Updated: Sep 12, 2017
Although a few years old, a statistic I came across in Forbes online is scarily similar to what I have observed personally; the average enterprise uses over 500 applications. While the rationale provided to acquire each may have been sound at the time, odds are less than half are actively used, and half again are necessary. Yet, it is a rare organization with the discipline to routinely cull its application portfolio. Why?
Applications, whether traditional or mobile, represent the tangible what of information technology. Applications are used by people. With people interacting with applications for most of their working day and beyond, applications become extensions of their worlds, competency, productivity and impact. This attachment can lead to formidable resistance when changing something as simple as a screen, let alone eliminating the application altogether. Capable change management is required during application rationalization programs. Messaging, whether to customers, users or staff, should be delivered by senior business leadership, not by IT, and focus on the advantages of leaning out the number of applications, and the risks of not doing so.
Information technology departments spend most of their time and budgets on KTLO (keeping the lights on) activities; application support is a major contributor. Activities include applying patches, auditing access, protecting sensitive data, prioritizing and implementing enhancements, supporting users, maintaining documentation, tracking changes, and more. Although this burden is somewhat reduced for cloud-based SaaS (software as a service) applications, organizations (not vendors) remain ultimately accountable.
More applications also mean more 3rd parties accessing your environment, a definite security concern. “The average company’s network is accessed by 89 different vendors every week,” according to CSO Magazine. In addition to governing their access, and assuring data is secure, managing vendors well involves staying up to date with product road-maps, tracking compliance with service-level agreements, ensuring vendors are still viable and stable (or, if they are about to be acquired and applications potentially sunset).
An additional and critical final justification for application rationalization comes down to the bottom line. Ongoing investment is required to simply sustain each application. The purchase of the application represents but a tiny fraction of the total cost of ownership. From licenses to support contracts, to training and ‘must attend’ user groups and conferences, to funding enhancements large and small, applications require care and feeding to thrive.
Purging application portfolios frees IT departments to focus on delivering innovation, from business process automation to analytics to creating exceptional technology-enabled customer experiences. These value-oriented activities are what draws many to the IT profession, and is a major contributor to technology workforce engagement. Make no mistake, a bloated application portfolio is a vulnerability, one that startups and other competitors can and do exploit, allowing them to disrupt established organizations, even industries, in a matter of months.
So, how does one go about achieving a lean application portfolio? The process can be as simple, or as complex as you wish. The four step plan below is how I approach it:
Application Rationalization Action Plan
STEP 1: Set an application reduction target.
STEP 2: Review the application inventory with accountable business leaders.
With business reorganization, mergers, turnover, accountable executives may be unaware of how many applications are in their purview.
Listen to understand perspectives of what business capabilities leaders believe each application provides, and what problems each solves. It is not uncommon to discover multiple applications with substantially overlapping/duplicate capabilities.
Provide full transparency around the total cost of ownership.
STEP 3: Agree on applications to retire and build support for the decision.
Be sure to quantify the anticipated benefits; time savings, bottom line savings, capacity created, reports and integration eliminated, etc.
STEP 4: Thoughtfully execute application retirements.
For additional approaches and ideas, I recommend checking out this article from CIO Magazine. While discussion around this topic has been in the IT leadership mainstream for years, companies are still struggling to execute. If capacity is the issue, consider dedicating an internal or external Project Manager, Change Manager or consulting firm to accelerate the effort. However, consider leveraging a talented internal resource to serve as the primary face of the initiative, one who can champion the effort long after supporting resources have left. Given the positive impact to the business, application rationalization could easily be positioned as a special project that serves as the springboard for a top performer to gain valuable visibility across the organization.
Let’s start a conversation. Send me your thoughts, experiences and opinions on application rationalization.