Presentation on theme: "Implementation of Application Portfolio Management"— Presentation transcript:
1 Implementation of Application Portfolio Management OverviewJuly 2006
2 Portfolio ManagementPortfolio management is: a strategic and dynamic decision-making process to assess value, prioritize actions, and allocate resources to meet key enterprise objectives. A portfolio is: a collection of items grouped together to facilitate efficient and effective management so that fiscal, staffing, and other scarce resources can be optimally allocated to provide the most benefits or greatest value for investments made. The objective of portfolio management is: to optimize the enterprise’s IT portfolios in order to contribute to the organization’s successful performance and its sustained viability, value, and growth. The major tasks of portfolio management are: inventory and classify items in the portfolios, identify problems and opportunities, develop viable options, determine relevant criteria and weights, evaluate alternatives using pertinent information, and make reasoned and appropriate decisions. The results of portfolio management are: fact-based, data-driven, and analytics-oriented management decisions, using a consistent and disciplined approach within a well-defined governance structure.Copious amounts of data, quantitative analyses, and useful and actionable information are not enough to produce right (versus wrong) and good (versus bad) decisions. They only start and enable the conversations.Executive perspectives, management expertise, and healthy decision-making cultures are essential ingredients. Political understandings, business sense, governmental program knowledge, technical awareness, and an honest open atmosphere for discussion are absolute prerequisites. This is a debate-and-decide; not a review-and-approve process.
3 Portfolio Management Goals Investment Portfolio Management:Identify, evaluate, and prioritize candidate investment opportunities that meet strategic business goals and objectives in the most effective and productive manner by appropriately considering and weighing key factors, such as alignment with agency missions or governmental initiatives, satisfaction of compliance mandates, delivery of desired returns or public value, initial and life cycle costs, architectural fit, risk profiles, staffing availabilities, and the inter-relations among investments.Project Portfolio Management:Advance the management of IT implementation projects by assisting to clarify roles and responsibilities; provide for well-understood and comparable oversight; ensure they are planned well and researched thoroughly prior to starting; facilitate the management and monitoring of them to achieve, budget, schedule, scope, and quality expectations; and complete them successfully so that proposed business goals and objectives are realized and anticipated benefits and value accrue.Copious amounts of data, quantitative analyses, and useful and actionable information are not enough to produce right (versus wrong) and good (versus bad) decisions. They only start and enable the conversations.Executive perspectives, management expertise, and healthy decision-making cultures are essential ingredients. Political understandings, business sense, governmental program knowledge, technical awareness, and an honest open atmosphere for discussion are absolute prerequisites. This is a debate-and-decide; not a review-and-approve process.
4 Portfolio Management Goals (Cont’d) Applications Portfolio Management:Inventory applications; assess them using a variety of criteria (such as agreement with agency business strategies or governmental priorities, benefits and value to agency missions or business processes, costs to maintain and operate, ability to meet current and future agency business requirements, operational performance, technical status, and risks; and develop a management strategy for continued investments in them over their useful lives to optimize benefits-costs. This is done by: a) analyzing present and future status from business, financial, operational, technical, and risk perspectives; b) determining business-criticality of applications and risk-urgency of results from assessments; c) identifying areas of over- and under-investments and reallocating funds to give the most benefits or greatest value for monies spent; and d) developing the best approaches, priorities, and timeframes for enhancement, renovation, consolidation, elimination, or replacement. Assets should be retired when they no longer are cost-justified or risk-acceptable.Copious amounts of data, quantitative analyses, and useful and actionable information are not enough to produce right (versus wrong) and good (versus bad) decisions. They only start and enable the conversations.Executive perspectives, management expertise, and healthy decision-making cultures are essential ingredients. Political understandings, business sense, governmental program knowledge, technical awareness, and an honest open atmosphere for discussion are absolute prerequisites. This is a debate-and-decide; not a review-and-approve process.
