Building the business case for application rationalization is a critical first step in tackling application bloat
Futurestate IT’s SaaS solution, called AppRx, enables organizations to identify redundant, unsupported and unused applications in their portfolio in order to determine candidates for rationalization. With Futurestate IT’s new Application Rationalization Savings Calculator, organizations can now quantify the operational cost savings of rationalizing these applications from the portfolio.
Application portfolios have suffered from a lack of attention by many organizations since as far back as Y2K, leading to bloated portfolios. Portfolio bloat drives huge operational costs, impedes migration to new technology platforms like Windows 7/8, causes downtime and hinders business productivity. According to a survey by Harris Interactive, 82% of organizations polled said that monetary losses due to sprawled, unused, unresponsive or crashed applications cost their business anywhere from $10k – $20 million per year.
Competing priorities are one of the biggest hurdles for tackling application bloat
Despite growing awareness of the importance of tackling application bloat, more than half of respondents in a recent Futurestate IT survey only rationalize their applications on an ad hoc basis. The main reason cited for this was ‘competing priorities’. This is understandable as IT is constantly under pressure from the Business to deliver new functionality, often at the expense of rationalizing legacy applications. Application rationalization, however, can deliver great benefit to both IT and the Business – the challenge is to quantify it.
Futurestate IT enables companies to build a compelling business case for application rationalization
Building a business case for application rationalization is critical for tackling application bloat. Both IT and the Business need to work together to understand the size of the problem as well as the cost savings that can be achieved.
Futurestate IT’s AppRx solution enables organizations to 1) size the application bloat problem by identifying redundant, unsupported, incompatible and unused applications that are candidates for rationalization and 2) determine the potential operational cost savings using Futurestate IT’s newly released Application Rationalization Savings calculator.
Sizing Application Bloat
The key to tackling application bloat is to gather an inventory of all the applications and rationalize them to determine which ones can be trimmed from the portfolio by retiring, replacing, consolidating or upgrading them.
Typically, organizations have taken a manual approach to inventory and rationalize applications using spreadsheets, conducting interviews, researching and calling vendors, etc. – whether conducted in-house or outsourced to a third party. Not only does this approach drive costs and project timelines, the data is static and rapidly becomes stale and useless as application lifecycles and usage change.
Futurestate IT’s AppRx solution dramatically reduces the time and effort to measure application bloat and identify applications for rationalization. It does so by providing automated analysis of an application inventory to determine if there are redundant, unsupported, incompatible or unused applications in the portfolio. AppRx also provides ongoing analysis of a portfolio to identify opportunities for rationalization as new applications are introduced into the portfolio and existing applications start to age-out as new versions are released.
Quantify the Cost Savings
It can be very challenging to determine the cost savings that may be attained by rationalizing applications from a bloated portfolio. Some application types (managed, unmanaged, custom, etc.) may generate more savings than others. Application usage will also affect costs/savings. The more users, the greater the license costs and, potentially, support tickets. Additionally, older applications may drive higher costs as compatibility and functional issues arise.
One approach, however, is to establish a benchmark cost savings for rationalizing applications as a starting point. This benchmark can then be honed based on individual application attributes.
Rationalization Business Case: Company with 5000 employees
For a company with 5000 employees AppRx can be used to size the bloat within a portfolio and quantify the cost savings.
Application Bloat – 20% of apps are redundant, unsupported, unused
A company with 5000 employees would likely have about 500 applications based on a Gartner metric of 1 application: 10 employees. (Gartner: Understand the Real Cost of Migrating to Windows 7, 2010).
Running these 500 applications through AppRx could identify an opportunity to rationalize approximately 20% of applications from the portfolio or, up to 100 applications.
Quantify the Savings – $840,000 +
Using Futurestate IT’s Application Rationalization Savings calculator, the Year 1 operational cost savings resulting from rationalizing 100 applications would be approximately $840,000.
The Year 2+ cost savings would include the year over year operational costs that each application would have generated were they not rationalized from the portfolio – approximately $8400/application. Additionally, each year, more applications would be rationalized from the portfolio as they become redundant, out of date or unused, generating further savings. Add to this resource cost / opportunity cost savings which are not factored into the equation above.
In addition to operational cost savings, application rationalization fosters IT agility. A well-rationalized portfolio will ensure applications are current and supported and, as such, able to readily adapt to new platforms and changes in the IT environment. Keeping applications up to date will also reduce risk of downtime due to old, unsecure, unsupported applications crashing.
About Futurestate IT
Futurestate IT offers AppRx, the leading SaaS-based Application Rationalization solution for enterprises worldwide to reduce application management cost and mitigate overall portfolio risk. Available via the web, AppRx provides automated rationalization of an organization’s portfolio and identifies applications that should be retired, consolidated or modernized in order to eliminate redundancy and improve portfolio health.
For organizations moving to Windows 7 or 8, AppRx can dramatically reduce the number of applications in the portfolio; driving down overall migration cost, effort and timelines.
AppRx also enables organizations to monitor their portfolio on an ongoing basis to continuously rationalize applications and reduce operational cost and risk. As a SaaS-based solution, customers can be up and running in minutes and do not require any hardware or software installation, maintenance or support.
Futurestate IT is a Microsoft partner. For more information, visit http://www.futurestateit.com.
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