Readers Write: The Multi-Million Dollar Transformation Opportunity Healthcare Loves to Hate: Application Rationalization

The Multi-Million Dollar Transformation Opportunity Healthcare Loves to Hate: Application Rationalization
By Amy Penning

Amy Penning is senior application analyst at CereCore.

Rationalize your applications, they say. It will lead to cost savings, streamline your portfolio, and release resources for innovation and technological advancement.

So why do we groan at the idea of starting an application rationalization effort? Immediate reactions to AppRat, as it is commonly called, are often due to the complexity of the work and lack of employee bandwidth to complete the work thoroughly. AppRat is often deemed a “not now, but maybe later” task that is driven by bigger strategic moves like M&A, cloud migration, and EHR implementations, further complicating these mission imperatives, adding to their timelines, and increasing their cost.

Consider these points about all there is to gain from having full visibility into your application portfolio before, rather than during, another strategic undertaking at your organization.

Application Sprawl is Expensive and Risky

Over time, even the most well-managed IT environments accumulate technical debt. Siloed purchasing, legacy systems, and shadow IT can create a bloated application portfolio that could:

• Drain IT support resources.
• Increase cybersecurity risk.
• Inflate licensing and maintenance costs.
• Complicate integration and data governance.
• Impact patient safety.

Application sprawl quietly erodes operational efficiency and financial flexibility, with the most significant impact observed at small to mid-sized hospital systems. However, application rationalization as a strategic lever introduces efficiencies through the elimination of overspending on resources and duplicated functionality.

Why AppRat Is a Strategic Lever, Not Just Cleanup

Too often, we think of AppRat as a “someday” project, something to tackle after the dust settles from a major initiative. But done right, it can:

• Fund transformation by freeing up capital that is tied to redundant or underused systems.
• Accelerate innovation by simplifying the IT landscape and enabling faster adoption of technology.
• Improve clinician experience by reducing system fragmentation and login fatigue.
• Streamline training and support by setting up your organization with enterprise standards versus siloed applications.
• Strengthen security posture by eliminating outdated or unsupported applications.

AppRat’s Anticipated Impact on Operations

I have led programs that decommissioned as many as 30% of an organization’s applications over five years, resulting in savings of as much as $70M. Given the value of resources that can be redirected to patient care, staff development, and digital innovation, the potential impact of an AppRat initiative is even higher.

Timing Is Everything, But So Is Framing the Purpose and Value of AppRat

Timing matters. No one wants to launch AppRat during a go-live or construction phase. But waiting for the perfect time often means that it never happens. 

Instead, organizations should reframe AppRat as a foundational part of transformation, not a follow-up act. AppRat should be a thoughtful, repeatable process that is embedded in the planning phase of any major initiative, not left for the post-project cleanup crew. 

Use Industry Tools Instead of Devising Your Own AppRat Approach

Leverage the findings and tools of those who have done the work before you. The CIO Council’s The Application Rationalization Playbook is available as a free download. It’s a great starting point to understanding methodology

Final Thought: Rationalization Is Essential

Application rationalization should become a regularly performed assessment of your overall application portfolio. It is never finished, but it is foundational. Start your organization’s next major technology innovation or change with full transparency into your organization’s IT costs and cost of ownership by conducting AppRat before it even starts.