Lots of organizations I speak with are undertaking rationalization and simplification of application portfolios – some successfully, some less so. I think that the key difference between successful and less successful rationalization is the order in which organizations go about it. Organizations that rationalize their applications successfully start with (1) business drivers that define the need for change, then (2) they define the characteristics of the application portfolio that will enable those business changes. They then (3) outline a program of phased activities that will deliver the portfolio changes and finally (4) undertake a series of projects that make the functional, technical or process changes. Less successful programs take a different sequence – it typically goes in a 4-2-1-3 sequence, starting with projects, then portfolio changes, which deliver some business change that are wrapped up in a program.
But of course there is more to it than that. Many organizations are not ready for the changes wrought by application rationalization and fail to adapt to new processes or ways of working. Equally, there is a gap in the capability of application performance tools to link application changes to real, material advances in the achievement of business goals. Benchmarking of application portfolios remains largely mechanistic and evaluates rationalization on application development-centric measures. There is very little EA-centric benchmarking of rationalization that measure the value of architectural compliance, reduction in risk or process latency, complexity or technical debt reductions and so on. Strategic planning for rationalization is primarily short-term and focused on reducing the number of applications. There is very little synergistic mapping of business drivers to business outcomes through the process of rationalization.
I believe the ability of organizations to systemically rationalize and simplify application portfolios will become a core competitive differentiator. Rationalization will provide clear line-of-sight of the linkage between technology portfolio changes and business goals. Rationalization will drive business change effectively and successfully, through a business-driver centric approach to technology that informs the shape, size and objective of an organization’s investments in applications. Rationalization will interlock with emerging technology adoption processes to create a holistic approach to on-boarding, employing and decommissioning of advanced technology that delivers material business benefit in a managed, systemic manner. Over time, this may result in increased off-premises, cloud-based and/or shared application services that make up the application portfolios of organizations. Going forward, the importance of application ownership, will be overtaken by the importance of access to application capability. Organizations will increasingly use a variety of devices (home computer, work computer, phone, tablet, TV) on a diverse range of platforms to provide application services to users from a variety of different providers. Rationalization value will be measured less on reducing application count, and more on reducing risk in the increasing variety of new ways organizations can deliver application services to users.