Maximizing Success with Application Portfolio Management: Best Practices and Tools for Portfolio Managers
Application portfolio management (APM) is a critical practice for organizations looking to optimize their application landscapes and align their technology investments with business strategy. Effective APM provides visibility into an organization's application portfolio, enables data-driven decision making around application rationalization and modernization, and ensures applications are supporting business capabilities and strategic objectives. This article outlines best practices for implementing a successful APM program and highlights key capabilities to look for in APM tools and solutions.
What is Application Portfolio Management and Why is it Important?
Application portfolio management refers to the continuous process of managing and optimizing an organization's application portfolio across the application lifecycle. APM provides a comprehensive view of all software applications in an organization's portfolio, capturing information on the business value, technical composition, costs, and risks of each application.
With this consolidated information and full visibility into the application portfolio, APM enables organizations to make better decisions around application rationalization, investment prioritization, and aligning technology with business strategy. Ongoing APM practices allow organizations to proactively manage their portfolio, retire unnecessary applications, modernize legacy systems, and focus IT resources on supporting critical business capabilities.
The goal of APM is to ensure technology investments are optimized to deliver maximum business value. Organizations that implement effective APM practices are better positioned to respond to changing market dynamics and new opportunities.
Application Portfolio Management Best Practices
Here are some best practices to follow when implementing an application portfolio management program:
Create an Inventory of All Applications
The first step is to create a comprehensive inventory of all software applications within the organization. This includes purchased or built in-house applications, SaaS applications, legacy systems, APIs, integrations, and any other software assets. Details should be captured on application owners, technology composition, users, interfaces, dependencies, data flows, and other technical specifications.
Assess Application Value and Alignment to Business Objectives
With the inventory in place, each application should be assessed in terms of its business value, cost, risk, and alignment to strategic objectives. Business value criteria include metrics like revenue contribution, customer engagement, and impact on core operations. Cost factors include licensing, maintenance, support, and other direct and indirect costs. Risks including security, compliance, and continuity issues should also be evaluated.
Rationalize the Application Portfolio
Using the assessment data, applications that are no longer delivering sufficient business value can be rationalized -meaning retired, replaced, or merged with other applications. Rationalizing unnecessary and redundant applications allows investment to be focused on strategic applications and new innovations.
Develop Application Roadmaps
Roadmaps should be created to guide application enhancements, migrations, integrations, and retirements over time. Roadmaps provide direction for optimizing and modernizing the portfolio to meet evolving business needs.
Implement Lifecycle Management Processes
APM is an ongoing process. Lifecycle management procedures should be implemented to maintain visibility and make continuous decisions over the application lifecycle. This includes intake and onboarding processes for new applications, change management, regular cost/value assessments, and retirement procedures.
Leverage APM Tools and Repository
APM tools provide critical capabilities like centralized visibility, reporting, analytics, and integrations with other systems like ITSM, project management, and enterprise architecture. A central APM repository maintains the authoritative information on business services, applications, technologies, dependencies, costs, and other data needed for effective management.
Critical Capabilities for Application Portfolio Management Tools
Organizations implementing APM should look for these key capabilities in APM solutions:
Centralized application inventory - All applications catalogued in a single repository with details on owners, technologies, lifecycle stage, interfaces, dependencies, risks, costs etc.
Business alignment mapping - Ability to map applications to business capabilities, processes, strategic goals and KPIs they support. Critical for rationalization decisions.
Automated data collection - Integration with discovery tools and CMDBs to automatically collect technical composition and relationship data. Minimizes manual surveys.
Cost transparency - Financial analysis including license costs, hosting fees, operational expenses, and cost drivers for each application. Provides hard ROI data for decisions.
Customizable dashboards and reporting - Interactive dashboards to visualize portfolio analysis from different perspectives. Flexible reporting to support various stakeholder needs.
Roadmapping - Tools for creating visual roadmaps of application lifecycles, migrations, integrations, enhancements, and retirements over time.
Integration with enterprise architecture - Contextual visibility into applications in relation to business capabilities, processes, technologies, and other entities mapped in EA tools.
Decision support - Analytics, assessment frameworks, and data visualization to quantify factors like business value, risk, functional overlap, and technical obsolescence. Provides data to support rationalization and modernization decisions.
Lifecycle automation - Workflows, forms, and integration with change management to streamline processes for onboarding, changes, assessments, and retirement of applications.
Conclusion and Key Takeaways
Application portfolio management is critical for gaining control of application investments and aligning technology with business strategy. Organizations should implement coordinated processes for application inventory, assessment, roadmapping, and lifecycle management. Leveraging purpose-built APM tools can maximize efficiency and enable data-driven portfolio optimization.
