"Reducing Application Costs Through Rationalization – A Systematic Approach Yields Cost Reductions and Improved Service"
Executive Summary
Organizations throughout the public and private sectors are challenged to improve mission support, reduce costs, and improve efficiencies. The lack of alignment to business objectives has resulted in organizations spending billions of dollars on initiatives with only short-term benefits. In addition, security is an overarching concern that influences daily operation, and with corporate and government mandates, has a substantial reporting obligation as well. One specific use of portfolio management offers very high leverage and produces dramatic results in the commercial and government spheres: Application Portfolio Management (APM). APM, a transparent process and toolset for portfolio management of software applications, enables application rationalization and drives enormous cost savings and efficiencies.
In the late 90s, there was a big push for application remediation in the commercial world to address the looming Y2K problem. Organizations dealt with this application review process as a one-time event, managed their way through the transition, and went back to letting their application portfolios gather dust. Now, beset with challenges from compliance demands to mergers, and acquisitions to budget crises, the realization is striking home that there will always be another “event,” and that ongoing active application portfolio management is a must.
Perhaps most persuasive of all is that according to industry analysts such as Gartner and META Group, a focused application rationalization effort will typically result in 20% cost savings while improving support for the lines of business. These savings are too huge to ignore. Additional benefits include a simplified infrastructure and an availability of resources now able to focus on what really matters. Against this backdrop, and with leadership under pressure to deliver “more with less,” application portfolio management should be fertile ground for identifying and harvesting funds for reinvestment.
In most organizations, the spend for operating and managing applications makes up 75-80% of the budget. There is a clear need to objectively prioritize investments and measure the business value derived.
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