Application portfolio management (APM) has evolved into a critical discipline. With businesses increasingly depending upon technology to create new products and services, having the right mix of applications to support business objectives is a necessity.
As the stewards of APM, enterprise architects can be the catalysts of digital transformation programs that drive revenue and growth. This requires acting as a modern-day Socrates, asking the right questions to an ever-expanding, multi-disciplinary list of roles in an organization to translate needs into actionable plans and outputs.
To help you be successful, here are 10 application portfolio management best practices to follow.
See how Planview’s enterprise architecture solution enables you to advance business capabilities and realize strategies by making better decisions to optimize application and technology portfolios.
Learn how Planview can support strategy to delivery in a changing world of work.
APM developed in the late 1990s when organizations began creating inventories of applications, primarily as a response to the Y2K problem. Over time, companies added cost data, categorization, and business process linkage information to the inventories, providing new insight into how applications support business operations.
As the use of technology in business increased, the application “inventory” process emerged as a more focused discipline, with dedicated people and tools to manage it. Applications were now key resources in implementing strategy, and represented a significant cost and potential risk area.
In addition, applications were more interconnected, adding more complexity. This drove a requirement for increased visibility and analysis beyond what could be provided in spreadsheets. To respond to these trends, purpose-built application portfolio management software started to appear a few years after Y2K and have continued to mature.
Application portfolio management software was deployed to help:
The early drivers for application portfolio management frameworks were to lower costs and risks. Mitigating costs and risks are still important, but today’s organizations are also using APM to drive growth and revenue.
With an increased number of mergers and acquisitions as well as pressure to create new, interconnected products and services, companies are constantly reassessing their business capabilities and striving to embed technology into everything. To support these initiatives, IT leaders and specifically enterprise architects must identify and fill capability gaps, which requires making better decisions about application and technology portfolios.
This job is more challenging than ever, considering the state of applications today. Applications are getting simpler but more numerous, with vendors using cloud services to create and release new ones faster than ever. Companies must evaluate these technologies quickly to respond to customer demands, or else risk getting behind the competition.
In addition, businesses are moving more and more applications to the cloud. Rather than running applications, they can spend more time and money delivering continuous innovation and change. Meanwhile, enterprises are still running lots of legacy systems along with cloud, and the integration between applications in these hybrid IT infrastructures is complex and critical to understand.
Today, application portfolio management is more important yet more complex than ever. Companies are under pressure to drive growth and revenue with digital transformation initiatives, requiring an optimized application portfolio.
Increasingly, enterprise architects must work with multi-disciplinary teams consisting of executives, line of business managers, planning professionals, and those involved in execution. Only by collaborating with these different roles across an organization can one understand the capability gaps and requirements, and then deliver the right outputs.
Here are the ten best practices for success with APM, which Planview has gleaned from working with its customers over the past 15 years.
The top key to success with application portfolio management is to develop relationships with your colleagues who are making decisions involving applications and technology. These are your primary customers. They are working on the most important initiatives in various digital transformation roles. To start, target:
These individuals can derive the most value from APM, but only if you can help them make better decisions. You can only get what you need by talking to them. Get used to it, since you will be spending a lot of time with them. If you are not already, something is wrong.
Your answers to your customers’ essential questions will help them execute on their transformation projects faster and with less risk. Find out:
You may need to translate each question by abstracting it further or making it more concrete. Often, you must dig for the question behind the question. For example: A decision maker may say, “Why is our branding so varied across our web site, mobile app, and retail store kiosks?” What he or she may really be asking is, “How can we achieve a single view for the customer across all touch points?”
Beyond understanding these questions, you must determine what decisions your customers will make with the answers. This information is necessary to ensure you deliver outputs that allow for streamlined decision-making processes.
In the graphic below, you can see that different roles will make different decisions based on the same question. You need to change the scope and level of detail of your answers accordingly.
When inquiring about what decision makers want, you will often get this answer:
“I can’t describe what I need, but I will know it when I see it.”
So, let them see it! To answer your customers’ questions, document the set of outputs you propose:
The target output list becomes the milestones for delivery. Depending on the size of your organization and degree of transformation occurring, the total target output list can take from six months to a few years to deliver. Successful APM programs regularly re-prioritize this list and deliver a small set of the highest priority outputs in regular, short, 30-60 day intervals.
The most effective APM programs deliver value with the smallest set of data possible. Your internal customer determines what the value is by telling you what questions need to be answered, and what outputs will answer those questions.
What data should be managed in an APM solution? Only what is essential to generate your target output list (see #3 above).
Thus, it is critical to maintain a list of the data items required for chosen outputs. This will help you limit the scope of work associated with maintaining your APM solution. Avoid this step at your peril.
It takes resources and dedication to identify data sources, cleanse the data, and keep it up to date. Don’t use these resources to capture and manage data that might be valuable. You only want to collect what is needed for outputs that you know will be valuable. How do you know? See best practices one and two!
Data ownership is important for a successful APM program. If your users do not trust the data, they will stop using it for decision making.
A data owner has the responsibility to manage a subset of data items from the Target Data List. The data owner identifies the source, method of collection, and processes to follow that ensure the captured data follows the three Cs:
The data owner is not necessarily responsible for doing these tasks himself, though more often than not it is the same person.
There are three primary methods of collecting needed data for APM:
To obtain the necessary data, you must explain exactly what you want. However, people sometimes get stuck on crafting definitions. As an example, enterprise architects have been arguing for years about the exact definition of an “application,” but the understanding of the definition is more important than the definition itself.
For instance, if you need to ask folks to provide you with all the “applications” they use, be very specific about what you mean by application. Provide examples from your environment of what is and is not an application.
Whatever your definition, don’t seek a consensus agreement on the definition of a particular term. You aren’t putting together a dictionary! Instead, seek to gain complete understanding of what you mean by that term.
APM failures often occur due to data management. Two common problems are:
Another challenge in APM is that you will require effort from folks outside of your own team to supply data and to maintain it on a regular basis. Even though most APM software provides built-in workflow systems to help manage your data suppliers, it is important to train this team. Since this is not their “day” job, you must make it as simple as possible for them. The best practices for this include:
Organizations with excellent communication have the best APM programs:
If you follow these best practices, you will deliver your program as a series of small successes. Every stakeholder should know about these. Make an announcement for each one, letting all involved know:
As IT and the business become more intertwined to achieve revenue targets, enterprise architects have an opportunity to be key facilitators of digital transformation programs. These best practices provide a tested application portfolio management template to follow.
Start by understanding what you want to get out of your application portfolio management program first. Data is critical, but it comes from people who don’t work for you. Make it easier for them to help you by answering their questions and helping them execute on their initiatives. Target short 30- to 60-day time frames for delivering value. Then, communicate continuously as you work with your colleagues to deliver the products and services that meet strategic business objectives.
The Planview solution for Capability and Technology Management enables enterprise organizations to advance business capabilities by connecting technology with business outcomes. By engaging cross-functionally with stakeholders, EAs can create enterprise architecture plans and roadmaps that achieve strategic objectives.
Application Portfolio Management is a part of Planview’s Capability and Technology Management solution, first released in 2003 as a core feature of the legacy Troux product line. APM best practices are supported through 15 years in partnership with over 300 deployed customers. The Planview solution for Capability and Technology Management helps you understand the dependencies between your organization’s program and application portfolios, the underlying technology stack, and business capabilities, projects, and products.
See how Planview’s enterprise architecture solution enables you to advance business capabilities and realize strategies by making better decisions to optimize application and technology portfolios.
Learn how Planview can support strategy to delivery in a changing world of work.
