Application portfolio management (APM) is a framework for managing an organization's software applications. APM provides visibility into all applications, their costs, usage, and business value. This allows managers to make informed decisions about which applications to keep, update, retire, or replace in order to optimize value. Key benefits of APM include cost savings, license optimization, and ensuring applications effectively support business needs. APM is implemented through inventorying all applications, collecting metrics on their performance, and regularly evaluating the portfolio to improve its content and capabilities over time.

1. DEFINITION
application portfolio
management (APM)





By
 Ed Tittel
What is application portfolio management (APM)?
Application portfolio management (APM) is a framework for managing
enterprise IT software applications and software-based services. APM
provides managers with an inventory of an organization's software
applications and metrics to illustrate the business benefits of each
application.
What is the goal of application portfolio management?
APM uses a scoring algorithm to generate reports about the value of each
application and the overall health of the IT infrastructure. By gathering
metrics such as an application's age, how often it's used, its maintenance
costs and its interrelationships with other applications, a manager can use
accurate, informative data to decide whether a particular application should
be kept, updated, retired or replaced. Thus, the goal of application portfolio
management is to monitor and track portfolio elements, keep what works
well and replace what is underperforming or too expensive.

2. What are the benefits of application portfolio management?
The benefits of application portfolio management are as follows:
 establishes, collects and tracks metrics to provide a rational, empirical
and data-driven basis for evaluating and comparing applications;
 provides an informed inventory of the application landscape that speaks
to business capability, the total cost of ownership, applications
supported and application lifecycle management;
 requires business and project management professionals to attend to
application usage patterns, values and costs over time; and
 offers evidence to developers, stakeholders and management about the
relative value, utility and costs of applications and services in use in the
organization's IT environment.
All in all, APM provides important insights into what applications are in use,
how well they're working, frequency of use, how much they cost and the
interdependencies with other applications. This data is essential to manage
an application portfolio and continuously improve its content and
capabilities.
APM frameworks
Application portfolio management frameworks provide the infrastructure to
support ongoing APM. This includes undertaking a complete inventory of
applications and services in use. Each value needs to be measured and
assessed according to metrics that include cost, frequency of use,
perceived value to users and stakeholders, capabilities and unmet needs or
desired -- but missing -- features and functions. Only applications that
score well on all metrics and are perceived as best in class should remain;
others should be altered, updated or replaced to improve ROI, productivity
and perceived value. This involves removing or retiring applications that no
longer meet user needs.
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In other words, an APM framework provides the basis for inventory and
evaluation of the current portfolio, along with mechanisms for improving or
replacing its constituent components to meet current and planned business
needs better.
How to get started with application portfolio management
Organizations without established APM can't jump right into a full scale
deployment; they have to follow specific steps and a process.
1. Establish a baseline for the current state of applications, current and
future application needs, and future goals for application portfolio
management.
2. Create an inventory of applications and platforms about which metrics
may be collected to guide and inform decision-making. Pay attention to
both front-end -- user interface and access -- and back-end -- server-
side, data handling, capacity and load handling, and more -- capabilities.
3. Employ formal methods and analysis to align applications with business
priorities and to evaluate and manage operational risks.
4. Establish communications tools and mechanisms to facilitate interaction
between application owners, managers and support staff.
5. Provide regular reports on application metrics and information.

4. 6. Hold scheduled sessions to evaluate portfolio contents, recommend
retirement for underperforming applications or services and solicit input
on new additions or replacements.
APM tools and vendors
While several APM platforms are available, some of the most well-known
include Datadog, Loupe, AppDynamics, Stagemonitor and Pinpoint.
Regardless of platform, an APM tool should include the following key
elements:
 digital experience monitoring and reporting that provides insight into
how users interact with and feel about using applications, along with
information about issues, bugs, delays and more;
 application discovery, tracing and diagnostics, which dig into the details
of application software to uncover and diagnose potential -- and actual
problems; and
 purpose-built AI for DevSecOps that supports automation of processes
involved in digital experience monitoring and application discovery,
tracing and diagnostics to support continuous improvement.
Step Action Plan for Effective Portfolio
Management
May 07, 2021
Contributor: Ashutosh Gupta
To remain relevant and deliver value in the evolving digital landscape, PPM leaders need to
evolve portfolio management. Here are six best practices.
When a portfolio is managed effectively, it delivers the right initiatives at the right time to
achieve the expected outcomes. Project and portfolio (PPM) leaders can keep up with digital
business demands by choosing the right portfolio management style and having a crisp action
plan in place.

