How to understand application portfolio management
The best analogy for understanding what portfolio management is about compares it to impulsively purchasing an item only to realize later that you do not need that item whatsoever. The primary purpose of application portfolio management is to always incorporate a more systematic approach by identifying the gap and selecting the best solutions to mitigate them. In the modern age of technology and market digitization, most organizations rely on applications to solve their issues without carefully thinking of the resulting implications. The impact caused by this is that there are piles of applications that pose a challenge when trying to integrate them with pre-existing apps or other systems within the organization.
This affects the business since many of these applications are still being paid for, despite not being in use or of any relevance and significance to the organization. There is also another instance where applications are purchased but end up not being used, leading to wastage of funds which the organization could use in more pressing matters.
How to manage an application portfolio
The first most crucial step in understanding the application portfolio is creating a complete inventory of all the currently used applications and owned by your organization. It is also advisable to rationalize and categorize applications proposed for future use, those used in the past, or those currently in use. You should note the price of operating each application, its function, other applications that run concurrently, and which projects it is used in.
Once all these have been established, the second most vital step is eliminating redundant applications, which is achieved by identifying what application performs a specific function. You will be surprised to learn that some tasks performed by legacy applications are overlapping with new upcoming applications.
It is essential to identify the value and function each application offers in your business. It would help if you focused not only on the financial aspects but also on the actual value an application has in its operations. This is only made possible if IT applications are rated under the following criteria: business process, architecture, strategic alignment, impact, direct payback, risk, and client revenue.
Lastly, map your application in a time chart to determine whether each application fits into its specific time chart. A regular time chart consists of four high-level categories that help your company have a clear perspective of where each application works regarding IT processes. These categories include: tolerate, integrate, migrate, and eliminate.
Benefits of application portfolio management
Application portfolio management helps your organization to determine applications that are adding value to the business strategically. The management portfolio also provides pertinent information regarding applications that need to be eliminated because they do not help meet the business goals and objectives. Application portfolio management offers insight on how to have a better forward-thinking approach to the management of applications.
