adopting an application portfolio management approach · portfolio management approach ... –...

Adopting an Application Portfolio Management ApproachKey principles and good practices

White paper by Fabrice Vila Consulting Director, Enterprise Architecture Practice Leader

2 Adopting an Application Portfolio Management Approach – © MEGA 2014

Content

I. The need for a sustainable APM process ......................................................41. Why APM is so important .............................................................................................4

2. Sustainable APM and IT governance..............................................................................5

II. Key principles of a sustainable APM approach: ............................................61. Main activities of APM .................................................................................................6

2. Defining roles and responsibilities for APM ....................................................................7

3. Establishing governance of the application portfolio ........................................................10

4. Choosing the cost analysis model ..................................................................................10

III. Moving from inventory to transformation ....................................................121. Inventorying applications .............................................................................................12

2. Evaluating the portfolio to identify opportunities for improvement ....................................14

3. Proposing transformation initiatives ...............................................................................16

IV. Adopting the best APM approach ..............................................................191. A project in its own right ..............................................................................................19

2. Key factors for successful APM .....................................................................................19

3. Organization of application portfolios and case studies ....................................................20

V. Conclusion ...............................................................................................22

3Adopting an Application Portfolio Management Approach – © MEGA 2014

Executive summary

CIOs face the daily pressures of providing high quality IT services, introducing new, innovative technologies to advance business objectives and keeping costs under control. Along with mee-ting these demands, they must develop a pragmatic IT budget each year that fits within the company’s financial parameters. Sometimes, because IT operational costs continue to rise, they must eliminate or reduce new services or technology plans in favor of keeping existing services running.

However, when CIOs have better information about the company’s IT assets, they can find ways to reduce operational costs so that important new IT initiatives can be launched. By managing the application portfolio on an ongoing basis, identifying the applications that are redundant, underused, no longer the best technology option, or too costly, CIOs can apply their IT budget to the most necessary, mission-critical options that will advance the enterprise’s goals.

Many CIOs have used some type of application portfolio management (APM) to monitor IT assets and make decisions about application retirement, changes or acquisitions. However, companies often limit their APM approach to a one-time inventory of IT assets or use very limited office management tools. These approaches aren’t sustainable over time and don’t deliver the rationa-lization capabilities and decision making support that a mature and well-designed APM program should provide.

APM should reduce the complexity and cost of an application portfolio, help manage risks and align the portfolio with business challenges. To achieve these goals, two primary actions are necessary:

– regular and special circumstance review and analysis of the portfolio in order to inventory, evaluate and plan the transformation of IT applications.

– a governance plan that relates the strategy of the IT department to a common framework for IT asset review.

Successful APM is an ongoing process, with measurable goals and deliverables. The IT team must understand:

– what roles and responsibilities should be established

– what skills are necessary and where they can be found

– the best way to effectively initiate the inventory of applications

– how to keep the inventory updated

– what governance should be implemented

By combining a sustainable approach with a well-designed APM software solution, and inte-grating the program with IT governance, CIOs are better able to support fast-changing business needs and innovation.

Read on to learn about the key principles of effective APM and discover the primary actions to take in setting an APM approach that will contribute to corporate goals.


I. The need for a sustainable APM process

1. Why APM is so important

As companies become more mature and grow, whether through increased market share, merger or acquisition or geographic expansion, they accumulate large numbers and varieties of appli-cations. Eventually, many of these become redundant, under-used or obsolete. In addition to rapidly rising software maintenance fees taking a larger share of IT budgets, these applications can increase company risks if they lead to vulnerabilities in IT systems or decrease flexibility.

INCREASE innovation

for business

REDUCE complexity and costs

“Despite the need to grow, there is pressure on budgets. The global weighted average expected change in CIO IT budgets is +0.2%. This lack of significant uptick presents challenges for the CIO and IT organi-zation since there is a need to simultaneously renovate the core of IT systems and services, and exploit new technology options.”

Source: 2014 Gartner CIO Agenda Report.

