Table of Contents
Executive Summary
This blog explores application rationalization, a strategic approach to streamline and optimize an organization’s application portfolio. It highlights the benefits of reducing complexity and cost, such as improved operational efficiency, enhanced security, and accelerated innovation.
The blog also covers the tools for assessment, real-world examples of successful implementations, and a step-by-step guide for executing rationalization initiatives. Organizations can unlock significant cost savings and drive digital transformation by reducing redundancies and improving agility. They can streamline their operations by partnering with Neev Systems as their application portfolio management partner.
Key Takeaways
Reduce complexity, cut costs, and boost operational efficiency with targeted application rationalization strategies.
Enhance security, compliance, and user experience by eliminating redundant or underperforming applications.
Use APM software, TCO calculators, and user feedback to identify the applications holding you back.
Internal messaging? “Let’s get Slack.”
Video calls? “How about Teams?”
Cloud storage? “I’ve heard Dropbox is better than SharePoint. Let’s go with that.”
And for that country where these apps don’t work? “FileCloud or maybe OneDrive will do the trick.”
Sounds familiar? The result: A bloated portfolio of apps that all do the same thing. Now, you’re juggling licenses, integrations, and inefficiencies while your tech stack keeps getting complicated and IT budgets keep going up.
It’s time to streamline and cut the excess. Rationalizing your applications is the key to reducing complexity and costs.
Application rationalization is about taking a hard look at your software landscape to spot redundancies, inefficiencies, and areas for improvement. By assessing each app’s business value, technical fit, and cost-effectiveness, you can decide whether to keep, upgrade, or let go of certain tools.
In this blog, we’ll dive into the benefits of rationalizing your app portfolio, share practical tools for evaluation, and highlight real-world success stories. Whether you’re a CIO wanting to trim IT costs or a business leader looking to simplify operations, you’ll get actionable strategies to streamline your tech stack.
Benefits of Application Rationalization
Application rationalization offers many benefits that extend far beyond mere cost savings. Let’s delve into the key advantages that organizations can reap by streamlining their application portfolios:Significant Cost Reduction
One of the most immediate and tangible benefits of application rationalization is the potential for substantial cost savings. A 2022 Deloitte study found that effective application rationalization can lead to average IT cost savings of 5-10%. Organizations can dramatically reduce their IT spending by identifying and eliminating redundant, underutilized, or obsolete applications. These savings come from various sources:- Reduced licensing costs
- Lower maintenance and support expenses
- Decreased infrastructure requirements
- Minimized training and onboarding costs
Improved Operational Efficiency
A streamlined application portfolio translates to smoother, more efficient operations across the organization. Employees can work more effectively and productively with access to a curated set of well-maintained, purpose-built applications. Benefits include:- Reduced time spent switching between applications
- Improved data consistency and integrity
- Streamlined business processes
- Enhanced collaboration and information sharing
Stitch Fix: Streamlining operations with Oracle Cloud
Challenge: Stitch Fix, a San Francisco-based retail and personal styling service, faced operational challenges as it scaled to $2B in annual revenue. The company struggled with over 15 critical systems, leading to inefficiencies and scaling issues. Neev Systems implemented Oracle Cloud Financials and Procurement solutions to address these challenges.
Solution: The solution included JCS-SX customization and real-time integrations via Oracle Integration Cloud (OIC) to enhance data exchange. The implementation streamlined financial processes, improving efficiency and reducing costs.
Results: Notably, Stitch Fix achieved a reduction of 4 full-time equivalents (FTEs) through process optimization and automation.This rationalization effort not only improved current operations but also laid the foundation for future system enhancements, demonstrating the power of strategic application streamlining in supporting rapid business growth.
Enhanced Security and Compliance
Managing a large, diverse application portfolio increases an organization’s attack surface and complicates compliance efforts.
By rationalizing applications, organizations can:
- Reduce potential security vulnerabilities
- Simplify patch management and updates
- Streamline compliance monitoring and reporting
- Improve data governance and privacy controls
Accelerated Innovation and Digital Transformation
When organizations are bogged down by maintaining a bloated application portfolio, they have less time, resources, and energy to focus on innovation.
Application rationalization frees up valuable resources that can be redirected toward:
- Developing new, value-adding applications
- Adopting emerging technologies (e.g., AI, IoT, blockchain)
- Implementing digital transformation initiatives
- Exploring new business models and revenue streams
Improved User Experience and Satisfaction
A rationalized application portfolio typically leads to a better user experience for employees and customers. Application rationalization can directly contribute to creating these positive experiences.
Benefits include:
- Consistent user interfaces and experiences across applications
- Reduced learning curves for new employees
- Improved application performance and reliability
- Enhanced customer satisfaction through more integrated, seamless services
Guardant Health: Streamlining fax processes for enhanced efficiency
Challenge: Guardant Health, a leading precision oncology company in Redwood City, California, faced significant challenges with their existing fax vendor, including integration issues with Salesforce and time-consuming manual processes.
Solution: Neev Systems implemented a comprehensive solution by migrating to a new fax vendor, mFax, and developing integration workflows. The solution leveraged Mulesoft, AWS SQS, AWS S3, and Salesforce CRM to create a bidirectional, seamless integration for fax transmission.
Results: This rationalization effort resulted in a 60% reduction in case resolution time, decreased user errors, and improved customer experience. The streamlined process eliminated the need for manual searching across multiple systems, significantly enhancing operational efficiency. By implementing real-time alerts and monitoring dashboards, Guardant Health achieved a more robust, automated fax management system, demonstrating the impact of targeted process rationalization in healthcare technology.
