APPLICATION PORTFOLIO MANAGEMENT (APM) 01 April 2017

Management Information System

Presented by: J. Castillo
MPA

I. Definition and Concept

The APM is a framework for managing enterprise IT software applications and

software-based services. APM provides managers with an inventory and metrics to illustrate the
business benefits of each application.

The APM is an IT management technique that applies cost benefit analysis and other
analytics to decision-making.

The APM have been integrated into business and enterprise software to help organizations
automate practices.

The APM is use to gain a comprehensive understanding of the applications used in your
organization, identify redundancies, and take effective decisions to cut down on budgetary costs.

It provides key capabilities to build an application inventory to understand how many

applications your business organization has and develop an application rationalization roadmap
aligned to the enterprise goals and objectives. The APM helps us to get a better insight into the
applications using real-time data from the platform through reports and dashboards that enable
you to make a better business judgment.

In business, adopting new technologies is imperative to retain business and to compete in

the ever-growing market, which increases the demand for new applications. The dynamics of
technology are so profound that the organization is unable to take an advantage of the existing
applications to fulfill its increasing needs. Procuring new applications in addition to maintaining
existing ones, and to keep a check on the redundancy of applications for similar functions add to
the budgetary constraint of the organization.

APM to address business challenges, such as:

 Redundant applications for similar functions;
 Increasing cost incurred as a consequence of owning and maintaining
applications.
 Ever increasing demand to upgrade the existing applications for new functions.
 Conflict between in-house legacy applications and that of the vendors.
 Inadequate performance because of outdated applications.

APM presents the following key solutions to overcome these challenges:

 Classify: Maintain an inventory of the existing applications and understand their
relationships, assets, and consumption.
 Analyze: Applications that must be upgraded, replaced, consolidated, or returned.

 Plan and Execute: Help in transformation of the portfolio, reduce cost and risk,
improve agility and quality.
 Govern: Check and maintain the portfolio periodically, apply to achieve results,
and benchmark the policies.

II. Importance of the APM

Build & Maintain our Application Catalog

APM begins by standardizing all application inventory to ensure that the information
needed to support transformation decisions – including workflow, descriptive data, portfolio
associations, metrics and TCO – is readily available. Capturing too much information for each
application makes it difficult to keep up-to-date. That is why it is critical to right size the data-set,
which helps ensure that APM becomes a continuous discipline and a key pillar to IT planning and
budgeting, and not simply a sporadic activity conducted once every few years to rationalize the
portfolio.

Visualize Application Associations & Relationships

One of the key challenges in IT is connecting-the-dots by linking related portfolios that are
typically managed in disparate systems. To develop the dynamic blueprint of IT required to truly
orchestrate transformation, it is critical to capture the relationships between an application and
the business capabilities it supports, the other applications it impacts, the technology it relies on
and the projects that support it. Understanding how applications support capabilities also enables
IT leaders to easily identify potential redundancy across the portfolio.

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APPLICATION PORTFOLIO MANAGEMENT (APM) 01 April 2017
Management Information System

Derive & Track Performance Metrics

Utilizing easy-to-build assessment surveys, IT leaders can quickly and easily derive and trend
key scores and metrics that can be used to evaluate the portfolio and finalize investment
decisions. These powerful metrics, include Business Value, Technology and Operational Risk,
Complexity, Architectural Fit and more.

Derive Total Cost of Ownership

Most organizations do not realize that 92% of the cost of application ownership occurs
after the application is moved into production. Rationalizing operational costs requires IT leaders
to track the true cost of application ownership – including one-time and operating &
maintenance costs. By linking project and maintenance activities to each application and
breaking down infrastructure costs, it is easy to establish cost allocation models to automatically
derive metrics to compare budget to actuals and better forecast the true total cost for each
application.

Analyze the Portfolio and Finalize Investment Decisions

With an up-to-date inventory and robust metrics, it is easy for the Portfolio Analyst to quickly
evaluate the portfolio and finalize lifecycle decisions to enhance, maintain, replace or retire.

Synchronize Strategic and Technology Roadmaps

Quickly and easily build application roadmaps to record lifecycle decisions and provide
visibility into cross-portfolio relationships. By capturing the relationships between an application
and the business capabilities it supports, the other applications it impacts, the technology it relies
on and the projects that support it, all stakeholders can have complete visibility into planned
changes and have insight into the potential impact on their domains.

Integrate Application and Project Portfolio Management

Decisions made on an application are put into practice through projects. Which means
an integrated PPM discipline that effectively executes the desired transformation is critical for
lifecycle decisions in a roadmap to be meaningful. By integrating the management of both
application and project portfolios, application owners and IT portfolio managers can easily see
the status of application development and enhancement projects. This provides them with the
insight required to fully understand the impact of delays in schedule or other key risks.

Flexible Reporting and Business Intelligence

Powerful and flexible reporting ensures that IT leaders can quickly and easily get answers
to any questions pertaining to managing the application portfolio. Intuitive out-of-box reports and
dashboards – including bubble charts, redundancy heat maps, vendor dashboards, top
performing/worst performing apps, TCO dashboards, and more – provide the insight required to
more effectively manage applications across the enterprise.

III. Status of the APM in the Philippine Government

Most businesses have accumulated a wide variety of applications, some redundant, many
underused and some are obsolete. Many of these applications are out of sync with the
government direction and complicating public service processes. The lack of governance of
these applications is slowing down the speed of agencies and definitely increasing cost.

The APM provides a comprehensive understanding of the applications operating within

work environment. The objectives of APM are to move the private organizations or government
agencies from a state of unknown to an organization of modern and comprehensive information
value.

IV. Conclusion

The APM provides a platform to make strategic decisions

Sources:

https://www.techopedia.com/definition/26653/application-portfolio-management-apm

https://docs.servicenow.com/bundle/istanbul-it-business-
management/page/product/application-portfolio-management/concept/application-
portfolio-management.html

https://www.umt360.com/solutions/application-portfolio-management.aspx

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