Application Portfolio Management Introduction

[kevinsaunders]

Welcome to the first instalment of a series on Application Portfolio Management. In this post we introduce APM as a concept and what it means to a business.

What is APM?

In many organisations, through factors such as organisational change, operational silos, shadow IT, and M&A activities, the portfolio of applications continues to experience sprawling growth with different teams having duplicate applications for the same functions.  Often there is insufficient control and little or no wider visibility of the applications deployed across an Enterprise organisation.

Application Portfolio Management, or APM, is the process of ensuring that the appropriate business applications are in place to support the needs of the business while minimising cost and minimising business risk.

What is the problem that APM solves?

To remain competitive, companies need to be increasingly agile to adapt to the demands of their customers, and to respond to new opportunities.  Applications are critical for delivering the capabilities required for the business to operate, and lack of control of the application portfolio results in additional business risk through the degradation of these business capabilities or delays in the ability of the business to respond to developing opportunities or threats.

Additionally, as these applications represent a major component of the overall IT expenditure, any lack of control and associated duplication increases costs unnecessarily where there are often pressures to reduce costs. 

Finally, legacy applications also represent a major source of risk and additional cost.  As applications and their supporting infrastructure reach or pass through the latter stages of the technology lifecycle, they become increasingly expensive and pose additional risk as the availability of support and / or development resources become increasingly scarce.  Maintaining out of date software impacts flexibility and agility as cross-platform integrations become more challenging, and new features are just not available.

Where are you on the APM maturity scale?

APM is one of those things that everyone does, even in the absence of a formal process. You know where you have old, outdated legacy applications or gaps in your capability. You just might not be measuring it in a formal way.

To enable a consistent level of measurement between businesses or even across departments APM is generally measured on a maturity scale, ranging from basic processes to continuous optimisation, as shown in the following table:

• Level 1 is about having all business applications in one trusted system of record.
• Level 2 allows for basic rationalisation using human input and manually analysing information to deliver against simple goals.
• Level 3 accommodates multiple objectives and many criteria for portfolio analysis delivering against more complex goals
• Level 4 is continuous improvement mode, using additional metadata, rationalisation use cases, and leveraging AI-suggested recommendations such as application elimination, upgrade, demands prioritisation and cloud opportunities to enable optimisation of the portfolio.

The maturity level for an organisation may well change over the course of time as changes happen.

What benefits does robust APM deliver?

With businesses increasingly dependent on technology to deliver key capabilities, the perception is that investment is required, be that monetary, people or something else. In order to make the best investment decisions, Enterprise Architects need up-to-date visibility of how the key business capabilities are being serviced and supported.  They need to understand which applications to retain, which to remove and where to invest further, and to be able to justify that decision.  IT needs to align activities and investment to supporting business priorities while reducing business risk and IT costs.  Enterprise Architects must be able to answer the questions: Where do technical gaps exist now, and where will gaps appear as the company strategy evolves and new business capabilities come online?

The adoption of APM as a capability enhances visibility and measurement of the portfolio of applications, and offers businesses opportunities to:

• • Enable Enterprise Architects to effectively view the relationship between business capabilities and the supporting people, processes and technology.
  • Provide visibility of the install state and lifecycle of applications and how they impact business services and business capabilities, to;
  • • Minimise risk to these services as they reach end of vendor support
    • Minimise the cost of maintaining legacy applications as skills become scarce and expensive
    • Enable de-duplication and rationalisation through removal of unnecessary installations and licences
  • Improve quality of experience and productivity through optimisation of application SLAs
  • Enable effective application placement and cost reduction initiatives through application analysis; a move to the Cloud, outsourcing, or subscribing to services
  • Unify M&A Silos
  • Improve agility with modernised processes and applications
  • Improve business alignment with sound investment planning and prioritisation for appropriate applications in the portfolio
  • Improve compliance and reduce risk in business context;
  • Avoid outdated technology; Lower capacity turnover; and identify security risks
  • Move funds to new innovation by reducing the costs of maintaining legacy or duplicate applications
  • Provide executive oversight, and always be in a position to share a view of the alignment of IT investment with business priorities

Please join us for Part 2, where we will explore what APM means in the context of the Service Now platform and how we enable capability for your business.