Application Bloat Is An Emergency Waiting To Happen
gettyI recently spoke with an IT leader from a large hospital. He described how he had recently renewed an application software contract, only to learn that the hospital’s corporate parent health system had also just purchased a different platform for the same function. The IT leader had no idea the enterprise deal was coming. And now he was stuck with a six-figure annual contract for an IT solution he would likely never even use.
Unfortunately, this disconnect is all too common, where the left hand is not talking to the right hand. These communication gaps, or failure to align applications with business needs, are costing health systems more than they realize. It’s a category of waste that is almost entirely preventable, but avoiding it requires IT and finance leaders to establish a shared view of what the organization owns, what it costs and which systems should remain part of its future. That’s called an application portfolio modernization (APM) analysis.
A thorough APM engagement is different from a simple application inventory. Where an inventory tells you what applications you own, APM goes further, identifying systems that duplicate each other and telling you how much that duplication is costing the organization. It can also recommend which solution should become the standard.
Tools already exist to help business leaders undertake the APM process. Gartner’s TIME framework helps identify which systems are active and determine how much each application costs. It helps business stakeholders create a strategic plan outlining which systems should be Tolerated, Invested, Migrated or Eliminated (TIME).
The financial case for APM is obvious. According to a 2026 survey from The College of Healthcare Information Management Executives (CHIME), an executive organization dedicated to serving digital health leaders, 76% of CIOs say that application rationalization is critical to their application strategies, with more than one-third calling it a major driver of cost savings. Yet only one in five say they have a fully implemented, ongoing program, and 20% of the CIOs surveyed say their organizations have not even started the work.
It’s confounding to me why something so critical keeps falling down the list of priorities, and why IT and finance leaders so rarely come together to aggressively pursue the savings. Perhaps part of the problem is that these expenses are already baked into annual budgets and spread across departments. IT may see the duplication but lack the capacity or authority to retire the systems behind it because the business stakeholders don’t have an enterprise-level alignment of their software portfolio. Finance, meanwhile, may see the spending but not realize how much could be saved if IT and the business aligned on which systems to keep.
Without a shared mandate, those costs roll forward year after year (after year). Each additional merger and acquisition, cloud migration and enterprise application rollout can add another layer of expense when the systems they could replace remain in place. Over time, health systems can accumulate a mountain of technical debt, paying to maintain the past while reducing innovations for the future, or worse, causing unsustainable operating losses.
I think many of us behave similarly in our own lives. If we’re suddenly confronted with an unexpected $5,000 car repair, that becomes an urgent priority. Have you recently reviewed your cell phone app subscriptions or your streaming subscriptions? When our expenses slowly rise over time due to adding streaming subscriptions, unused memberships and rising insurance premiums, we often don’t take much notice. When the extra costs do catch our attention, we tend to procrastinate, pushing reconciliation and consolidation to another, more convenient time that never seems to come.
Application portfolios get bloated in much the same way, though the associated risks and costs accumulate at a much greater scale. Organizations acquire companies, add platforms, replace systems and purchase specialized tools, with new applications always seeming to arrive much faster than old ones get retired.
We need to reframe how we think about the costs of application bloat. Money tied up in redundant systems is money unavailable to retain experienced staff, support patient care or invest in AI and other innovations. CIOs and CFOs need to look beyond whether software spending stays within budget and ask strategically what that spending is costing the organization in people and capabilities.
Think of that IT leader locked into a six-figure annual contract for a system his hospital would never use. Those dollars could help keep a valued employee on the payroll. Multiply that by dozens or hundreds of cases across years of acquisitions, cloud migrations and application replacements, and the consequences become much harder to dismiss.
Ongoing reductions in force (RIFs) across healthcare put that tradeoff into sharper focus. Hospitals and health systems are eliminating jobs as they confront mounting financial pressures. Every position lost represents a person’s livelihood, along with experience and institutional knowledge the organization may struggle to replace.
Application portfolio modernization will not prevent every layoff or fund each new innovation. But eliminating unnecessary recurring costs can certainly reduce the savings leaders need to find elsewhere, including through workforce cuts.
CIOs and CFOs should make application portfolio modernization a shared priority before financial pressures force decisions about staffing. Eliminating redundant systems creates recurring savings that can help preserve jobs and the expertise those employees bring. Before we decide we can no longer afford the people doing essential work, we should ask why we’re still paying for applications that aren’t.
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