Delivering a Streamlined and Optimised Toolset in IT and Operations Rationalisation: A Strategic Approach

In the last 2-3 years, IT and operations rationalisation has become a critical strategy for organisations looking to optimise efficiency, reduce costs, and align their technological infrastructure with overarching business objectives. This agenda has increased even further to manage the complexity of disparate, often redundant, systems and tools. This has driven many organisations to take a more streamlined approach, focusing on rationalising their technology stacks while ensuring that the selected tools deliver maximum value.

One of the most effective approaches for achieving this is through a structured toolset rationalisation process. This process can help businesses eliminate inefficiencies, optimise their IT portfolios, and enable greater operational agility. This article explores some key considerations, strategic frameworks, and lessons learned (based on personal experience) when delivering a streamlined and optimised toolset as part of a comprehensive rationalisation initiative.

Strategic Framework for Toolset Rationalisation

A robust and methodical approach to rationalising IT and operational tools is vital to success. One such framework is the six-step application rationalisation framework, which provides a strategic foundation for IT functions to ensure that rationalisation efforts are aligned with broader business objectives.

This framework is composed of six key steps:

1. Assess Organisational Needs and Preparedness

The first step in the rationalisation process is conducting a portfolio assessment to identify the applications that need to be reviewed. This involves creating an inventory of all tools and technologies currently in use, along with their functionalities, owners, and integration points.

Understanding the organisation’s needs and preparedness for change is crucial to this step. By engaging business stakeholders early, IT leaders can ensure that the application portfolio is accurately assessed and aligned with organisational goals. A comprehensive assessment also identifies legacy systems that may hinder innovation or drain resources, allowing the business to prioritise development spending where it generates the most value.

One challenge that often arises at this stage is organisational pushback. Rationalising toolsets can lead to resistance, particularly when stakeholders perceive that maintaining existing systems is more critical to "keeping the lights on" (KTLO) than investing in new technologies. To overcome this, it is essential to communicate how rationalisation supports broader business growth while ensuring that IT budgets align with organisational objectives.

2. Consolidate Application Inventory

Once organisational needs have been assessed, the next step is consolidating the application inventory. This involves documenting all existing applications and tools, identifying which are critical to operations, and determining which are redundant or underutilised.

Launching a questionnaire to collect data from critical stakeholders helps capture valuable insights into the tools’ effectiveness and user experiences. By gathering this feedback, IT leaders can make more informed decisions about which tools to retain, consolidate, or eliminate. Validation of the collected data is also critical to ensure that any subsequent rationalisation efforts are built on accurate and reliable information.

A well-executed consolidation step enables businesses to streamline their technology portfolios and eliminate unnecessary complexity, saving time and money.

3. Assess Business Value and Technical Compatibility

The next logical step in the rationalisation process is to assess each application's business value and technical compatibility. This step evaluates how well an application supports or enhances existing business processes, focusing on automation and efficiency.

For example, a tool that automates a previously manual process could be considered high in business value. Conversely, applications that no longer align with the company’s strategic direction or require outdated infrastructure may be targeted for decommissioning. Additionally, organisations should consider how well each application integrates with their overall IT architecture and whether it supports future initiatives such as cloud adoption.

As organisations modernise, IT stakeholders often aim to expand their cloud footprint through Infrastructure as a Service (IaaS) or Software as a Service (SaaS). However, moving to the cloud requires careful consideration of each application's dependencies and security risks, ensuring that the transition does not compromise data integrity or create vulnerabilities.

4. Determine the Total Cost of Ownership (TCO)

Determining the total cost of ownership (TCO) is a critical aspect of toolset rationalisation. This involves calculating the total cost of each application, including licensing fees, infrastructure requirements, maintenance, and operational expenses.

To do this effectively, organisations must assess the current state of their TCO processes and identify cost outliers—applications that are disproportionately expensive relative to the value they deliver. By conducting regular TCO analyses, businesses can make data-driven decisions about where to allocate resources, ensuring that investments are directed toward applications that provide the greatest return.

5. Score Applications for Business Value

Scoring applications based on business value and technical performance provides a clear framework for determining which tools should be prioritised for retention or decommissioning. This step helps IT leaders focus on high-value applications that support business growth while identifying lower-value tools that may be candidates for retirement.