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“The push to digital business means that the traditional style of portfolio management may
now be inadequate,” says Anthony Henderson, Senior Director Analyst, Gartner. “Siloed
portfolios can’t work in isolation to provide the organization with a true picture of
performance. It helps to optimize the value of all major initiatives in the organization — and
that requires integrated portfolio management.”
Here are the six practices for effective portfolio management:
No 1: Ensure visibility into work and constraints
For improving a portfolio’s performance, it’s essential to proactively identify and remove
constraints. It can happen if there are no silos and the product teams operate in an
environment that provides clear visibility into who is doing what, and what is getting
delivered when.
With that insight, PPM leaders can easily determine the interdependencies and risks. They
can transparently prioritize and allocate the work so that there are no negative impacts to the
portfolio.
No 2: Prioritize around customers’ expectations
Digitalization has led to ever-growing customer expectations. The increased dynamics
encourage organizations to implement new ideas and initiatives. Given the budgetary
constraints, prioritization becomes all the more important. Without a well-thought-out
portfolio prioritization approach focused on customer objectives, organizations may end up
investing in less-promising initiatives.
Defining internal and external customers is paramount. They may have mutually exclusive or
overlapping goals or demands across various lines of business. From this mix, it is important
to identify the initiatives that matter most to them.
Stakeholders from different functions can form an investment committee to zero in on the
most valuable ideas. Having a cross-functional understanding can help them make unbiased
investment decisions that align with strategic goals and optimize limited resources.

6. No. 3: Apply adaptive resource management
The increasing use of agile methodologies in conjunction with other waterfall and hybrid
approaches presents a significant challenge for resource management.
Digital business runs on flexibility, not rigid planning practices. An adaptive approach
focuses on allocating resources as per market shifts and changing customer needs. It’s about
creating an environment where resources can seamlessly switch between initiatives to deliver
optimum value. For this to happen, it is essential to:
 Recognize and manage the interdependent risks
 Negotiate the competing priorities

7.  Identify impediments to strategic coordination across groups
No. 4: Deliver value continuously
Every portfolio promises value, and therefore, engaging sponsors consistently and effectively
becomes critical to assess whether that promise is being delivered or the portfolio is
becoming irrelevant.
For a dynamic digital business, it’s a good practice to have weekly meetings at which product
managers and sponsors can discuss the previous week’s deliverables, ongoing tasks, resource
availability, and existing risks or roadblocks.
This way, the involved parties can keep track of the portfolio’s health and realign it with
value, if required.
Read More: Extending the Project and Product Ecosystem to Lean Portfolio Management
No. 5: Create a change-enabled culture
Digital transformation leads to increased changes in business and technology processes,
which can have unintended consequences and affect the experience of customers and
employees.
It’s essential, then, to know how to handle change productively and how much change is too
much change.
The key components of a change-enabled culture are:
 Feedback and communication channels involving business leaders, managers and end
users
 Engagement with change champions at multiple levels
 Executive confirmed roadmap for change
No. 6: Realize benefits continuously
As digital business evolves, effective portfolio management and measuring results are more
crucial than ever. Organizations expect faster results and benefits must be viewed as
incremental units of value delivered in a continuous stream. A dedicated owner should be in
place to track the actual benefits realized.
Organizations will get better at portfolio management by making informed future decisions
based on prior mistakes. If they fail to realize the expected benefits, then they can revisit
business assumptions and ask these questions:
 Did they understand customer needs?
 Did the market conditions change?
 Did they overestimate value?
 Did they know the risks and complexities involved?

