Application Portfolio Management


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Presentation on the APM - Application Portfolio Rationalization/Management methodology

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Application Portfolio Management

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