Challenges Addressed by APM

Growing ITmaintenance budget

Aging technologies

Application portfoliosize, interrelationships

and complexity

Lack of applicationflexibility

Redundantapplications due

to mergers / acquisitions

Need for flexible useof new technologies

Dependenceon critical skills

IT Systemsunderperforming

Inability toshare & manage

business information

Time to market is too long

Business strategynot well supported

Costs too high

Increased riskof loss of business

A formal and ongoing APM program is an important practice today that allows CIOs to:

– obtain a precise view of the application inventory, dependencies, interfaces between applications, required infrastructures and technologies, and more

– evaluate the application portfolio based on different perspectives and needs, such as value, costs, and risks

– identify potential improvements in terms of performance and costs

– organize and manage portfolio transformation initiatives, focusing specifically on reducing Total cost of ownership (TCO).


2. Sustainable APM and IT governance

For an APM approach to be sustainable, it must be integrated with IT governance. An applica-tion portfolio can’t be managed without taking into account the related IT project portfolio and the infrastructure portfolio that support and affect the applications.

Likewise, management of the application portfolio must integrate IT transformation rules, if any, as well as technology standards and strategic guidelines for IT and the business.

Some APM approaches have shortcomings because of their ad hoc or limited nature:

– a scope limited to an application inventory. Limiting APM scope to just the inventory process does not meet a fundamental requirement to optimize the application portfolio and link it to IT governance.

– the use of short-lived tools. Spreadsheets, simple diagramming tools, or ’homemade’ databases may be useful and flexible when initializing the approach or for a one-shot exercise, but they rapidly become limited for repeated and long-term use.

– the one-time evaluation, often proposed by consulting firms. While this may provide a relevant analysis of the portfolio and areas of rationalization at a single point in time, every major change (merger, change of IT/business strategy, etc.) means carrying out a new inventory, evaluation and identification of opportunities for improvement. Repeating this process from the beginning is just as costly and time-consuming as the first time.

CIOs need the appropriate tools to manage their assets, which could consist of thousands of applications used in numerous subsidiaries worldwide, and based on a range of technology. Today, it is impossible to imagine an accounting department trying to function without accoun-ting software or a human resources (HR) department without specialized HR tools. Why should a CIO try to work without a portfolio management solution?

APM should be an integrated process rather than a siloed approach. The benefits of structuring APM in this manner become measurable throughout the life span of the IT department, as application main-tenance fees may decrease year to year, or as staff time may be devoted to newer and more important initiatives rather than old application support.

To support a sustainable, ongoing evaluation pro-cess for application portfolios, simultaneous activi-ties must be carried out to set up an organization, process, governance and toolset, both appropriate for the organization and flexible enough to function through change.

Projects HardwareAssets

ITPortfolio

NetworkAssets

Applications


II. Key principles of a sustainable APM approach:

1. Main activities of APM

The APM program must analyze the effectiveness of the existing application portfolio in order to identify the best options for improvement, which could mean application retirement, migration or adaptation for selected applications. It must also identify risks linked to these changes, such as end of support for applications, gaps in skills, and more.

To reach these goals, the APM process must include:

1. Portfolio review and analysis carried out by cycle, and covering objectives, issues and IT/business priorities. This review will suggest improvements that can be quantified and prioritized.

2. Application portfolio governance for proactive and ongoing portfolio management. This provides a common framework for reviews of the portfolio using standardized evaluation criteria, rationalization objectives, and IT transformation rules. It enables comparative analyses and ensures comprehensive portfolio management.

