Application Portfolio Management

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Presentation on the APM - Application Portfolio Rationalization/Management methodology

Presentation on the APM - Application Portfolio Rationalization/Management methodology

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  • 1. Application Portfolio Rationalization Methodologybase on”IT Portfolio Rationalization: 1” by PrashantHalari, SushilPaigankar, Hitesh Salla, RajaramVengurlekar
    Presented by:
    Alain Charpentier
  • 2. Table of content
    Origin of the methodology
    Objectives
    Present the methodology
    Lessons learned
    Recommendation
    Questions
    Copyright © 2009 by Alain Charpentier
    Page: 2
  • 3. The methodology is based on the book:
    “IT Portfolio Rationalization: 1” by PrashantHalari, SushilPaigankar, Hitesh Salla, RajaramVengurlekar.
    IT Application Portfolio Rationalization/Management(APM) is a practice that has emerged in mid to large size organizations in the mid 1990s. It attempts to use the lessons of financial portfolio management to justify and measure the financial benefits of each application in comparison to the costs of the application's maintenance and operations.
    Origin of the methodology
    Copyright © 2009 by Alain Charpentier
    Page: 3
  • 4.
    • Establish a quantitative baseline on the efficiency and effectiveness of the current application landscape so that prudent management decisions, in terms of current and future application development, application phase-out or remediation (e.g., re-write), can be made
    • 5. Ensure proper Business-IT alignment (i.e., IT is working on those things that business values the most)
    • 6. Prioritize the applications that need attention
    • 7. Determine the several management options for undertaking the application value improvement initiatives
    Objectives
    Page: 4
    Copyright © 2009 by Alain Charpentier
  • 8. Copyright © 2009 by Alain Charpentier
    The methodology
    Participant
    selection
    Planning
    Data collection
    Roadmap
    Validation
    Analysis
    Category
    Page 5
  • 9. Copyright © 2009 by Alain Charpentier
    Step 1: Participant Selection
    Selection of appropriate:
    • Business relationship managers (BRM)
    • 10. Business owners
    • 11. Application owners
    • 12. Application support teams
    • 13. IT development teams
    Page: 6
  • 14. Copyright © 2009 by Alain Charpentier
    Step 2 : Filtering & Data collection
    Overall Portfolio Application List
    Appln 3
    Appln 4
    1000
    Appln 2
    Appln 5
    Appln n
    Appln 1
    1
    Filter Criteria – Filter out non-applications, unused applications and applications under rewriting
    1
    700
    Step 1
    Step 1
    Filer out unused and
    applications under rewriting
    Filer out
    Non-applications
    2
    Filter Criteria – Filter out applications which are not under the responsibility of IT or supported by other parties
    2
    Step 2
    Filter out Applications not under IT
    500
    3
    Filter Criteria – Filter out applications for which we don't have maintenance investment information
    3
    Step 3
    Filter out based on Maintenance investment
    150
    4
    Filter Criteria – Filter based on the data gathering exercise
    4
    Step 4
    Filter on data gathering
    100
    Note: The number of applications is representative of a large organization.
    Final “In Scope” Application List
    “In scope” application list
    Page: 7
  • 15. Copyright © 2009 by Alain Charpentier
    Step 3 : Analysis
    Conduct analysis on dimensions of cost vs benefit, current capability vs. future capability, etc.
    Page: 8
  • 16. Step 4 : Categorization
    • The dimensions used are
    • 17. *Technology Appreciation includes application owner and technical scores and covers aspects of
    • 18. Application stability
    • 19. Performance
    • 20. Flexibility
    • 21. Technical complexity
    • 22. Technical documentation
    • 23. **Business Appreciation score covers aspects of
    • 24. Current functional capability
    • 25. Future functional capability
    • 26. IT delivery
    • 27. End user satisfaction
    High
    1
    Category
    2
    Category
    Renovate
    Retain
    • High Technology Appreciation
    • 28. Low Business Appreciation
    • 29. High Technology Appreciation
    • 30. High Business Appreciation
    Technology Appreciation*
    Category
    3
    Category
    4
    Re-engineer
    Replace / Retire
    • Low Technology Appreciation
    • 31. High Business Appreciation
    • 32. Low Technology Appreciation
    • 33. Low Business Appreciation
    Low
    High
    Low
    Business Appreciation**
    Copyright © 2009 by Alain Charpentier
    Page: 9
  • 34. Copyright © 2009 by Alain Charpentier
    Step 4 : Categorization example
    29/100 Applications
    51/100 Applications
    10/100 Applications
    20/100 Applications
    Note: The number of applications is representative of a large organization.
    Page: 10
  • 35. Maintenance Spending
    Copyright © 2009 by Alain Charpentier
    Step 5: Validation – Detail analysis example
    Distribution and Assessment
    Number of Applications
    Percentage Spend
    Page: 11
  • 36. Copyright © 2009 by Alain Charpentier
    Step 5: Validation of Business alignment
    Funding of initiatives depends on their alignment with critical business drivers
    Initiative; size of the bubble indicates estimated cost of initiative
    Page: 12
  • 37. Copyright © 2009 by Alain Charpentier
    Step 6: Roadmap development
    Immediate
    Near term
    Long term
    To ensure proper Business-IT alignment the roadmap is develop after proper validation with the key stakeholder
    Savings Timeline
    Page: 13
  • 38. Managing “projects” and managing “applications” are not the same
    Change the organization’s culture — from the top down
    Establish an enterprise architecture framework to provide focus
    Include APR as part of a broader decision-making process
    Have a destination in mind and communicate it throughout the organization
    Use tools as productivity aids, but they do not replace tough human decisions
    Measure operation of the application over its life cycle
    APR is not just an IT decision
    Copyright © 2009 by Alain Charpentier
    Lessons Learned
    Page: 14
  • 39. Establish a strong baseline
    Agree on how to measure “value”
    Identify operational “costs”
    Ensure fairness throughout the process
    Match decision making to organizational style — edict or democracy?
    Institutionalize the process, not the event
    Copyright © 2009 by Alain Charpentier
    Recommendations
    Page: 15
  • 40. Questions
    ?
    Copyright © 2009 by Alain Charpentier
    Page: 16