How Agile Application Portfolio Rationalization Delivers Digital Success

How Agile
Application
Portfolio
Rationalization
Delivers Digital
Success
Frequent tweaks based on user
feedback can help IT provide the
right mix of applications with the
least delay and cost to advance
business objectives.
Executive Summary
The effective use of digital typically requires orga-
nizations to revamp, if not update, applications
and apply data in new ways to grow revenue, cut
costs and speed the delivery of new products and
services. Existing application portfolios are often
unable to keep pace with the dynamism of today’s
digital economy because they are too complex,
rigid and bloated with unused or underused apps.
The answer: Application portfolio rationalization
(APR) that assesses and adjusts a business’s
application mix to meet its changing needs more
quickly and flexibly. Done right, APR consolidates
unneeded applications, dramatically reduces the
time required to deliver new products and ser-
vices, taps the lower cost and scalability of the
cloud, standardizes processes for efficiency and
compliance, and frees funds for innovation.
This white paper explains how an agile, iterative
approach to APR avoids the pitfalls that sink many
traditional APR efforts. By involving all the right
stakeholders more deeply at each step, agile APR
quickly delivers a mix of applications that more
closely meets a business’s digital needs, and that
its employees are more likely to use.
Cognizant 20-20 Insights | October 2018
COGNIZANT 20-20 INSIGHTS

Cognizant 20-20 Insights
How Agile Application Portfolio Rationalization Delivers Digital Success | 2
HOW APR HELPS ENABLE
DIGITAL BUSINESS
To succeed in the digital age, organizations must
reassess their applications and infrastructure
in the face of ever-faster and less predictable
changes in business dynamics, technology, cus-
tomer needs and regulations. This flies in the
face of stiff headwinds, which include tighter
profit margins, rising competition and compli-
ance with increasingly steep requirements to
protect customer data.
In the coming months and years, the pivot to
full-on digital will also require organizations to:
• Perform more complex and real-time anal-
ysis of data from both legacy systems and
newer sources such as social media and the
Internet of Things (IoT). The companies with
the best insights into their operations and the
needs of their customers will not only maxi-
mize revenue and profits from their existing
businesses but will be first to create markets
for new products and services which they
can dominate.
• Allow enterprise applications, services and
products to derive insights from, and pro-
vide data and services to, devices ranging
from smartphones to wearables to sensors
on the IoT. This can facilitate additional
revenue streams from new products and ser-
vices, as well as from (where appropriate) the
sale of data about customers, products and
market trends.
• Quickly and easily migrate applications and
data among on-premises and cloud-based
platforms to speed the delivery of products
and services, as well as to meet performance,
cost, compliance and other objectives.
Complex, inflexible application portfolios weighed
down by applications that no longer meet the
business’s needs can delay or even prevent digi-
tal progress by locking up to 80% of IT budgets
into the maintenance of such applications. A
portfolio that contains too many applications
that serve similar purposes across geographies or
business units also makes it harder to standard-
ize processes for greater efficiency, compliance,
security and customer service.
As it eliminates or consolidates applications, APR
frees money now spent on maintenance for more
innovative growth opportunities. By moving
applications to more scalable and cost-effective
platforms such as cloud, rationalization makes
it easier for the organization to deploy new appli-
cations to exploit growth opportunities and to
handle rising transaction levels.
Complex, inflexible application portfolios
weighed down by applications that no longer
meet the business’s needs can delay or even
prevent digital progress by locking up to 80%
of IT budgets into the maintenance of such
applications.

