Applications exist to make life easier for employees. A good application improves the maturity and efficiency of business processes. Applications simplify processes for people working inside and for business process owners, supporting the people in doing their job in a very straightforward way without any unclarity.
A single application is easy to manage, but in most businesses, you require more than one application to manage different business processes. With the current technological advancements and the daily development of tools that can potentially support your business, things might get complicated quickly.
With a few blinks of an eye, all these applications and decentralized initiatives might end up into a gordian knot of applications: the worst nightmare of any IT manager. Once that happens, you need to force a solution; the only solution is cutting the know.
This post explains how you can manage a situation of “application armageddon” by introducing the method of Application Rationalization.
What is Application Rationalization?
By implementing a strategy of Application Rationalization, you identify business applications across your entire organization, determining which applications you should keep, replace, retire, or consolidate.
Application Rationalization streamlines your existing application portfolio with the following goals:
- Improving efficiency
- Reducing complexity
- Lowering the Total Cost of Ownership (TCO)
Application Rationalization initializes the start of other IT cost-saving actions:
- Optimization of Software licenses and renegotiations with suppliers of these licenses
- Optimization of SaaS (Software as a Service) solutions
- Retirement of aged and low-value applications
- Server optimization
- Rationalization of IT projects
- Optimization of data storage
- Elimination of redundancies and
- Introduction and standardization of standard technology platforms
With Application Rationalization, you also specifically select applications based on their positive effect on the business. Application rationalization also balances the value and costs of all existing and proposed applications and allows you to monitor the application value in real-time continuously. In case this is required, adjust your application strategy.
Application rationalization will provide a more vital, adaptive, and scalable application landscape and give you more control.
Benefits of Application Rationalization
With a strategy of Application Rationalization, you decrease complexity, and by using this methodology, you will have the opportunity to instill a lot of potential benefits if appropriately executed.
Reduction of IT costs
By doing an Application Rationalization assessment, you might uncover potential savings, and you can reinvest these savings in optimizing applications contributing to the most significant business value. Additionally, it might allow you to invest in more innovation that can give you an edge ahead of your competitors, like investment in the Internet of Things (IoT), Artificial Intelligence (AI), Job Floor Automation (Robotics), and machine learning.
Minimizing waste of IT spend
Suppose you maintain an organized application landscape that is well organized with continual upkeep and proper license management in place. In that case, you will have the information ready to negotiate the necessity of future applications.
Reduction of complexity
The bigger your company, the more complex your organizational structure. The bigger the chance you don’t have control over all applications running in your company. Sometimes you are unaware of applications running, leading to security risks, hidden IT costs, and business capacity spent on decentrally maintaining applications instead of through the IT department.
Elimination of redundant applications
There is always a chance that you have different applications running in your business that more or less do the same. Multiple applications with the same features running for the same business processes happen when you are not entirely in control: different departments might look for applications to support them. These applications can be different, but they do the same in the end, leading to inefficiencies and eliminating the potential of increasing synergy between different departments. In addition, different subscription plans are up and running for applications that provide the same support, leading to double-dipping costs.
Reduction of training
An application running in your organization requires support from in-house staff and the application vendor, and both cost money. The fewer applications you support, the less capital and internal resources you have to spend on maintaining applications.
Application Rationalization: where to start?
Stakeholders that don’t value the approach of Application Rationalization can seriously impact your efforts to create a lean and transparent application landscape. The best way to get these stakeholders on board with your strategy is to engage them in a fact-based conversation about the Total Cost of Ownership (TCO) of all existing applications that are running (loose) in the business. By providing the correct data, you can quickly assess which applications the organization can divest, leading to cost savings and more clarity. Always start by investigating older applications that run on legacy systems. Most of these applications are likely to absorb significant resources and are quick wins most of the time.
When you start with the methodology of Application Rationalization, you might run into hundreds of applications that are out there. At first, this unharmonized and chaotic overview of all applications might discourage you. Try to keep your head cool and start by looking into applications that have (more or less) the same functionalities and start marking them. Put these applications on an elimination schedule and get approval from management to eliminate them, slowly cutting down your forest of applications. Within time you will have a transparent and manageable situation. I would start with elimination.
After elimination, there is a big chance that some of the applications are under-utilized. Buying a new application is easy, and getting something new is always exciting. But before getting something new, always try to maximize existing applications before you purchase additional applications. Also, inquire with colleagues worldwide about their applications and functionalities. Sharing knowledge is excellent, and don’t try to reinvent the wheel when there might be people out there who have already dealt with the functionalities of an application you are not using.
My approach
It is essential to have a central body in your organization to which you can reach out when you have questions about applications or when you run into problems when using an application. In my opinion, this central body should be the IT department, and the IT department should own all applications.
Owning all applications does not mean all key users and admins should be part of the IT department. However, IT should facilitate, coordinate and support any initiatives, upgrades, maintenance, questions, and application issues. Decentralized ownership leads to unclarity, inefficiency, and half-hearted initiatives.
IT managers might hesitate to “go the full monty” on applications, and taking complete ownership of all applications might be overwhelming. Still, in the end, it gives you grip and control of all software/applications and secures IT involvement and advice in application-related subjects. So as a start:
- Claim full ownership of all applications, even if they are far removed from your IT department and your development team. Ensure to enforce this within the organization, including management and key stakeholders. It might be tempting to avoid some applications, especially in an environment that leans heavily on department-owned legacy systems and applications. Still, you can keep behind the steering wheel instead of sitting in the backseat by claiming full ownership. You won’t be able to fully manage and control your application landscape and application architecture if you don’t take full control/ownership.
- Once you are in control, set up an application governance structure and secure that all users follow the rules. Important in this is that you need to evaluate your application structure periodically. There are always new opportunities, and you can gain an edge for your company by anticipating technological advancements. This way, you will always stay ahead of the game.
- Make an inventory of all applications and allow only a fixed number of them into your ecosystem. Make sure that applications are also able to interact with each other.
- Avoid Excel/VBA applications and select a decent low-code platform instead. In my opinion, Excel/VBA-based solutions depend too much on individuals. Once an Excel/VBA-based solution developer is not accessible anymore, applications can become obsolete because nobody knows how to maintain them.
- Appoint an application manager. As an IT manager, you can’t do everything by yourself, meaning that you need an officer to support you in securing that your application landscape is as lean and efficient as possible based on the approach of Application Rationalization. An application manager would also be an easy point of contact for everyone in your organization, to which they can turn in case of any questions or problems.
Final Thoughts
I think it’s a nightmare for most IT managers: an uncontrolled application landscape with legacy applications, decentrally managed by departments and individuals without any sense of responsibility. These low-value applications can take up 70%+ of an IT budget on maintenance, license costs, and support, which means that there is only a fraction of the budget left to spend on new applications that can improve your business’s maturity processes.
Assessing you application landscape with a system of Application Rationalization provides you with a state-of-the-art architectural vision that drives business goals, addresses the concerns of your stakeholders, and responds to strategic business drivers.
A clean and structured application landscape also establishes transparency within the group of stakeholders you are dealing with and optimizes your application portfolio. The approach of Application Rationalization also contributes to cutting down IT costs on ineffective applications and uncovers money invested in new business initiatives, keeping an edge on the competition. Feel free to contact me if you have questions or in case you have any additional advice/tips about this subject. If you want to keep me in the loop if I upload a new post, make sure to subscribe so you receive a notification by e-mail.
