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Rationalization

Rationalization is the process of envisioning, planning and executing operational strategies to change a business in order to improve its efficiency and effectiveness. Corporate rationalization is the practice of examining and assessing an organization’s processes in order to reduce costs, increase profits and boost market share.

Product rationalization is a similar strategy, but focused on improving the performance of a company's product and services. Companies may take this approach when they want to update their current offerings, streamline their product families, automate production processes and eliminate redundancies.

Application rationalization is the practice of assessing and reorganizing the primary applications used in an organization for scalability, security, performance and cost savings. This is done by examining applications currently in use, deciding which ones should stay, which should be repurposed or updated and which should be thrown out or replaced.

While rationalization can produce some impressive benefits, there can be some risk associated with it. For instance, focusing too much on cost-cutting or efficiency improvements at the expense of human capital can lead to a lack of motivation or initiative from the workforce, resulting in a lack of innovation or improved performance. Additionally, it can be costly (both in terms of time and money) and provides no guarantee of improved returns.

In summary, rationalization is the the practice of examining, assessing and reorganizing an organization’s operations in order to increase profits and improve efficiency. There are several known forms of rationalization, including product and application rationalization which are specifically targeted at product and service performance. Although rationalization can be beneficial, it must be done carefully in order to avoid any potential negative consequences.

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