3. Support Activities, which may include

– APM training for portfolio managers

– the provision of specialized APM tools

– enterprise-wide communication of APM results

– technology development monitoring


Main Activities of the APM Process

Governance of Application Portfolios

IT transformationprojects

Inventory Evaluation Transformation

– Plan

– Collect application info (questionnaires, interview, and documents)

– Complete the repository

– Verify, compile information

– Validate application details with application managers

– Score applications (value, risks and costs) and classify them: invest, migrate, eliminate…

– Analyze the portfolio (recommended actions, critical oversight points: skills, technologies, etc)

– Identify and characterize opportunities for transformation/proposed roadmap

– Prioritize and quantify terms of the business case

– Identification of changes for inventory maintenance– Identification of major changes (business/IT) that might

impact plans/integration of the business/IT strategy (master plan)

– Taking architecture rules into account

Arbitration, Staffing, Planning, Execution

and Oversight

Prioritized proposals for improvements,

replacements, retirement of applications

Project feedback (renewed

applications)

– Arbitration of transformations

– Measuring results of transformations/application portfolio rationalization objectives

APM Process

Review & Analysis of the Application Portfolio

ArbitrationValidation of

recommendations

Periodic review cycles for ongoing alignment and

improvementGovernance framework of the application portfolio

2. Defining roles and responsibilities for APM

Distinct categories of stakeholders are involved in APM and roles should be adapted to each organization. In practice, one individual in the organization might play several roles, depending on the size and complexity of the company.

APM Sponsor (in charge of all company application portfolios)

Responsibility – the entire application portfolio (budget, performance and timeframe)

Main actions – sets targets for the rationalization and optimization of the application port-folio

– coordinates the team of application portfolio managers and sets their targets

Candidate within the organization

– CIO

– Enterprise Architecture Practice Leader


Application Portfolio Manager (in charge of a single portfolio)

Responsibility – the ‘health’ of his/her application portfolio

Main actions – ensures the quality of information of the portfolio

– mobilizes the appropriate individuals for the inventory update and scoring of applications

– has a clear view of all ongoing projects in the portfolio

– performs and coordinates the evaluation of the portfolio in order to identify options for optimization/rationalization

– prepares the business case describing and supporting transformation ini-tiatives to perform and defends it before the application review committee


– member of the enterprise architecture team

– representative of a regional and/or functional IT field, such as corporate applications

Application Owner

Responsibility – ensures that the application is in adequate operating condition

– functional development of application responds to business needs

– documentation is up to date

– application performance

Main actions – provides inventory information related to the application under their res-ponsibility

– mobilizes appropriate individuals (business manager, support) to update the application record if needed


– Project manager

– Application owner

Other Participants

Responsibility – provides information related to the applications or their evaluation

Main actions – provides inventory information related to the applications within the scope of their responsibility

– mobilizes other individuals (business manager and support) to update the application records with relevant information

The following participants may be requested to contribute, as required, by the application owner and/or directly by the portfolio manager (for example, for applications evaluation)


Infrastructure Manager

– provides information on infrastructure (servers, hosting sites, etc.) and tech-nology components (e.g. SQLServer, IIS and Oracle) required for the suc-cessful operation of the application

Finance Manager, Management Control

– provides cost models applicable to applications

– provides cost information for specific applications

Business Manager – provides or validates information related to the business coverage of applica-tions, such as evaluations on user satisfaction and level of business support

Enterprise Architect

– ensures alignment with the target architecture and compliance with archi-tectural standards and modelling rules. Enterprise architects may provide experience and best practices gathered from enterprise architecture projects

Supplier Manager – oversees the performance of providers and fulfillment of service level agree-ments (SLA)

Support / Maintenance Manager

– provides information on the history of major incidents related to applications and the difficulties encountered during the IT operations of applications

Risk Manager – provides information highlighted by risk assessments or business continuity plans, such as necessity and recovery time objective (RTO)

Application Review Committee

Responsibility – decision making body, chaired by the CIO and composed of IT and business representatives and key stakeholders of APM

Main actions – agree on joint objectives, scope and limitations (budget and priorities) in IT transformation

– validate and prioritize opportunities for rationalization and transformation of the portfolio presented by the application portfolio manager

Composition – CIO

– Enterprise architecture practice leader

– Business representatives

– Portfolio manager/infrastructure manager

Additional members may be added depending on the needs and agenda of the committee.