Better Decision-Making Through Data Consolidation
When data is spread across multiple disconnected applications, gaining a holistic view of the business becomes challenging, especially in a data-driven economy.
Application rationalization often involves data consolidation, which can lead to:
- Improved data quality and consistency
- Enhanced business intelligence and analytics capabilities
- More accurate forecasting and planning
- Data-driven decision-making across all levels of the organization
Increased Agility and Scalability
A leaner, more focused application portfolio allows organizations to be more agile and responsive to market changes.
Benefits include:
- Faster deployment of new features and capabilities
- Improved scalability to handle growth or changing business needs
- Easier integration of new technologies or acquired companies
- Reduced time-to-market for new products or services
By realizing these benefits, organizations can position themselves for long-term success in an increasingly competitive and digital-first business environment. However, achieving these benefits requires a systematic approach to application rationalization, which we’ll explore in the following sections.
Tools for Assessment
Organizations need efficient assessment tools and frameworks to rationalize their application portfolios. These tools help gather data, analyze applications, and make informed decisions about each application’s future.
Here are some essential tools and methodologies for application rationalization:
Application Portfolio Management (APM) Software
APM tools provide a centralized platform for managing and analyzing an organization’s entire application landscape.
Key features of ARM software include:
- Application inventory management
- Dependency mapping
- Performance monitoring
- Cost tracking
- Risk assessment
Some widely used APM solutions include ServiceNow IT Business Management, Apptio, and Planview Enterprise One.
Time-in-Motion Studies
These studies involve observing and measuring the time employees spend using various applications. A Harvard study found that employees switch between applications an average of 1,200 times daily, highlighting the importance of streamlining the application landscape.
This data can reveal:
- Which applications are most frequently used
- How much time is spent switching between applications
- Potential workflow inefficiencies
Total Cost of Ownership (TCO) Calculators
TCO calculators help organizations understand the total cost implications of maintaining an application. This usually includes:
- License fees
- Infrastructure costs
- Maintenance and support expenses
- Training and user productivity costs
Business Capability Modeling Tools
Organizations using business capability modeling in their rationalization efforts achieved significantly higher cost savings than those that didn’t. These tools help map applications to specific business capabilities, revealing:
- Areas of application redundancy
- Gaps in capability support
- Opportunities for consolidation
Examples include Ardoq, LeanIX, Avolution ABACUS
Application Performance Monitoring (APM) Tools
Businesses use APM tools to optimize application performance and reduce downtime. APM tools provide deep insights into how applications are performing, helping to identify:
- Underperforming applications
- Resource bottlenecks
- User experience issues
Popular APM tools include Dynatrace, New Relic, and AppDynamics.
User Surveys and Feedback Tools
A study found that 65% of clients shifted to a different brand when their customer support experience went awry, underscoring the importance of user feedback in application rationalization decisions. Gathering direct feedback from application users is crucial for understanding:
- User satisfaction levels
- Feature utilization
- Pain points and improvement areas
Tools like SurveyMonkey, Qualtrics, or purpose-built IT service management (ITSM) platforms can facilitate this feedback collection.
Data Integration and Analytics Platforms
Organizations that invest in data integration and analytics as part of their rationalization efforts see a significantly faster time-to-market for new digital initiatives.
These tools help organizations analyze data across multiple applications to identify:
- Data redundancies
- Integration opportunities
- Analytics and reporting improvements
Examples of data integration and analytics platforms include Informatica, Talend, and Microsoft Power BI.
Take Control of Your Application Portfolio
Step-by-Step Guide to Rationalizing the Application Portfolio
Implementing an effective application rationalization program requires a structured approach. This step-by-step guide will help organizations navigate the complexities of the rationalization process, from initial planning to ongoing maintenance. While the specific details may vary based on organizational size and complexity, these core steps provide a solid foundation for any rationalization effort.
Making the Right Choice
Application rationalization is not a one-time project but an ongoing journey of optimization and alignment with business needs. Following this step-by-step guide, organizations can systematically reduce complexity, cut costs, and create a more agile, efficient application landscape. While the benefits are clear, the process can be complex and challenging. This is where Neev Systems’ Application Management Services excel.
With a proven track record, as seen in the Stitch Fix and Guardant Health case studies, Neev Systems offers comprehensive solutions to navigate the complexities of application rationalization. By partnering with Neev Systems, you can accelerate your application rationalization journey, realizing benefits faster and more effectively. Our approach addresses immediate optimization needs and lays the foundation for future digital transformation initiatives.
Maintaining a streamlined, value-driven application portfolio will become increasingly critical for business success as technology evolves rapidly. Organizations that master the art and science of application rationalization will be well-positioned to navigate the challenges of digital transformation and emerge as leaders in their respective industries.
Remember, the key to successful application rationalization lies not just in the tools and methodologies employed but in the commitment to continuous improvement and aligning IT capabilities with business objectives. By embracing this approach, organizations can turn their application portfolios from a source of complexity and cost into a powerful engine of innovation and competitive advantage.
Don’t let a complex application portfolio hold your organization back. Contact Neev Systems today to learn how our Application Portfolio Management services can help you reduce costs.
Simplify and Optimize Your Tech Stack
Sitaram Pothula
With 22+ years of IT experience, Sitaram combines technical expertise with strategic leadership. He has led engineering teams and delivered solutions across BFSI, telecom, and healthcare. Sitaram excels in aligning technology with business goals to drive innovation and efficiency.
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