Key takeaways include:
Maintain a continuous inventory of all applications with details captured in a central repository
Assess the business value, costs, risks, and alignment of each application
Rationalize unnecessary and redundant applications to optimize the portfolio
Define roadmaps guiding enhancements, integrations, migrations and retirements
Implement processes to maintain visibility and make decisions throughout the application lifecycle
Select APM solutions that provide actionable data visualizations, automation, and integration capabilities to support effective management
Maximizing Success with Application Portfolio Management: Best Practices and Tools for Portfolio Managers
Application portfolio management (APM) is a critical practice for organizations looking to optimize their application landscapes and align their technology investments with business strategy. Effective APM provides visibility into an organization's application portfolio, enables data-driven decision making around application rationalization and modernization, and ensures applications are supporting business capabilities and strategic objectives. This article outlines best practices for implementing a successful APM program and highlights key capabilities to look for in APM tools and solutions.
What is Application Portfolio Management and Why is it Important?
Application portfolio management refers to the continuous process of managing and optimizing an organization's application portfolio across the application lifecycle. APM provides a comprehensive view of all software applications in an organization's portfolio, capturing information on the business value, technical composition, costs, and risks of each application.
With this consolidated information and full visibility into the application portfolio, APM enables organizations to make better decisions around application rationalization, investment prioritization, and aligning technology with business strategy. Ongoing APM practices allow organizations to proactively manage their portfolio, retire unnecessary applications, modernize legacy systems, and focus IT resources on supporting critical business capabilities.
The goal of APM is to ensure technology investments are optimized to deliver maximum business value. Organizations that implement effective APM practices are better positioned to respond to changing market dynamics and new opportunities.
Application Portfolio Management Best Practices
Here are some best practices to follow when implementing an application portfolio management program:
Create an Inventory of All Applications
The first step is to create a comprehensive inventory of all software applications within the organization. This includes purchased or built in-house applications, SaaS applications, legacy systems, APIs, integrations, and any other software assets. Details should be captured on application owners, technology composition, users, interfaces, dependencies, data flows, and other technical specifications.
Assess Application Value and Alignment to Business Objectives
With the inventory in place, each application should be assessed in terms of its business value, cost, risk, and alignment to strategic objectives. Business value criteria include metrics like revenue contribution, customer engagement, and impact on core operations. Cost factors include licensing, maintenance, support, and other direct and indirect costs. Risks including security, compliance, and continuity issues should also be evaluated.
Rationalize the Application Portfolio
Using the assessment data, applications that are no longer delivering sufficient business value can be rationalized -meaning retired, replaced, or merged with other applications. Rationalizing unnecessary and redundant applications allows investment to be focused on strategic applications and new innovations.
Develop Application Roadmaps
Roadmaps should be created to guide application enhancements, migrations, integrations, and retirements over time. Roadmaps provide direction for optimizing and modernizing the portfolio to meet evolving business needs.
Implement Lifecycle Management Processes
APM is an ongoing process. Lifecycle management procedures should be implemented to maintain visibility and make continuous decisions over the application lifecycle. This includes intake and onboarding processes for new applications, change management, regular cost/value assessments, and retirement procedures.
Leverage APM Tools and Repository
APM tools provide critical capabilities like centralized visibility, reporting, analytics, and integrations with other systems like ITSM, project management, and enterprise architecture. A central APM repository maintains the authoritative information on business services, applications, technologies, dependencies, costs, and other data needed for effective management.
Critical Capabilities for Application Portfolio Management Tools
Organizations implementing APM should look for these key capabilities in APM solutions:
Centralized application inventory - All applications catalogued in a single repository with details on owners, technologies, lifecycle stage, interfaces, dependencies, risks, costs etc.
Business alignment mapping - Ability to map applications to business capabilities, processes, strategic goals and KPIs they support. Critical for rationalization decisions.
Automated data collection - Integration with discovery tools and CMDBs to automatically collect technical composition and relationship data. Minimizes manual surveys.
Cost transparency - Financial analysis including license costs, hosting fees, operational expenses, and cost drivers for each application. Provides hard ROI data for decisions.
Customizable dashboards and reporting - Interactive dashboards to visualize portfolio analysis from different perspectives. Flexible reporting to support various stakeholder needs.
Roadmapping - Tools for creating visual roadmaps of application lifecycles, migrations, integrations, enhancements, and retirements over time.
Integration with enterprise architecture - Contextual visibility into applications in relation to business capabilities, processes, technologies, and other entities mapped in EA tools.
Decision support - Analytics, assessment frameworks, and data visualization to quantify factors like business value, risk, functional overlap, and technical obsolescence. Provides data to support rationalization and modernization decisions.
Lifecycle automation - Workflows, forms, and integration with change management to streamline processes for onboarding, changes, assessments, and retirement of applications.
Conclusion and Key Takeaways
Application portfolio management is critical for gaining control of application investments and aligning technology with business strategy. Organizations should implement coordinated processes for application inventory, assessment, roadmapping, and lifecycle management. Leveraging purpose-built APM tools can maximize efficiency and enable data-driven portfolio optimization.