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Recommended resources for Gartner clients*:
6 Practices for Effective Portfolio Management
3 Steps to Managing Distributed Portfolios in an Increasingly Digital World
How PPM Leaders Can Help Resource Management in Product Teams
Use Adaptive Governance Styles for Portfolio Management
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Shortcuts
1. Introduction
2. What you need to know about Application Portfolio Management
3. What you can achieve with APM
4. Typical stakeholder questions
1. Application investment
2. Supporting business capabilities
3. Application redundancies
4. Application roadmap

10. 5. Top 12 reasons to use Application Portfolio Management
6. How to start with Application Portfolio Management?
7. Conclusion
Introduction
In recent years, the practice of APM has largely evolved to help manage mixed portfolios of
on-premises and cloud-based IT applications.
By generating clear, actionable metrics on decentralized applications and monitoring rapid
software development cycles, enterprise architects and cloud architects perform APM via
increasingly automated means to evaluate enterprise-wide services and ensure the availability
of diverse supporting technologies.
APM in large-scale enterprises typically involves the following:
 Documenting past, present, and future applications deployed or planned to be, inside
an organization.
 Identifying and/or automating changes to application service lifecycles.
 Organizing applications according to business capabilities.
 Arranging IT components into technology stacks.
 Grading the technical and functional value of applications
APM
What you need to know about
Application Portfolio
Management
Application portfolio management is like taking a proactive approach to managing your
wardrobe. That t-shirt you bought on impulse before arriving home and realizing it doesn't
match anything you already have? Chances are it’s still gathering dust in the back of a
drawer. Things would have worked out better had you taken a more methodical approach.
For example, you could have looked at your existing clothes before you went shopping,
identified the gaps, and selected items to fill them.

11. Coincidentally, it’s the same story with enterprise applications. As organizations grow, IT
departments and even individual employees buy applications to solve urgent problems
without giving any (or at least enough) thought to the implications.
As a result, unmanaged apps pile up that are difficult or impossible to integrate with existing
apps or other systems. Similar apps for completing the same tasks are purchased multiple
times. Others fall out of favor and are no longer used, but are still paid for, and never
uninstalled or canceled. And still, others are bought and never used at all!
The methodical approach to avoiding these scenarios looks like this:
 Take a full inventory
 Decide the value of each app
 Keep the great ones
 Update/alter the apps that are useful but don’t quite fit anymore
 Eliminate/retire the apps that are no longer fit for the purpose
 Use the refreshed overview to decide what you need before purchasing any more apps
Now imagine that this process has to cover hundreds or even thousands of apps at a time,
especially with the SaaS growth. For many organizations, that sounds like such a big job,
they simply never get around to doing it!
That’s a problem.
Failing to keep your application portfolio up to date means organizations are spending money
unnecessarily on apps that don’t add value, leaving less money and fewer resources to spend
on the software and services that could add value and boost organizational competitiveness. It
also leaves them open to potential and compliance and security breaches.
This is where Application Portfolio Management and SaaS Management solutions come in.
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Find out how enterprise architecture can help stakeholders. What questions does your CIO,
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APM
What you can achieve with
Application Portfolio
Management
So what concrete benefits do we obtain with application portfolio management?
 Application portfolio management is an effective way to identify capital for
reinvestment.
 Application rationalization can lead to cost-savings of more than US $2 million in a
single enterprise. (Infosys)
 License optimization results in 30% savings on licensing costs (Gartner)
 Over 20% of applications are unused and can be retired
 Infrastructure costs can be reduced by 45%
 At least 10% of IT project costs can be avoided through application rationalization
(Oracle)
 Vendor consolidation can reduce Total Cost of Ownership (TCO) by 22-28%