5 Definition of Applications Portfolio Management Portfolio management is a competency of applying structured processes to evaluate selected classes of application assets or resources, determine issues or variations for defined standards, and implement appropriate actions to resolve these issues. The objective of applications portfolio management is to maintain good awareness of the portfolio and to optimize life cycle cost, quality, risks, and value creation across each class of applications and integration assets/resources.Source: Gartner Research Note titled The Application Management Activity Cycle dated 21 July 2006.
6 Summary of Findings of Keane/Gartner Legacy Applications Study – December 2004 In the portfolio of approximately 900 applications: 40% are considered critical for department mission/strategy; 17% are enterprise (statewide) applications; and 75 of the applications processed by the state data center require 1-day return-to-service capability.The statewide portfolio is relatively young, with an average age of 7.5 years – since 1997, from 70 to 90 new or replacement applications have been added each year to bring down the average age.Health status is: 23% presenting functional, technical, or both problems; 50% with some problems, but manageable; and 27% healthy, with a prescription for continuing on-going operations and maintenance.Remediation timeframes are: 11% require action immediately (within next two years), 35% require action in the near term (2 to 4 years), and 54% require action in the long term (4 to 6 years).Although the immediate needs of the portfolio appear to be manageable, projections of its future status, if no remediation actions are taken, indicate an increasingly deteriorating condition as the applications age.
7 Framework for Managing IT Investments I. Strategic Business and IT Planning and Investment Selection and Budgeting- Investment Portfolio Management (IPM) – Build, Buy, and/or Implement the Right AssetsIII. Investment Operation and Maintenance, and Renewal, Retirement, or Replacement - Applications Portfolio Management (APM) – Maintain and Operate Assets in the Right Ways and Retire or Replace Them at the Right TimesLife Cycle of IT InvestmentsIdentify investments that best:Enable governmental initiatives or agency missions and strategiesResult in financial returns – revenue generation or cost savingsProvide better constituent services or program effectivenessFit technical architecturesSatisfy budget, staffing, and other constraintsMeet risk profilesOperate and maintain assets so that:Benefits/costs are optimized over their useful lives through astute and timely renovations, consolidations, or eliminationsServices offered meet availability, reliability, security, quality, and recoverability expectations within acceptable budgetsRetirements and replacements are effected when assets are no longer cost-justified or risk-acceptableII. Project Implementation - Project Portfolio Management (PPM) – Build and Implement Assets in the Right MannerManage projects by:Clarifying roles and responsibilitiesProviding appropriate oversightEnsuring they are well planned and thoroughly researched prior to startingDefining, tracking, and evaluating project progress frequently to achieve budget, schedule, scope, and quality expectationsCompleting them successfully so that business goals and objectives are realized
8 Why Lifetime Management of Applications is Important – Causes of Value Dissipation Lose 10 – 15%Lack of strategic business planNot strategically aligned with business goals and objectivesBusiness cases deficient in tenuous benefits, overly optimistic costs, too ambitious schedules, unrealistic staffing, optimistic risk assessments, and/or unachievable benefits/returnsPoor architecture fitInadequate investment evaluation, ranking, and selection processes (pick wrong investments)Lose 5 – 10%Lacking executive supportWeak project managerDeficient project planning, monitoring, and reportingInsufficient or inadequate requirements definition; contracting; and management of risks, vendors, testing, training, scope, quality, change, data conversion, communications, etc.Failure to reengineer business processesOver-customizing COTS packagesNo or inadequate post implementation assessments (PIAs)Lose 20 – 25%Lacking service management best practice framework (e.g., ITIL) and not implementing associated good processesInadequate asset management best practices – current and complete inventories; periodic assessments; management plans for useful lives; and business cases for renovations, replacements, or retirementsAssets are not cost justified or risk acceptable, but are not being remodeled, retired, consolidated, or replacedAsset Life Cycle Value100%50-65%Phase of Investment Life CyclePotential or Expected ValueActual Value RealizedSelectionImplementationOperationAdopted from PMO Executive Council Research
