Key Metrics for Application Portfolio Management

What is Application Portfolio Management?

APM, short for Application Portfolio Management, is a framework for monitoring and managing all the software a company owns and uses. With the Application Portfolio Management approach, a company’s applications are listed and stored altogether. This enables people in charge to better understand the IT architecture of the company by evaluating applications that are compiled in a single place, which brings about both responsiveness and detailed info.

With Application Portfolio Management, the business value of an application can be understood with grounded data. This is because APM gathers all the applications and comparing these assets become quite practical.

So, a company can handle their IT landscape thanks to APM by keeping track of the efficiency of its software applications. So, APM could make it easier to optimize the IT budget as it enables decision-makers to actually see which application is more valuable for the business. Most would agree that IT is one of the most important parts of a company today, so understanding the real values of software applications in a company would benefit both the current IT budget and business plans in the future. See Application Portfolio Management’s overall interaction and value for IT Asset Management, the umbrella term for any kind of asset management in IT, here.

One should also know that APM is a comprehensive and practical approach towards IT Asset Management, so there may not be just a single “correct answer” on employing it. That is, there might be different understandings as there could be several ways to handle APM. These ways might differ from business to business, sector to sector, or even from department to department. Yet, a tendency towards APM software is more generally preferred than sticking to legacy techniques like storing application data on spreadsheets or in physical materials. In parallel, conducting efficient APM has some widely accepted metrics.

What is Metric?

A metric means the important points that should be centred around while measuring something. These metrics differ, slightly or heavily, for each concept compiled under IT Asset Management but some pivots could be constant and almost always considered important.

For example, concepts mentioned below are almost always crucial in the business:

1. Potential Business Value: How this project is going to add value to the business? Is it really necessary or dispensable? Why should the company invest in this? And many more are the questions asked upon a new project plan or a purchase request. So, Potential Business Value can be considered a metric in evaluating a new business opportunity.
2. Feasibility/project duration: How long this project is going to take? How many hours does the company have to wait before the purchase take place? Is it really doable? Some questions regarding the possibility of a new project/purchase in business.
3. Cost: How much this is going to cost? At the end of the day, finance matters. Measuring the opportunity cost, TCO (Total Cost of Ownership), revenue stream, and many more financial subjects are always important for taking a business decision.

What are the Metrics of Application Portfolio Management?

The same business-fit metrics aforementioned are also the focused points of Application Portfolio Management. Yet, they may appear in slightly different wordings that better account for the aims of Application Portfolio Management.

Here are some metrics of interest for Application Portfolio Management:

1. Application Technical Performance: Evaluating how an application is running is crucial, right off the bat. If an application does not run efficiently, it damages the business process let alone add value to the overall success of a company. So, Application Portfolio Management has to deal with monitoring the operative quality of an application in a company’s inventory.
2. Application-Business Accord: Interchangeable with Technical Performance, Application-Business Accord means how an application is helping a business process. Some applications may not be technically fit, but indispensable for business fit. And vice-versa. For these cases, an Application Portfolio Management software Loggle offers different approaches to resolve the issues. Learn about APM more here.
3. Application Cost-Business Value: If an application cost much but doesn’t create that much added value, some radical changes might be necessary. Application Portfolio Management focuses on identifying such applications that might be deadweight for the company. On the other hand, it also identifies low-cost applications that produce great business value. That way, companies can decide which applications to make an investment by using the data provided by Application Portfolio Management.