Applications Portfolio

Portfolio Application Management:
Align and Reduce Management Costs

Management and use of applications represents 70 to 80% of the IT department budget. However, studies of common practice show that application management is often rather improvised and even disorganized. Information is stored in scattered databases or in Excel files located here and there in different services, and the application manager’s knowledge of application components and the links between applications and the application portfolio is primarily intuitive. Consolidation on the corporate level is very difficult and knowledge is lost when staff members change positions or leave the company.

In this context, we can easily understand why company application portfolio management is difficult, especially when the company is based at different sites. Application management is carried out as well as possible under the circumstances: in other words, as long as no issues arise.

When the application portfolio is poorly managed, costs are not correctly piloted and adapted to business priorities, and evolution requests needing management will not be managed as projects but will be lumped together with maintenance. In addition, it is impossible to implement a proactive approach for preventing malfunctioning issues or incidents tied to implementation of changes and results in a decrease in user satisfaction.

One of the reasons that explains why the application portfolio is not optimized is that its implementation is complex and requires a sizable investment in resources. However, even though the portfolio might not be installed clearly and with the appropriate tools, this won’t keep IT departments and personnel from creating and maintaining their own personal solutions to meet their application management needs. The result is a multitude of references, non-reproducibility of management processes, great difficulty in collaborating and sharing information, etc.

Everyone recognizes that a project should be adapted to the organization and maturity of the company, precisely to avoid launching a project that is too ambitious, complex or costly to be successful. In the same way, management of the application portfolio should be adapted to the IT department and could very well involve simple piloting based on the main cost indicators, monitoring user satisfaction (notably following version changes) and indicators like obsolescence, and ensuring the necessary skills. Knowledge management can be effected using an application brief that includes the main information concerning the application: who is in charge of it, how long it has existed, what technologies are used, its critical level, etc. For more mature organizations, it will be a question of detailed descriptions of the applications, possibly from urbanization or Enterprise Architecture.

Application Portfolio Management is a new field. It represents a circle of continuous improvement designed to reduce risks and enhance system adaptation to the business needs of the company and to the evolution of its perimeter, which are priority goals for the IT department. Mergers, acquisitions and general evolution of perimeters have become very common. In this context, mastery of the application portfolio is a key factor in success.