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3 July 2007

What is Application Portfolio Management?

By Andrew Clifford

Application Portfolio Management (APM) is set to become the next big thing in IT. But different vendors have a very different view of what it is.

If you search for Application Portfolio Management (APM), you will find two things: industry analysts such as Gartner and Forrester making very bold claims about the value of APM; and leading tool vendors positioning their products as APM tool sets.

What is APM, why is it so valuable, and what should you do about it?

APM starts with the realisation that your existing IT applications are a major asset and a major cost. They underpin the IT services you provide. They are the starting point for any IT changes you make. You spend 70% or more of your IT budget running and supporting your existing applications.

Despite their importance, applications get little management attention. We put our effort into managing change, and day-to-day service delivery. We rarely make applications themselves the object of our management.

If we focus on managing applications, we can begin to get a grip on this major business asset. We can make a case for proactive maintenance that can cut support costs. We can escape from the trap of legacy systems. We can reduce risk. We can make change easier. We can transform our application portfolio to better meet the needs of our business.

All APM approaches have similarities. They all involve building an inventory of applications, and assessment and analysis to drive business decision making.

There are differences of emphasis between different APM offers. Some are low level, and are based on automatic code analysis. Others emphasise large-scale transformations. Others are more allied to project portfolio management (PPM). In many cases, these differences reflect the background of the vendors; the APM offers are built around, or incorporate, other products.

To deliver most value, I believe that APM needs to be separated from other disciplines.

  • APM must be a management-level discipline. Anything that starts with code scanning is unlikely to be sufficiently high level to justify and drive through significant change.
  • APM must be separate from PPM. The ongoing management of applications is different from the management of projects.
  • APM is a fundamental, ongoing discipline. It is not just a one-off exercise to support a transformation.

At this point, I ought to disclose my interests. My company's system governance offering is an approach to APM. We did not develop system governance because we heard that APM would be the next big thing, but looking at the major problems in IT has lead us to the same point. Almost by chance we have stumbled into the space where others are now heading, without the baggage that other vendors have.

I firmly believe that APM is the next big thing. It reflects IT's coming of age - moving from a dash for growth to a more mature management of what we have. When you look at APM, have a look at system governance too. Even if you decide that system governance is not for you, it will at least provide good food for thought as you evaluate other vendors.

Next: Breadth-first IT management

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