3. Establishing governance of the application portfolio

APM governance is intended to provide a common framework for application portfolio reviews and ensure comprehensive control.

They key principles of APM governance include:

– establishing the frequency of reviews and analyses

– enabling the synchronization of APM activities with other processes the CIO coordinates at the same time, such as IT architecture or management of project portfolios

– monitoring the performance and results of transformation projects resulting from APM activities and comparing them with the initial objectives

– identifying major business or technology changes that could have an impact on APM analyses and transformation plans

Governance of APM depends on many factors:

– the business and IT strategy – technical architecture and technology standards – current and target enterprise architecture – conclusions of application portfolio reviews for decision-making – project feedback

The main body in this governance process is the application review committee.

4. Choosing the cost analysis model

One of the basic decisions at the outset is the cost structure that will be used in the APM solu-tion. This involves finding the right balance between the level of information detail that will make it possible to make informed decisions and the time necessary to obtain and maintain this information.

There are two primary cost models: total cost of ownership (TCO) and relative cost of operations (RCO).

The TCO model is the most commonly used. It calculates the total cost of an IT asset, from acquisition or development of the solution to its retirement. TCO includes:

– annual hardware and software maintenance costs – lease or lease-credit costs if the hardware is not bought outright by the company – insurance – installations and migrations – procurement/purchase and IT asset management – product monitoring and testing – costs linked to equipment reconditioning


Total Cost of Ownership Model

Infrastructure(service)

Infrastructure (service) Licenses(maintenance)Personnel / Service(operation)

Infrastructure(service)Personnel / Service(operation)

Licences (acquisition)

Infrastructure(procurement)Personnel / Service(development)

Operating costs

Application Life cycle

Preparation Production Retirement

Investment costs

Other organizations prefer the RCO, a simpler model recommended by Forrester Research. It is short of a complete TCO analysis, but provides more information than a return on investment (ROI) calculation. RCO is used by IT organizations to compare the impacts of several options using relevant inputs, but using fewer resources than required to conduct a complete TCO ana-lysis. RCO can be used to evaluate cost impacts of changes to the application portfolio.


III. Moving from inventory to transformationPortfolio reviews and analyses are conducted in order to prioritize suggested options about the future of each application. These reviews and analyses consist of three main activities:

– application inventory

– evaluation of opportunities for improvement

– transformation planning

A business case groups all of these elements together and helps validate the decisions on which initiatives to implement.

1. Inventorying applications

What does the inventory involve?

The collection and verification of information gathered from different sources is the founda-tion of the application inventory, the key element for analysis, cost reduction, identification of opportunities for improvement and choice of investment.

The application inventory consists of:

– a list of portfolio applications

– a set of data and information for each application (name, application ID, functions supported, geographical use, etc.) with a single ID enabling the cross-reference of information from multiple sources

– a set of quantitative and qualitative characteristics used in the different application reviews.

Examples of application information include:

Category Examples

General Information Name, ID description, status, age and type

Responsibilities / Organization User / owner / manager

Functional information Business necessity, processes supported, functions supported and capacities

Usage Number of users, user entity, frequency, availability and deployment site

Technology Database technology, programming language, security and status of technical documentation

Integration Application interfaces, incoming and outgoing (number)

Support Number of support FTEs and incident count

Costs Fixed costs and periodic costs (support, licenses and hardware)

Collecting this data involves interviewing IT and business subject matter experts and having them formally validate the information that will be used for analysis.




The following separate operations are then performed:

1. Planning and preparing data collection

– identifying sources of information, such as spreadsheets, APM tools and asset management tools, and any existing collection processes; for example, surveys via email or intranet

– validating the data collection approach

– ensuring that the tools in place enable optimum information collection

2. Collecting data

– collecting information using questionnaires and interviews

– organizing and cleaning data, then capturing it in the repository; once this is complete, providing initial reports to interviewees to validate the information

– sharing the progress of data collection with executives using dashboard summaries

3. Verifying the data in the application inventory repository

– verifying the accuracy of information captured in the repository by performing calculations and aggregation of data

– comparing information from the repository with what is commonly known within the organization

– making the necessary corrections and obtaining a formal validation of the information from the subject matter experts


2. Evaluating the portfolio to identify opportunities for improvement

What does the evaluation of the application portfolio involve?

