4 steps towards successful Application Portfolio Management

In many organisations, line of business managers can commission new applications – few, though, have an overview of the entire portfolio. This results in a complex, inefficient and costly landscape. Erwin ter Berg, Director of Operations at Logicalis SMC, looks at how application portfolio management addresses the problems.

 Application Portfolio Management?
Time to rationalise
All those applications cost a lot of money. They have been implemented, usually as part of an expensive project, and licences have been bought. They take up hardware and infrastructure capacity and have to be managed for many years with support for end-users.

In an average-sized business it doesn’t take long before several hundred applications are in use, and at this point a rationalisation drive could save a great deal of money. The solution is Application Portfolio Management. This includes the following steps:

1.  Inventory of applications and technologies used.
Using automated discovery tools and holding discussions with application owners are the first steps of a detailed survey of all applications in the organisation. Questions to address include:

      • What functionality does the application provide?
      • What are the costs in terms of management, licences, infrastructure, etc.?
      • How many users does the application have?
      • What value does the application have to the business?
      • Who is the vendor?
      • What are the underlying technologies used by the applications?

2. Defining standards.
In order to chart a direction for the future application landscape and halt its proliferation, it is important to make clear choices and lay down standards. For example, which database technology and operating system should the business standardise on?

All the information gathered up until this stage is recorded in an Application Portfolio Management tool that enables all these data to be managed – including in the long term.

3. Analysis of the application portfolio and identification of rationalisation potential.
Application Portfolio Management tooling allows rationalisation analysis of the applications being used.

Applications that have disproportionately high costs in relation to their value to the business are identified and can be dispensed with and applications with similar functionality can be combined, leading to considerable reductions in licensing costs. Substantial savings in the landscape can be achieved and the landscape can be made  fit for the future.

4. Planning and conducting the rationalisation.
Once it is clear which application rationalisations make sense, a roadmap and a detailed step-by-step plan should be drawn up that show when the various rationalisation projects will take place. Of course, there are some quick wins to be made, but in some cases the full rationalisation can take several years.

A future-proof portfolio
Once the Application Portfolio Management solution is in place, it provides a good tool for assessing whether new application requests fit in with the desired application landscape. This eliminates the risk of large divestments at an early stage and guarantees a stable, future-proof portfolio.

Critically though, it is important that rationalisation takes place in close co-operation with the business, further enhancing IT’s status as a business enabler with a clear, long-term vision and a department that handles the company’s budget efficiently.

Tags Application Portfolio Management, APM, Business Strategy