Rationalisation made easy

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“Your IT experts will need to carefully manage any transition .” - Paul Allen, senior legal consultant, Technology Media and Commercial Group, Middle East, South Asia and Africa

If an organisation is implementing a shared services centre, its infrastructure needs may be reduced. Again, depending upon the arrangements it has in place with its relevant suppliers, the organisation can look to reduce spend on any leasing, hosting or maintenance services associated with any hardware that is no longer needed.

Finally when compared to decentralised IT operations, centralised IT departments are more likely to have (or there is generally more scope to agree) major procurement contracts which have preferential commercial terms simply due to the volume of business that is likely to be generated under them. Centralising IT operations and outsourcing certain aspects of those operations is a well-trodden path to realising efficiencies or cost savings over the medium to eventual long term.

How can your organisation implement a Technology Rationalisation program?

Like most things in the IT world, ‘one-size fits all’ solutions are rarely as effective as a solution which is tailored to the specific shape, size and needs of the organisation. Having said that, the process described as follows should help any organisation to develop a technology rationalisation program that works for it.

First, prepare a long list of ‘candidates’ for rationalisation, the guiding principle being: what can we get rid of without having a negative effect on the performance or output of the organisation? This is where your IT department’s expertise and knowledge will be critical. Your IT department should be able to identify your organisation’s existing portfolio of infrastructure and applications and associated vendors and service providers, evaluate whether they are necessary for the purpose of meeting current and anticipated needs, and then identify them as ‘candidates’ for rationalisation if they are not.

Second, from that long list, gather together all associated contracts. These will need to be reviewed by legal counsel as well as your commercial or procurement function as part of your decision making process - for this you can see step four to assist in settting this up.

Third, establish a set of criteria and a scoring system which will be used to prepare a short list of candidates for rationalisation. This criteria needs to be derived from your organisation’s needs not only from a technology perspective, but also from a commercial and legal perspective. Criteria includes technology and legality.

Additionally, ‘wider’ issues need to be considered such as the financial stability of the vendor or service provider as well as the relationship between the parties.

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