9 Definition of an Application – Business / IT Alignment View Some of the criteria used to evaluate applicationsApplications are inventoried, analyzed, and reported in the applications portfolio management systemInfrastructure assets are inventoried, analyzed, and reported in the asset management system
10 NC is not Alone in Implementing APM - Gartner Prediction for 2006 Gartner predicts that 40% of large public and private enterprises will implement application portfolio management in the next two years. The reason for the rapid growth in the use of APM is other companies and government entities have achieved successes in cost reduction, managing the complexities of hundreds of established assets, and improving budget process effectiveness.Applications portfolio management is critical to understanding and managing the 40 percent to 80 percent of IT budgets devoted to maintaining and enhancing software. Most organizations don’t track established applications over time to ascertain return on investment (or to determine which should be disposed of), and few manage application portfolios with tools. In other words, these organizations haven’t truly associated the substantial amount of money they’re spending with what they are spending it on.Gartner Research Note “Predicts 2006 Reacting to Application Development Challenges With Management and Automation” dated November 15, 2005
11 Why the Management of Legacy Applications is Important Ongoing and long-term management of:Risks – Consequences of unanticipated failures may be severe (due to operations or technical problems or inability to meet future business needs)Costs – Applications require significant $ to operate, maintain, and enhance; thereby, necessitating scrutiny and justification of these expensesInvestment Planning – Improve accuracy, effectiveness, and timeliness of planning for replacements, renovations, and consolidationsBenefit/Cost optimization – Limited fiscal resources must be allocated to the assets and investments offering the most benefits and value.Fiscal liability – Funding bodies must know future $ requirements to anticipate and plan for covering O&M, enhancement, and remediation costs.Performance and capacity – Must be measured and monitored and appropriate actions taken to ensure applications continue to meet business needs (adaptability, availability, reliability, maintainability, scalability, etc.)Disaster recovery and business continuity – Enable the development of viable plans and support recovery actions
12 Reasons for Applying APM Concepts and Disciplines to Existing Applications Identify and catalogue all applications – know what you have and what they do in order to manage them.Track and communicate technical and business status of applications to identify problems and take advantage of opportunities.Enhance the alignment of applications with agency strategies and technical architectures to improve support of business processes.Identify and eliminate or replace applications that are redundant, high-risk, low-performance, or high-cost (especially O&M).Develop a multi-year management decision roadmap to optimize benefits/costs and minimize risks over application useful lives.
13 Primary Goals for Managing Applications Identify high-risk applications (serious vulnerabilities with severe impacts) and assist in developing remediation approaches.Identify areas of over- and under-investments and reallocate budgets to more appropriately mitigate risks and maximize benefits.Achieve all possible savings through eliminations of duplications and unnecessary applications, reduce complexities of underlying infrastructure through remediation efforts (achieve better fit with state and agency technical architectures), and employ savings as a source of funds for new investments.Align IT with business priorities – better satisfy business strategies and evolving goals and objectives of governmental programs.Create a disciplined ongoing approach for the life cycle management of applications – there is not enough money to do everything, so do the right things.