13.  Currently, 75-80% of IT budgets are spent on operating and managing applications.
(Science Direct)
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14. See all free resources
FA QS
Typical stakeholder questions
APM supports the informational needs of diverse stakeholders (CIOs, CTOs, IT managers,
enterprise architects, cloud architects, and more). If practiced with a dedicated tool, the
following can be addressed:
Which apps deserve investment, and which need to be shown the door?
After mapping applications, an IT manager must decide which applications to support and
which to abandon altogether. To do so, they must determine both the technical and functional
fit of the application. This information can be collected by sending out surveys to the actual
users of the applications.
Once feedback is returned, it will be clear which applications are fit for an organization. The
next step is then to divest.

15. Image 1: Application Portfolio showing the functional and technical fit of applications.
Which applications are not adequately supporting business capabilities?
Enterprise architects manage both sides of the business and IT coin. A business program
manager might naturally be interested in finding out how current applications are supporting

16. the business capabilities of the office. In the below example, we can see that many
applications do not functionally support customer service. This is a perfect occasion to
remove these applications and balance the application portfolio.
Image 2: Application Landscape showing the functional fit of applications regarding business
capabilities.
Which applications are necessary? Are there gaps or overlaps?
A difficulty encountered in big corporations is streamlining applications across an entire
organization.

17. Image 3: Application Matrix showing which applications are supporting business capabilities,
depending on their geographical user group.
Is our application portfolio developing in the right direction to support future
strategic goals?

18. In large and complex organizations, one can quickly lose sight of application lifecycles.
When an application reaches its end-of-life stage, a successor for the application must be in
place, especially if it is depended upon by projects or others. This information is pertinent to
numerous stakeholders in a company (e.g., the security officer needs to know that all
underlying applications are up-to-date to avoid attacks on obsolete apps; the CTO needs to
know what the application roadmap looks like).

19. Image 4: Application Roadmap showing the lifecycle of applications and the projects related
to those applications.
There are many additional types of reports that an enterprise architect should have access to
that are essential to a company.
TOP 12
Reasons to use Application
Portfolio Management
1. Enable cloud native strategies
A dynamic catalog of applications is a pre-requisite for securely upgrading core IT processes
according to business criticality and implementing tailored yet efficient cloud native
development standards. A practical resource for EAs and cloud architects, APM exposes
organizational roadblocks when iteratively expanding cloud environments and integrating
agile principles.
2. Mitigate security and compliance vulnerabilities
Compliance issues stemming from end-of-life application service lifecycles can be forecasted
using IT portfolios either integrated into vendor information databases or distributively
maintained. Further, all applications handling customer data yet running on time-sensitive
software licenses can be tracked to support audit management.
3. Optimize cloud and hybrid costs and resources
IT leaders must support business in analyzing cloud costs and investments. Doing so while
strategically splitting workloads between on-site data centers and public cloud spaces
requires contextualized, automated updates on cloud cost trends across multiple accounts and
business units—the likes of possible with application inventories directly integrated to cloud
vendors.
4. Upgrading processes with lean principles and the Technology Business
Management (TBM) framework
Data from APM programs is leveraged to measure enterprise-wide adoptions of the TBM
framework. By documenting cloud vendor-specific services according to their ability to help
IT optimize run-the-business and change-the-business spending, APM is a natural companion
to IT and business leaders wishing to scale services in cost-effective manners.
5. Secure the adoption of strategic platforms with holistic insights using powerful
reporting

