Establishing clear objectives is essential for the success of any rationalization effort. Without well-defined goals, organizations risk making decisions that fail to align with broader business and IT strategies or deliver tangible value. Setting rationalization objectives helps ensure that efforts remain focused, measurable, and aligned with the overall vision for Application Portfolio Management (APM).
9.2.1 Why Define Rationalization Objectives?
Clear rationalization objectives:
- Provide Direction: Help prioritize actions and allocate resources efficiently.
- Align with Business Strategy: Ensure rationalization supports organizational goals such as cost reduction, risk mitigation, or innovation enablement.
- Facilitate Stakeholder Buy-In: Clearly articulated objectives make it easier to communicate the benefits of rationalization to business and IT leaders.
- Enable Measurement of Success: Well-defined objectives provide a baseline for evaluating the impact of rationalization efforts.
9.2.2 Types of Rationalization Objectives
Depending on the organization’s priorities, rationalization objectives can fall into the following categories:
- Cost Reduction
- Reduce Total Cost of Ownership (TCO) by eliminating redundant or underutilized applications.
- Optimize licensing agreements and reduce infrastructure expenses.
- Risk Mitigation
- Retire unsupported or obsolete applications that pose security and compliance risks.
- Minimize exposure to vulnerabilities by consolidating or upgrading aging systems.
- Operational Efficiency
- Simplify IT operations by reducing the number of applications in the portfolio.
- Standardize platforms and tools to streamline support and maintenance efforts.
- Strategic Alignment
- Align the application portfolio with the organization’s digital transformation initiatives.
- Ensure all applications contribute to business-critical goals.
- Enhanced User Experience
- Reduce confusion caused by redundant tools with overlapping functionality.
- Improve employee productivity by providing streamlined, intuitive systems.
- Innovation Enablement
- Free up resources to invest in innovative technologies by rationalizing low-value applications.
- Create an agile IT environment capable of responding quickly to changing business needs.
9.2.3 Steps to Set Rationalization Objectives
- Assess Organizational Priorities
- Identify key business and IT goals, such as reducing operational costs, enhancing cybersecurity, or driving innovation.
- Align rationalization objectives with these priorities to maximize relevance and impact.
- Engage Stakeholders
- Collaborate with CIOs, business leaders, and application owners to understand their pain points and aspirations.
- Incorporate stakeholder feedback into the objective-setting process to gain buy-in.
- Leverage Data Insights
- Use application inventory data to identify areas of opportunity, such as high-cost, low-value applications or redundant tools.
- Establish baselines for metrics like cost, usage, and business value to guide decision-making.
- Define Measurable Goals
- Set Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals.
- Example: “Reduce application licensing costs by 15% within the next six months.”
- Prioritize Objectives
- Rank objectives based on their potential impact, feasibility, and alignment with business goals.
- Focus on high-priority objectives during the early stages of rationalization.
- Communicate Objectives
- Clearly articulate the objectives to all stakeholders, emphasizing their benefits and alignment with organizational goals.
- Use simple, relatable language to ensure understanding and support.
9.2.4 Examples of Rationalization Objectives
- Cost Reduction: “Retire 20% of underutilized applications within one year to achieve $200,000 in annual cost savings.”
- Risk Mitigation: “Eliminate all unsupported legacy applications within the next quarter to reduce security vulnerabilities by 30%.”
- Efficiency: “Standardize collaboration tools across the organization within six months to improve productivity by 10%.”
- Strategic Alignment: “Ensure 90% of applications directly support key business objectives by the end of the year.”
- User Experience: “Streamline the portfolio to eliminate duplicate applications in HR and Finance departments within the next six months.”
9.2.5 Challenges in Setting Objectives
- Competing Priorities: Balancing diverse organizational goals can lead to conflicting rationalization objectives.
- Solution: Prioritize objectives based on business-critical needs and align them with strategic goals.
- Unclear Metrics: Defining success can be difficult without accurate data or clear benchmarks.
- Solution: Start with readily available data and refine metrics as rationalization efforts mature.
- Stakeholder Resistance: Objectives perceived as overly disruptive may face pushback from business units or IT teams.
- Solution: Engage stakeholders early and ensure objectives reflect their input and concerns.
9.2.6 How Objectives Support APM Success
By defining clear, actionable objectives, organizations can:
- Maintain Focus: Keep rationalization efforts on track and aligned with broader APM initiatives.
- Measure Progress: Evaluate the impact of rationalization through predefined metrics and KPIs.
- Demonstrate Value: Showcase the tangible benefits of rationalization to build momentum and sustain stakeholder support.
Setting rationalization objectives is a foundational step that ensures efforts are purposeful, measurable, and aligned with the organization’s strategic vision. These objectives guide early-stage rationalization activities and set the stage for more advanced efforts as the organization matures in its APM journey.
