Learning about Application Rationalization

Application Rationalization is the process of reviewing and improving a company’s collection of software applications to make them more effective and efficient. The main goals are to save money, reduce complexity, and enhance productivity.

By focusing on Application Rationalization, companies can:

1. Save Costs: By removing unnecessary or redundant applications, companies can cut down on expenses. These savings can be used to fund new projects or innovations.
2. Improve Efficiency: Streamlining applications helps employees work more effectively by using tools that are best suited for their tasks.
3. Reduce Complexity: Simplifying the IT environment makes it easier to manage, which can include retiring outdated applications or optimizing how servers and data storage are used.

To make Application Rationalization successful, it’s important to understand the specific needs of the company. For example, when aiming to improve efficiency, the company should clearly define what efficiency means for its employees and identify the steps needed to achieve it. Similarly, reducing complexity can involve different actions depending on the company's specific situation.

Companies that implement Application Rationalization can see significant benefits. For example:

• Saving millions of dollars by optimizing the application portfolio.
• Removing a large percentage of redundant applications within a short time.
• Freeing up financial resources that can be used for new innovations.

To implement Application Rationalization effectively, you can use a platform like SAP LeanIX, which follows three main steps:

1. Identify Goals and Sponsors: Start by understanding the goals of the company and identifying who will sponsor the project. This will help determine what kind of applications are needed and how they should support business goals.
2. Keep it Simple: Focus first on understanding what applications are currently being used and how they contribute to the business. Avoid getting lost in too many details at the beginning.
3. Create and Connect: Use SAP LeanIX to link each application to specific business capabilities and assess how well they fit the company’s needs. This process should involve regular communication with stakeholders and users to ensure the applications align with long-term business goals.

Application Rationalization is a strategy for any company looking to improve its IT environment. By following these steps and using tools like SAP LeanIX, companies can streamline their applications, achieve cost savings, and empower employees to work more efficiently.