7 years, 10 months ago

How to Build a Successful Application Portfolio Management Solution

In many organizations if an application is needed to solve a specific business problem, it is purchased or built. However, more often than not, these purchases happen in an ad-hoc manner within a specific department or business unit, resulting in a business owning hundreds (maybe even thousands) of redundant, overlapping, and ultimately, outdated applications. Maintaining these applications is expensive and puts a tremendous burden on the IT department.

With multiple applications supporting a variety of systems and processes, information becomes dispersed across several databases, making it extremely difficult for users to access the information that they need in a timely and efficient manner. Organizations often do not know what applications they own, and have little insight into the value they bring to the company, how much they cost to maintain, and who uses them. To further complicate this issue, Gartner reports that by 2015, 60% of new business application purchase decisions will be made outside of IT¹.

As you look to maximize your technology investments, the following guidelines can help you better understand what applications your business owns and needs:

1.  Collect information about your current portfolio
One of the largest problems when building an application portfolio management (APM) repository begins within the initial phases of collecting information. Organizations don’t always know what they have. To get your APM project going, it takes a champion at the executive level to bring together different areas of the business to identify, understand and examine each individual application and what business process and capabilities it supports. According to Gartner, a top-down approach allows you to collect the highest level of information for each application, which allows you to undergo a quick assessment of the balance of value to cost and risk for each application. From there you can group allocations according to their specific characteristics².

2.  Facilitate collaboration between business and IT
Often, IT drives an APM initiative either for IT chargeback purposes, or to conduct maintenance impact analysis, and may be viewed as having little interest in supporting the business’ interests. On the other hand, the business often advocates for APM to identifying where they could leverage an existing application to save a capital investment required to support a new business capabilities, unaware of the impact it might have on IT. The only way APM will be successful is if the two groups collaborate and work together to meet both requirements and viewpoints. Together, business and IT can take into account their experience and collective knowledge to identify, understand and analyze the value and impact each application has across the business.

3.  Don’t try to boil the ocean
Organizations tend to think that they need to have a complete application portfolio before they can see value from the investment. This is not the case. Companies are more successful if they select a business unit, focus on the applications within that domain, and implement reports and dashboards that illustrate the business value. Your team can leverage early success demonstrating value to the company and then move on to improve other areas of the business. 

4.  Establish visibility into your processes
The best APM solution complements your organization’s enterprise architecture initiatives. Taking a business capabilities-oriented approach allows you to prioritize the various needs of existing applications, such as maintenance, training and cost. Embedding your APM solution into your enterprise architecture framework allows you to establish clear visibility into your process. An excellent APM solution, built on an enterprise architecture platform, gives you the ability to understand – all the way down to the business process level – what it takes to retire a system with minimal disruption to operations.

5.  Build a repository of APM information
As your application portfolio matures, more and more meaningful data should not only be collected, but maintained. A repository of data can be extremely valuable when making large-scale business decisions. With extensive information about your applications in one central location, executives are able to make smart, creative decisions that result in huge bottom line savings.

Enterprise collaboration and executive sponsorship is the foundation for a powerful APM solution. It is essential that you communicate with knowledge workers across your business to really understand the value and role each application brings to the success of your organization. APM needs to be a cooperative effort between both business and IT. A champion from the executive level can help build the case for fostering collaboration between business and IT. 

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¹Gartner, Predicts 2011: Aligning Enterprise Business Applications to Drive Business Outcomes, November 2010.
²Gartner, Planning for Application Overhauls: Start From the Top With APM, July 2010.

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