Application Portfolio Management: Build & Maintain Your Inventory

Application Portfolio maintenance and operations can consume between 70% to 90% of an organization’s IT funds, meaning Business and IT Executives are increasingly having to “do more with less” when delivering innovative new business and IT initiatives.

Application Portfolio Management helps save time and costs that can be utilized for other more strategic and valuable programs. In this blog series will touch upon some of the benefits including:

  • Understand the cost of your IT estate
  • Analyze the impact of change to an application in your portfolio
  • Visualize application and technology roadmaps for future decision making
  • Easily build an application of entry through simple form based data capture
  • Identify overlaps and gaps in IT capabilities
  • Manage your vendor relationships

Interestingly, Application Portfolio Management (APM) is considered to be a strategic IT capability that utilizes Enterprise Architecture and Innovation techniques. The overall aim is to run a focused campaign to gather ideas for application improvement and the application detail itself. Additionally, the interdependencies between applications and the rest of the enterprise can be recorded.

This blog series seeks to address the effective management of your Application Portfolio by using Enterprise Architecture and Innovation Management techniques.

Innovation Management (IM) concerns itself with capturing information and ideas, from a wide range of stakeholders across the organization. By incorporating gamification techniques, it helps keep stakeholders involved in the information capture process.

Enterprise Architecture (EA) allows organizations to produce business and IT blueprints that provide visibility of your strategy, capabilities, business processes, IT infrastructure and Information Systems and their dependencies.

By utilizing both techniques in your APM efforts, you can engage stakeholders incredibly effectively and introduce new ideas into your wider enterprise blueprint.

Application Portfolio Management can typically be broken up into four stages:

  • Build and maintain your inventory
  • Analyze your portfolio
  • Manage your portfolio
  • Optimize the portfolio

Application Portfolio Management, Build and Maintain Inventory

This first blog in the series will focus on; Build and maintain your inventory. We sometimes link our approach into erwin EA software so that you can see a real-world use-case of Application Portfolio Management.

Step 1 – Collect, validate and maintain data

The first task is to collect and harvest your application inventory. The applications in your organization must be documented and stored in one system for completeness. Applications are often owned by IT or different lines of business and so associating them with an appropriate Community helps keep things organized.

Step 2 – Define your communities

By creating different Communities inside your tool, groups of individuals or separate teams can focus on specific concepts that are relevant to them and discuss and share information effectively. You must define a community strategy for your organization and identify the stakeholders needed​ to support your APM requirements.

Step 3 – Set your goal

By defining your Goal and relating all your subsequent activities to it, you can ensure that you stay focussed on achieving your desired end-state.

Step 4 – Create and launch a campaign

Build and run a Campaign (or survey) to engage your stakeholder Communities in the information gathering process and make it simple for them to feedback about applications through a collaboration tool or portal. Promoting and sharing your campaign via email, social collaboration tools or notice boards helps you reach your stakeholders wherever they are. You should consider if your Campaign could be publicly visible to all stakeholders or private to select Community.

Step 5 – Perform initial collection and validation of data

Once the application concepts have been collected from various invited stakeholders as part of a Campaign, you’ll need to refine them. This is important because you might require additional information and/or additional stakeholders to assist. It’s also a good idea at this point to collect and validate data for any implementation projects that are dealing with application assets. Again, you may create a Campaign to gather work packages (projects) that are in progress.

Step 6 – Assign tasks to stakeholders

Sometimes you will need individual stakeholders or team members to manage a specific task, especially when working with a large number of different stakeholders. By assigning tasks to individuals you implement a much more collaborative approach to your APM work stream and ensure you get the input you require to be successful.

Step 7 – Set your major attributes

Here’s where it gets really interesting! You must set the major attributes to measure your applications inventory. Major attributes include:

  • Application Lifetime Cost
  • Number of Users
  • Active Users
  • License Cost
  • Maintenance Cost
  • Business Criticality
  • Functional Quality
  • Technical Quality
  • Risk
  • Business Processes Supported

For example, erwin EA customers can utilize predefined attributes for Application Portfolio Management that look like this.

Application Lifetime Cost Attributes

Here, you can calculate the Application Lifetime Cost by summarizing an application’s attributes for Lifespan, Monthly User Cost, Number of Users, License Cost, Maintenance Cost.

You must be able to measure Number of Users. This represents the number of users that were assigned when the application was purchased or subscribed to. Active Users represents the number of users that have used or are currently using the application. Business Criticality measures how important the application is in maintaining business performance.

  • High – The business couldn’t operate without it.
  • Medium – It’s important but we the business could continue with a back up plan.
  • Low – The business could operate without this.

Note that some of our attributes have array type values. For example, Business Criticality can be “High” and has a value of 100. This is very useful when producing charts and reports later on.

Functional Quality; how functional is the application in support of the business?

  • High – It is functionally rich and does everything we need of it.
  • Medium – It satisfies some of the functions of our business
  • Low – It has low alignment with what the business requires.

Technical Quality helps measure technical performance of an application?

  • High – It aligns 100% with our technical strategy and is defect free to our knowledge.
  • Medium – It has some known defects but performs adequately.
  • Low – It has defects and requires support.

What is the Risk Profile for this application?

  • High – It presents a high risk to our business.
  • Medium – It is a manageable known risk to our business.
  • Low – It has no risk to the business.

Business Process Supported or enabled by the application?

It can be valuable to group the associated processes that application supports into a single view.

Business Process Associated Attribute View

Step 8 – Add further attributes

Now that you have begun to gather input from your stakeholders you may identify some additional pieces of information required. At this point you can add and define new attributes as required alongside the major attributes described above.

Step 9 – Prioritize on Kanban boards

Kanban boards provide you with a visual storyboard for work. Your different concepts are represented as ‘cards’ on the board and move from one stage to another as they develop and change in status.

Using Kanban boards for APM involves working with community to define the different stages of the kanban and positioning your cards into the appropriate stage (for example; To Do, Doing, Done, Parked). You can update the cards as they are investigated, refined and implemented; progressing them through to completion.

Kanban Board for Application Portfolio Management

erwin EA provides you with pre-defined Kanban boards for Application Portfolio Management allowing you to move concepts along the board. It’s important for APM that we keep work moving along the board so that we can track the progress of each concept. Different stakeholders can be assigned as collaborators on each concept on the board and receive automatic notifications when they progress.

Stay tuned for the next update in this series, which will focus on stage 2; Analyzing your portfolio.

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