20. APM offers enterprise architects and executive-level stakeholders alike the oversight to
monitor large-scale IT transformation projects. In particular, many companies use automated
and configurable reporting mechanisms to measure, in real-time, the impact of their evolving
application landscapes.
6. Reduce IT complexity and improve efficiency
IT landscapes in billion-dollar enterprises usually contain thousands of interdependent
entities—the majority of which are disconnected from their anchoring business capability.
APM systematically untangles this IT complexity by categorizing applications and
pinpointing redundancy. This organization helps when coordinating the implementation of
technologies and processes.
7. Promote collaboration between business and IT to react faster to business needs
APM is rooted in close collaboration between IT and business. The sooner development can
diagnose business needs, the sooner solutions can be tailored to relevant security, software,
and market standards. Quite often this involves identifying where and with what data sources
to most effectively apply autonomous development cycles.
8. Rationalize application costs and lower total cost of ownership
Server license optimization, application retirement, standardizing common technology
platforms—APM is an engine for maximizing IT budgets through highly scoped value
assessments. For every application, a total cost of ownership (TCO) is recorded alongside
other sets of criteria such as strategic value, available skills, user satisfaction, and availability
of alternatives.
9. Improve IT visibility and control across scaling hybrid cloud environments
Enterprises rely on APM methodology to guarantee the exact visibility they have on
traditional, on-premises IT with granular assets deployed on cloud platforms. By detecting
violations that affect cloud landscapes while validating architecture, infrastructure, and
deployments against established best practices, APM ensures that hybrid IT environments are
documented and controlled.
10. Prioritize IT projects
APM prioritizes projects and their associated applications according to business value and
available resources (personnel and technological). This high-level clarity is directly used to
support the decisions of CIOs and CFOs when charting organizational targets.
11. Strengthen business processes by uncovering technological gaps and data
redundancies
A fully-delineated application portfolio offers a clear path to the technological gaps and
redundancies likely to be slowing business processes. APM outlines feasible improvements
while incorporating the knowledge of stakeholders with close ties to the technology.

21. 12. Map data flows and application dependencies
By integrating networks of applications and their shared interfaces, APM provides the
groundwork for seeing the implications of service lifecycle phase-outs across the wider
application landscape. The reliability of any particular interface and dependency can
accordingly be scrutinized by operations teams.
Getting started with
Application Portfolio
Management
Now that we have covered why Application Portfolio Management is necessary, it is time to
show how to actually get started with Application Portfolio Management and assess your
portfolio.
1. Compile a list of applications
Compile a list of past, present, and future applications deployed on your system. This should
include all users and offices worldwide. Use the SaaS management process to identify SaaS
applications.
2. Identify who owns the application
Identify the affected stakeholders (users) of the applications. During this discovery period, it
is common to find out that very few people are using certain applications. You may also find
that some applications are, or are becoming, totally unused.
3. Identify the lifecycle of the application
Once a technology is activated, its value increases and its potential risks go down. As it
reaches its end-of-life, however, IT management has to confront challenges such as
integration issues, limited functionality, varying service levels, lack of available skills, and
missing support from vendors. Many experienced executives are quite good at managing
risk at an early stage but may nonetheless still ignore the risks of technology at the end-of-life
stage.

22. Image 5: View of Application lifecycles, showing which are supported, in phase-out, or not
supported.
4. Assess the usage of applications
Misused applications can be identified by conducting a thorough application rationalization.
Applications are not often used to their full potential or can be easily exploited when used
incorrectly.
5. Establish the application business value, its quality, and its costs
Determine the total cost and business value of every single application– even the ones barely
used. Compare this cost to the TCO of similar applications being used in the industry. At this
stage, it is best to use business capabilities.
Business capabilities define what a business is doing right now and what it needs to be doing
in order to meet current and future challenges. They outline “what” a business does rather
than “how” it is done. Additionally, business capabilities help to identify redundancies in IT,
spot risks, and develop innovative technology solutions.
6. Create an application architecture framework
One best practice is to develop a rationalization framework for your application architecture
by defining a set of business, information, and application concepts that your organization
would like to see reflected in the long term.

