Since the spring of 2000, most IT organizations have taken every opportunity to reduce costs to bolster the bottom line as much as possible.

That sharp focus on operating a lean IT organization meant that companies had to trim costs from project work. In turn, they consolidated facilities and platforms. And, as many technology professionals learned the hard way, it meant eliminating IT jobs, especially developers. Of course, along the way, the IT organization sacrificed flexibility and scalability. Moreover, in many cases, instead of getting rid of applications to keep costs down, companies simply shuffled them around the organization. In the process, they limited their ability to develop new applications or extend existing ones to accommodate new business needs that arise. With the economy improving, those business needs are indeed arising, and many organizations are unable to answer the call.

For example, today, companies that slashed IT budgets and staff aggressively spend most of their IT dollars maintaining existing applications, at the expense of new development. A common maintenance/development ratio several years ago was 60 percent/40 percent. Today, 80/20 is more commonplace, and 95/5 is not unheard of. These ratios are way out of balance for companies that must "swarm" with quickness and agility in response to opportunities.

As business increases, executives are discovering that it is time to re-optimize the IT shop. The first step in that comprehensive effort is a thorough portfolio assessment, in which they review their applications and determine how to most effectively and efficiently support the business. From this effort, companies must determine where to integrate, consolidate and eliminate applications, as appropriate, to meet current business requirements and free up capacity to address coming ones.

A comprehensive evaluation of IT capabilities and assets helps an organization:

• Leverage its existing technology assets more effectively
• Understand its IT shortcomings with respect to their ability to meet business demands
• Determine which applications to keep, and which to eliminate to create room for growth.

A portfolio assessment clearly illustrates a company's ability to meet business needs, and shows which applications are extraneous, and which add little value and are thus not worth the cost of ownership. In most cases, an IT assessment will indicate that companies should strike a more sensible balance between maintenance and development, so agility lost in cost reduction mode can be recovered as business picks up.

Assessments also frequently indicate that as IT organizations contracted, the number of platforms they supported did not contract along with them. In fact, numerous IT shops support mainframes, UNIX servers, Linux operating systems, and other products that are often spread all over a variety of infrastructures. Fixing this inefficiency also requires investment. However, reining in and integrating disparate systems goes a long way toward ensuring company's ability to excel in a vibrant marketplace.

Additionally, it is beneficial to consider new market approaches, such as Business Process Management. These provide companies with ways to use existing applications more effectively. However, to exploit so-called "new age leverage models," organizations must first rationalize their applications to ensure they feature the best possible components.

Furthermore, application assessments are not risk-free. For instance, if a company decommissions a certain capability, it may alienate a population of users. As such, executives must weigh the pros and cons of decisions to consolidate, rationalize, retire or otherwise alter an application.

Lastly, while rationalizing the IT portfolio, executives must also now consider external applications available through Web Services. Although these frequently add complexity-a problem for a maintenance-focused IT shop-they also provide significant opportunities to enhance the business.

Enabling the business to take advantage of opportunities as soon as they arise is the mark of a successful IT organization. As opportunities become more abundant, this ability becomes more critical. An IT portfolio assessment is a good way to make sure that your organization is prepared to pounce when occasion present themselves.

John Williams leads Collaborative Consulting's service offerings, and helps define the company's national practice. He maintains a special focus on data management, an area in which he has nearly two decades of relevant experience. In fact, John has spent a large portion of his career helping high-profile companies rein in data and use it to create immediate, long-term business advantage. John has extensive systems development and integration experience, and is expert in data management, data warehousing, database design and architecture. Write to him at: jwilliams@collaborative.ws