Application Portfolio Management: Explore the Benefits


Application Portfolio Management (APM) serves as an excellent method for monitoring all of an organization’s applications. IT departments grapple with an escalating number of applications to oversee, necessitating heightened visibility into their functionalities, particularly in relation to business support. Leveraging the advantages of portfolio management can confer a competitive advantage upon companies within their respective industries.

APM, or Application Portfolio Management, furnishes organizations with an inventory of their applications and evaluates their technical and business worth. This empowers organizations to make informed decisions about whether to retain, modernize, or phase out specific applications. IT departments deploy a proven methodology to streamline their IT systems effectively.

For those seeking avenues to enhance organizational efficiency, capitalizing on the benefits of portfolio management becomes imperative. While the intricacies of managing a business’s applications are intricate, the undeniable benefits make the endeavor worthwhile.

Benefits of application portfolio management (benefits of APM)

It facilitates the straightforward tracking of application usage—identifying which applications are utilized, how often, and by whom.

This data proves invaluable for decision-makers seeking a comprehensive understanding of the current utilization landscape within their organization and its implications for overall productivity. Furthermore, the APM system furnishes organizations with valuable insights into application performance and usage trends, enhancing their comprehension of the sustained performance of technology investments over time.

1. Visibility and control over the applications

In recent decades, numerous IT departments have witnessed a surge in applications, often attributed to factors such as mergers, acquisitions, globalization, or organic growth. Consequently, IT departments grapple with mounting complexity and multiple redundancies, necessitating a heightened understanding of their applications. The integration of new resources into existing legacy systems poses challenges in terms of time and effort.

Application Portfolio Management (APM) proves instrumental in conducting a comprehensive application inventory, considering various perspectives like lifecycle, costs, deployments, and the business capabilities they support. IT portfolio managers can establish links between applications, technologies, and business capabilities, facilitating a profound understanding of the impact of IT assets on the business. Through what-if analysis, applications can be rationalized effectively.

To streamline the application inventory, organizations can engage application owners who, when prompted, update pertinent information. This process can even be crowdsourced to application owners, expediting the application inventory. In essence, this comprehensive inventory offers heightened visibility and a deeper understanding of IT systems, empowering IT leaders to readily embrace new business initiatives.

2.Application rationalization

Application Portfolio Management (APM) equips organizations with diverse dashboards to gain insights into the overall portfolio status. Dashboards focused on application lifecycles offer crucial information, predicting when applications are slated for retirement or replacement with newer versions.

In addition to lifecycle data, essential insights into data flows between applications provide clarity on the repercussions of removing or exchanging an application. However, the real efficacy of an APM practice stems from its business-oriented approach. IT leaders gain a clear understanding of how applications underpin business capabilities, identifying those crucial to the business. APM tools incorporate questionnaires allowing business users to provide satisfaction feedback on applications.

These dashboards not only flag potential inconsistencies but also serve as valuable tools for strategic IT planning. Leveraging these dashboards, IT managers can streamline applications, cut IT costs, and enhance IT flexibility by gaining a more profound understanding of the business value each application brings.

3.IT costs reduction and agility

IT departments often grapple with the management of an extensive array of software technology components that pose a potential threat to organizations. To achieve crucial economies of scale and enhance the proficiency of development teams, there’s a need to curtail the diversity of technology products employed.

Application Portfolio Management (APM) software facilitates a connection to external libraries containing lifecycle information, including end-of-life dates, thereby aiding in the identification of technology obsolescence. Dashboards are then generated, illustrating the impact of technology end-of-life on applications.

Following a comprehensive assessment, technology portfolio managers can make informed decisions on whether specific technologies align with the company’s standards. The establishment of technology standards, guided by technology portfolio managers, contributes to a reduction in the number of technologies employed—resulting in cost savings—while safeguarding projects against the use of unauthorized technologies.

4.Technology obsolesence risk reduction

In addition to offering a comprehensive view of IT systems, application portfolio management solutions play a pivotal role in aiding IT managers in strategizing their IT systems’ transformation.

Drawing insights from application lifecycles and cost projections, IT managers can simulate forthcoming IT projects and assess the potential outcomes. This involves creating a spectrum of initiatives based on varied assumptions, such as extending or phasing out applications, which are then amalgamated into distinct scenarios.

The ability to observe the impact on IT systems and make comparisons among different scenarios empowers IT managers to make informed decisions. Through meticulous planning and execution of IT transformation, IT departments gain the flexibility to allocate more resources to new business initiatives and concentrate on fostering innovation.

5.Technology standardization

When an organization opts to outsource a segment of its IT operations, a meticulous inventory of assets becomes essential, possibly involving the elimination of irrelevant applications. Thus, an evaluation is imperative to determine which applications merit retention and which are suitable for outsourcing.

This process not only facilitates efficient IT audits but also aligns with requirements for IT certifications. External consulting firms or governmental bodies often advocate or mandate organizations to vigilantly monitor their IT assets. Through the practice of application portfolio management, organizations can enhance their ability to support the IT roadmap or reallocate capital to address IT risk effectively.

6.Improved IT transformation map

In addition to furnishing a holistic view of IT systems, application portfolio management solutions play a pivotal role in guiding IT managers through the intricacies of planning and executing transformative endeavors within their IT infrastructure.

Grounded in the lifecycles of applications and comprehensive cost assumptions, IT managers can utilize these solutions to simulate and analyze the trajectory of future IT projects. This involves crafting a diverse array of initiatives based on nuanced assumptions, such as the extension or phasing out of applications, which are then amalgamated into distinct scenarios.

The beauty lies in the ability to dissect the impact of these initiatives on IT systems and engage in thorough comparisons among different scenarios. This empowers IT managers to make well-informed decisions, optimizing the IT transformation process.

By embracing meticulous planning and execution of IT transformation, IT departments position themselves to efficiently allocate resources, freeing up capacity for new business initiatives and fostering a culture of innovation. The application portfolio management practice emerges as a strategic enabler, guiding organizations through the dynamic landscape of IT transformation with clarity and precision.

7.Easier outsourcing of IT operations

When an organization decides to entrust a segment of its IT operations to external partners, the journey becomes notably more straightforward with the aid of application portfolio management.

Before embarking on outsourcing endeavors, a meticulous inventory of assets is essential. Application portfolio management facilitates this process, enabling organizations to identify and potentially eliminate irrelevant applications. This thoughtful assessment is crucial in determining which applications are best suited for retention and which can be seamlessly outsourced.

In essence, application portfolio management streamlines the outsourcing process, ensuring that organizations make informed decisions about their IT landscape. By providing a clear understanding of the portfolio’s composition, it empowers organizations to optimize their IT operations efficiently through strategic outsourcing initiatives.

Application Portfolio Management is an essential tool for any company. It provides an efficient and effective way to organize, manage, and update their applications. It significantly reduces complexity, simplifies IT management, and eliminates redundant applications. Furthermore, it helps organizations stay on top of the latest trends and technologies and provides a comprehensive view of the entire application landscape. Lastly, it can help improve operational efficiency by reducing costs and improving performance. 

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