Optimizing Your IT Ecosystem Through Application Rationalization

Do you feel like your IT ecosystem is becoming more complex by the day? Legacy systems, SaaS solutions, and custom apps—some overlap, while others collect digital dust. Managing all this is costly (40% of yearly IT operating expenses go to business applications) and simply inefficient. If you’re already facing these issues, now is the time to consider app rationalization.

Application rationalization is a strategy that involves evaluating and eliminating duplicate or underutilized software within your organization. The process does its job — it helps you declutter, reduce costs, and become more efficient.

As a support and modernization services provider, we’ve helped lots of businesses streamline their IT ecosystems. For example, we made our client’s app leaner and faster by cleaning up their code. In this guide, we’ll explain why app rationalization matters and how to assess and optimize your software portfolio.

Highlights:

• Why implement app rationalization? Reduce costs, stay compliant, and make your business more efficient.
• Inventory, data gathering, analysis, action, review — five steps to rationalize your apps.
• How to categorize your apps correctly? Consider ROT (Redundant, Outdated, Trivial).

Why Application Rationalization Matters

Why should you care about application portfolio rationalization in the first place? It’s simple. Keeping outdated, redundant, or unnecessary apps:

• Drains your budget with licensing fees, maintenance, and support for apps you don’t need
• Complicates compliance since it’s difficult to keep track of security and regulations with so many apps
• Makes decision-making harder as you often have to deal with a lot of inaccurate and complex data

Not to mention, shadow IT, software your teams may adopt without official approval. It can increase your spending and introduce security risks that you can easily avoid. Mergers and acquisitions make things even messier, often leaving you with overlapping systems that do the same thing but don’t communicate.

“Companies are starting to realize that a bloated app portfolio is not just expensive, it’s unsustainable. With 70% of M&A-driven IT integrations failing due to poor early-stage planning, businesses can’t afford to ignore the application rationalization framework.”

So, what are the application rationalization benefits? Beyond cost reduction, simplified compliance, and improved decision-making, it’s about ensuring your IT ecosystem is actually helping you reach your business goals.

Application Rationalization in 5 Steps

Step 1: Inventory (1–2 Weeks)

Before making any decisions, you need to take stock of everything — every app, every piece of software used across your organization.

Use automated discovery tools, spreadsheets, and good old-fashioned interviews to identify all the applications. During the process, you’ll likely uncover shadow IT — apps you didn’t even know existed. Make a list of every tool, whether officially approved or not.

Step 2: Data Gathering (2–3 Weeks)

Once you have a list, start gathering data. You need to know how often each app is used, who uses it, how much it costs, and its business value. Usage analytics reports, cost statements, and user surveys may help you with data collection.

Step 3: Analysis (2–4 Weeks)

At this point of the application portfolio rationalization process, you need to analyze your findings. Identify which apps are keepers, which are duplicates, and which are just plain obsolete. Categorize them as ROT — redundant, outdated, trivial. You may also use a scoring system to rate applications depending on their business value.

Step 4: Action (4–12 Weeks)

That’s where the application rationalization methodology brings tangible results. Execute your plan by retiring unnecessary apps, migrating to better alternatives, consolidating redundant software, and modernizing the architectures of the ones you keep.

If interested, you can learn more about the software components in our web app architecture guide.

Step 5: Review (Ongoing)

After you implement the IT rationalization plan, review your current ecosystem. In fact, conduct such reviews regularly. Monitor key metrics to make sure that new redundancies don’t appear and that your software investments are justified.

“Getting stakeholder buy-in is one of the biggest hurdles in the application rationalization process. Teams get attached to their tools, and convincing them to let go of inefficient apps requires clear communication and a well-thought-out strategy.”

Exoft’s Tips for a Successful Application Rationalization

You’ve got the steps and developed the plan, but how to make sure it actually works? Don’t worry, we prepared several tips for a successful applications rationalization strategy.

“What we constantly see is that by optimizing their IT ecosystem, businesses free up resources — both budget and manpower — that can then be reinvested into innovation.”

Here are the best practices we typically apply:

• Start small, scale smart. Don’t try to transform your entire IT ecosystem, especially if your resources are limited. Begin with a manageable scope. For example, focus on the department with the most significant IT spending or the most obvious redundancies. Consider outsourcing some tasks to external providers — learn more in our agile outsourcing guidelines.
• Leverage helpful tools. Use monitoring tools to track real-time application usage and improve visibility into shadow IT. The data you discover will come in handy during your analysis phase.
• Align IT and business. Your IT goals should be directly tied to your business objectives. Don’t rationalize for the sake of rationalizing — rationalize to support your company’s strategic direction.
• Manage apps systematically. System rationalization is not a one-and-done project. Regular audits of your ecosystem should become one of your business automation essentials.
• Invest in employee training. When implementing an app rationalization framework, you may face resistance from employees. And it’s natural as people tend to oppose what they don’t understand. Make sure you provide sufficient training, so your staff can quickly adapt to new processes.

Choosing the Right Partners for Application Rationalization

If you find application rationalization overwhelming, you may consider partnering with dedicated specialists. But how do you make sure you’re working with the right experts? And which criteria to pay attention to? While we’ve shared some helpful tips on managing outsourced team, here’s our checklist for picking a suitable partner for system rationalization:

All in all, a decent partner for IT portfolio optimization must be proficient in both modern and legacy systems — key knowledge to determine your best path forward. Where to look for such specialists? Think about Eastern Europe. In our recent guide, we explain why to hire developers from Ukraine.

Conclusion

As mentioned several times, app rationalization is more than just cutting costs. It’s a way to make your enterprise more agile, efficient, and, ultimately, ready for the future.

If you’re still managing a bloated software stack, now’s the time to take action. Evaluate your current apps — which ones add value, and which ones are just draining resources — and streamline your IT portfolio.