Why Your Company Needs to Use Application Rationalization

Application rationalization, which is sometimes referred to as application portfolio rationalization, helps organizations to streamline their existing application portfolio to improve efficiency and lower costs. What is Application Rationalization? Who Should...

Application rationalization, which is sometimes referred to as application portfolio rationalization, helps organizations to streamline their existing application portfolio to improve efficiency and lower costs.

  1. What is Application Rationalization?
  2. Who Should Use Application Rationalization Within Their Organization?
  3. What are the Benefits of Application Rationalization?
  4. Application Rationalization Tools
  5. The Application Rationalization Framework
  6. Challenges You May Face with Application Rationalization and How to Overcome Them
  7. Conclusion

Any organization should be looking for ways to improve its customer experience while also operating at a lower cost and with more efficiency. Within the IT department, company budgets are broken down into maintenance and strategic categories. Of course, as your business expands, you no doubt add more applications into your portfolio, increasing costs and reducing efficiency. When the maintenance of these applications begins to cause more issues within your organization, it’s time to consider application rationalization. Today we’re going to take you through everything you need to know about this process and what benefits it can offer to your organization this year.

What is Application Rationalization?

Applications are one of the key concerns for your IT department, and they offer many benefits to the rest of your organization. They can equip an employee with the information they need to complete their job, and help managers to make good decisions. However, you want to ensure these applications offer everything your employees would need to experience these benefits. Application rationalization helps you to streamline your current application portfolio to improve the efficiency of your organization and lower your overall costs.

Application rationalization involves many components and can begin by retiring applications you no longer use in your business. From there, you can remove any applications that have issues with functionality, as these probably cause more hassle than help to your business. After removing the defunct applications, you’ll then validate your current application portfolio and work to standardize your offerings. Synergy is a key focus within application rationalization and is something IT departments work on to improve the overall experience for your employees. Finally, your application portfolio should be inspected in regards to your business goals to ensure it is aligned with your company’s requirements.

In a large organization, you may be using hundreds or thousands of applications, and the money and time spent on these applications can be extremely prohibitive to your company and employees. With application rationalization, you’ll be able to reduce the number of applications your IT team has to support and monitor. While it’s certainly not a quick or easy process, it’s one that will be well worth it in the long run for everyone in your organization.

Who Should Use Application Rationalization Within Their Organization?

If you work within a smaller company, you may think there’s no need for you to take part in application rationalization. However, that’s far from the truth. Regardless of the shape and size of your company, you should still consider using a system to help organize your applications more efficiently. Even if you can reduce your applications by as little as 10%, that’s still going to have a good impact on your costs and efficiency. There are many benefits for companies of all shapes and sizes that you can enjoy from application rationalization. Companies find their IT reaction times improve and that they have increase time and funds for innovation. Even if you think you just have an average or below-average amount of applications, it’s something you should certainly consider moving forward.

What are the Benefits of Application Rationalization?

The benefits of application rationalization are one of the key reasons we encourage a company of any size to consider this process. Without application rationalization, you increase your security risks and may even miss out on great business opportunities within your company. These are just some of the top benefits you’ll experience from application rationalization:

  • Reduce Your IT Spending – We’re all looking to save money within our IT departments, regardless of the size of your company. Usually, after application rationalization, companies notice they make significant savings. If your company is struggling due to the recent pandemic or just looking to free up costs for future innovations, you’ll benefit from a reduction in spending in the future.
  • Simplify Your Application Portfolio – While you may think more applications will improve your organization, that’s rarely the case for companies today. Even companies that have hundreds of applications on offer usually just use the same ones over and over again. Running applications that aren’t needed within your company makes innovation more challenging and overcomplicates the landscape for your IT department.
  • Reduce Training Costs – Training your new employees to use applications can take up a lot of time and money for your organization. Whether that’s your in-house team or your vendors who use applications, they’ll need to be trained on how to use them and updated when upgrades are made. By removing applications you aren’t using, you can free up time and resources for other more important areas.
  • Improved Security – On top of these other benefits, the reduction of applications can increase your security. There are fewer entryways for threats, and therefore, less of a chance of compromising your company’s overall network.

Application Rationalization Tools

While you may think you can have a go at application rationalization by yourself, you’ll soon find this is a massive undertaking for many companies. For anyone without experience in this area, you’ll find there are many challenges to overcome. While it does sound like an easy process at first glance, for anyone who has completed application rationalization before, you’ll know that’s not the case at all. You’ll soon find that the applications all begin to rely on each other, and by eliminating one incorrectly, you’ll find that it impacts other applications in your portfolio.

