Most organizations understand the importance of application rationalization, yet many postpone these initiatives because of various challenges, such as a lack of budget or in-house expertise.
We get it — you have to put out more seemingly urgent fires than taking stock of the tools that plug along just fine. But the truth is that a bloated application portfolio may be costing you dearly. Besides the cost of redundant software, an outdated tech stack could lower productivity, impact the customer experience, and cause security and compliance issues.
Let’s delve into why you can’t afford to delay application rationalization and the best practices to get the most out of the process.
The Risks of Delaying Application Rationalization
Without well-executed application rationalization, the negative impacts of complex IT infrastructure, redundant applications, and security vulnerabilities compound — driving up costs, decreasing efficiency, and affecting the employee experience. Here are the top reasons why organizations can’t afford to delay application rationalization.
A Complex IT Landscape
Most organizations accumulate various applications over time as they grow. 10% of enterprises have an average of 3,400 applications deployed simultaneously. Meanwhile, 70% of CIOs believe they can consolidate at least 20% of their applications.
Application rationalization simplifies your tech stack. It reduces the challenges associated with a complex IT environment, such as increasing technical debt that can impact a business’s agility and cybersecurity vulnerabilities that may affect business resiliency.
Rising IT + Administrative Costs
Maintaining a bloated application portfolio is costly since redundant or obsolete applications contribute to unnecessary expenses. These include licensing fees and the labor cost to install updates and perform maintenance.
Unfortunately, many enterprises spend 75 to 80% of their IT budgets on operating legacy systems and maintaining applications. Yet, companies can reduce costs by 15% by eliminating redundant applications without affecting quality and business value.
Diminished Efficiency + Business Agility
A complex application landscape often requires employees to switch between different software, impacting productivity and the employee experience. Application rationalization streamlines workflows to optimize personnel and IT resources and improve cost efficiency.
Moreover, too many applications can hinder business agility and diminish your ability to respond to market changes. For example, a bloated application portfolio often harbors technical debt that prevents you from launching new services on a dime.
Security + Compliance Risks
More applications mean a larger attack surface, making your organization more vulnerable to cybersecurity threats. Moreover, outdated and legacy applications are often more susceptible to security risks since many are incompatible with new security measures.
Meanwhile, a complex IT architecture requires more time and resources to conduct audits. These security and compliance risks can cause data breaches, loss of business, reputational damage, and legal and financial consequences.
Poor Data Management
A complex application landscape often contains software and platforms that don’t integrate well. The scattered and siloed data often prevents an organization from collecting, processing, and analyzing data effectively to inform accurate and timely decisions.
A complex IT landscape may also hinder business growth since data analytics is essential for digital transformation. Application rationalization aligns your applications with digital strategies and emerging technologies to help pave the way to long-term success.
Application Rationalization Best Practices
Now you understand the urgency of performing application rationalization, let’s look at how to do it right. Follow these top best practices to maximize your ROI:
Set the Foundation
Define the objectives of your application rationalization initiative, like reducing costs, retiring outdated applications, enhancing security, and driving business growth. Then, take inventory of all applications within the organization and assess their functionality, usage, business value, technical health, and dependencies.
Engage Stakeholders
Transparency is critical for the success of application rationalization. Engage stakeholders from all business units early to understand their requirements, address their concerns, get their buy-in, and align the application portfolio with their strategies. The effort will help facilitate change management and drive user adoption.
Focus on Business Value
Identify and prioritize applications that align with your organization’s core objectives. Consider their impact on revenue generation, customer experience, and employee satisfaction. Also, evaluate their strategic importance to determine their long-term value to your enterprise.
Evaluate Technical Health
Assess the compatibility, interoperability, scalability, and security of each software. Identify outdated or unsupported technologies and evaluate the impact of retaining or retiring these applications. Also, consider your application portfolio’s technical debt and how it impacts future development and maintenance.
Understand Dependencies
Before consolidating or removing redundant or outdated applications, analyze integrations and identify dependencies to avoid causing unintended disruptions during the rationalization process. For example, you may map out data flows to ensure all the links in the chain are intact.
Create a Roadmap
All the studies and efforts won’t do any good without a plan to turn insights into action. Develop a detailed roadmap to outline the steps and timeline for implementation. Identify quick wins without losing sight of long-term strategic goals. Communicate the plan to stakeholders to ensure alignment and commitment.
Implement Governance
Set criteria for application retention, retirement, or replacement and establish governance structures, standards, and policies to guide decision-making during the rationalization process. Also, create a cross-departmental governance body to define and enforce an application compliance and rationalization strategy.
Get the Most Out of Application Rationalization
Modern enterprises can’t afford to postpone their application rationalization initiatives. They’re essential for accelerating digital transformation, reducing unnecessary costs, improving employee and customer experience, supporting a data-driven culture, future-proofing your IT infrastructure, and addressing potential security vulnerabilities.
However, application rationalization involves significant time, effort, and resources. To get the most out of your investment, you need expert support to manage all the moving pieces and guide you through the entire process.
When you partner with Compugen Systems, our team will be there with you every step to understand your requirements, conduct the assessment, interpret the results, provide vendor-agnostic recommendations, orchestrate change management, and establish governance mechanisms to ensure long-term success.
Learn more about our Application Rationalization services and get in touch to see how we take the guesswork out of application rationalization to help you pave the way to your desired future state cost-efficiently.
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