Application Portfolio

Rationalization

April 2008

© 2008, Cognizant Technology Solutions. All Rights Reserved.

The information contained herein is subject to change without notice.
Background

 Two problems typically become apparent

when an organization develops the current-
state model for the first time:
» There is a complex web of overlapping applications;
and
» Complexity and overlap in the application portfolio
adds significant hidden costs:
• Increasing the time and cost of application
maintenance
• Complicating the task of impact analysis when scoping
changes
• data integrity problems.
• Increasing the risk of creating unanticipated problems
when making application changes
• Reducing the agility of the IT organization to respond
quickly to changing business needs

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Objectives
 Reduce the number of applications, increase
manageability and overall IT expenditures.
 Realign IT efforts with business processes and reallocate
budgets to most-prominent gaps.
 Clarify the application landscape, leading to action-
oriented synergies across different business units and the
pursuit of global systems architectures.
 Identify improvements to established applications and
new applications that cross traditional boundaries.
 Lower data center/infrastructure costs through
decommissioning and consolidation.
 Prioritize efforts and focus for IT delivery organization.
 Identify the required IT skills needed to support business
requirements.

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Application Rationalization Services

 Designed to address problems at hand: project

overruns, resource utilization, unstable systems,
inflexible architectures, TCO, duplicate technologies,
lack of standardization etc.
 Identifies applications at risk, as well as prioritize the
candidate projects in the portfolio of new investments
 Taking the first step in your Application
Rationalization journey involves understanding
» What applications do you have?
» Where are they housed?
» How do they work together?
» How important are they to the business, regulators,
customers, and the supply chain?
» What databases do they access?
» What are their critical up-stream and down-stream
dependencies?

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Getting a Holistic View

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Comprehensive Analysis

 Evaluate the existing architecture and constituent

applications

 Review applications that may have differing characteristics

 Examine historical and anecdotal information to determine

the level of business value and technical quality of each
application

 Examine the potential costs and revenue impact of

modernization for each application

 Rank and categorize each application as you discuss the best

approach to take with each one

 Identify those applications best positioned for modernization

 Establish a target architecture

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Approach
• A four-step approach to developing an
application rationalization and investment plan:

• Health check - performed on the existing application

portfolio, using high-level indicators (red, amber, green)
of application health from the functional and technological
perspectives

• Portfolio Investment mix - determines the potential

contribution of an application to achieving business goals
versus achieving overall business performance.

• Strategic grid - The existing application portfolio is

mapped to determine the criticality of the applications in
the portfolio, ensuring that the portfolio is balanced to
match the optimal investment mix. The prioritization of
candidate projects was then tested against the published
business strategy to ensure reasonable alignment.

• Rationalize maps - are created to show the high-level

migration plan which is driven by the highest-priority
projects and considers the dependent projects within an
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overall program plan. 7
Health Check

Workshops, interviews & ITEM Methodology to

determine application health based on the empirical
knowledge of business and technical experts

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Portfolio Investment Mix

Applications that provide

Vital for both business
the opportunity for
performance and business
business innovation
goals

$$

Vital for business Applications that have

performance, but not a low overall
for contribution to
achieving business achieving business
goals goals.

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Strategic Grid

The prioritization of candidate projects/applications is tested

against the published business strategy to ensure reasonable
alignment.

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Rationalize Map
The time dimension is added to the portfolio. Typically,
this step will require several iterations to achieve the
right mix of projects and roughly right time scales

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 Deliverables

• Inventory of applications in use and key attributes

THE
BINDE
R • Assessment of applications from business, technology and
financial perspectives
• Gaps and Improvement opportunities

Tactical • Short/midterm classification related to application life cycle (Do

Actions we tolerate, integrate, migrate or eliminate applications?)
1
3 •
2 Recommended action for each application (area) to seize
improvement opportunities
• Project charter for recommended actions

• Strategies to rationalize, reduce costs and increase overall value

• A "to be" applications portfolio/architecture and metrics to
manage application portfolio in time
• Road map that outlines and prioritizes an application's
improvement programs
• Initial assessment of financial implications

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 Engagement Overview
Inventory Collection • Finalize scope after identifying a
representative sample of important
Filt applications
er
Application Scope
Finalization

• Collect quantitative data using

Executive Management

Business Application Financial templates (can be customized- if

Owner level Data Data required)
Data Collection & Collection & • Conduct interviews & qualitative
Interviews

Collection Interviews Interviews discussions around effectiveness

Pain parameters with all stakeholders
points

End User Process Maturity &

Survey Financial Analysis

• Derive effectiveness scores based on

quantitative analysis
• Support & supplement numbers using
qualitative findings
• Analyze as-is scenario to suggest
Final Analysis & Deliverable improvement opportunities at
Preparation application / process / organizational
dimensions
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Tools & Methodologies

ITEM – IT Effectiveness Management

APA – Application Portfolio Analysis
TWP - Transforming while Performing

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Results

 Set Of Models That Provide A Simple Yet Auditable Way Of

Determining Application Risk And Investment Priority In A
Very Short Time Frame.

 The Process Is Simple And Transparent

 Applies Structure To The Investment Decision-making

Process With The Collaboration Of Business Managers.

 Deals With The Issues Of The Day, Enabling A Longer-term

Analysis Effort, Which Is Required To Create A Complete
Enterprise Architecture

 Uses Empirical Knowledge Along With Quantitative

Analysis.

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Thank you

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