How to Use Application Portfolio Management
Application Portfolio Management must be a business-centric activity. That is, it must answer the questions you need to make intelligent decisions about where to allocate IT resources to support business goals. To understand better, let’s look at the constituent parts of an Application Portfolio Management approach.
Set the Business Context
Your application portfolio can be viewed from many perspectives. It is a collection
of logic, data access, and user interface of course, but it is more than that. It
supports complex business processes, it supported by large teams across geographies,
it operates on sensitive customer data, and it is subject to a variety of regulatory
burdens.
As a result, it is important to manage your application portfolio in a context that
matters to your business. You must be able to ask key business-centric questions
in order to achieve alignment between IT and your strategic goals. These questions
could include, are you looking to improve support for key business processes? Do
you want to better govern outsourcing partners? Are you looking to determine the
quality of development project outputs?
To ensure that you can manage from this business perspective, you should define
how you manage the business: by project, process, geography, or regulatory regime,
for instance. Linking the relevant concepts and their hierarchies to your application
portfolio provides a business lens on portfolio management decisions. In another
section, we’ll look at
business-centric application portfolio management in more detail.
Ask the Right Questions
Much like for KPIs, it is important to ask the right questions when conducting Application
Portfolio Management. For instance, you may want to set development priorities based
on business priorities. This could lead you to create specific questions that identify
the cost, business risk, and value of a set of business processes.
By understanding the goals you want to achieve, you can formulate the questions
you need to ask. By knowing what these questions are, you can determine the metrics
that you want to collect and trend. Too many approaches to APM proceed immediately
to this stage and require the collection of specific industry-standard complexity
measurements.
A more effective approach is to start with your business aim, and then determine
how to measure your progress toward that goal. Our goal could be to determine where
cost savings can be derived. This may lead us to collect cost and business value
data for select business processes. The connection between our business process
grouping and the underlying source code would then allow us to begin prioritizing
modernization and rationalization decisions.
View and Act on the Results
Once you have the right measurements in the right business context, you must get this data to the right decision maker from the CIO to development team members. A CIO could use the data to reallocate development teams toward strategic priorities. An application manager could identify slipping quality for a core business process. And a development manager could identify non-adherence with Service Level Agreements.
The key for this stage in the process is that APM data should be immediately applicable toward decision making throughout the organization.