When I moved into my current house, I thought there was no way I'd ever fill up all the space. But one thing I quickly learned was the amount of stuff one collects seems to accumulate in direct proportion to the space one has available for it.
This principle applies to insurers' collections of systems, as well. Over time, carriers build and buy more applications to do different–or even similar–things until data centers are bursting at the seams and system diagrams look like a ball of string that a dozen cats played with. Controlling the chaos is the overriding goal of portfolio rationalization.
"Today, there is more traction for doing a thorough portfolio analysis beyond simply identifying what applications you have," says Rodney Nelsestuen, a senior analyst in TowerGroup's financial strategies and IT investments cross-industry practice. Rationalization also is intertwined with other concurrent initiatives, such as IT governance and enterprise architecture.
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