Perform Better and Spend Less through Application Portfolio Optimization

 In Portfolio Rationalization

Many organizations struggle to manage their application portfolios and deliver secure, modern, and cost-effective applications on time, on benefit, and aligned to the business. IT staff are constantly driven to improve business agility, respond to new demands quickly, and do more with less. This requires companies to remove inefficiencies in their existing portfolios and better manage the portfolio of applications that support key services and strategic projects:

  • Finance
  • Legal
  • Human Resources
  • Marketing
  • Customer Relationship Management (CRM)
  • IT Operations Management (ITOps)
  • IT Service Management (ITSM)

In order to make the right business decisions regarding its application portfolios, IT leadership needs complete visibility of all applications deployed in the enterprise as well as information about each application from a variety of dimensions.  What business capabilities and processes are associated with a particular application.  Should a particular application be tolerated, enhanced, or retired? How well does it support current business objectives?  Does it fit in with your future IT landscape?

These questions and more can be answered through application portfolio rationalization, which is the process of understanding how applications impact/support the business with goal of reducing the number of applications . Its primary purpose is cost reduction, with a typical goal being to minimize software licenses required, especially since many enterprise applications are priced according to the number of users. Meaningful cost reductions also occur as a result of having fewer applications to manage as fewer deployments, tests, and updates are needed.  An added bonus is that IT staff can focus their time on other responsibilities more important to the business.

The first step in gaining the necessary visibility to truly take control over the application portfolio is to take a comprehensive inventory of all the business applications so that IT managers, application owners, and architects can get a consolidated view of the application landscape.   It is important to have the flexibility to view the application inventory in terms of a variety of parameters, such as platform, architecture, or technology stack used by each of the applications. Given the large number of applications and broad scope involved, this first step alone can be daunting without the ability to crowd-source this important research information. Once discovery is complete, architects and application portfolio owners should be able to drill into application details to get insights into the various infrastructure components making up the application as well as the business and technical capabilities supported by each application. Armed with detailed information, application portfolio owners and architects can make informed decisions regarding application investments by assessing and comparing the applications across many relevant metrics such as:

  • Business and technical value
  • Associated processes, capabilities, data, value streams, etc.
  • User satisfaction
  • Costs
  • Quality
  • Risk

For example, the application assessments plotted on bubble charts can help quickly identify applications that are candidates for replacement, retirement, migration, or upgrading. Simple yet powerful graphical representation with drill-down capability enables businesses to quickly answer such questions as:

  • How much does it cost to support this application?
  • Is there any overlapping functionality or technology that can be consolidated?
  • What is the perceived business value of the application?
  • Specifically, how well does the application support business objectives?
  • Should we consider moving the application to the cloud?

Graphical and tabular views of applications shed light on performance data, costs, and workloads to help make informed decisions and draft strategic recommendations. Architects, application owners, and other stakeholders are able to align these recommendations to IT goals and make them visible for IT to clearly see what they need to work on. IT leadership can visualize these planned application investments and how they shape the application landscape over time. In addition, dynamic roadmaps can show you the application landscape from various points of view such as what organizational, location, and information elements are involved with each application.

Application portfolio rationalization enables IT to work with the business to make intelligent decisions with the goals of meeting demands, managing risk, and controlling costs. Rationalized investments in the application portfolio focus on the areas of greatest opportunity for growth and innovation. If you’d like to learn more about how your organization can benefit from running IT like a streamlined business, please feel free to contact us.

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