How to Rationalize Your Application Portfolio

Is your application portfolio bursting at the seams? Chances are that it is, and it’s likely that many of the applications in that portfolio are either unused or underutilized, and that could be costing you millions of dollars.

“These findings point to the need for IT to get a grip on application bloat and think twice about whether they need to add new apps,” says John Newsom, vice president and general manager of Application Performance Monitoring at Dell’s Quest Software, which in conjunction with Harris Interactive recently surveyed enterprises about application bloat. “If not, they might cost the business more than they help it.”

Enterprises Have a Tendency to Application Bloat

Enterprises tend to accumulate applications. Often applications are deployed for the right reasons—to give users access to new capabilities that, in theory, allow them to do their work better or more efficiently. Sometimes applications are added to the portfolio as part of a merger or acquisition. Organizations also tend to custom-build applications to support their unique business processes. The problem, Newsom says, is there’s little provision made for the rationalization of older apps. In some cases, a group of users may continue to use an older app for reasons of familiarity or even feature sets that a newer app lacks. In many cases, apps are unused or underused because of a disconnect between the business and the IT teams that design and build the applications. Whatever the reason, unused or underutilized apps remain on the network, consuming resources.

“When Alcatel merged with Lucent, we inherited an IT landscape where most applications were duplicated or multiplied given the history of previous purchases,” says Pascal Bataille, enterprise architect at Alcatel-Lucent, France. “Yet we had to connect and maintain them to support all our customers and all business specificities from Day 1. It took some time to deal with the usual politics in this situation and assess them technically against the strategy of our new company, and come up with a strategic landscape and validated decommissioning plan.”

Half of Enterprises Have More Than 500 Apps, Many Unused or Underused

Harris Interactive surveyed 150 senior IT decision-makers from organizations with $500 million or more in annual revenue. Fifty percent of respondents said their enterprise has more than 500 applications deployed (34 percent have more than 1,000 applications deployed). Yet 57 percent of respondents said their users use fewer than 249 applications on a typical day and 28 percent said their users use fewer than 50 apps a day.

That jibes with the findings of IT management consulting firm Capgemini, which in 2011 surveyed more than 100 CIOs globally, 85 percent of whom said their application portfolio needed to be rationalized (60 percent said they currently supported “far more” applications than they needed).

“What we found confirms our initial hypothesis: todays IT organizations are carrying a heavy burden of applications that are often not delivering full value to the business,” Capgemini wrote in its Application Landscape Report, 2011 Edition. “Most companies have far more applications than the business needs and are forced to spend valuable IT resources on supporting obsolete systems from the past instead of focusing their assets on future growth.”

Application Sprawl Costs Hundreds of Thousands of Dollars or More

Application sprawl isn’t purely academic. Newsom says slow, crashed or unresponsive apps cost enterprises bundles of cash. More than half of respondents reported that it costs them hundreds of thousands of dollars a year (22 percent reported the costs in the millions of dollars and 7 percent said it cost them tens of millions of dollars or more).

“They have to get a grip on what the heck’s out there and consuming resources,” Newsom says. “There’s definitely a management challenge there.”

Doing so in a meaningful way requires visibility into your applications—who’s using them, how they’re being used and what resources they consume. Newsom points to one automobile manufacturer which spent years developing a new lending application for its dealers. But the day the app went into live production, it slowly ground to a halt (though it didn’t crash). The app was unusable and the IT team couldn’t figure out why.

“They spent months trying to figure it out,” Newsom says, noting that the manufacturer brought in consultants and platform vendors to help and deployed numerous upgrades and patches.

After five months, the manufacturer turned to an application performance management (APM) solution, which identified the problem within two hours: Users were exiting the application in a way the developers hadn’t anticipated, causing a severe memory leak.

Strategies for Rationalizing Your Application Portfolio

Combating application sprawl requires a strategy that allows you to maintain a healthy, continuously rationalized application portfolio. Capgemini recommends seven steps you can take:

1. Build maintainable applications. Increasing collaboration between the groups involved in application design, development and maintenance will allow you to build applications that are easy to maintain, and give IT the opportunity to streamline operations, reduce costs and achieve greater agility. Capgemini points to Cummins, a manufacturer of engines and related technologies. Cummins’ IT has divided responsibilities for application development into layers. The first consists of business users paired with business analysts and functional architects who understand the requirements and structure of applications. They hand the application design off to a second team, the hardware architecture team, which ensures Cummins has the right enterprise architecture to support the application. The hardware architecture team then hands the design to the Application Development and Support Centers for each major application area, which has responsibility for development of support of those systems. The Standards and Processes Group controls ways to manage development and deployment (essentially a functional excellence team), developing the tools needed to run Application Development and Support Centers. Finally, the next level of IT supports and maintains the application infrastructure and backs up application data.
2. Implement portfolio governance strategies. A clear governance strategy is a requirement for accurately prioritizing IT demand and keeping IT aligned with business needs. Putting in place portfolio governance practices and tools gives you the ability to review each IT project for a good fit within the overall enterprise architecture.
3. Seek greater alignment with the business. The business initiates most application development projects, not IT, according to Capgemini. This means that IT needs to foster a true “fusion” of business and IT—one that starts with ensuring alignment between business users and the teams that develop and support the applications, but then goes further by allowing IT to become a catalyst and driver for innovation through its increased understanding of the business.
4. Overcome resistance to change. Users often resist adopting new applications. They’re often comfortable with older applications, even if they’re inefficient. It’s not enough to simply build an app. You need users to embrace it. To overcome this resistance, involve business stakeholders when designing the application strategy and ensure that every step of the process—development, phased implementation, introduction and learning—is closely monitored and aligned.
5. Gain visibility. Before making changes or embarking on a new product, you need to use analysis and metrics to understand the interrelationships between applications and their dependencies. Automated discovery and relationship mapping tools can help you identify and map the relationships between applications and the underlying infrastructure. APM tools can help you understand who’s using your applications, how they’re using them and what resources they consume. Context is essential. How many users an application has is often far less significant than understanding the business criticality of each specific system and how the application affects the company’s revenue.
6. Outsource the solution, not the problem. Capgemini notes that 74 percent of all application portfolios are partially or fully outsourced, but outsourcing may create more problems than it fixes unless you’ve rationalized your portfolio first. Maintaining complex IT systems often requires specialized, local knowledge contained within the company, making the learning curve steep. As a result, Capgemini says, your costs could go up despite the fact that the outsourcing provider is benefiting from economies of scale and optimizing the use of resources. To avoid that outcome, rationalization must be an integral part of the engagement.
7. Apply a true lifecycle approach to applications and data. If an application is no longer used to support a current business process and its data is no longer growing significantly, it should be retired and its data archived. Doing so will lower energy bills, reduce footprint and free up engineers to focus on developing new, innovative IT systems rather than maintaining outdated ones.

Thor Olavsrud covers IT Security, Big Data, Open Source, Microsoft Tools and Servers for CIO.com. Follow Thor on Twitter @ThorOlavsrud. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Thor at tolavsrud@cio.com