Executing a successful rationalization plan: Eliminate, Consolidate, Modernize
Driving an organization toward application modernization requires clear enterprise architecture goals and a continuous process of application portfolio rationalization. Whether you are looking for cost savings, standardization, business agility, or all of these factors – making the rationalization of your application portfolio a ‘business as usual’ process will provide continued benefits.
The key input to the rationalization process is a complete application inventory. Once gathered and consolidated, IT and business can work through the process of analyzing and categorizing the applications into one of four categories:
Sometimes the hardest category to fill is applications to eliminate. But think about applications that are running multiple versions in your organization – eliminate the older versions through upgrades.
Applications that are specialized, very old or appear with only a few users may require a quick user survey to determine if those applications are even being used at all. Applications that no longer have a known vendor or have been retired by a vendor should also be slated for elimination. Determining a low demand or a low business value on the application can easily move it into the elimination category.
In cases where several business units have a similar need, but do not collaborate on solving that need, there is a good chance for application redundancy to occur. This could either be in the use of two or more applications that do the same function or maybe several license agreements have been signed with the same vendor. Either way, there may be an opportunity for savings to pick a single corporate tool and consolidate the licensing. In other cases there may be a possibility to address business needs with an application that provides a variety of services instead of a one off utility for this function and that functions. This is especially true of IT operational tools and areas where a suite of applications may work better as a solution than a variety of tools from different vendors.
Applications that are up-to-date, supported and hold a high business value will obviously fall into the maintain category. However, some of these applications may have pain points or issues that should be documented for future iterations of rationalization.
All other applications would fall into the enhance/upgrade category that suggests that a replacement is required. Whether this is driven by EA policies, business agility requirements, or changes in business priorities, applications in this category will drive the application modernization in the organization and also may be providing the replacements for applications that will eventually land in the consolidate or eliminate categories.
Much of the details and risk assessments for application portfolios are maintained by the Futurestate IT AppRX database – adding your application portfolio to our cloud may provide some interesting insights into your applications and automate some of the decision processes involved in rationalizing your portfolio
Lastly, we need to remember that our application portfolios never stop aging. The application rationalization process needs to continue on an ongoing basis to keep your organization on track. Maintaining your application inventory is easy in AppRx and will continue to report on the health and risk assessment of your applications in real time.