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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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    Application Portfolio Management Application Portfolio Management Presentation Transcript

    • Application Portfolio Rationalization Methodologybase on”IT Portfolio Rationalization: 1” by PrashantHalari, SushilPaigankar, Hitesh Salla, RajaramVengurlekar
      Presented by:
      Alain Charpentier
    • Table of content
      Origin of the methodology
      Objectives
      Present the methodology
      Lessons learned
      Recommendation
      Questions
      Copyright © 2009 by Alain Charpentier
      Page: 2
    • 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
      • 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
      • Ensure proper Business-IT alignment (i.e., IT is working on those things that business values the most)
      • Prioritize the applications that need attention
      • Determine the several management options for undertaking the application value improvement initiatives
      Objectives
      Page: 4
      Copyright © 2009 by Alain Charpentier
    • Copyright © 2009 by Alain Charpentier
      The methodology
      Participant
      selection
      Planning
      Data collection
      Roadmap
      Validation
      Analysis
      Category
      Page 5
    • Copyright © 2009 by Alain Charpentier
      Step 1: Participant Selection
      Selection of appropriate:
      • Business relationship managers (BRM)
      • Business owners
      • Application owners
      • Application support teams
      • IT development teams
      Page: 6
    • 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
    • Copyright © 2009 by Alain Charpentier
      Step 3 : Analysis
      Conduct analysis on dimensions of cost vs benefit, current capability vs. future capability, etc.
      Page: 8
    • Step 4 : Categorization
      • The dimensions used are
      • *Technology Appreciation includes application owner and technical scores and covers aspects of
      • Application stability
      • Performance
      • Flexibility
      • Technical complexity
      • Technical documentation
      • **Business Appreciation score covers aspects of
      • Current functional capability
      • Future functional capability
      • IT delivery
      • End user satisfaction
      High
      1
      Category
      2
      Category
      Renovate
      Retain
      • High Technology Appreciation
      • Low Business Appreciation
      • High Technology Appreciation
      • High Business Appreciation
      Technology Appreciation*
      Category
      3
      Category
      4
      Re-engineer
      Replace / Retire
      • Low Technology Appreciation
      • High Business Appreciation
      • Low Technology Appreciation
      • Low Business Appreciation
      Low
      High
      Low
      Business Appreciation**
      Copyright © 2009 by Alain Charpentier
      Page: 9
    • 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
    • Maintenance Spending
      Copyright © 2009 by Alain Charpentier
      Step 5: Validation – Detail analysis example
      Distribution and Assessment
      Number of Applications
      Percentage Spend
      Page: 11
    • 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
    • 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
    • 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
    • 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
    • Questions
      ?
      Copyright © 2009 by Alain Charpentier
      Page: 16