Managing a large number of applications can be overwhelming, with competing objectives – improving business support, cutting costs, improving security, verifying compliance with technical standards and compliance to regulatory requirements – vying for attention. 

One way to overcome these challenges is through application portfolio management (APM), providing an objective and transparent process for optimising the application portfolios which best balance business requirements.
The APM should consist of an initial rationalisation of existing applications, and an ongoing governance process to keep an organisations portfolios optimised. This should result in lower application costs, simpler maintenance, and measurably better support for the business.
Paul Viviers, CEO of PM Sight, explains: “In most organisations, the spend for operating and managing applications makes up 75% to 80% of the IT budget. So when IT leadership is under pressure to deliver more with less, application portfolio management should be a fertile ground for identifying and harvesting funds for reinvestment.”
In fact, analysts say companies can realise double-digit percentage savings on IT spend through application rationalisation.
“We believe that a straightforward, three-step process can be effective in not only achieving the initial savings, but in building a process for making application portfolio management an integral part of the organisation’s IT governance practices,” says Viviers.
“Almost all organisations have executed an application inventory collection effort at some stage – any of our clients have gone through the process a number of times over the years
“These efforts are usually one-time events where a push to collect application data results in a new spreadsheet – probably different from and unrelated to the one collected 18 months earlier. Some painful, manual analysis is done on the spreadsheeted data, and a few actions might be taken.
“However, there is often no continuity to the process, the data or the analysis. So the next time, the organisation will potentially go through the same time-consuming process again.”
Actively managing applications, on the other hand, is a strategic activity, paying enormous dividends in direct costs and, more importantly, in business impact.
Applications are the primary means by which technology supports the needs of the business, with the balance of IT activity and spending ultimately servings to keep the applications running.
Consequently, until companies are certain their application investments are the right ones, their infrastructure and the project investments supporting them may not be returning any real value to the business either.
“When advising clients on an effective APM tool, we preferably use one which is able to capture the data from the next application inventory effort, which enables the client to use the enterprise-wide availability of information to support an initial application review as well as an ongoing governance process,” says Viviers.
“So instead of standalone spreadsheets, with conflicting formats, clients can develop a standard method of capture and review, using a standardised set of application governance metrics.”
Ideally the inventory process should be aided by a tool that will automatically detect the applications across your network, making the basic collection and ongoing tracking of applications, supporting software and servers a continuous, automated process.
“With the data collected either automatically or manually, and supplemented by application owner and user input, clients have the opportunity to identify initial overlaps and duplications of functionality supporting the organisation’s various business processes.
“Especially in geographically dispersed organisations, you are likely to find multiple systems providing similar functionality,” Viviers adds.
Beyond application functionality, evaluation of the inventory against a set of preferred technologies can provide an additional opportunity to align the technology inventory with the organisation’s current and/or planned enterprise architecture standards.
New systems can be evaluated for implementation based on whether they meet the standards companies expect to implement.
“Ultimately, the organisation should be moving toward an ongoing application governance process that will enable the organisation to identify which applications should have additional investment, which should be maintained at the status quo and which should be decommissioned or replaced,” says Viviers.
“Such a governance process (either quarterly or semi-annually) will enable the organisation to reduce duplication, retire unnecessary applications and refresh its technology through a periodic, systematic review of existing and proposed application investment.
“In a period of shrinking technology budgets, application portfolio management is a method that will enable companies to enhance an application portfolio’s return on investment while improving its ability to meet organisational goals.”