Application rationalization is a critical process that helps organizations streamline their application portfolio to reduce costs, improve efficiency, and align technology with business goals.
To achieve this, an application rationalization questionnaire is used to evaluate the suitability of each application in an organization's portfolio.
Smaller organizations can still collect this data manually, while mid-to-enterprise size organizations migrate to enterprise architecture tools.
Before we move to the key questions included in the questionnaire, let's understand what it is, its purpose, and how it can be used.
An application rationalization questionnaire is a set of questions used to evaluate an organization's applications, determine their relevance and value, and identify rationalization opportunities.
The questionnaire typically covers a range of topics, including application functionality, usage, cost, and compatibility with other systems.
It is a standardized and structured approach to collecting information on an organization's application portfolio.
Until the organization's application inventory is small, these questionnaires can be created and collected manually within legacy tools, such as Excel.
Once the application portfolio increases, this data should be collected within enterprise architecture tools, such as LeanIX EAM.
📚 Related: Collect information without the hassle of sending out individual emails in LeanIX EAM
An application rationalization questionnaire is used as part of a larger application rationalization process.
The process begins with an inventory of an organization's applications, followed by an assessment of each application's usage, functionality, and cost.
No matter the chosen medium, the application rationalization questionnaire is used to collect this information and identify potential opportunities for rationalization.
Once the questionnaire or fact sheets have been completed, the data is analyzed, and recommendations are made for streamlining the application portfolio.
This may involve consolidating applications, replacing outdated or redundant applications, or eliminating applications that are not essential.
📚 Related: Application Rationalization Playbook
Using an application rationalization questionnaire can provide a number of benefits to an organization, including:
The first step in an application rationalization process is to understand the apps in an organization's portfolio. The following questions can help to gain a better understanding:
Result: Identify the primary purpose of the application, its level of usage, and its role in supporting business processes.
One of the key objectives of application rationalization is to reduce costs associated with an organization's application portfolio. Add the following questions to evaluate the costs of each application:
Result: Identify the costs associated with licensing, maintenance, and other expenses related to the application over its lifecycle.
📚 Related: SaaS Spend Optimization
Another important aspect of application rationalization is understanding the integration and complexity of an application portfolio. Ask these questions to assess integration and complexity:
Result: Identify any integration requirements or complexities associated with the application.
To prioritize which applications should be the first to act on, it's important to assess each application's criticality and risks. Questions to determine criticality and risks:
Result: Identify the application's criticality to the business, and its potential impact on revenue, customers, and other key business metrics. It also helps uncover any potential security risks associated with the application.
📚 Related: Application Portfolio Assessment
To ensure that an organization's application portfolio is meeting its needs, it's important to evaluate the functionality and performance of each application. The following questions can help to evaluate functionality and performance:
Result: Identify any gaps in functionality and performance.
The user experience is a critical factor in the success of any application. Assess the user experience with these questions:
Result: Identify any user experience issues that may be impacting the application's effectiveness.
Vendor support is a critical factor in the ongoing maintenance and support of an application. The following questions can help to evaluate vendor support:
Result: Identify any issues with vendor support.
📚 Related: SaaS Evaluation Template
The final step in an application rationalization process is to evaluate how well an application aligns with an organization's overall business strategy. The following questions can help to determine business alignment:
Result: Identify whether an application is helping to drive the organization's success or if it's holding it back.
When you use LeanIX EAM, you don't have any use for this template, if not, follow along.
Here is a template you can copy into your medium of preference, and share with application owners, department heads, and other IT architects.
Introduction: The following questionnaire is designed to help us evaluate our application portfolio. Please answer the following questions for each application in your portfolio.
Cost and ROI:
Functionality and Performance:
Conclusion: By answering these questions, we will be able to optimize our application portfolio.
An application rationalization questionnaire is a powerful starting point for smaller organizations looking to streamline their application portfolio.
By evaluating costs, functionality, performance, user experience, vendor support, and business alignment, organizations can optimize their application portfolio and drive greater success.
Once the application inventory size increases, it's essential to automate data collection and reporting, and implement the right EA tool.
Scope and inventory the application portfolio, assessing each by functional fit, technical fit, and lifecycle
Identify opportunities for investment or the decommissioning of redundancies, and deciding on a desired future state technology architecture
Plan and implement the roadmap for success, including key financial metrics and governance.
What is application rationalization?
Application rationalization is the process of evaluating an organization's application portfolio to identify which applications are essential, which are redundant, and which can be retired.
Why is application rationalization important?
Application rationalization can help organizations reduce costs, improve efficiency, and align technology with business goals.
What are some benefits of application rationalization?
Benefits of application rationalization include cost savings, improved efficiency, better alignment with business goals, and reduced security risks.
Who should be involved in an application rationalization process?
An application rationalization process should involve stakeholders from IT, business, finance, and other relevant departments.
How often should an organization conduct an application rationalization process?
The frequency of an application rationalization process can vary depending on the organization's needs, but it's typically recommended conducting a review at least every 2-3 years.