APR aligns a business’s applications and infra-
structure with its digital needs, and helps it
assess its digital readiness, through a structured
set of processes:
• Identifying business objectives such as rev-
enue growth, increased efficiency, reduced
complexity, lower costs and improved security
and compliance.
• Inventorying existing applications and
infrastructure (both customer-facing and
those that support internal processes) to
understand their intended use, how well they
meet digital business needs, and which are
unused or underused.
• Performing a weighted assessment of
the business value, technical value and
cost of each application and its associated
infrastructure.
• Creating a detailed plan for retaining, retir-
ing, or reengineering applications to reduce
the number of legacy or obsolete applications,
and creating a new portfolio of applications
that are flexible, agile and open enough to
meet even unpredictable future needs.
• Helping organizations identify critical
business processes that could be digitized
and mapping current applications to these
processes.
• Identifying interfaces that span multiple
business processes.
• Determining the complexity of each process
area.
• Confirming that the digital blueprint aligns
with the overall business environment.
• Gathering input from customers and end
users to help prioritize digital initiatives.
In our view, however, too many APR initiatives
fail. This leaves enterprises paying for more
applications than they need and saddled with
slow, inefficient and rigid processes that reduce
efficiency and make it harder for them to
innovate.
The answer: Applying agile, iterative principles
to APR to create a flexible, robust, optimized
application portfolio more quickly and at lower
cost than traditional methods. By giving users a
greater voice and stake throughout the process,
By giving users a greater voice and
stake throughout the process, agile
APR requires fewer iterations and
delivers a better and faster match
between applications, infrastructure
and a business’s needs.

agile APR requires fewer iterations and delivers
a better and faster match between applications,
infrastructure and a business’s needs. Giving
users a bigger say in the process also makes it
more likely they will use the revised application
portfolio to drive the digital change the organi-
zation needs and thus deliver a greater ROI from
the APR process. All this gives an organization
the ability to discover and meet new market
needs before its competitors.
FIVE WAYS APR FAILS
Successful APR requires change, not only in
applications but in how human beings and orga-
nizations work in the real world. Many APR
efforts flounder because they fail to take such
complexities into account.
Five common “worst APR practices” we have
found are:
1. A top-down down focus that, because it
lacks sufficient input from front-line man-
agers with the best views of the business,
fails to reflect emerging digital needs.
Users who believe the focus of an APR effort
is on eliminating applications often fear this
will endanger their jobs, force them to learn
new systems or make it harder to meet their
key performance indicators. As a result, they
often try to protect old, inefficient applica-
tions by giving them higher scores than they
deserve during the APR assessment. This lack
of accurate user feedback and involvement
also makes it less likely they will use the new
mix of applications, which reduces the bene-
fits of the APR effort.
How APR Advances the Digital Agenda
Digital Requirement How APR Can Help
Collect and analyze more and different types
of data to improve business processes, better
understand customer needs, and provide new
digital products and services.
Clarifies the company’s requirements for data,
and for platforms that allow cost-effective, forward-
looking analysis of such data, through a detailed
roadmap for rationalizing and enhancing data flows
among applications and analytic platforms.
Provide bidirectional sharing of data and
services with an ever-expanding range of
devices, including wearables, IoT sensors,
autonomous devices such as automobiles
and intelligent agents such as price-
comparison bots.
Clarifies the requirements for an architecture
that spans new and existing applications and
enables the associated data flows.
Flexibly and dynamically move applications
and data to public and hybrid clouds to
meet cost, performance, security and other
requirements.
Creates a process to periodically identify
applications that are best suited for the cloud
and whose architecture makes such a
migration feasible.
Figure 1

2. Focusing on cost without enough empha-
sis on overall business impacts. Too many
organizations approach APR only as an
opportunity to reduce their total cost of appli-
cation ownership. As a result, they may fail to
meet business-critical needs such as security
and compliance, or (even more important)
to develop more flexible architectures that
enable them to grow by meeting unpredict-
able digital challenges and opportunities.
3. Rigid, inflexible inventory and evaluation
methodologies that do not accurately
assess each organization’s unique needs.
Even when APR templates and models are
customized for a specific industry, the ques-
tions and assessment criteria are often not
detailed and granular enough to capture the
needs of users in a specific company. Nor do
they identify the hidden inefficiencies unique
to that organization that raise costs and make
it harder to meet the needs of the digital
marketplace.
4. Siloed upgrades that delay the APR pro-
cess and raise long-term costs. In an
attempt to cut short-term spending, many
organizations upgrade only those systems
that cause the most obvious and pressing
problems, such as an inefficient or outdated
manufacturing execution system. Such one-
off upgrades are often difficult to integrate
with other legacy systems such as ERP plat-
forms, which slows implementation, increases
long-term costs and reduces efficiency. They
can also delay the productivity and cost bene-
fits of mergers and acquisitions because they
do not consolidate all the resulting redundant
or overlapping applications.
5. The lack of an implementation plan. Ratio-
nalizing a complex portfolio requires choosing
and deploying new applications, training
employees on them, reconfiguring business
processes, integrating new applications with
legacy systems, negotiating contracts with
new vendors and assessing whether to site
new systems on-premises or in the cloud.
In an attempt to cut short-term spending, many
organizations upgrade only those systems
that cause the most obvious and pressing
problems, such as an inefficient or outdated
manufacturing execution system. Such one-off
upgrades are often difficult to integrate with
other legacy systems such as ERP platforms,
which slows implementation, increases long-
term costs and reduces efficiency.

