Rationalisation made easy

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“Technology rationalisation aims to streamline the IT that is deployed.” - Hinal Patel, partner, Head of Technology Sourcing, Middle East, South Asia and Africa

Technology Rationalisation means that IT departments can save enterprises a significant amount of money. DLA Piper Middle East’s Hinal Patel, Kelly Tymburski and Paul Allen explain how IT professionals can go about putting rationalisation into practice.

Following years of buoyant if not booming trading conditions, IT spends were trending upwards to support growth and expansion of organisations. Now, many businesses are being forced to become more efficient and lower their IT capital and operating expenditures in line with what are arguably the fiercest trading conditions since the dot.com bubble burst in the early 2000s. With this switch in emphasis from growth and expansion to efficiency and cost reduction, technology rationalisation is one technique which IT departments can adopt to help.

What is Technology Rationalisation exactly?

Put simply, technology rationalisation aims to streamline the IT that is deployed to support the organisation. Implemented properly, this technique can be an effective tool to realise efficiencies and reduce IT spend by removing under-utilised, support-heavy or unnecessary IT applications, infrastructure and services. On the other hand, if this technique is implemented poorly, an organisation could be exposed to legal, commercial and operational risks which have the potential to eradicate the efficiencies or cost savings that the organisation was striving for in the first place.

The question being asked by many IT managers and CIO’s though is whether technology rationalisation is right for their organisation. Many organisations will benefit from a properly implemented technology rationalisation program.

There is a very strong chance that technology rationalisation will bring about meaningful benefits for an organisation where it has predicted or is undergoing a reduction in headcount; been overly enthusiastic in its adoption of new technologies; set about establishing a shared services centre; undergone a merger, acquisition or some other form of corporate reorganisation; or decided to move from a decentralised IT procurement function to a centralised one.

In any one of the above circumstances, it is likely that there will be superfluous technology in that organisation which could be ‘rationalised’ or that supplier arrangements may be modified to deliver efficiencies or cost savings.

Examples of this can be where an organisation has suffered a drop in headcount, it may be that user-based software licences, desktop computers and network capacity requirements can be scaled-back. Depending on the contracts the organisation has in place with its vendors or service providers, the fees associated with superfluous technology can be targeted for removal.

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