Project Portfolio Rationalization

Rationalization is a reorganization of a company in order to increase its efficiency. This reorganization may lead to an expansion or reduction in company size, a change of policy, or an alteration of strategy. Rationalization is necessary for a company to increase revenue, decrease costs and improve its bottom line. Engaging in project rationalization, especially during mergers and acquisitions, helps companies reduce costs, operate more efficiently and focus on supporting deal objectives, legal and regulatory issues, systems and process integration and business continuity. Most businesses accumulate a vast information technology application portfolio over time, especially when companies grow and do not fully integrate operations and assets with each transaction. Many applications do not support the company’s objectives after each merger or acquisition and need revision to support the new business. Examining a company’s application portfolio is important to attain more efficient operations and cost integrations, reducing stranded costs left by a seller and streamlining the portfolio to best serve the business.

Portfolio Rationalization is management of a collection of Projects or Applications to optimize business spend and value returned. Project Rationalization: If a company is not canceling the bottom 20% of projects yearly, then it is not managing its project portfolio effectively. We have techniques to help assess and score these projects so that they are ranked in order of their “true” ROI, clearly identifying the bottom 20%.

See Also

Project Management
Project Portfolio Management