Many organizations fail to take this into
account in planning an APR effort. Others fail
to implement the recommendations of an APR
plan if they already meet current production
and revenue goals. This imposes an ongoing,
hidden tax in the form of inefficient, manual
processes as well as lost growth opportuni-
ties because the organization cannot quickly
adapt to new digital needs.
EIGHT BEST PRACTICES FOR
AGILE APR
Like DevOps in the application development
world, agile APR taps the power of user input —
and frequent changes based on that input — to
enable digital to take hold more efficiently and
effectively. We recommend the following best
practices for achieving the maximum benefit
from agile APR.
1. Gather accurate user data. Engage users
and other stakeholders more completely and
consistently to generate more accurate data
about how they use their current applications,
the quality of those applications and emerg-
ing digital requirements. Freeze the templates
that capture functional, technical and cost
data about applications only after completing
discussions with stakeholders and workshops
that train users in how to gather the required
data. Quickly customize templates and
models based on user feedback to assure
they reflect the features and functions users
need the most. This iterative improvement of
the data collection process helps assure that
the new application mix meets the needs of
the business and will be used.
2. Find hidden needs. Consider conducting
on-site research at customers’ offices to iden-
tify and meet their hidden human needs. This
approach — which we call Insight to Code (see
“Digital Engineering: Combining Computer
Science with Social Science to Translate
Human Needs into Precise Code” for more
detail) — goes further than conventional focus
groups and interviews to gain insights into
user needs and incorporate them into new
solutions. Such interactions help improve the
APR process by identifying new user needs
and data flows which the new, rationalized
portfolio will need to support. This, in turn,
increases end-user satisfaction and retention
and produces incremental revenue.
Identifying those applications and
making higher availability for
them a priority in the APR process
would help assure the new portfolio
drives higher productivity and user
satisfaction.

Such research might show, for example, that
users were annoyed by frequent application
downtime due to unplanned maintenance
during working hours. Identifying those appli-
cations and making higher availability for
them a priority in the APR process would help
assure the new portfolio drives higher pro-
ductivity and user satisfaction.
3. Vet the data. Be sure department heads
communicate the critical drivers of the APR
exercise to all users to ensure the timely
collection of accurate data. To avoid similar
and biased answers from a lead that handles
multiple applications, establish a team from
multiple business units to define metrics
based on application/platform cost, value
and available data. Validate users’ answers to
eliminate “fudged” answers aimed at protect-
ing their current applications. After an initial
check to identify issues such as format dis-
crepancies, missing data and manual errors,
a mathematical model can check for inconsis-
tencies such as a user ranking an application
poorly on most of the individual criteria such
as “user-friendliness” or “quality of reports”
but still ranking the overall application highly.
4. Look beyond features and functions. To
better focus APR on the organization’s IT
and business needs, proactively identify and
address governance, regulatory or security
issues that could delay the APR effort. A
compliance gap, for example, would occur if
an application that handles customer data
from the European Union fails to meet the
requirements of the General Data Protection
Regulation (GDPR). A security assessment
would include, for example, how well an
application’s level of security aligns with its
importance to the business, how vulnerable it
is to attack and the number of threats it has
faced in the past.
5. Clarify business goals. Create clear, quan-
tifiable measurement criteria and key
performance indicators, as well as a cost/
benefit analysis, to help effectively communi-
cate the need for (and benefits of) APR and
generate the needed support.
6. Be flexible. After receiving feedback from
users on their application requirements, reca-
librate the model based on the value of the
functional, technical and cost aspects for
each business unit, as well as for the subdi-
mensions within each category. This allows
organizations to assign different priorities
for various parameters, such as a bank giving
more weight to security than to ease of use.
A security assessment would include, for
example, how well an application’s level of
security aligns with its importance to the
business, how vulnerable it is to attack and the
number of threats it has faced in the past.

