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IT Rationalization Part 1 of 2: The Why

Never before have businesses, and people, had such incredible access to information. From the power of an instant Google search to the ability to manage a complicated global supply chain, technology has changed the face of the modern organization.

We have access to so much data, technology and innovation, but it’s a challenge to convert these assets into everyday business processes. By not taking full advantage of the impressive multitude of technology capabilities, we miss out on the opportunity to drive efficiencies, save on costs and impact our company’s bottom line in a consistent manner.

On top of this, computing infrastructures are expanding their reach in every dimension of the business fabric. And new platforms and applications are under pressure to integrate with legacy systems at low costs, while virtual enterprises span multiple companies.

With the sheer volume of moving parts that must be managed, concepts such as IT rationalization and application profiling are essential to be competitive and produce successful results.

First thing’s first: Establishing the APM (Application Portfolio Management) Connection

Most departments are under pressure to keep costs low. This is especially true in IT, where budgets are often watched very carefully. As a result, IT executives are seeking methods and tools to effectively and efficiently evaluate and prioritize their respective portfolio investments.

While at the top of the list, cost-containment is not the only reason for such strategies. Driving efficiency and positioning the business for growth and expansion are leading factors for better management of application portfolios. In a nutshell, APM is a set of disciplines and techniques that align commonly used tools and processes in a repeatable and defined framework.

Why do we need IT Rationalization?
Now that we’ve established how APM fits into the process, rationalization is about managing these applications from start to finish in ways that are predictive, value-based and efficient.

One thing to keep in mind is that rationalization does not replace existing processes for project management or other program management, but rather compliments what is already in place. Rationalization is a set of techniques and approaches to understand, guide and monitor investment decisions both current and planned.

Some key advantages to rationalization that encompass the complete application lifecycle are:

1) Technology and infrastructure footprints become less and cost to deliver services is lowered

2) Resources can be reduced or redistributed as needed

3) An organization is now able to rationalize and virtualize technology and associated infrastructure with the implicit goal of cost reduction and environment efficiency

Understanding the Opportunities
When organizations make decisions regarding their IT investments, one of their most common challenges is the mistakenly simple issue of: what is the real or apparent value of the asset under review? Most of the time, it is easy to calculate the purchase price of the hardware or the license fees for the vendor’s software.

This is not always the case. Due to integration of process, application, data and technology, traditional methods of asset valuation are not effective to address the challenges of the modern computing landscape. The primary objective of rationalization is to maximize investments, improve strategic alignment and significantly reduce costs and overall complexity.

So what’s next? I’ll be sharing the “How” of IT rationalization in my next post. Don’t forget to check back next month!

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