Trim your application portfolio for savings

Reducing the number of applications can save money, but be prepared for a potentially tedious inventory process -- and for users with emotional attachments

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Paul Valente, a Chicago Public Schools systems engineer, jokes that his employer is "a $7 billion organization with a $6 billion budget." Not surprisingly, the underfunded department has a short-staffed IT team, so Valente is always looking for ways to cut costs and streamline operations -- and he feels he has struck gold with an application rationalization scheme.

"When we look at all the applications within the organization, we find commonalities and can steer purchasing toward these programs and achieve volume discounts," Valente says.

Reviews like the one Valente has undertaken usually involve a strategy that's referred to as software rationalization or application portfolio management (APM), where IT takes inventory of the applications in use across the enterprise and then determines, with input from stakeholders such as financial teams and line-of-business leaders, whether programs should stay or go. Those that aren't immediately shut down can remain as is, migrate to a hosted platform or software-as-a-service offering, or get marked for future retirement.

John Picciotto, senior principal at Accenture, says most organizations engage in portfolio reviews as part of an annual quest to wring savings of 5% to 10% out of their budgets. Application rationalization, which involves taking action on the review, can lead to streamlined operations and reduced complexity, and could possibly "jump-start more innovative solutions," he says.

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