Application rationalization is the radical reshuffling of an application portfolio as part of an application strategy, a plan that implements changes to applications to achieve a business outcome. Many organizations try to achieve this by reducing the overall number of applications but many fail to deliver the expected benefits of reduced cost and increased efficiency.
Essentially if you don’t use any software applications then you do not need to have any IT infrastructure and associated costs. Therefore the logic would indicate that if you reduce the number of applications then you will also reduce your overall costs of IT. The relationship can be summarised by the “software iceberg” diagram as shown below. You see the visible costs of the software licenses and support but it is much harder to relate these back to all the supporting costs.
Software licensing cost iceberg
Over time there is a tendency for IT requirements to change, business processes are revised or eradicated and organizations change so that the supporting software applications become irrelevant or of less value to the organization. In addition there is a tendency towards duplication of applications, for example one retail organization admitted to having 12 different software applications for performing essentially the same task but their business units had each chosen different products from different suppliers.
As organizitions move towards new platforms such as cloud there is a natural tendency to remove the complexity of application where similar or duplicate exist. If this isn’t done they will replace an old inefficient infrastructure with a new inefficient infrastructure. There are many examples of transitions which go ahead and transfer applications that are no longer used to the cloud.
Application rationalization is not a revolution it is evolution. It won’t be an overnight task but instead one that become a process of continuous improvement . Key things to remember are:
- Make sure you have accurate data for deployments, license entitlements and most importantly what you actually need based on real usage.
- Prioritise your applications with costed variances which show the value of your unused applications.
- Validate with users the impact of eliminating or replacing the applications.
- Measure your success and track ROI to show the value that you are delivering back to your organization.
- Start now don’t put this task off as you are wasting money every day.
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