A reliable scoring framework should assess each application’s ability to streamline processes, improve efficiency, and deliver a positive user experience. Engaging with application owners and users throughout this process can help ensure that the organisation’s most critical needs are met and that any potential issues with existing tools are addressed.

6. Build a Migration and Change Management Strategy

The final step in the rationalisation framework is to build a comprehensive migration and change management strategy. Rationalising a toolset often requires significant changes to workflows, infrastructure, and employee roles, making it essential to manage the transition carefully.

IT and operations teams should develop detailed migration plans that outline how each tool will be transitioned or decommissioned while providing employees with the necessary training and support to adopt new tools. This approach minimises disruption and ensures the rationalisation initiative delivers the intended benefits.

Key Considerations and Lessons Learned

Several important considerations must be addressed throughout the toolset rationalisation process:

1. IT Asset Management (ITAM): ITAM plays a crucial role in rationalisation by providing visibility into how tools and systems are used. Organisations can make informed decisions about which tools to keep, eliminate, or replace by tracking usage and performance metrics. Following best practices in ITAM can significantly improve the efficiency of the rationalisation process and ensure that the right tools are in place to meet business objectives.
2. User Adoption: One of the most common challenges in rationalisation is achieving widespread user adoption of new tools. Early engagement with end-users is key to ensuring they feel invested in the process and willing to embrace the changes. Comprehensive training, clear communication, and ongoing support can help facilitate this transition and reduce resistance.
3. Flexibility and Future-Proofing: While rationalisation seeks to reduce complexity, it should not sacrifice flexibility. Organisations must ensure that the selected tools adapt to future needs and support long-term growth. Investing in scalable, cloud-based solutions can enable greater agility and help businesses respond to changing market conditions.
4. Executive Sponsorship: Toolset rationalisation requires strong leadership from the top. Executive sponsorship ensures that the initiative is prioritised across the organisation and that any challenges are addressed swiftly. Without active involvement from senior leadership, rationalisation efforts may struggle to gain traction.
5. Continuous Improvement: Even after rationalisation is complete, the work doesn’t stop. Organisations should continuously monitor the performance of their toolsets and make adjustments as needed to ensure ongoing alignment with business goals. Regular reviews of TCO, usage metrics, and user feedback can help identify areas for further optimisation.

Lessons Learned from Toolset Rationalisation Initiatives

1. Don’t Undervalue User Adoption: One of the most common challenges in toolset rationalisation is achieving widespread user adoption. No matter how powerful or efficient the new tools are, their effectiveness will be limited if employees refrain from using them. It is crucial to involve end-users early in the process, solicit their input, and provide comprehensive training and support.

2. Keep Flexibility in Focus: Businesses and their toolsets evolve. While rationalisation seeks to reduce complexity, it should not sacrifice flexibility. Ensure that the selected tools are adaptable to future needs and market changes. Choosing modular or scalable systems allows for continued optimisation as the business grows.

3. Ensure Executive Sponsorship: Toolset rationalisation requires strong leadership and sponsorship from the top. Executives must actively champion the initiative and communicate its rationale, ensuring it is viewed as a strategic priority rather than an operational exercise. Their involvement can also help resolve conflicts between departments or teams with varying technology preferences.

4. Maintain a Future-Forward Vision: While it can be tempting to focus solely on immediate cost savings when rationalising tools, a more balanced view is required. While cost optimisation is important, organisations should prioritise tools that position them for long-term success by enabling innovation, improving collaboration, and enhancing customer experiences.

5. Invest in Monitoring and Continuous Improvement: The work is ongoing even after rationalisation. Organisations must continually monitor their toolset’s performance to ensure it continues to meet evolving business needs. Regular reviews and adjustments allow companies to fine-tune their technology stack and improve further.

Final takeaway

Delivering a streamlined and optimised toolset through IT and operations rationalisation is a strategic initiative that can drive significant improvements in efficiency, cost savings, and alignment with business objectives. By following a structured framework, engaging stakeholders, and maintaining a future-forward vision, organisations can rationalise their toolsets and position themselves for sustained success. Ultimately, the goal is to eliminate tools and create a more integrated, flexible, and high-performing IT environment that supports long-term growth.