Key takeaways include:
Maintain a continuous inventory of all applications with details captured in a central repository
Assess the business value, costs, risks, and alignment of each application
Rationalize unnecessary and redundant applications to optimize the portfolio
Define roadmaps guiding enhancements, integrations, migrations and retirements
Implement processes to maintain visibility and make decisions throughout the application lifecycle
Select APM solutions that provide actionable data visualizations, automation, and integration capabilities to support effective management
Maximizing Success with Application Portfolio Management: Best Practices and Tools for Portfolio Managers
Application portfolio management (APM) is a critical practice for organizations looking to optimize their application landscapes and align their technology investments with business strategy. Effective APM provides visibility into an organization's application portfolio, enables data-driven decision making around application rationalization and modernization, and ensures applications are supporting business capabilities and strategic objectives. This article outlines best practices for implementing a successful APM program and highlights key capabilities to look for in APM tools and solutions.
What is Application Portfolio Management and Why is it Important?
Application portfolio management refers to the continuous process of managing and optimizing an organization's application portfolio across the application lifecycle. APM provides a comprehensive view of all software applications in an organization's portfolio, capturing information on the business value, technical composition, costs, and risks of each application.
With this consolidated information and full visibility into the application portfolio, APM enables organizations to make better decisions around application rationalization, investment prioritization, and aligning technology with business strategy. Ongoing APM practices allow organizations to proactively manage their portfolio, retire unnecessary applications, modernize legacy systems, and focus IT resources on supporting critical business capabilities.
The goal of APM is to ensure technology investments are optimized to deliver maximum business value. Organizations that implement effective APM practices are better positioned to respond to changing market dynamics and new opportunities.
Application Portfolio Management Best Practices
Here are some best practices to follow when implementing an application portfolio management program:
Create an Inventory of All Applications
The first step is to create a comprehensive inventory of all software applications within the organization. This includes purchased or built in-house applications, SaaS applications, legacy systems, APIs, integrations, and any other software assets. Details should be captured on application owners, technology composition, users, interfaces, dependencies, data flows, and other technical specifications.
Assess Application Value and Alignment to Business Objectives
With the inventory in place, each application should be assessed in terms of its business value, cost, risk, and alignment to strategic objectives. Business value criteria include metrics like revenue contribution, customer engagement, and impact on core operations. Cost factors include licensing, maintenance, support, and other direct and indirect costs. Risks including security, compliance, and continuity issues should also be evaluated.
Rationalize the Application Portfolio
Using the assessment data, applications that are no longer delivering sufficient business value can be rationalized -meaning retired, replaced, or merged with other applications. Rationalizing unnecessary and redundant applications allows investment to be focused on strategic applications and new innovations.
Develop Application Roadmaps
Roadmaps should be created to guide application enhancements, migrations, integrations, and retirements over time. Roadmaps provide direction for optimizing and modernizing the portfolio to meet evolving business needs.
Implement Lifecycle Management Processes
APM is an ongoing process. Lifecycle management procedures should be implemented to maintain visibility and make continuous decisions over the application lifecycle. This includes intake and onboarding processes for new applications, change management, regular cost/value assessments, and retirement procedures.
Leverage APM Tools and Repository
APM tools provide critical capabilities like centralized visibility, reporting, analytics, and integrations with other systems like ITSM, project management, and enterprise architecture. A central APM repository maintains the authoritative information on business services, applications, technologies, dependencies, costs, and other data needed for effective management.
Critical Capabilities for Application Portfolio Management Tools
Organizations implementing APM should look for these key capabilities in APM solutions:
Centralized application inventory - All applications catalogued in a single repository with details on owners, technologies, lifecycle stage, interfaces, dependencies, risks, costs etc.
Business alignment mapping - Ability to map applications to business capabilities, processes, strategic goals and KPIs they support. Critical for rationalization decisions.
Automated data collection - Integration with discovery tools and CMDBs to automatically collect technical composition and relationship data. Minimizes manual surveys.
Cost transparency - Financial analysis including license costs, hosting fees, operational expenses, and cost drivers for each application. Provides hard ROI data for decisions.
Customizable dashboards and reporting - Interactive dashboards to visualize portfolio analysis from different perspectives. Flexible reporting to support various stakeholder needs.
Roadmapping - Tools for creating visual roadmaps of application lifecycles, migrations, integrations, enhancements, and retirements over time.
Integration with enterprise architecture - Contextual visibility into applications in relation to business capabilities, processes, technologies, and other entities mapped in EA tools.
Decision support - Analytics, assessment frameworks, and data visualization to quantify factors like business value, risk, functional overlap, and technical obsolescence. Provides data to support rationalization and modernization decisions.
Lifecycle automation - Workflows, forms, and integration with change management to streamline processes for onboarding, changes, assessments, and retirement of applications.
Conclusion and Key Takeaways
Application portfolio management is critical for gaining control of application investments and aligning technology with business strategy. Organizations should implement coordinated processes for application inventory, assessment, roadmapping, and lifecycle management. Leveraging purpose-built APM tools can maximize efficiency and enable data-driven portfolio optimization.
Key takeaways include:
Maintain a continuous inventory of all applications with details captured in a central repository
Assess the business value, costs, risks, and alignment of each application
Rationalize unnecessary and redundant applications to optimize the portfolio
Define roadmaps guiding enhancements, integrations, migrations and retirements
Implement processes to maintain visibility and make decisions throughout the application lifecycle
Select APM solutions that provide actionable data visualizations, automation, and integration capabilities to support effective management