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Gartner BPM Summit 2014: Implementing an Application Rationalization Program

Leveraging BPM towards an Application rationalization Effort

Sandeep Khare's avatar

By: Sandeep Khare

December 12, 2014 | EventsCase Management/BPMAnalystsAgile Development

In an insightful session here at the Gartner BPM Summit in Las Vegas, analyst Andy Kyte discussed the need for application rationalization and how BPM can play a role in such an effort. In this post I will highlight the points that jumped out to me, and I will also look at them in the context of Case Management and BPM.

Application Rationalization in the Enterprise

Application rationalization is an enterprise wide program that can help sort out the bloated application portfolio, and provide guidelines on how an organization should invest in applications. Such an effort is generally multiyear and should be revisited at constant intervals.

Organizations with larger and complex application portfolios should keep two main goals in sight when trying to implement application rationalization:

  • Reduce the total cost of ownership
  • Improve agility by responding more quickly to the business needs

When it comes to application portfolio, Pareto principle that states, “20% of applications account for 80% of the cost”, is still applicable. Organizations trying to rationalize their application portfolio must look closely into these top 20% of the applications, which are also some of the biggest and most complex applications in an organization.

There are two common myths that many IT departments tend to believe, one is that reducing the number of applications will reduce the cost and second, reducing the number of applications will reduce complexity. 

Many IT departments start by removing smaller applications and assume that will directly cut down the cost and complexity of the operations. Obviously, they face less resistance from the stakeholders when it comes to the smaller applications. But in reality, cost impact and complexity of all the small applications is much less than that of one large application. These big applications not only have internal complexity but also external complexity where they integrate with many 3rd party systems and have stakeholders at higher positions. So taking them down or reducing their overall cost of ownership becomes a challenge.

When it comes to small applications, the general recommendation is to have a separate program to improve their management. For the larger applications, it is useful to set up domain specific governance teams such as for HR, Finance, etc. There are other factors that should be considered when consolidating or removing an application. Some of these are,

  • Current cost of each application
  • Expected future cost, possibly for the next 5-10 years
  • Utilization trends – For example, do you expect the user base to increase over the next few years?
  • Technical risk analysis - what kind of technology risks might you experience if you stick with a system built on older technology in next 5-10 years.
  • Gap analysis – to understand what the application lacks relative to business needs.
  • Market testing
    • Every 2 or 3 years you need to market test the application
    • Ask the question if any application that you are running internally, can that be outsourced and done by a vendor who specializes in it.

The Case Management and BPM Perspective

So how does Case Management and/or BPM come into play here? When removing or consolidating a large and useful application there should also be a meaningful change in business processes for stakeholders. This may require a business-led process standardization and simplification effort. Andy cautioned in his session that an IT-led application rationalization initiative may not have the necessary authority to implement meaningful changes in a business process. 

A mature, model-driven BPM and/or Case Management product can handle such a process standardization and simplification effort.  It can help consolidate multiple business processes within one enterprise level system, simplifying the maintenance and management of these processes and underlying components. This can also help filter out duplicate applications serving the same business purposes. For example, MicroPact’s Case Management and BPM platform, entellitrak, allows organizations to set up shared services, which allow for different departments to subscribe to the services they need without the need to install multiple instances of the same application. This can significantly bring down the total cost of ownership. entellitrak also supports agile methodology and a continuous delivery approach, which in turn accelerates the ability to respond quickly to changing business needs.

Application rationalization is a long term effort, therefore a buy-in from the top management is critical to the success of such a program.

About the Author

Sandeep Khare worked at MicroPact from 2003-2016, most recently in the Marketing department.