Application rationalization is the process by which organizations strategically
identify business applications to determine which applications should be kept,
replaced, retired or consolidated. The goal is to achieve improvements in business
operations and a reduction in IT costs.

Application rationalization has become a critical process for IT departments, under the
sponsorship of the CIO,faced with an excess of legacy applications and the high cost
that comes with maintaining these systems.
The number of applications in organizations has also seen significant growth through
mergers and acquisitions.

As organizations tackle regulatory and compliance requirements and migrate business applications to cloud computing models, CIOs and IT executives utilize application rationalization initiatives to align their application portfolios with business objectives.

Application rationalization projects lay the foundation for a scalable, responsiveapplication infrastructure that can handle business operations associated with mobile, social and big data initiatives. An application overhaul also helps companies take advantage of emerging technologies, platforms and changes in IT best practices.

Benefits that can be derived from application rationalization are:

  • Helping companies identify legacy applications that can be exposed to security risks. These applications can be replaced with new applications that come with enhanced security features.
  • By retiring redundant applications companies can control technology sprawl.Application rationalization projects can provide CIOs and IT managers with the opportunity to drive standardization into their business operations, as well as introduce innovation, cutting edge technology and better business processes across an
    organization.
  • Conducting an application portfolio review empowers organizations to better understand their business needs, which helps broaden the conversation between the vendor and customer. IT executives can discuss with vendors not only the price of the product, but whether their applications meet the organization’s business requirements.
  • Knowing what applications are required to improve business performance can help organizations evaluate vendor/service provider options, and negotiate better service-level agreements (SLA) and contracts.