An analysis of the information collected through the different analysis criteria enables the evaluation of the portfolio and identifies the subsequent actions to be taken about individual applications.

Portfolio Evaluation Elements

ApplicationPortfolio

– Aligns with the new business strategy/ operational needs

– Contributes to growth of revenue

– Improves operational effectiveness, reduces costs, risks

– Necessity for the business

– Performance– Flexibility– Ease of maintenance– Configuration flexibility– Security

– Operating and support costs

– Maintenance and development costs

– Costs of licenses– ...

– Usability – Availability– Productivity

– Quality– Accessibility of data– Ease of maintenance– Flexibility

DataFunctionalcondition

TCO costs Technicalefficacy

Business value

From the inventory information, applications are scored according to each of the chosen ana-lysis criteria. The evaluation is collective, with the portfolio manager coordinating the efforts.

As with the inventory collection process, the application portfolio manager gathers the scores from different individuals, using the same collection tools: Excel, Intranet survey, APM tool, or others.

A pre-defined score sheet sets a company standard for the entire portfolio, leaving as little room as possible for subjectivity.

Consolidation of scores and cross-referencing of criteria support the classification of applica-tions. Applications may be categorized based on their importance to the business. This type of analysis ensures that the most important investments and expenses (maintenance and develop-ment) are indeed focused on the most critical applications.




The first recommendations for improvement of the portfolio can then be made.

The use of graphs and diagrams facilitates the analysis of information and allows effective deci-sions on the best options for application modernization.

Different analysis perspectives

The primary actions on applications can be grouped into six categories:

Action Reason for Action

Retirement Applications with little value to the organization or impact on the business, such as those that are seldom used, not critical, replaceable by any existing application or have excessive maintenance costs

Replacement Applications important to the business but with functional shortcomings and/or faults in terms of technology quality

Migration Applications adding real value to the business, but their operational performance is poor, whether they fail to meet technological standards, need to re-engineer the application platform or required a code review

This is also the case when competent resources to support the application are scarce, such as when provider support may be at risk for interruption

Re-prioritization Applications whose level of support and maintenance has been over-estimated in relation to business needs

Re-localization Applications that are candidates for other sourcing methods, perhaps leasing or SaaS

Maintain High value for the business/technical efficiency


3. Proposing transformation initiatives

What does this analysis involve?

Recommendations made during the previous phase must now be analyzed in greater detail, in terms of time planning, costs, risks, benefits and impact.

The preparation of a business case encompassing all of these elements is an essential delive-rable because it will enable decision makers such as the application review committee or mana-gement to make informed decisions regarding initiatives and projects to be in the budget. The CIO must filter the projects using specific, pre-defined criteria. The business case justifies the investments needed for transformation initiatives, evaluating the benefits generated in terms of operational performance, improvement in services offered to the business and cost reduction.

Based on the collected information and recommendations, it is appropriate to further refine the assessment of impacts and risks of high-priority actions.

There are key questions that should be answered before applications are retired or changed in some way:

– What would be the impact on the application interfaces?

– Which functionalities would no longer be available?

– What would be the impacts on current projects?

– What impact would these changes have on the IT roadmap?

Before final decisions are made, all of these questions must be answered in order to predict the full impact of projects.

A prior analysis of transformation scenarios ensures the right decision is made based on the organization’s capacity for change. This reduces the financial, organizational and human risks of transformations.

Recommandations ranking

Prioritization criteriaBusiness valueImplementation cost

StrongWeakImplementation cost

Recommendation grid

Preliminary recommendations

1

2

3




Simple tools (see grid p.16) are available to set the priorities of different options: quick win priorities (high impact, low effort), key recommendations, etc.

