Application Rationalization 101
Application Rationalization is a managed process that reviews and evaluates applications in the IT Application Portfolio on a rational basis, to determine which should be preserved and enhanced, redeveloped and re-platformed, replaced with alternative solutions, or simply retired.
The goal of application rationalization is two fold.
- To Identify candidate applications for modernization action that might include enhancing, transforming or migrating to newer technology platforms, replacing with new solutions available as COTS or Cloud offerings, or simply retiring with no replacement.
- To initiate action based on the rationalization plan, and begin the modernization effort.
What follows is a brief discussion of application rationalization, beginning with scoping, and following through to taking action on the rationalization plan.
To begin the rationalization process, you and TIC Software develop an action plan to decide on the scope of the application rationalization effort, considering such drivers as:
- Which business unit generates the highest IT costs?
- What class of technology generates highest support costs, (e.g. NonStop)?
- Which Line of Business (LOB) was most recently acquired and is now least integrated with the balance of the portfolio?
Then, we capture the following information, used to scope the Application Rationalization effort:
- A count of applications to be reviewed,
- The quantity and availability of supporting application documentation and support records
- The report and presentation process that will follow from the rationalization effort (high-level, high-impact supported by detail roll-up
We will be grading applications on their cost, and the value they deliver, both now and in the future. Therefore we will need your agreement on how forward-looking we should be.
The key drivers for the rationalization are typically
- Enabling a “do more with less” attitude by identifying IT portfolio bloat and reducing it, thereby freeing funds
- Bring transparency to IT by portraying IT spend in a meaningful (e.g. business and value-oriented) way, and
- Establishing business ownership of IT assets (applications, data) through the Application Rationalization effort
To understand cost and value, we will gather and evaluate information within the scope of the effort. Here are some examples of what we would examine…
- Where is your organization or individual business unit, if that is our scope going as a business
- What are the desired principles of IT’s operation to support client’s business direction
- What is the history and projection of annual support, license, and enhancement costs (people and technology) by application, considering direct costs first, and indirect from client’s rational basis of overhead allocation
- What do Business and Technical Stakeholders think about the application suites under review, compiled through interviews and completed surveys
The Application Rationalization process gives insight into the value that applications deliver and the costs and risks associated with that delivery. Delivered value can be understood as profits derived from business functions directly supported by application suites under review. However, there is a deeper meaning to delivered value, having to do with key strategic alignments, discussed following.
Alignment between Business Processes and Applications
Proper alignment means that the time and effort you spend running your business is devoted to productive work, not work-around. Misalignment means extra work such:
- Is each business process is supported by multiple applications? This gives insight into redundant user interfaces among applications, identifies the use of application integration, and also identifies the number of applications that must be modified when the business process changes.
- Are business activities are supported by a single application?
- Are critical business processes/activities supported by different applications than the noncritical business processes/activities? This helps to identify less critical applications that might be replaced or retired
- Does each application’s functionality support at least one business process activity? Applications that play no role in supporting the business should disappear
Alignment between Business Processes and their Data
Business and Data alignment means that business people have the information they need – accurate information, with the right level of detail, and on time. Misalignments make it difficult to get information that is relevant for the business.
We perform a technology and business process review to answer questions such as…
- Is every data attributes used by at least by one business process?
- Are all data entities meaningful to their business users?
- Is the organization using standard, off the shelf applications for generating ad-hoc reports, inquiries, and graphs, or are custom-written applications doing this work?
- How well is data lineage (origin, and update path) of data entities tracked?
- Are business people responsible for overseeing the quality and relevance of data content?
- Does the organization use an Information Architecture with published principles and rules? If so, which data entities are in compliance, and which are not?
Alignment between Applications and Data
Application and Data alignment means that IT experts expend coding effort coding business functions and logic, rather than on data repair, conflation, and extra transformation. We perform a technology and business process review to answer questions such as…
- Is data entity managed by only one application? This means that entities are identified, created and reused by a single application, simplifying information management
- Are data entities created with null values present, or with plugged values, when real values are not available?
- Are there vocabulary and semantics organization standards so data from one business entity can be easily shared with others?
- Do standards exist for data interchange formats across the organization? Are they used, or ignored?
Our application rationalization offering brings focus on the business value delivered by client application suites vs. the cost and risk associated with that value delivery.
No matter how complete the go-forward plan, or how compelling the analysis for modernization, retirement, or replacement of applications, clients will only derive real benefit by putting the rationalization plan into action. Successful implementation of a rationalization plan will require buy-in from all in-scope business and technology stakeholders. Therefore, selecting the right initial application suite, engaging stakeholders, and selecting the right modernization partner, are all crucial to success.
To learn more about TIC, Application Rationalization, Modernization with BluAge, and what it means for your NonStop environment, schedule a conversation by emailing us to TIC Sales .
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Stuart Selip owns and operates Principal Consulting, LLC, an IT Strategy consulting firm that is a business partner of TIC Software. Prior, as the Chief Executive Officer of Luxoft’s Consulting Strategies unit, he managed delivery of IT Strategy consulting to Fortune 500/Global 2000 firms in the Financial Services, Insurance, and Media industries.