From sprawl to strategy: Building a smarter tech stack 

Imagine your business is a restaurant overflowing with blenders, gadgets and appliances. Most of it is gathering dust. Some you don’t even know how to use. Over the years, you’ve accumulated tools — some redundant, others forgotten — while your kitchen operates in silos with little awareness of what’s already available. This inefficiency mirrors what happens with enterprise technology: a sprawl of tools and systems that leads to waste, redundancy, and missed opportunities for value. If you took inventory, you’d find incredible uses for some and no reason to keep others. And you’d probably organize it all better to get more use and value.

A tech stack should directly reflect your technology strategy, informed by your business strategy: It’s how tools, systems, and applications are organized to drive operations and outcomes. A messy tech stack often includes duplicate apps, outdated or unnecessary software, siloed systems, and inconsistent data. This disorganization leads to employee frustration, wasted time navigating between tools, miscommunication, delays in decision-making, and unreliable analytics due to mismatched or incomplete data. Plus, imagine the resources to manage all this complexity — tech shouldn’t be the work; it should do the work.

In contrast, a thoughtfully designed tech stack transforms how your business operates. It simplifies workflows, fosters collaboration by breaking down departmental silos, and makes data analytics clear and actionable. Gone is the chaos of SOS (“shiny object syndrome”), compounded by north–south silos of tech serving specific domains and talking to nothing else. In a rationalized, optimized, well-integrated tech stack, your systems work together seamlessly, and every tool is deployed with intent. The result? A seamless and frictionless employee experience that empowers your team to deliver measurable results, positively impacting the bottom line. But without direction, adding more tech leads to disaster. A disorganized, messy tech stack not only frustrates employees, but it also drags down performance. If you want your team to thrive, rationalizing your tech stack is nonnegotiable.

AI-driven solutions are revolutionizing how organizations approach their tech stacks, but they also add complexity. AI should be integrated strategically to enhance efficiency, innovation, and decision-making while staying aligned with business and HR objectives. Rather than existing as a standalone tool, AI works best when integrated and embedded across your tech stack — automating repetitive tasks, delivering valuable workforce insights , personalizing user experiences, bolstering security and supporting scalability. When thoughtfully integrated, AI doesn’t just complement your tech stack — it transforms it into a smarter, more agile ecosystem.

Achieving the right balance between rationalization and specialization in a tech stack is crucial for optimizing performance while supporting business goals. Rationalization reduces redundancies, cuts costs, and simplifies management by consolidating tools and systems. However, over-rationalization can stifle innovation and limit functionality by forcing one-size-fits-all solutions. Specialization, on the other hand, ensures that specific business needs are met with tailored tools, enabling teams to operate more efficiently and effectively. The key is to rationalize where overlap exists and standardize while allowing room for specialized solutions in areas critical to differentiation, innovation or unique operational demands. This balance ensures cost efficiency and also fosters agility and scalability in the tech stack.

Balancing tech stack rationalization with specialization is about finding the sweet spot between simplicity and functionality. Consider two client examples where tech rationalization was integral to broader transformation initiatives:

• An industrial technology company was struggling with 29 HR systems — many outdated and difficult to scale, and maintaining compliance was a challenge. By rationalizing its tech stack while preserving critical specialized systems, the company reduced the number of systems to nine. This strategic consolidation resulted in US$7.4 million in total estimated benefits over five years.
• A Canadian airline faced inefficiencies caused by manual processes that disrupted data flow and decision-making. By implementing an enterprise resource planning (ERP) system, the airline unlocked substantial savings over 10 years, including estimates of C$276,000 annually in reduced headcount costs, C$122,000 in improved vendor management, C$114,000 in efficiency gains, and C$107,000 from better billing and collections.

There is power in rationalization to streamline operations while also retaining the specialized tools that deliver unique value. 

By streamlining these principles and focusing on these critical questions, companies can achieve a leaner, more effective tech stack.

Tech rationalization isn’t a one-time task — it’s an ongoing commitment to aligning technology with business and HR goals. Effective rationalization requires a governance framework that balances diligence with flexibility, ensuring room for innovation and the adoption of better solutions as they emerge. Whether the goal is maximizing the value of a core system, building a new tech stack from scratch or enhancing the employee experience, the process must be consistent and routine. For large enterprises, this might mean an annual review; for smaller, fast-growing startups, quarterly assessments may be necessary. Regardless of the timeline, success lies in maintaining a disciplined approach to governance, ensuring your tech stack remains efficient, adaptable and aligned with the business’s needs.

At Mercer, we bring deep expertise in helping companies craft digital strategies that align seamlessly with their business and HR objectives. With our robust data insights, HR Operations Scanner and other tools, and in-depth knowledge of vendor capabilities and overlaps, we create actionable plans that deliver measurable results. From identifying savings to setting clear timelines for achieving them, we empower organizations to stop tech sprawl and focus on where technology offers the greatest impact. Let’s work together to ensure your tech stack is streamlined, strategic and perfectly aligned with what matters most to your business.