In some cases, several transformation scenarios may need to be considered. To do this, and to have access to all available decision-making elements, APM solutions provide a wealth of tools and maps to show different options for the future of the lifecycle (for example, retirement date in the short or long term) and to help in selecting the target roadmap.

APM solutions can also help compare the different transformation scenarios according to prede-fined analysis criteria (costs, risks, business, etc.) based on business and IT strategies.

Example of a comparison between two scenarios:


Preparation of a business case that encompasses all of these elements will allow sponsors to agree on decisions regarding which initiatives to implement.

An example of a business case would be:

1. Executive summary 2. Objectives of the business case

2.1. Objectives2.2. Scope2.3. Hypotheses

3. Findings on current development areas3.1. Key business factors3.2. Key technological milestones3.3. Description of the current situation

4. Conclusions of the technical evaluation4.1. Application map4.2. Technical infrastructure4.3. Specific needs

5. Recommendations5.1. Modernization and maintenance proposal5.2. Other alternatives5.3. Proposed application map5.4. Technological recommendation

6. Cost/benefit analysis6.1. Risk assessment6.2. Costs6.3. Benefits6.4. Value proposal


IV. Adopting the best APM approach

1. A project in its own right

Management of the application portfolio is not a siloed initiative but a process with its own deli-verables and integrated activities. It has clearly defined roles and responsibilities, management indicators, governing bodies and information system (the APM solution).

APM implementation should be understood as an independent project to ensure its success. The process needs to be carefully designed since the integration of an APM solution is a key element of the approach.

2. Key factors for successful APM

Several actions will ensure the successful adoption of an APM project, including:

– Defining quantifiable cost targets and monitoring the ROI of the APM approach (e.g. 10% reduction of application maintenance costs per year over five years).

– Defining the basics effectively: organization, data structure of the APM solution, expected analysis, etc.

– Establishing an incremental scope

• Storing just the right amount of information in the APM repository to facilitate inventory maintenance.

• Performing a pilot project on a realistic number of applications (from 50 to 100) to test the toolset, process and organization, as well as to validate the benefits of the approach.

• Setting up a simple toolset initially (Excel list, APM software package with a limited range of implemented functionalities, etc.) and then refining this as the organization gains experience. Later, the company can integrate a larger number of functionalities and analyses into the APM software package and focus on interfaces between the APM solution and other asset knowledge management solutions such as CMDB tools, or PPM, project management tools, etc.)

– Driving and facilitating change

• Establishing clear responsibilities for the APM team, expected contributions, governance structure, etc.

• Putting in place adapted tools for each stakeholder: score charts for the CIO, analysis and decision-making tools for portfolio managers, information capture forms for application owners, etc.

• Managing resistance to change. The request for information about applications to application owners may be perceived as unproductive or even disruptive. It is important to emphasize the contribution and benefits of APM for management and operations.

– Setting up control points for information in the repository and gains achieved by the system (verification, during application reviews, on delivery of projects and update campaign depending on APM priorities)


– Not re-inventing the wheel

• If no in-house resource with the required skills in the field of APM is available, there are many options for expert assistance in consulting firms. They can help provide more visibility to support the implementation of APM more effectively.

• The adoption of specialist APM software will make help the initiative benefit from ready–to-use and well-established information models for the management of APM data, analysis, profiles and pre-configured workflows. This will speed up the implementation phase and help avoid over-dependence on an external provider.

To sum up, the following phases are recommended in the implementation of the APM process:

– Integration of the business/IT strategy– Definition of APM objectives/main evaluation criteria– Identification of existing information– Definition of the scope of applications/ pilot project

Definingthe fundamentals

Review of theapplication portfolio

in the scopeof a pilot project

Preparationfor roll-out of

the APM

– Collection of application information/initialization of data– Review and evaluation of information with application managers (business applications, technology and risks)/financial evaluation– Analysis of redundancies/divergence from standards– Proposed optimization opportunities/prioritization– Review of evaluations and alternative changes– Business case of transformation proposals (budget and planning)

– Organization: sponsors, APM team, contributors and committees– Analysis tools: time and grids– Information model, attributes, application keys and definitions– Reference nomenclatures: process/capacities– Preparation of the toolset: MEGA APM, imports, etc.

