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From 2001 through 2011, Accenture cut global applications by 57 percent, and local applications by 83 percent. This rationalization led to stunning reductions in IT metrics.
The typical global enterprise uses thousands of software applications for tasks from finance and human resources to sales and supply chain management, making these tools indispensable for high-performance business operations. But having too many different applications, or multiple instances of the same application, can quickly become too much of a good thing.
IT shops need specialists with the technical skills to maintain and enhance each application, which is easier said than done when legacy code is often decades old. Costly updates must be made as new releases become available. Uncontrolled proliferation of applications can stress resources and stretch budgets.
Accenture’s experience with application rationalization suggests that the business case for change is compelling, with impressive benefits coming in three key areas:
But how an enterprise goes about transforming its application portfolio is often just as important as deciding which applications to keep.
Accenture is a global management consulting, technology services and outsourcing company, with more than 246,000 people serving clients in approximately 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended August 31, 2011. Its home page is www.accenture.com.
Now a US$25.5 billion global company, Accenture traces its origins back to a collection of decentralized, country-based consulting partnerships that collectively were running more than 600 global applications and 1,500 local applications. In a core business process such as finance, for example, project time and expenses and other data crucial to running the business were dispersed across 50 different applications.
Although Accenture’s IT costs were in line with industry averages, it was difficult to lower those costs, provide more timely information and improve controls when all this disparate financial data could not be integrated efficiently. Accenture’s rapidly growing global enterprise needed to obtain business information more quickly, and to become more proactive in achieving business objectives.
Accenture senior IT executive Dan Kirner describes the challenge that faced Accenture at the time: “If we were going to enable faster and higher quality information at a significantly lower business processing and IT cost point we needed to be on single global applications.”
From 2004 through 2007, Accenture eliminated hundreds of applications through a systematic, rigorous initiative. Three examples dramatize the benefits and challenges of application rationalization.
From 2001 through 2011 Accenture cut global applications by 57 percent—from 600 to 267—and local applications by 83 percent—from 1,500 to 255. This process of rationalization and simplification drove stunning reductions in key IT metrics. At the start of the process, Accenture’s IT costs were generally consistent with industry averages. By the conclusion of the initiative:
Accenture came away from the experience with valuable lessons:
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