Application rationalization requires a consistent process that is supported by automation tools to ensure the results are accurate and reliable.
The steps in the process are:

1. Document all the applications in the organization and ensure there is a complete understanding of all the components of the applications. This will give a well-defined, complete, accurate, and vetted inventory of applications. Remember to include in the inventory both business and IT owners for each application.

2. When there is an understanding of all the applications use the documentation for each application and map it to the business processes it performs.

Automation tools maybe required to produce the documentation if accurate and current documentation is not available. This process starts the process of identifying duplication, redundancy and opportunities for consolidation.

3. For each application, it is necessary to determine the cost of ownership. These costs include things like:

  • infrastructure
  • operations (internal IT costs or external services)
  • licenses
  • licensed software support
  • direct application support (internal IT employees or external staff)
  • enhancements, and smaller changes

4. This gives us a definition of the portfolio in terms of applications, business processes supported and the costs. Next, align the costs to the organizations’ departments and how much of the cost of each application supports each department.

5. In step 5 it is important to understand the functional and technical quality of each application. To do this the business users will determine how well each application supports business processes which include things like ease of use, accuracy, data currency and how easy it is to meet legal and regulatory requirements.
The IT support teams will need to provide the data on technical quality – how well does each application meet standards and architectural requirements, reliability, complexity, integrity,
and support risks going forward.

6. Now there is an understanding of each application, how it supports the business, how well it supports the business and its running costs. The next thing to be done is to define the future state – what should the application landscape look like going forward. This step should focus on improving (and simplifying) the functional and technical architectures while reducing annual costs and eliminating redundancies.
Once the target is understood then a roadmap can be developed to get from the current state (as defined in steps 1-5) to the desired state defined at this stage.

7. The last step is to create the business case to show both the financial and business value that will be gained from carrying out the roadmap defined in the previous stage.

By following this type of application rationalization process the business can reduce the number of applications and the costs of running IT. However, doing this process entirely manually is error prone and
time-consuming but by using automation in particular for stages 1,2, & 5 the speed and accuracy of the process can be significantly improved.