DefiningAPM objectives

– Implementation of governance of the APM: roles, committees, etc.– Automation: collection/evaluation/decision-making process– Improvement of tools: interfaces (PPM, CMDB, EA, etc.)– Training/change management– Establishing oversight of ROI

These phases are usually completed in two to three months.

3. Organization of application portfolios and case studies

To effectively manage an application base, it is necessary to organize it into several portfolios on a human scale, since application sub-portfolios are the responsibility of portfolio managers. The grouping of applications into portfolios is generally performed within the functional domain of the company’s IT (e.g. CRM, HR manager, etc.), by geographical area (e.g. manager for Asia or Europe), for single-department applications, or according to the organization in place (e.g. applications in the business export line).


Below are some cases that illustrate these principles:

Case International company of 3,000 people across three continents / Media sector

Context – newly established corporate CIO

– target: reduce the number of applications by 35%

– implementation of SAP (replacement of existing applications)

– recent merger with a new company

Key figures 800 Business applications / 100 people under the CIO

Organization

of application

portfolios

15 Portfolio managers responsible for 15 application portfolios broken down into:

– 1 portfolio by cross-sector application: Finance

– 8 portfolios by regions: USA, UK, Germany and France

– 6 portfolios by functional cross-sector: management of rights, management of the logistics chain and management of catalogues

40 application managers

Governance – CIO committees: bi-annual / Application review committees: quarterly

– program led by the enterprise architecture department

Case International company of 100,000 people / Tobacco industry

Context – implementation of SAP and replacement of existing local applications

– goal is to reduce the number of applications by 50% over 5 years

– APM and enterprise architecture plan performed jointly

Key figures 3,000 business applications

Organization

of application

portfolios

40 application portfolio managers broken down into 40 portfolios by geographical area: Southern Europe, Eastern Europe and Canada

Governance – portfolio review committees: monthly

– program led by the group architecture department

Case International company of 3,500 people / Financial Sector

Context – recent implementation of an enterprise architecture system

– activity ased costing (ABC) system with a cost reduction target

Key figures 350 applications / 200 people under the CIO

Organization

of application

portfolios

10 Portfolio managers responsible for 10 application portfolios broken down into 10 portfolios by business line: markets, monetary funds and real estate

Governance – program led by the enterprise architect department

– participation of management control


V. Conclusion A sustainable APM approach is no longer a mere “nice-to-have” in the CIO’s toolset, but a key element to effectively manage assets and the transformation of a company’s IT system.

A clear view of existing applications is a prerequisite for any plan to rationalize and develop IT systems. APM is the process by which the CIO ensures proper understanding of applications and makes effective decisions to develop application portfolios.

The information to be collected in terms of portfolio optimization criteria is quite large, so cri-teria must be adapted to each company. These may include cost, sustainability of the vendor, legal constraints, user satisfaction, ease of adaptation for future needs or respect for architec-tural principles. For the different stages of the APM process, the stakeholders, decision-making bodies and the software solution to be used must be defined and adapted according to the specific requirements of the company.

Adopting a sustainable APM solution, integrated into other major IT transformation processes, provides the CIO with a powerful governance tool. It also facilitates better communication throughout the company about IT resources.


About MEGAMEGA International is a global software solutions company that supports large com-mercial organizations and government agencies in managing their enterprise com-plexity by delivering an interactive view of the business. We provide business leaders with the necessary visibility and information for improved decision-making. Our solu-tions help companies optimize and transform operations, and ensure that they are continuously managed in alignment with the organization’s business strategy and objectives. Today more than 2.700 companies in 40 different countries are using our solutions.

For more information, visit: mega.com

If you’re looking for a way to improve your Application Portfolio Management, visit: mega.com/apm

http://www.mega.com

http://www.mega.com/apm

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