Transform your Application Portfolio - But don’t lose focus!

Issue 3, 2011 Download pdf

According to Forrester Research, “enterprises spend two-thirds or more [of IT operating budgets] on ongoing operations and maintenance.”1 Application Portfolio Management is a discipline used to justify and measure the business value of each application in comparison to the cost of maintenance and operations. But Enterprise Architecture Management also plays an important role in solving this challenge. How do these two disciplines fit together? Is Application Portfolio Management a pure IT-related topic? Software AG’s Solution for Enterprise Architecture Management provides the methodology, the tools and best practice to answer these questions.

Set the stage
When it comes to application portfolios, there are things we all agree on and things we do not. We all agree that there is the need to develop and drive new applications to support strategic business growth. We know that IT budgets are not a bottomless treasure chest that allows us to jump on every innovation train that comes along. In fact, reducing enterprise costs is still one of the top priorities on CIO’s agendas. On the other hand, driving innovation and creating new products and services is essential for attracting and retaining new customers.

So far, so good—we all agree. Where opinions differ is when it comes to the definition of Application Portfolio Management (APM). If you ask three people to define APM, you will likely get three different answers—based on that person’s focus, desired goals, and background. Some people see APM as a topic located in and driven by IT only; some see APM has to have a strong integration to the business; and others prioritize the management of the application portfolio rather than the transformation.

Luckily, we don’t have to agree on the definition of APM to know that the motivations to conduct APM are something we can all agree upon:

  • A ‘Keep The Lights On’ strategy eats up IT budgets and eliminates the ability to support business innovation and growth
  • New applications intensify the biggest problem—a growing, uncontrolled application portfolio

Facing these major challenges, we need to actively drive the transformation of the application portfolio to support business growth rather than support just the rampant growth of the application landscape. The definitions of APM may be different but the bottom line is the same—Application Portfolio Management is
the technique and discipline you need to get back into the driver’s seat. To transform the application portfolio you can count on APM to  provide:

  • The transparency and metrics needed to guide good and strategic decision-making
  • Reliable IT modernization roadmaps
  • The process for achieving your transformation goals

Application Portfolio Management is a Process!
The process of APM is described in four simple steps, as shown in Figure 1. However, execution is not always as simple as the process. Transparency is the foundation of a successful APM approach and at the same time the biggest challenge. The secret to success is to find the right level of transparency, depending on the goals to be achieved. This is challenging, as often there are many different data sources holding redundant information about the application portfolio and—to make it even worse—in a different format. Therefore, the very first step is to consolidate, structure, and merge the content of the sources before someone starts to use this information.

Defining the metrics to use can end up in endless discussions with various stakeholders. This can be a very time consuming process. Moreover, decisions regarding the fate of diverse applications are often very tactical, political, and emotional rather than rational. The bottom line is that there is a lot of potential to lose focus within these four simple steps of APM.

Figure 1: The Process of Application Portfolio Management

Figure 2: Software AG’s Enterprise Architecture Management Solution – Tools to manage the APM Process

Never forget what you actually want to achieve!
To help keep your team focused, here are some questions you should think about before you start your Application Portfolio Management initiative. Thoughtful answers to these questions will help guide you successfully through the APM process:

Step 1 – Create Transparency

  • What applications are in scope?
  • What level of detailed information is necessary?
  • Where to start?
  • What are the goals of this initiative?

Step 2 – Define and Gather Metrics

  • Which kind of metric is necessary?
  • What can be collected?
  • How is the metric used?
  • How is it updated?

Step 3 – Use Insight

  • What analytics are needed?
  • What viewpoints are needed?
  • Who is involved?
  • Who else needs this information?
  • What else can be answered?

Step 4 – Modernize

  • Who has the decision-making power about the fate of the applications, IT budgets and investments?

Application Portfolio Management:
Where Software AG’s Enterprise Architecture Management Solution can help

The execution of the APM process without any tool support is near impossible. To be successful we need tools to support that process. Software AG’s Enterprise Architecture Management Solution, based on ARIS, provides stakeholders a tool to integrate business and IT. It provides powerful methodologies, reference models and a robust set of features to execute APM. As a result, every decision within the application portfolio can easily be analyzed regarding the impact on business processes. As shown in Figure 2, there are multiple sources of information. Information can be gathered automatically, manually or by accessing inventory systems such as the ARIS IT Inventory—a powerful product for documenting IT assets like applications, technologies and other IT components.

With the help of appropriate reports and ARIS MashZone dashboards, the application architecture can be analyzed using the defined metrics. Based on these results, Application Portfolios can be designed and modernization roadmaps created.

Without looking at business processes, IT cannot be transformed into a cost efficient, innovative and flexible construct that can react quickly to business changes. Establishing an APM for your company will put you back in the driver seat to not only manage the application portfolio but to lead it to drive business growth. And though some may see it as project based, APM is an ongoing process that should be installed permanently in your organization! Move away from just “keeping-the-lights-on” and start to actively support strategic business growth!

Learn more about how Software AG’s Enterprise Architecture Management Solution can help you by watching this video and visiting this website

1 “The State of Global Enterprise IT Budgets: 2009 To 2010”,Forrester Research