23. LeanIX, by providing an easily referenceable, tangible, visual display of the application
landscape, can establish an overview of which parts of the organization are being fulfilled by
the current application stack in order for you to determine what is truly needed.
7. Map the total concept onto the landscape
Business leaders, IT heads and EAs should gather to review the recommended actions of each
application and design an implementation roadmap for moving forward. Involving various
business leaders while creating a supporting architecture will help to establish transparency
and properly align the business to IT.
Though some consolidation efforts will be easier to implement than others, it is best to unite
applications within one business domain (e.g. Human Resources, Financials, etc.) to achieve
a shared business model.
8. Make application rationalization a continuous process
Once an application portfolio is officially inventoried and optimized, it is imperative to
continually maintain the landscape. One-time application rationalization endeavors might
save the organization money in the beginning, but they lack the long-term value that
continuous application rationalization promises.
Application rationalization improves the overall effectiveness of IT by regularly ensuring that
the IT landscape is actively aligning to business goals and objectives.
Check out the video below and join Ross Francis from UnitingCare — one of Australia’s
largest charitable providers of healthcare and support services in Australia — to present his
group’s journey to LeanIX. Francis shared details about the IT complexity inherent to
UnitingCare’s IT environment and shared an APM Business Case Example within his
company.
Duplicate technology, spreadsheets, inconsistent data — in order for UnitingCare to reach its
2030 transformation roadmap, it had to thoroughly organize its application landscapes and
take care of what Francis termed “dirty data”.

24. In Conclusion:
Operating an agile landscape is key in today’s business climate. With digital
transformation driving customer demand, IT architecture must dynamically adapt to the
rapidly changing needs of the market. Most businesses spend 70-80% of their IT budgets on
supporting aging, low-value legacy applications, leaving very little money to invest in
optimizing business processes.
The goal of application portfolio management is to articulate a singular architectural vision to
enable business goals, respond effectively to strategic drivers, conform with architectural
principles and standards, and address the concerns and objectives of key stakeholders.
APM efforts help you optimize your application stack, establish transparency between
stakeholders and deliver true value to your business leaders.
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Home / Resources / Articles / Application Portfolio Management using Enterprise Architect
 Application Health
 Application by Lifecycle
 Application Ownership and Support
 Application Security Classification
Application Portfolio Management using
Enterprise Architect
May 10, 2018
Application Portfolio Management includes several tasks which require careful analysis of
EA model information. Dynamic, intuitive reports and charts provided by Prolaborate can
present the model information in Enterprise Architect in a visual way to make users aware of
current or upcoming architecture and specifications. This allows teams to take the right
decisions driven by accurate model information.
The Architecture dashboards by Prolaborate leverage the information in EA Models. These
dashboards allow EA modellers to address key reporting requirements such as application
lifecycle management, portfolio management, cost management, health management and
much more. Dashboards for these use cases can be created for different organizational units
and consumers using Prolaborate Dashboard designer. This Article shows some commonly
used dashboards for Application Portfolio Management
Application Health
The dashboard for application health check showcases the health indicator information for all
applications (Systems). This is considered as one of the most informative views to understand
the IT landscape. The clickable charts and reports allow users to understand the details if
required.

32. Applications by Lifecycle
The dashboard for Applications by Lifecycle shows a holistic view of the Status of
Applications in the IT landscape. This view allows users to be informed in the budgeting,
forecasting, and new integration designs. The intuitive report allows searching Applications
by Name or status and identifying its status. Users could also delve into the details to
understand additional details of the systems including its IT and Business Units, Health
Indicators, etc.

33. Application Ownership and Support
This multi-factor dashboard reports on applications, by its ownership (IT and Business) and
Vendor (Support). The graph allows users to enable or disable a supporting vendor and see
the result set or slice and dice based on Business unit or IT unit and understand the
supporting vendor. These types of consolidated reports greatly simplify the due diligence
activities and provide significant business insights.

34. Application Security Classification
The EA security dashboard for applications provides users with an overview of Security
classification of applications categorized by its lifecycle. This chart gives users and
governing authorities a clear view of applications that need attention and further IT Spend.

35. These dashboards present data in EA models in a conceivable and comprehensible way that
allows you to evaluate the application landscape seamlessly. This was a quick look at the
Reporting and charting utilities in Prolaborate that allows performing Application Portfolio
Management using EA models.
The video below shows all these dashboards in action.

