over the years. Moreover, a patchwork of newer technologies, without a thorough clean up of legacy systems, has made the situation spiral out of control.
The approaches to application portfolio rationalization have always been a technology-driven approach. It typically involved an analysis of the state of the application on a variety of measures and then making a retire, re-architect, replace, maintain (or equivalent) decisions. While this is still a required step, what is lacking is how does a bank relate to the business and explain the rationale and present the conclusions in a manner that is not esoteric and arcane? So a pure top-down analysis of applications and a decision matrix for rationalization is not sufficient.
What is needed is a more business-centric approach, and viola enter the banking business capabilities model. A structurally sound and internally coherent banking business capabilities model will help in including the business or letting business drive the process of application portfolio rationalization.
Capstera offers a detailed and in-depth Bank Capability Map to help banks get a holistic perspective of what are the retail banking capabilities. The Bank capability map is a set of industry/sector specific capabilities models that Capstera offers.
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