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5 ways CIOs can rationalize application portfolios

Thor Olavsrud | March 17, 2014
The pressure is mounting for CIOs and other IT leaders to help the business enable new disruptive technologies like mobile, social, cloud and big data, but many CIOs are struggling to do so because maintaining and supporting legacy applications consumes the lion's share of the budget. Here are five recommendations for rationalizing your application portfolio.

And there's the rub: Even as the business is beginning to look at IT as a strategic enabler that can help it get its arms around these new technologies, IT is struggling to deal with an application landscape that is more complex than ever before.

"There's a striking difference from 2011: IT is considered much more, particularly by the business side, as something that helps them innovate and inform themselves," says Ron Tolido, senior vice president, Application Services, at consulting, technology and outsourcing services provider Capgemini.

"Despite the ambitions CIOs had a few years ago to simplify their IT landscape, in practice they haven't really been able to do it." -- Ron Tolido, Capgemini

Tolido is also the author of Capgemini's recently released Application Landscape Report 2014, a follow-up to a 2011 report on the same subject.

"In 2011, there was much more looked at for cost reduction," Tolido adds. "Now it's seen as a strategic enabler. It puts a lot of the CIOs that we've been surveying under a lot of additional pressure."

Even back in 2011, CIOs clearly felt the pressure to rationalize the application landscape, Tolido says.

"Despite their worries - and clear recognition of the need for action - many CIOs indicated that they found it difficult to actually start rationalizing their portfolio," Tolido writes in the report. "The impediments of complexity, cost constraints and the inability to define a convincing business case were simply too big to take on."

Now, he says, the need is becoming critical. He has five recommendations to help CIOs get rationalization programs under way.

1. Industrialize and Standardize First

Nearly one-half (48 percent) of respondents to Capgemini's study reported they have more applications in their portfolio than the business actually requires. That's a large jump from 2011, when 34 percent of organizations reported the same.

"Most CIOs will admit that they have far too many applications," Tolido says. "It's a clear increase compared to 2011. Despite the ambitions CIOs had a few years ago to simplify their IT landscape, in practice they haven't really been able to do it."

One of the big contributing factors to the growing number of applications in the portfolio is that few businesses are willing to decommission applications, even as individual business units turn to software-as-a-service (SaaS) solutions to meet their needs, either with IT's approval or in the form of shadow IT. These SaaS solutions add to the complexity as well.

Capgemini recommends starting by taking a fresh look at your application landscape, seeking ways to apply industrialization and standardization to rationalize its foundation. Fully 70 percent of respondents to Capgemini's study believe that at least one-fifth of their applications could be consolidated by eliminating redundant functionality.


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