14 Issues Surrounding Systems Obsolescence Over time, sustainability of applications becomes questionable due to age and technology advances, combined with changed business needs. They no longer:a) support business goals and objectives,b) are cost-effective to operate or maintain, and/orc) are risk-acceptable by presenting too much security vulnerability and/or too great a likelihood of failure with cataclysmic consequences.Business IssuesImpediment to the implementation of new and more cost-effective service delivery models – unable to respond to demands for new functionality or expanding user base, support business processes, or provide adequate and secure information accessBecomes a constraint in meeting regulatory or compliance requirementsStaffing Issues - Unavailability of SkillsUnavailability of staff skills or expertise to maintainUnavailability of third party vendorsDependency on individual contractorsTechnology and Operational IssuesExpired warranties, with no vendor supportCan not handle increased usage or volumes of dataDoes not run anymore on available platformsInefficient IT resource utilizationUsed beyond original intent, and cannot be enhancedCannot meet security, privacy, or confidentiality requirementsAre not easily recoverable for disaster recovery and business continuitySystem can fail, with untraceable errorInconsistent or inadequate information and data qualityNot compliant with state or agency technical architecturesSources of RisksApplication modernization projects are created because: enterprises need to boost performance, make easier to access (through Internet), transition from technologies no longer being supported, or extend the reach of existing application by integrating them with new programs being built by Java or other modern platforms.Extending legacy applications, rather than calling in the virtual bulldozer, appeals to enterprises because these applications are proven after perhaps decades of battle hardening, and because they are full of important business and customer information.Seems to run forever, but ultimately has a finite business, economic, operational, and/or technical life
15 Key Concepts: Analysis Perspectives Business, technology, operational, and financial perspectives are combined to determine the posture of the application, indicate the appropriate remediation strategy, and to provide recommendations for managing the application portfolio over timeGeneral idea – action is required when an asset is not cost-effective or risk-acceptable (it is worn out, no longer technically fits, or costs to much to keep)How do we maximize overall value, especially by redirecting funds to other applications or uses offering more value?Can costs be optimized across the organization, especially by eliminating or renovating costly applications?To what extent can innovation and new applications be funded by cost savings?Do they cost too much to operate or maintain?Do we have the right capabilities in place to support business processes?Are they aligned with business priorities?Where are potential synergies?Are there duplications?Do they provide quality and timely information?BusinessFinancialApplication Portfolio Analysis PerspectivesDo they fit the desired technical architecture?What is the technical migration road-map?What risks are presented by outdated technology?Are applications sustainable?Are they risk-acceptable?Do they present security, privacy, or disaster recovery vulnerabilities?TechnologyOperationalAre updates current with vendor releases?Do they support interoperability and information exchange among applications?Are they scalable, extendable, and adaptable – can they accommodate change easily?Do they help standardize underlying infrastructure to simplify operations and reduce costs?Do they meet availability, reliability, and maintainability requirements?Is there long-term staffing support?Do they require a supporting infrastructure that is too complex or diverse?Technology / Operational
16 Applications Portfolio Inventory and Classification Key Attributes for Each ApplicationGeneral – ID, business owner, age, etc.Business processes enabled/supportedBusiness value/criticalityUser informationFunctional qualityPresent business requirementsFuture business growth and new business needsTechnical qualityArchitectural complianceOperations and maintenance – support of or detriment toCostsOperationsMaintenance and technical supportRisk profileDisaster recovery/business continuity statusAttributes can be unlimited – use potential for compelling analyses (usefulness) and ability for consistent refresh as decision criteria for the selection of them.
17 Applications Portfolio Inventory and Classification Who Knows About Particular Attributes:Public Users (State’s Citizens and Businesses)Users From Other Government EntitiesBusiness UsersManagers and ExecutivesIT ManagersTechnical ArchitectsApplication DevelopersApplication MaintainersIT OperationsHelp DeskBusiness and IT Security and DR/BC StaffFinancial, Accounting, and Budgeting PersonnelSources of information can (and maybe should) be numerous – don’t overcomplicate, but ensure that all perspectives are offered and data is fact-based, reliable, and complete.
18 Analysis of Applications Portfolio - Basics Business leadersWhat are strategic business drivers?Which apps fit drivers (are mission critical)? Which do not?UsersWhich apps meet business needs? Which are lacking?How many users are dependent on app? What are the vulnerabilities and what are the impacts of outages.Business analystsWhich apps have accessible, complete, actionable, accurate, timely, and useful data? Which do not?Which apps enable business process reengineering? Which do not?Applications maintenanceWhich apps require the most maintenance effort and expense? Which are scalable and adaptable? Which are not? Which are most reliable and maintainable? Which are not?Help deskWhich apps generate the most trouble tickets?
