What is Application Portfolio Management (APM)?

Before delving into Application Portfolio Management, let’s define what an application portfolio is.

What does the Application Portfolio Mean?

To meet their diverse business goals, companies use various kinds of software applications. An application portfolio refers to this collection of applications. An application portfolio includes on-premise, cloud, SaaS, iPaaS, and all other application and software types. In an application portfolio, all information pertaining to the application is collected. A portfolio of applications lets a business know what software they have and avoids shadow application risks.

Application Investments Increase

As companies grow, information technologies departments and independent employees buy applications to solve momentary problems without giving much thought to their implications. Applications pile up; some are impossible to integrate, some are redundant, and others are duplicates of previous purchases. This can quickly get out of control.

To avoid this situation, a systematic and structured process to oversee the application portfolio must be in place. This ensures that application data is up to date and prevents unnecessary purchases. Anything that doesn’t add value to your business is filtered out, so your resources aren’t wasted on ineffective services.

This portfolio spring cleaning can seem tedious and intimidating, especially for companies with hundreds (or thousands) of applications in their IT landscapes. So companies never get around to do it. In the long run, this leads to slow work processes and loss in revenue.

This is where Application Portfolio Management comes in to save the day!

What is Application Portfolio Management (APM)?

Application Portfolio Management is the business process that covers the management of on-premise, cloud, SaaS and all other applications in the inventory of enterprises. IT Application Portfolio Management covers the process from purchasing the applications to the end of their use. With the implementation of APM, companies can obtain comprehensive insights about their applications and make decisions about their application inventory.

The main purpose of an APM methodology is for businesses to have an inventory of applications with maximum efficiency. By applying Application Portfolio Management, businesses can identify inefficient and low-IT value applications and save on IT expenses by getting rid of them. World-renowned research company Gartner has introduced a "Gartner TIME model" for businesses to evaluate their application inventories.

• Tolerate
• Invest
• Migrate
• Eliminate

Benefits of Application Portfolio Management

Similar to investment portfolio management, application portfolio management is the craft of organizing and evaluating assets. For APM, these assets are software applications and services. IT APM helps optimize IT resources for delivering maximum business value.

Aligning your company’s application portfolio with its business goals will help you:

• Innovates services and products
• Reduces risks and IT complexity
• Prioritizes resource allocation
• Rationalizes application costs
• Increases operational efficiencies
• Prevents shadow and duplicate applications

What does Application Portfolio Management Provide?

Other than providing a comprehensive inventory, application portfolio management promotes a framework for regular assessment and optimization of software applications. Loggle, our APM tool, helps create specialized metrics that provide insight into the value of each application. Executives can get detailed reports on the business value and technical quality of their IT products.

With APM, the lifecycle stage of an application is decided through clear and actionable information: application age, maintenance cost, frequency of use, and operability with other applications. Educated guesses become a thing of the past. (See our post on applying Gartner’s TIME model to your applications.)

APM provides CTOs, CIOs, enterprise architects, and IT managers with a complete set of information on the business applications. With the right tool, APM addresses the following needs of relevant stakeholders:

• The organization’s history of applications
• Identification of application service lifecycles
• Organization of applications according to business domain
• Regular assessment of the functional and technical value of applications

How do You Implement Application Portfolio Management?

Application Portfolio Management is a process of evaluating and categorizing applications according to their business value, growth potential, technical characteristics, cost of maintenance and other criteria. The goal is to identify applications that are underutilized or overly costly and make strategic decisions about which ones to grow and improve, which ones to sunset or consolidate, and which new applications to build.

Application Portfolio Management is not a one-time process, it is a process that must be repeated periodically. Applications should be evaluated every two years or so, as needed. This evaluation can also be used to help validate the ongoing benefits of your application modernization efforts: Do they improve business agility? Reduce costs? Increase innovation?

An effective application portfolio management initiative will help you:

• Understand what you own and why
• Understand how your applications are used
• Identify new opportunities to grow or transform your business
• Identify application rationalization targets
• Identify redundant, underutilized and/or obsolete applications
• Have visibility into total application costs
• Understand technical debt

Steps for implementing Application Portfolio Management

The Application Portfolio Management process can be broken down into the following steps:

• Gathering business requirements
• Analyzing the current state and inventorying the application portfolio
• Assigning business value to each application
• Aligning applications with business strategies and initiatives
• Creating future-state application portfolio strategy and roadmap

Why is Application Portfolio Management Important?

With the digital transformation, companies have been making large investments in information technologies for the last 20 years. With these investments, the IT environments of companies have grown significantly. Growth at all times and in every field must occur in a controlled manner in order to provide 100% benefit. Application Portfolio Management enables companies to monitor and control their growing inventories of applications over time. APM is important because it allows companies to make more informed decisions about their application portfolio. In companies whose application inventory is growing day by day, if APM is not implemented, companies cannot control their applications and become vulnerable to many threats.

Application Portfolio Management Sofware

Loggle is an Application Portfolio Management Software. Loggle will help you evaluate your IT infrastructure and ensure that your application portfolio serves your company’s strategic goals. Begin optimizing your application pile, establish transparency between stakeholders, and add value to your business with Loggle. For more features and benefits, feel free to explore our other knowledgebase posts.