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Application Portfolio Management

Application Portfolio Management is the effective management of all enterprise application as business assets. 

Application Portfolio Management tools enable today’s technology and business leaders to ensure the right technology assets are in place, that they are optimally aligned with the needs of the business, and that they are being invested in to support the organization’s strategic objectives.

What is Application Portfolio Management?

Application Portfolio Management is a structured way to manage all technology assets.  It covers everything from an inventory of all those assets along with the relationships between those assets and business capabilities; to the active management of the lifecycle of applications from ideation to retirement and replacement. Application Portfolio Management supports improved decision making, helps understand and manage total cost of ownership (TCO) and guides strategic investment decisions for the organization.

Application Portfolio Management is a key contributor to effective Integrated IT Portfolio Analysis, as well as an effective decision support tool around technology and business investments.  Application Portfolio Management also provides active portfolio management in support of the organization’s strategic objectives and roadmap.

Importance of Application Portfolio Management

In many organizations it is very difficult to develop an accurate and complete picture of digital assets.  From ‘forgotten’ and outdated applications to shadow IT investments, to the use of spreadsheets to try and track everything, there simply isn’t a complete understanding of what exists.  Even in organizations where efforts are taken to develop that understanding it ends up being a snapshot in time that quickly becomes outdated through a lack of maintenance and management.

That means it is very difficult to successfully implement cloud strategies, address vulnerabilities and optimize TCO.  It also makes it harder to drive technology simplicity and efficiency, enable technology integration and collaboration, and understand system and data dependencies.  More significantly, if an organization doesn’t understand the assets it has, then it can’t possibly understand how those assets support – or don’t support, business capabilities.  By extension, the organization cannot optimize investment and management decisions to ensure that technology is always enabling the highest level of business performance.  That’s a serious problem that has to be addressed.

Key Elements of Application Portfolio Management

Application Portfolio Management must start with an accurate and complete picture of the technology assets in an organization.  But that’s only the start.  It needs to also include the effective leveraging and management of that information in support of the business.  The complete list of elements of Application Portfolio Management are therefore:

  • Complete an inventory of IT assets and characteristics.  This must include all assets regardless of where they reside, as well as the key characteristics of those assets.  That will need to include technical information (versions, platforms, integrations, etc.) as well as business information (departments, functions, and capabilities supported; business ownership; usage; etc.).
  • Implement processes and tools to ensure the inventory can be maintained effectively and efficiently.  Technology today is highly dynamic and fast-paced; maintaining an accurate inventory requires constant updates and that cannot be delivered using manual approaches and spreadsheets.  It must be managed in as automated a manner as possible using the right tools integrated with the rest of the technology and business infrastructure.
  • Analyze, assess and rationalize the technology portfolio.  The inventory will reveal areas of excessive technical debt, outdated and obsolete applications, duplicated and overlapping assets, solutions that are no longer aligned with business needs, etc.  Technology roadmapping tools automatically update to reflect those applications that are at (or beyond) end of life, those that require greater investment, those that need to be put on a path to replacement, etc.
  • Synchronize technology and business roadmaps.  The application portfolio doesn’t exist in isolation, it must support the current business capabilities as well as the strategic business roadmap and objectives.  To ensure optimal alignment between technology and business functions, Application Portfolio Management and IIPA must align to ensure investment decisions, work prioritization, and project delivery all address both the issues and opportunities identified in the application inventory, and the strategic imperatives of the business.

Key Challenges

Many of the challenges around Application Portfolio Management can be tied back to the inability to manage digital assets effectively and efficiently.  The combined reliance on manual maintenance of information and the absence of the right tools for the job result in the application inventory being a one-time exercise or, at best, a periodic snapshot.  Without an accurate, complete and current inventory feeding Application Portfolio Management, the process can never be successful.

However, organizations also experience some significant challenges even after the inventory is in place.  It’s vital to have an enterprise architecture view of the application portfolio to develop a roadmap for rationalization and modernization.  That requires an effective technology roadmap and strategy to be in place – something which doesn’t always happen.  More importantly, it also requires alignment between the strategic business roadmap and the technology roadmap and that is an area where many organizations continue to struggle.

Finally, organizations struggle to convert Application Portfolio Management into effective execution.  The ability to consistently select, manage and deliver the right investments to enhance the digital portfolio while supporting business capabilities and objectives remains difficult for many – especially across the tri-modal reality.

Strategic Portfolio Management Software

UMT360’s powerful strategic portfolio management software supports every element from roadmapping to resource management to portfolio analysis. By integrating the software into how you plan, fund and manage your work, your key people are freed up to focus on strategy execution.

  • Your portfolio management function has total insight
  • Business units can manage their own strategies and outcomes
  • Strategic planning can be tied directly to strategic outcomes
  • Integrated data provides a single source of truth for all activities

UMT360’s Proven VIC Framework

UMT360’s VIC framework offers a proven approach to help organizations identify and activate the exact capabilities needed to help them more effectively drive business agility. Our experts can quickly assess what’s needed to help you incrementally establish the right foundation, then help you move from tactical execution to become more strategic.