19 Analysis of Applications Portfolio - Basics Technical architectsWhich apps contain components that comply with agency and statewide technical architectures? Which do not?Which apps contain components that are beyond vendor support – aged releases and/or removal of product support?IT managersWhich apps have reliable and dependable vendor maintenance support – either in-house or outsource? Which do not?Which apps do not integrate (share data) well? How critical are the these apps to the performance of other applications supporting critical business processes?Which apps have performance problems? What are the business and cost impacts of these? Can they be rectified?Which apps are subject to determinable vendor mergers or acquisitions? What are the consequences, and how can they be mitigated?Which apps have questionable risk profiles – security; DR/BCP; vendor viability; regulatory compliance; HR risk from staff retirement; privacy and confidentiality; and/or information availability, quality, and retention?
21 Application Portfolio Management - Action Approaches High/Good AlignmentMaintain/Evolve:Evaluate costs and business, technical, and operational qualityIf provides value as is and costs reasonable, continue regular support and maintenanceReengineer/Modernize or Replace:Consider renovation, retirement and replacement, or consolidationImportance to the Organization / Strategic AlignmentTolerate:Evaluate costs and business, technical, and operational qualityIf low costs and/or no business, technical, and/or operational problems, may consider elimination or consolidation or continue as isEliminate:If low business value or high costs, probably doesn’t justify replacement or renovationConsider decommissioning or consolidationLow/Bad AlignmentLowHighRisks
22 Application Portfolio Management - Action Approaches High/Good AlignmentReengineer/Modernize or Replace:Consider renovation, consolidation, or retirement and replacementMaintain/Evolve:Evaluate risks and costsIf low risks and costs, continue regular support and maintenanceImportance to the Organization / Strategic AlignmentEliminate:Evaluate risks and costIf high risk and/or high cost, consider elimination or consolidationTolerate:Evaluate risks and costIf low risks and low cost, continue regular support and maintenanceIf high risks and/or high cost, consider remediation, elimination or consolidationLow/Bad AlignmentBadTechnical Architecture Fit or Operational QualityGood
23 Application Portfolio Management - Action Approaches High/Good AlignmentMaintain/Evolve:Evaluate risks and business, technical, and operational qualityIf provides value as is and risks low, continue regular support and maintenanceReengineer/Modernize or Replace:Consider renovation, retirement and replacement, or consolidationImportance to the Organization / Strategic AlignmentTolerate:Evaluate risks and business, technical, and operational qualityIf low risk and/or no business, technical, and/or operational problems, may consider elimination or consolidation or continue as isEliminate:If low business value or high risks, probably doesn’t justify replacement or renovationConsider decommissioning or consolidationLow/Bad AlignmentLowHighOperations and Maintenance Costs
24 Application Portfolio Management - Action Approaches Risk is indicated by color of bubble: red is high, yellow is medium, and green is lowCost is indicated by size of bubble: large is high, medium is medium, and small is lowHigh/Good AlignmentReengineer/Modernize or Replace:Maintain/Evolve:High Risk and High CostImportance to the Organization / Strategic AlignmentChoice of Actions ???Low Risk and Low CostMedium Risk and Medium CostTolerate:Eliminate:High Risk and High CostLow Risk and Low CostLow/Bad AlignmentBadTechnical Architecture Fit or Operational QualityGood
25 Application Portfolio Management - Determining the Posture of Applications Generic criteria are defined to assess applications from a business and technology perspectiveGoodMeets present service delivery needsMeets anticipated needs for new services, business process reengineering initiatives, and information accessProtective of individual privacy and data confidentialityHighWarning Zone – High Technical RisksSafe ZoneSafe ZoneBusiness PerspectiveCreates inefficient and less effective service delivery processesConstraint on implementation of new services, expanded citizen benefits, and/or more efficient business processesIndividual privacy and data confidentiality at riskHigh Attention Zone – Both Business and Technical RisksWarning Zone – Not Making