7. See the big picture. Take a comprehensive
architectural approach, with up-front assess-
ments of the expected effort required to
implement the portfolio rationalization. By
understanding the scope of work up-front,
business managers can budget for an over-
all rationalization plan, thus avoiding siloed
upgrades and easing the application and data
integration effort.
8. Follow through comprehensively. Prepare
and execute a detailed plan to apply the APR
recommendations for applications to retire,
consolidate and upgrade. This includes, for
example, training end users and familiarizing
them with the changes implemented in the
portfolio to assure the maximum use of the
new, rationalized portfolio. It also may include
renegotiating maintenance and support
contracts to ensure the organization is not
paying unneeded support costs and is getting
the best support for its investment and for
deciding which applications to host in-house
and which in the cloud. A phased implementa-
tion delivers the initial benefits most quickly
to drive continued support from users and
business leaders.
AGILE APR FOR DIGITAL
SUCCESS
APR is seemingly straightforward: Assess an
organization’s existing applications and infra-
structure and modify them to better meet its
needs at the lowest possible cost. But getting
APR right requires meeting a complex blend of
technical, business and cultural challenges. In the
digital age, it must also provide the flexibility to
quickly and easily upgrade applications and infra-
structure to meet unpredictable technical and
business needs (see Quick Take, page 10).
A successful APR effort also relies on getting
accurate answers about application value from
front-line business users, gathering a detailed
enough picture of an organization’s specific busi-
ness needs, and then providing a roadmap so the
rationalization is implemented and the optimized
applications are used. (see Figure 2).
A truly agile and iterative APR program meets
these goals, giving the enterprise the tools and
flexible architecture to grow by meeting today’s,
and tomorrow’s, digital needs more quickly and
at lower cost than its competitors.

IDENTIFY
THE GOAL
INVENTORY EXISTING
APPLICATIONS
ASSESS BUSINESS
VALUE AND COST
MAP THE
DESIRED
PORTFOLIO
IMPLEMENT
THE CHANGES
Identify business
goals such as
reduced cost,
improved efficiency
and compliance.
TO BE AGILE:
Use a human-centric
approach to understand
future business needs,
such as data sharing
with wearables and the
Internet of Things.
Identify which
applications to
retain, retire or
reengineer.
TO BE AGILE:
Ensure the under-
lying infrastructure
meets organizational
needs such as cloud
computing, and digital
requirements such as
Big Data analytics and
rapid application
delivery.
Sweat details such
as renegotiating
vendor contracts,
reconfiguring
processes and
retraining users.
TO BE AGILE:
Identify costs and benefits early to assure
funding and to plan more efficiently for a
step-by-step implementation. Feedback from
stakeholders after each phase improves
planning for the next. Early visibility into
costs and benefits also helps avoid siloed
upgrades that delay the full benefits of APR.
Define dimensions
along which apps
will be scored.
TO BE AGILE:
Identify broader business
and technical objectives,
with a deep dive into each
objective to understand
every issue of importance
to each stakeholder.
Identify functional
objectives of each
application, how they
are used and redundant
applications.
TO BE AGILE:
Continually refine
assessment metrics
based on user feedback
and ensure quality data is
being captured.
How Agile APR Speeds Digital Change
Figure 2

QUICK TAKE
APR Drives Savings for
Pharmaceuticals Giant
A Fortune 500 pharmaceuticals giant turned to us for help streamlining
more than 600 applications across six business units, supporting functions
such as finance, human resources, operations and security.
We worked closely with end users and business partners from multiple
departments to understand the application landscape, developing a cus-
tomizable solution to evaluate application systems from both business and
technical standpoints. Our work resulted in a short-term plan for reducing
maintenance costs and a long-term roadmap for streamlining the portfolio
to better meet the organization’s future needs.
Among other benefits, our recommendations are expected to deliver:
• A 5% decline in software maintenance and support costs by identifying
and eliminating low-value and underused applications.
• A 15% reduction in application bloat.
• More than $750,000 in savings in the overall cost of applications, in part
by identifying applications that no longer need the highest, and most
expensive, levels of vendor support.

