Presented by:

Alain Charpentier
 Origin of the methodology
 Objectives
 Present the methodology
 Lessons learned
 Recommendation
 Questions

Copyright © 2009 by Alain Charpentier Page: 2

 The methodology is based on the
book:

“IT Portfolio Rationalization: 1” by

Prashant Halari, Sushil Paigankar,
Hitesh Salla, Rajaram Vengurlekar.

IT Application Portfolio
Rationalization/Management (APM) is
a practice that has emerged in mid to
large size organizations in the mid
1990s. It attempts to use the lessons
of financial portfolio management to
justify and measure the financial
benefits of each application in
comparison to the costs of the
application's maintenance and
operations.

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 Establish a quantitative baseline on the efficiency and
effectiveness of the current application landscape so that
prudent management decisions, in terms of current and future
application development, application phase-out or remediation
(e.g., re-write), can be made
 Ensure proper Business-IT alignment (i.e., IT is working on
those things that business values the most)
 Prioritize the applications that need attention
 Determine the several management options for undertaking the
application value improvement initiatives

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 Participant
Planning selection

Roadmap Data collection

Validation

Analysis
Category
Financial Technical Business
Appl ID Appl Name Architecture Type Criticality Profile
Perspective Perspective Perspective
307 ESSBASE Analytical 0.826 0.784 0.798 0.558 0.050
722 Kiting - Sécurité Fraude Analytical 0.768 0.679 0.643 0.428 0.038
A25 INTRANET - Blanchiment Analytical 0.871 0.752 0.620 0.528 0.047
A31 Intranet - GOC Analytical 0.855 0.770 0.783 0.598 0.054
M4R Junior Analytical 0.772 0.652 0.563 0.603 0.054
M7A Analyse de comptes Vostros Analytical 0.833 0.597 0.521 0.503 0.045
029 FERR/FRV Integration 0.777 0.558 0.527 0.423 0.041
069 TPV - IBM Integration 0.770 0.562 0.595 0.628 0.061
070 Prêts du SAGE - Interface Integration 0.868 0.462 0.764 0.528 0.051
294 Aiguilleur/Formateur MQ Integration 0.836 0.762 0.691 0.643 0.063
667A IMN - SCD - Guichet Integration 0.950 0.748 0.663 0.668 0.065
667P IMN - IDP - TPV-POS Integration 0.950 0.748 0.663 0.693 0.068
693 MQ BNC Integration 0.786 0.667 0.611 0.428 0.042
707 Transfert inter bancaire Integration 0.862 0.561 0.578 0.528 0.051
A24 IA - Intelligence d'Affaires Integration 0.903 0.518 0.631 0.428 0.042
A33 EAI MAN Core Integration 0.975 0.692 0.717 0.508 0.050
M09 CAPS (choix du NIP) Integration 0.761 0.689 0.595 0.503 0.049
M10A TXN Analyser - Guichet-ATM Integration 0.866 0.590 0.677 0.528 0.051
M10P TXN Analyser - TPV-POS Integration 0.866 0.590 0.677 0.553 0.054
M6J EAI Entreprise Application Integration - ICE Integration 0.735 0.624 0.760 0.718 0.070
M72 TFC - Transfert fichiers corporatif Integration 0.856 0.416 0.751 0.703 0.069
002 Signalement Legacy 0.776 0.534 0.794 0.468 0.017
003 Smartstream Legacy 0.826 0.661 0.909 0.633 0.023
005 PAT - Placements à terme Legacy 0.637 0.469 0.535 0.573 0.020
010 CPCS - Mtl Legacy 0.824 0.630 0.756 0.503 0.018
012 Agent OFAC - Fircosoft Legacy 0.856 0.744 0.741 0.528 0.019
014 Commercial - GABI Legacy 0.932 0.690 0.787 0.678 0.024

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 Selection of appropriate:
• Business relationship
managers (BRM)
• Business owners
• Application owners
• Application support teams
• IT development teams

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 Overall Portfolio

Appln 3
Application List

Appln 4

Appln 2
Appln 5
Appln n
1000

Appln 1
1
Filter Criteria – Filter out non-applications,
unused applications and applications under 1
rewriting
700 Step 1 Step 1
2 Filer out
Non-applications
Filer out unused
and
Filter Criteria – Filter out applications which applications under

are not under the responsibility of IT or 2 rewriting

supported by other parties Step 2

3 500 Filter out

Applications not
under IT
Filter Criteria – Filter out applications for
which we don't have maintenance 3
Step 3
investment information Filter out based on
Maintenance
investment
4 150
Filter Criteria – Filter based on the data
gathering exercise
4
Step 4
Filter on data
gathering

Note: The number of applications is 100

Final “In Scope”
representative of a large organization. Application List “In scope” application list