Best Use of In-Place Technology to Meet Business NeedsBadLowHighBadGoodTechnical PerspectiveExpensive to operate or maintainNone or decreasing vendor support for major componentsInsufficient or decreasing availability of staff supportCan not enhance for new business requirementsInefficient IT resource utilizationInadequate data access and qualityVulnerable securityRecoverability difficult or suspectNot compliant with state or agency tech. architecturesCost-effective to operate and maintainAdequate vendor support for major componentsAdequate availability of staff supportCan enhance for new business requirementsEfficient IT resource utilizationAdequate data access and qualityAdequate security protectionResilient to human-induced or natural disastersCompliant with state and agency tech. ArchitecturesEasily recoverableUnderstanding strengths and weaknesses of the existing set of applications from both a business and technical perspective can offer a good starting point for portfolio management. This starts with building profiles for each application (costs, business purpose/value, technology footprint, support, and architecture fit) followed by a business assessment that examines operational efficiency, business risks, and strategic importance and a technology assessment that examines capabilities, ongoing risks, and architecture issues. The results can be graphically displayed using a 4 sector quadrant that show poor performing applications, those with primarily technical issues, those with functional issues, and those that are doing a god job supporting business needs. Red zone applications are candidates for replacement or renovation. Orange zone applications are technically sound, but have shortcomings in providing effective business support and are god candidates for functional enhancements with relatively minor investment. Yellow zone applications are meeting business needs, but have technology shortcomings that probably require technical enhancements to address risk and prolong their life. Green zone applications are healthy and require regular support and maintenance.
26 Application Portfolio Management - Remediation Approaches High/GoodGood Technical Reengineering Candidates:High business value means quicker ROIRenovation will improve support and maintenance costsLow Priority Technical Reengineering:Low maintenance and support costsProvides value as isRegular support and maintenanceBusiness PerspectiveReplace - if possible, with Commercial or Government Package:If low business value, probably doesn’t justify custom code renovation or replacementConsider elimination or consolidationNo Technical Reengineering:Re-host candidateFunctional enhancementTolerate or investLow/BadLow/BadHigh/GoodTechnical Perspective
27 Risk / Business Urgency Application Portfolio Management - Investment Selection and PrioritizationPrioritization and timeframe for action are driven by overall importance to the organization/strategic alignment of application, business urgency for remediation, and risks.“Very Important and At Risk/Great Urgency” are highest priority were level of risks and degree of urgency drive remediation activities“Very Important and Limited Risk/Less Urgent” applications are second priority compared to above due to less strategic importance and/or mission criticality“Less Important and At Risk/Great Urgency” applications are also second priority for remediation, but may deserve slightly higher consideration due to high risk and more pressing business urgency“Less Important and Limited Risk/Less Urgent” are lowest priorityHigh/HighVery Important and Limited Risk / Less UrgentVery Important and At Risk / Great UrgencySecond PriorityFirst PriorityImportance to the Organization / Strategic AlignmentSelectivelySecond PriorityLess Important and Limited Risk / Less UrgentLess Important and At Risk / Great UrgencyLow/LowLow/LowRisk / Business UrgencyHigh/highIn addition prioritization is driven by:Specific business initiatives, programs, and/or funding streams availableOverall risk issues, interrelationships between applications, and the general need for modernization of legacy systems
