Author: Jason Rose, CEO, Clearsense

Since attending the inaugural Chief Applications Officer Summit hosted by This Week Health and the 229 Project, one theme has stayed with me. It is one the broader industry needs to hear.

Decommissioning is not a one-time project. It is a standing function.

The Problem Is Structural

Healthcare organizations are exceptionally good at implementing new applications. They are far less disciplined about retiring them.

A new EHR goes live, but the legacy system lingers. A cloud migration begins, but the on-premises environment remains online “just in case.” A new analytics platform is deployed, while its predecessor continues consuming licenses, infrastructure, and staff capacity. Each lingering system adds cost, cybersecurity exposure, and operational burden while diverting resources from the next priority.

The reason is structural, not intentional. No one owns retirement as an enduring operating capability. It gets treated as a one-time project, a cleanup task, something to get to after the next go live. And so, the portfolio grows; the debt compounds, and the integration burden multiplies.

Capacity, Not Capital, Is the Gate

Across health systems with mostly flat-to-growing budgets, the binding friction is not money. It is bandwidth. According to the 229 Signal Index from the Napa Summit, 55% of CIO and CAO leaders report growing budgets, yet 68% name competing priorities as their primary constraint. Even where budgets are growing, internal bandwidth remains the greater constraint.

That is exactly why application rationalization keeps surfacing as the neglected work with no velocity. Not because anyone disagrees with its importance, but because no one owns it as a standing function with real governance behind it. The Signal Index found that technical debt and application rationalization was the single most consistent blind spot named across both CIO and CAO tracks. Both rooms. Same answer.

The CAO-specific read from the Signal Index puts it plainly: "The portfolio is the product. Rationalize it or drown in it."

Vendor consolidation is compounding the pressure. This is not simply an archiving challenge. Health systems are working to consolidate applications across the enterprise, and the mandate to reduce portfolio sprawl is coming from every direction: IT, finance, operations, and the business.

The Exposure Is Sharpening

There is a risk dimension that does not get enough attention.

Vendors consolidating or closing with limited notice have moved third-party data risk from a procurement footnote to a board-level concern. The data must outlive both the application and the vendor. Health systems that treat archiving as passive storage are exposed in ways they may not fully recognize until a vendor exit forces the issue.

An archive cannot simply be a place where historical data goes to sit. It must preserve that data in a governed, accessible form that supports compliance, longitudinal analysis, operational use, and future AI initiatives.

The Signal Index found that 50% of leaders in this cohort are already running multiple AI tools in production, the most deployed group across the entire Napa summit series. For this cohort, the conversation has moved beyond experimentation and toward proving ROI, scaling adoption, and governing AI in production. What leaders consistently name as the neglected work underneath it is technical debt, application rationalization, and the foundational infrastructure that AI is being deployed on top of.

AI is being built on a foundation that was never rationalized to support it. That is the risk sitting quietly inside most modernization roadmaps today.

The Work Has Shifted

The focus has shifted from launching innovation to proving ROI and scaling it. That sounds like progress, and it is, but it also exposes a gap. Without disciplined portfolio governance, there is no capacity left to scale anything. Capacity management and ROI are paired problems. You cannot solve one without addressing the other.

The organizations getting this right have stopped treating rationalization as a side-of-desk activity. They apply the same cross-functional governance disciplines to application retirement that they use for every other major enterprise technology initiative. Finance is involved and cost reduction is tracked rigorously. Priorities are unified. The program has a named owner, a target run rate, and real velocity.

They connect decommissioning to the financial statement. Hard-dollar savings from contract terminations, reduced hosting, and permanent OpEx reduction are reported at the CFO level. This is a margin improvement discipline, not an IT backlog item.

Trinity Health is one of the clearest examples of what this looks like at scale. Over 800 applications retired over four years, resulting in nearly $100 million in annual operating expense savings. The approach, the governance model, and the outcomes are documented in a Gartner case study worth reading if you want to see what a standing rationalization function actually produces.

The Question Worth Asking

The right ask for every CAO to bring back to their organization is simple:

What is the run-rate target for decommissioning, and who owns it as a standing function rather than a one-time project?

If the answer is not clean, the integration burden keeps growing, the technical debt keeps compounding, and the AI roadmap keeps running on a foundation that was never built to hold it.

The portfolio is the product. The health systems that win are the ones that govern it like one.