By Andrew Swindell

‍

Companies today face challenges managing complex and disparate application environments that have grown organically over many years. Legacy systems, redundant capabilities, and lack of integration all contribute to inefficient and expensive IT environments. Application portfolio management provides a structured approach to gain control of the application landscape and align it with business needs.  

What is Application Portfolio Management?

Application portfolio management involves cataloguing, analysing, and planning for an organisation's application assets to maximise their value. Key activities include:

Maintaining an inventory of all applications with details like costs, technology platforms, business owners, usage metrics, and risk profiles

Tracking total cost of ownership for each application, including licensing, operations, support, maintenance and decommissioning

Developing an application strategy and roadmap owned jointly by business and IT leaders

Implementing centralised governance processes to ensure applications meet business needs cost-effectively

Benefits of Application Portfolio Management

Taking an enterprise view of application assets provides transparency into the true costs and value of applications. This enables more informed decision making on rationalising redundant systems, retiring legacy applications, and future investments. Application portfolio management delivers several key benefits according to author Andrew Swindell:

Reduced costs - Consolidating applications, reducing unused licenses, and retiring unnecessary systems yield direct cost savings. Optimising ongoing support and operations also reduces expenses.

Improved alignment - Jointly developing an application strategy ensures future investments map to business priorities. Central governance also prevents each business unit implementing fragmented systems.

Increased agility - Eliminating complex interfaces between systems enables faster delivery of new initiatives which support changing business needs.

Steps to Implement Application Portfolio Management

How can organisations start leveraging application portfolio management? Key steps outlined by Swindell include:

1.      Catalogue application inventory with cost, technology, and ownership details

2.      Identify opportunities for rationalisation, retirement, and consolidation

3.      Develop an application strategy and principle son future platforms and capabilities

4.      Establish processes for centralised application governance and architecture

5.      Communicate application strategy and transition plans to stakeholders

6.      Incorporate application portfolio analysis into technology investment decisions

While implementing application portfolio management represents a significant effort, the long-term payoff is an optimised application environment that evolves with the business. Organisations can leverage this capability to reduce IT costs, retire technical debt, and improve alignment to ever-changing business needs.

‍