Saurabh Patel
Senior Consultant, Cognizant
Consulting
Praveen Kumar
Narayanan
Consultant, Cognizant
Consulting
Rohan Sharma
Consultant, Cognizant
Consulting
Saurabh Patel is a Senior Consultant within Cognizant Consulting.
He has spent the last six years working in the life sciences, manu-
facturing and supply chain domains in the area of consulting and
business development. Saurabh specializes in business consult-
ing and analysis, business process mapping gap analysis, COTS
evaluation, portfolio analysis and business development, and he is
a certified Six Sigma green belt. Saurabh holds a bachelor’s degree
in mechanical engineering and an MBA from Indian Institute
of Management, Tiruchirappalli. He can be reached at
Saurabh.Patel@cognizant.com | www.linkedin.com/in/saurabh-pa-
tel-761b2b20.
Praveen Kumar Narayanan is a Consultant within Cognizant Con-
sulting, and has spent the last five-plus years working in information
systems and business consulting. He is a Certified Scrum Product
Owner and Scrum Master. Praveen holds a bachelor’s degree in
electronics and instrumentation engineering from Anna Univer-
sity, India, and an MBA in technology and innovation management
from Iowa State University. His areas of expertise include the
Internet of Things, new product development, application portfolio
analysis, and Agile frameworks and methodologies. Praveen can
be reached at Praveenkumar.Narayanan2@cognizant.com | www.
linkedin.com/in/praveen-kumar-narayanan.
Rohan Sharma is a Consultant within Cognizant Consulting, work-
ing for the past three years in digital technologies, data analytics
and business consulting. His areas of expertise include business
gap assessment, application portfolio analysis and connected
product solutions (IoT). Rohan holds a bachelor’s degree in elec-
tronics and communication engineering from LNM Institute of
Information Technology, Jaipur, and an MBA in international
business from Indian Institute of Foreign Trade, Delhi. He can be
reached at Rohan.Sharma2@cognizant.com | www.linkedin.com/
in/rohan-sharma-9b14b231.
ABOUT THE AUTHORS

World Headquarters
500 Frank W. Burr Blvd.
Teaneck, NJ 07666 USA
Phone: +1 201 801 0233
Fax: +1 201 801 0243
Toll Free: +1 888 937 3277
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD England
Phone: +44 (0) 20 7297 7600
Fax: +44 (0) 20 7121 0102
India Operations Headquarters
#5/535 Old Mahabalipuram Road
Okkiyam Pettai, Thoraipakkam
Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
Fax: +91 (0) 44 4209 6060
© Copyright 2018, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means,electronic, mechan-
ical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other
trademarks mentioned herein are the property of their respective owners.
TL Codex 3855
ABOUT COGNIZANT CONSULTING
Cognizant Consulting combines deep domain expertise with advanced technology thinking to help global 2000 companies worldwide
accelerate their digital journeys. By orchestrating capabilities across strategy, design, IT and industry/functional knowledge, we help
clients solve their toughest business-technology challenges at speed and scale, and lead in today’s dynamic digital age — while planning
for whatever tomorrow brings. We do this by applying a keen understanding of the uniquely human aspirations, behaviors and needs
of our clients’ customers and employees to first envision and specify, and then deliver and extend modern digital solutions
that enable leading players to differentiate and ultimately separate themselves from the competition. Learn more by visiting us at
www.cognizant.com/consulting.
ABOUT COGNIZANT
Cognizant (Nasdaq-100: CTSH) is one of the world’s leading professional services companies, transforming clients’ business, operating and
technology models for the digital era. Our unique industry-based, consultative approach helps clients envision, build and run more innova-
tive and efficient businesses. Headquartered in the U.S., Cognizant is ranked 195 on the Fortune 500 and is consistently listed among the
most admired companies in the world. Learn how Cognizant helps clients lead with digital at www.cognizant.com or follow us @Cognizant.

How Agile Application Portfolio Rationalization Delivers Digital Success

Recommended

More Related Content

What's hot (20)

Similar to How Agile Application Portfolio Rationalization Delivers Digital Success (20)

More from Cognizant (20)

How Agile Application Portfolio Rationalization Delivers Digital Success