Application consolidation strategies?

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CIO
Consolidation
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Redundancy
Curious how wide spread application redundancy is? I know that, particularly after a number of acquisitions, companies often have app creap, but any advice beyond what Niel Nickolaisen offered in his article? He suggested regularly reminding upper management that dual systems were running, but I'm curious as to if this sort of approach has caused internal conflicts, and if there's more diplomatic ways to phase out redundant systems.

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Hi,

I don’t know that consolidation is about the reduction of identical applications or systems so much as it is about the consolidation of redundant “types” of applications or systems.

Solving this problem is the same problem that people in charge of Mergers are dealing with. In a Merger of two enterprises, you almost immediately run into redundancy of systems or applications but the technologies used to implement the same types of solutions may be very different.

The strategy used by successful Merger professionals is as follows…

1) Itemize and prioritize all unique IT Disciplines. This gives you a linear list of all major functions performed by an enterprise.

2) Associate all Systems or Applications that exist to their correlating IT Discipline. This shows you clear purpose of the Application or System. Also, as you relate each to its correlating IT Discipline, you will be able to clearly identify redundancies.

3) Associate Costs to each System or Application (Delivery Costs, Maintenance Costs, Headcount Costs, etc.). This will allow you to help develop the ROI of consolidation for each Application or System in each IT Discipline area.

4) Develop the ROI for consolidation. This should not only include the Savings but should also include the Investment Cost to Disinvest and a clear Break Even Point.

I hope this helps.

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  • Nspanos
    Redundancy of application functions occurs for various reasons. Acquisitions/mergers are one cause but a more common cause is the failure of IT organizations to retire old applications when they implement new applications or ERP systems. Application Portfolio Management is lacking in many organizations. The redundancy is not obvious because of a lack of Application Inventory tracking. What is the solution? Track application inventories and periodically rationalize the applications to determine their value. Please feel free to contact me at nspanos@aol.com for a white paper on Application Rationalization.
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