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 Financial Technical Business
Appl ID Appl Name Architecture Type Criticality Profile
Perspective Perspective Perspective
307 ESSBASE Analytical 0.826 0.784 0.798 0.558 0.050
722 Kiting - Sécurité Fraude Analytical 0.768 0.679 0.643 0.428 0.038
A25 INTRANET - Blanchiment Analytical 0.871 0.752 0.620 0.528 0.047
A31 Intranet - GOC Analytical 0.855 0.770 0.783 0.598 0.054
M4R Junior Analytical 0.772 0.652 0.563 0.603 0.054
M7A Analyse de comptes Vostros Analytical 0.833 0.597 0.521 0.503 0.045
029 FERR/FRV Integration 0.777 0.558 0.527 0.423 0.041
069 TPV - IBM Integration 0.770 0.562 0.595 0.628 0.061
070 Prêts du SAGE - Interface Integration 0.868 0.462 0.764 0.528 0.051
294 Aiguilleur/Formateur MQ Integration 0.836 0.762 0.691 0.643 0.063
667A IMN - SCD - Guichet Integration 0.950 0.748 0.663 0.668 0.065
667P IMN - IDP - TPV-POS Integration 0.950 0.748 0.663 0.693 0.068
693 MQ BNC Integration 0.786 0.667 0.611 0.428 0.042
707 Transfert inter bancaire Integration 0.862 0.561 0.578 0.528 0.051
A24 IA - Intelligence d'Affaires Integration 0.903 0.518 0.631 0.428 0.042
A33 EAI MAN Core Integration 0.975 0.692 0.717 0.508 0.050
M09 CAPS (choix du NIP) Integration 0.761 0.689 0.595 0.503 0.049
M10A TXN Analyser - Guichet-ATM Integration 0.866 0.590 0.677 0.528 0.051
M10P TXN Analyser - TPV-POS Integration 0.866 0.590 0.677 0.553 0.054
M6J EAI Entreprise Application Integration - ICE Integration 0.735 0.624 0.760 0.718 0.070
M72 TFC - Transfert fichiers corporatif Integration 0.856 0.416 0.751 0.703 0.069
002 Signalement Legacy 0.776 0.534 0.794 0.468 0.017
003 Smartstream Legacy 0.826 0.661 0.909 0.633 0.023
005 PAT - Placements à terme Legacy 0.637 0.469 0.535 0.573 0.020
010 CPCS - Mtl Legacy 0.824 0.630 0.756 0.503 0.018
012 Agent OFAC - Fircosoft Legacy 0.856 0.744 0.741 0.528 0.019
014 Commercial - GABI Legacy 0.932 0.690 0.787 0.678 0.024

Conduct analysis on dimensions of cost vs

benefit, current capability vs. future
capability, etc.

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 High Category 1 Category 2 The dimensions used are
• *Technology Appreciation
includes application owner
Retain Renovate and technical scores and
covers aspects of
Technology Appreciation*

 High Technology Appreciation
 Low Business Appreciation
Category 4
Replace / Retire
 Low Technology Appreciation
 Low Business Appreciation
Low
Low
Business Appreciation**
 High Technology Appreciation
 High Business Appreciation
Category 3
• **Business Appreciation
Re-engineer
 Low Technology Appreciation
 High Business Appreciation
High
• Application stability
• Performance
• Flexibility
• Technical complexity
• Technical documentation
score covers aspects of
• Current functional capability
• Future functional capability
• IT delivery
• End user satisfaction

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 29/100 Applications 51/100 Applications

10/100 Applications
20/100 Applications

Note: The number of applications is representative of a large organization.

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 Distribution and Assessment Maintenance Spending
Number of Applications

Percentage Spend

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 Retain Renovate

Funding of initiatives depends on their

alignment with critical business drivers
Technical Condition

Replace or Retire Re-engineer Initiative Category Cost BVI Priority

Business Value
1 Strategic $$ N1 9
2 Strategic $$ N2 8
3 Growth $$ N3 6
4 Growth $$ N4 4
5 Efficiency $$ N5 6
6 Efficiency $$ N6 1
7 Efficiency $$ N7 3
8 Compliance $$ N8 5
9 Compliance $$ N9 2

Initiative; size of the bubble indicates estimated cost of initiative

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 2009 2010 2011 2012
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 To ensure proper
Business-IT alignment the
Assess-
ment Retire

roadmap is develop after

Rating #1 Rating #2 Rating #2

Policy Admin #1 Policy Admin #2 Policy Admin #3

Customer / CRM #1 Customer / CRM #2 Customer / CRM #3

proper validation with the
key stakeholder
Customer / Agent UI #1 Customer / Agent UI #2

Claims #1 Claims #2 Claims #3

Billing #1 Billing #2 Billing #3 Billing #4

Mgt Reporting #1 Mgt Reporting #2

Infrastructure
Infrastructure #2 Infrastructure #x
#1

Savings Timeline

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 Managing “projects” and managing “applications” are not
the same
 Change the organization’s culture — from the top down
 Establish an enterprise architecture framework to provide
focus
 Include APR as part of a broader decision-making
process
 Have a destination in mind and communicate it
throughout the organization
 Use tools as productivity aids, but they do not replace
tough human decisions
 Measure operation of the application over its life cycle
 APR is not just an IT decision

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 Establish a strong baseline
 Agree on how to measure “value”
 Identify operational “costs”
 Ensure fairness throughout the process
 Match decision making to organizational style
— edict or democracy?
 Institutionalize the process, not the event

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