28 Application Rationalization Rationalization implies the use of logical processes, rational thought, and agreed upon principles to weed out unwanted items and effect change. The rationalization of applications portfolios involves a step-by-step process conducted on an application-by-application basis with agreed upon methodologies and criteria and within a decision-making governance model to: 1) reduce the number of applications by the consolidation of those performing similar functions and the elimination those of low value and high cost, and 2) remodel or replace those providing value but not fitting technical architectures, requiring high cost, and/or presenting exposure to unacceptable risks.HighHigh Value, Poor Architecture Fit, and High Costs – Renovate or replaceHigh Value, Good Architecture Fit, and Low Costs – Maintain and keep currentBusiness ValueLow Value, Poor Architecture Fit, and High Costs – Eliminate, consolidate, or replaceLow Value, Good Architecture Fit, and Low Costs – Evaluate if really needed, consider functional enhancementLowArchitecture Fit and Cost-Effectiveness of OperationsBadGood
29 Portfolio Management Strategy The management of applications portfolios uses similar strategies and disciplines as those employed by financial managers. Portfolios are optimized by determining which applications receive current, lower, or increased levels of funding and which ones are targeted for renovation, consolidation, elimination, or replacement. Over time, the applications portfolios as a whole should reflect the greatest business value and closest architectural fit with the lowest costs and risks.HighHigh Value, Poor Architecture Fit, and High Costs – Renovate or replaceHigh Value, Good Architecture Fit, and Low Costs – Maintain and keep currentBusiness ValueLow Value, Poor Architecture Fit, and High Costs – Eliminate, consolidate, or replaceLow Value, Good Architecture Fit, and Low Costs – Evaluate if really needed, consider functional enhancementLowArchitecture Fit and Cost-Effectiveness of OperationsBadGood
30 APM is an Ongoing Process – Not Just a Project Examples of How APM Information Will be Used by AgenciesIdentify expansion budget requests for:Long (biennial budget) session of General AssemblyShort (2nd year of biennial budget) session of General AssemblyAssist in the preparation of annual DR/BCPs (COOPs)Assist in the preparation of biennial agency IT plansIdentify funding needs from other sources, such as federal fundsAssist in making decisions for or documenting changes in applications due to:New implementation projectsAdditions, renovations, or upgrades to technical infrastructureRenovations/modernizations to applicationsProvide answers to ad hoc questions
31 Overview of IT Portfolio Management Agency Missions and Vision and Business Goals and ObjectivesDevelop Business Drivers and Business CasesInvestment Portfolio ManagementIdentify Problems and OpportunitiesStatewide and Agency IT PlansAnalyze Candidate InvestmentsProject Proposals for Applications Renovations, Retirements, or ReplacementsSelect and Plan InvestmentsFunded New ProjectsManage PortfolioAdjust Project PortfolioAnalyze PortfolioApplication Portfolio ManagementOptimize PortfolioAssess Value of Projects and PortfolioProject Portfolio ManagementManage PortfolioNew or Renovated ApplicationsImplement ProjectsBuild and Maintain Inventory
32 Application Portfolio Management Perspectives Level IV (Step 4)Alignment (Optimize Portfolio)Process Inventory, contribution, function associationCore Business Drivers, priorities, process contributionInitialDeploymentFocusLevel III (Steps 2 and 3)Financial (Analyze and Manage Portfolio)Detailed application-level costs and cost-effectiveness analysesLevel II (Steps 2 and 3)Assessment (Analyze and Manage Portfolio)Risk, Operational Performance, Architectural FitScope of Keane-Gartner StudyLevel I (Step 1)Inventory (Build and Maintain Inventory)Application identity and basic information
33 ConclusionsApplications swallow cost, time, and management bandwidth, while increasing risks – unless they are well managed to reduce complexity and risk and retired or consolidated in a timely fashion, the entire IT budget will be operations and DR/BCP will be unaffordableCreating a portfolio view of existing applications does not have to be complicated; focus on the basics and the big picture – let the software tool highlight problem areas and offer improvement opportunities for management decision makingBenefits of APM are clear;Investment decisions for elimination, replacement, or remediation are made in a consistent manner considering application risks, value/importance to organization and its priorities, most effective use of personnel, and life span optimization of costs/benefitsIT complexity is reduced; thereby, maximizing business value received while minimizing IT cost incurredPlanning for DR/BCP is facilitated to ensure continuity of operationsRisks are managed, and stewardship for assets is facilitated