Application portfolio rationalization is the act of streamlining the existing application portfolio with an explicit goal of improving efficiency, reducing complexity, and lowering total cost of ownership (TCO) through a myriad of processes. Application rationalization sets the basis for other cost-saving endeavors, including:
Application portfolio management (APM) is a framework for managing enterprise IT software applications and software-based services. APM provides managers with an inventory of the company's software applications and metrics to illustrate the business benefits of each application.1
Obscurity in the Application Portfolio Landscape
Imagine you’re browsing retail stores in the mall. You have a healthy collection of business attire in various colors, leisure attire, and pajamas at home, yet somehow, you are drawn to a clothing store. A cream-colored cardigan jumps out at you. “This will go well with my burgundy corduroy pants.” you think. You approach the register, eagerly pay the €130, and head home.
We are living in the era of technology. Smartphones power the world around us, giving us tips of where to eat in new cities, keeping us connected with family members on different continents, and keeping a steady beat of music in our ears as we go throughout the day.
Informed business decisions fuel innovative enterprises. Organizations succeed when they make well informed, integrated business decisions across the organizational landscape. Understanding the application portfolio is more important than ever. Operating an agile application portfolio enables a rapid response to business, technology, and market changes.
Many older corporations rely on legacy systems, often built 40 to 50 years ago. These organizations are also putting off a very much needed overhaul of their IT landscape. Digital transformation is rapidly changing all aspects of business, and a part of the change is incorporating beneficial design and development practices like microservices, agile, and DevOps. In order to shift from legacy systems, there should be an active portfolio management practice in place.
When companies are looking to cut costs, application rationalization should be one of the first methods that they turn to. There are a set of list and guidelines to successfully carry out application rationalization.
In today's world of rapid digitalization, majority of enterprises have thousands of applications currently deployed on their global networks. Alas, not all of the applications are necessarily practical, or being used at all. An unorganized, and overinflated application landscape leads to greater risk, and wasted IT cost. Application rationalization efforts have helped organizations uncover millions in savings.
CIOs create measurable value by delivering IT capabilities that are in tune with business priorities. In the age of rapid digital transformation, CIOs should gauge all possible tools and trends including artificial intelligence, machine learning, IoT and the cloud, to find money saving and market-leading innovative opportunities.