Using an integrated IT portfolio management tool, such as Hoozin, can give you everything you need to complete this task with ease. You’ll understand why you can and can’t remove certain applications and appreciate the relationships between each of the applications. Regardless of the size and complexity of your IT system, you’ll find Hoozin to be the best partner for your application rationalization project.

The Application Rationalization Framework

To enjoy a successful application rationalization project, you need to follow a set framework. While this may vary slightly depending on your company, you’ll generally find this framework works for most organizations.

  • List Your Current Applications – Begin by taking stock of your current and previous applications. You’ll also want to take into account any applications you are planning to use in the future and ones that may be used elsewhere in your company.
  • Who are the Users of the Applications? – Consider who exactly uses each application, so you can get an understanding of the regularity of their use. You may soon identify that some applications are used by no one within your organization, and you’ll also find the ones that can’t be removed.
  • Are Any of Your Applications at their End-of-Life? – In order for technology to continue offering the benefits you need for your organization, you need to ensure an application is within an early stage of its lifecycle. When technology gets towards the end of its life, you’ll find there are far more difficulties with its integration, which may make it more of a challenge than a help to your company. You can minimize risks by removing technology that is of higher risk to your company.
  • Determine The Overall Cost to Your Business – Each application should be looked at to determine the cost it holds for your business. This includes the actual cost, the time it uses up, and the quality and value it offers your business.
  • Create Your New Application Architecture Framework – By now, you should be able to create a new framework for your application architecture. This will need to be created and then documented, which you can use to complete your application rationalization process. Think about how things will work in your organization in the long term so that you don’t have to go through this process from scratch again in the future.
  • Involve Everyone in the new Framework – At this stage, you’ll want to involve businesses and IT leaders in your organization in the process. You can work with leaders across your company to establish your future plans and ensure the new framework will work for everyone going forward. This will help to align business needs across the organization.
  • Application Rationalization – Now that your new framework is complete and everyone is involved in the process, your work shouldn’t stop here. While a one-time approach can certainly make a huge change to your business, this needs to be a continuous process for maximum impact. You’ll find that continually assessing your portfolio will give you greater value for your business, and you can simply follow these steps over and over again in the future. You’ll likely find the process gets a little easier and quicker each time, as you should find you’ve eliminated the majority of redundant applications the first time around.

Challenges You May Face with Application Rationalization and How to Overcome Them

Application rationalization is not a quick or easy process for anyone to be involved in, and you’ll find there are some challenges you will face. However, these are easy to overcome with the right assistance and tools, such as Hoozin.

  • Costs – One of the biggest arguments within companies is the cost of application rationalization. You may be unsure whether the current time is suitable for this project and whether it should be the top priority for your company. However, most companies find they save money in the long run from application rationalization, so it’s well worth the initial investment.
  • Disinterest from others in the organization – As with any project that doesn’t directly impact their day-to-day work, other stakeholders may not be interested in the process. Ensure everyone is kept in the loop and involved in the decision-making process to keep engagement levels high.
  • Communication challenges – Due to the structure of some organizations, this can make application rationalization more challenging. When reporting and communication are not agreed on at the start of the process, you may find that people have different priorities for the project.
  • Previous experiences – If your company has tried application rationalization in the past and felt the exercise was a failure, you may not be ready to commit either financially or time-wise again. This is one of the most common reasons for a lack of support for application rationalization within the company. However, the benefits and savings in the long-term should be the motivation for everyone to try again. You can learn from your previous challenges and failures and apply this to the next attempt.

To help overcome some of these challenges, focus on the value of this exercise. Understanding the value of each application you use will help you to focus on the applications that are of top importance to your company. Ensure the leaders within your organization are on board from the very start of the process. When you find you have unsupportive leaders for this project, it can be a battle throughout the whole process to get the communication and support you need. Some companies have mandates in place for business improvement, and they are much more likely to cooperate with the process. 

If you do think the project may be too large to tackle in one go, why not break it down into sets or areas of your business. You could focus on everything HR uses the first time around and then move to finance for the second round. This may also help to increase the buy-in from leaders, who see the benefits it offered to one department. This approach may be a good way forward for larger organizations, and the improvements you make to the efficiency in a department can be used to motivate everyone to continue application rationalization in the future.


Application rationalization often sounds like a more complex process than it actually is. By using a tool such as Hoozin for your application rationalization, you’ll find the process is far simpler than doing it all yourself. You’ll still receive all of the benefits of application rationalization without having to do so much of the work yourself or facing some of the challenges we discussed here today.

Carwin Heierman

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