Application Portfolio Management

Application Portfolio Management (APM) recognises the importance to the organisation of existing IT systems. APM is sometimes termed Application Portfolio Governance. It can be considered part of IT governance, or a standalone discipline independent of IT governance.

Existing IT systems are critical because:

  • They support the current business.
  • They are the starting point for any changes to the IT support of the business.
  • They are the major part of IT costs, often estimated at 70% to 80% of total IT spend.

APM involves gathering a body of information about the existing IT systems, and using this information to inform management decisions. APM helps reduce costs, reduce risks, and increase return on IT system investments. To quote Forrester: "Early APM practitioners report 10% to 30% reductions in maintenance costs and returns on project investments within 12 months."

There are different APM approaches, and each has a different emphasis.

  • Some approaches are primarily concerned with the reuse of software assets, and look in detail at what code is running where.
  • Some approaches are primarily concerned with work planning, and are closely integrated with project portfolio management (PPM).
  • Some approaches are concerned with application transformation, moving the portfolio of systems from where it is now to a future defined point.
  • Other approaches see APM as a fundamental discipline that could be used alongside other initiatives such as PPM or a transformation, but that has an ongoing value as part of continuous improvement.

Application Portfolio Management Tools typically provide a repository for a system inventory and captured information, with analysis and reporting capabilities. Most of the major tool vendors such as MicroFocus, Compuware and Serena offer APM tools.

System governance

System governance is an approach to APM. Its distinctive characteristics are:

  • System governance sees APM as a fundamental ongoing discipline, which feeds into transformation and other initiatives such as PPM, but which is not dependent on them.
  • System governance takes a broad but simplifying view of IT. It does not attempt to model the implementation of systems and technology, but to gather and use management-level information.
  • System governance is not just a tool set, it is supported by processes, tools, materials, training and services.
  • System governance tools are web-based and incorporate a rule-based expert system to provide consistent advice on the management and improvement of IT systems
  • System governance is highly descriptive, capturing both qualitative descriptions and more objective grading. This allows system governance to work effectively with high-level information, without drowning in detail. It also means that the outcomes of system governance are traceable and justifiable.
  • System governance is independent of planning, architecture or process management activities. It is therefore suitable for small organisations have not formalised these aspects. It is also suitable for large organisations that have different planning, architecture or processes across the IT estate, or for organisations of any size that are not mature in these areas. It is particularly suitable during mergers, acquisitions and reorganisations, as a framework for evaluating IT when architecture, processes and plans are inconsistent or unknown.

System governance is an appropriate and cost-effective APM framework for most organisations. In some cases, such as organisations planning detailed analysis of code, other application portfolio tools might be required, and system governance used for higher-level management and reporting.