Application rationalization is the process of analyzing the applications being used by your enterprise to determine the presence of overlapping functionalities, unused applications and sunsetting technologies in order to improve efficiency and reduce cost. Most organizations take a laissez-faire approach to governing the long-term efforts to transform business capabilities, and gather substantial risks in the process.
Steps to success
- Assign Leadership Responsibility to an individual
The first thing that needs to be done is to establish decision right i.e. who has the final right to make decisions when a conflict occurs. Funding and investment decisions come next but getting the first step right is critical. This step has no alternatives as application rationalization is a transformation of business capabilities, and IT has very little chances of succeeding in it. This individual should be capable enough to make difficult decisions about funding and prioritization, and standardize business processes.
- Establish a Funding Mechanism and Prioritization process
Many organizations have a project and portfolio management system that is used to evaluate issues and competing investments. Evaluation parameters include cost, benefits (including financial, strategic and tactical) and risks that might have to be taken over a specific period time. Organizations have processes to conduct these evaluations.
In many organizations, the projects that are generated for application rationalization are bound to fit into an already defined process. Some organizations also segment a pool of funds from the available business capital pool for transformation efforts.
- Establish a Monitoring and Communication Process
The other important thing for ongoing application rationalization process is to maintain awareness that rationalization is an important program by demonstrating its progress. The funding levels for the process will change with time as application rationalization is a long-term game that takes several years. Not estimating funding appropriately can put the application rationalization program in jeopardy if the momentum of progress is lost. A major cause of a loss of momentum is the use of a long waterfall project that takes months, or perhaps years, to deliver.
Approach for Application Rationalization
There are basically two parts of the communication process. In the first part, a set of measures and metrics that demonstrate progress must be decided upon. They need to include the status of the initiative and also focus on business objectives such as ROI, cost reduction and process improvements. Next step is reporting these measures to senior management on a regular basis, including all senior management and not just the business sponsors. Moreover, the progress of each individual application rationalization program or project should be a part of the rationalization program office’s responsibility.
These are some steps an organization can follow to enhance their application rationalization process. But you always have to keep in mind that application rationalization is a time consuming process, so have patience while applying these steps.