36. Email us at prolaborate@sparxsystems.com in case you have any questions or would like to
look at some worked out examples in EA to enable such Architecture capabilities.
10 application performance
metrics and how to measure
them
You've deployed your application, now what? To keep your
application performing well, you need to track various metrics. Take a
look at these ten critical KPIs.



37. 


By
 Joydip Kanjilal
Published: 22 Jul 2022
Application performance metrics are important for deciphering the extent to
which an application actually helps the business it supports and revealing
where improvements are needed. The key to success is to track the right
metrics for your app.
These application performance metrics, commonly known as key
performance indicators (KPIs), are a quantitative measure of how
effectively the organization achieves the business objectives. Capturing the
right metrics will give you a comprehensive report and powerful insights
into ways to improve your application.
Below are 10 core application performance metrics that developers should
track.
1. CPU usage
CPU usage affects the responsiveness of an application. High spikes in
CPU usage might indicate several problems. Specifically, this suggests the
application is busy spending time on computing, causing the
responsiveness of an application to degrade. High spikes in usage should
be considered a performance bug because it means the CPU has reached
its usage threshold.

38. 2. Memory usage
Memory usage is also an important application performance metric. High
memory usage indicates high resource consumption in the server. When
tracking an application's memory usage, keep an eye on the number of
page faults and disk access times. If you have allocated inadequate virtual
memory, then your application is spending more time on thrashing than
anything else.
THIS ARTICLE IS PART OF
What is APM? Application performance monitoring guide
 Which also includes:
 5 benefits of APM for businesses
 APM vs. observability: Key differences explained
 Explore the 2022 application performance monitoring market
3. Requests per minute and bytes per request
Tracking the number of requests your application's API receives per minute
can help determine how the server performs under different loads. It's
equally important to track the amount of data the application handles during
every request. You might find that the application receives more requests
than it can manage or that the amount of data it is forced to handle is
hurting performance.
4. Latency and uptime
Latency -- usually measured in milliseconds -- refers to the delay between
a user's action on an application and the response of the application to that
action. Higher latency has a direct effect on the load time of an application.
You should take advantage of a ping service to test uptime. These services
can be configured to run at specific intervals of time to determine whether
an application is up and running.

39. Uptime guarantees are one way to differentiate
data center tiers.
5. Security exposure
You should ensure that both your application and data are safe. Determine
how much of the application is covered by security techniques and how
much is exposed and unsecure. You should also have a plan in place to
determine how much time it takes -- or might take -- to resolve certain
security vulnerabilities.
6. User satisfaction/Apdex scores
Application Performance Index (Apdex) is an open standard that measures
web applications' response times by comparing them against a predefined
threshold. It's calculated as the ratio of satisfactory to unsatisfactory
response times. The response time is the time taken by an asset to be
returned to the requestor after being requested.
Here's an example: Assume that you've defined a time threshold of T.
Hence, all responses completed in T or less time are considered to have
satisfied the user. On the contrary, responses that have taken more
than T seconds are considered to have dissatisfied the user.
Apdex defines three types of users based on user satisfaction:
1. Satisfied. This rating represents users who experienced satisfactory or
high responsiveness.

40. 2. Tolerating. This rating represents users who have experienced slow but
acceptable responsiveness.
3. Frustrated. This rating represents users who have experienced
unacceptable responsiveness.
You can calculate the Apdex score with the following formula,
where SC denotes satisfied count, TC denotes tolerating
count, FC denotes frustrated count and TS denotes total samples:
Apdex = (SC + TC/2 + FC × 0)/TS
Assuming a data set of 100 samples, where you've set a performance
objective of 5 seconds or better, suppose 65 are below 5 seconds, 25 are
between 5 and 10 seconds and the remaining 10 are above 10 seconds.
With these parameters you can determine the Apdex score as follows:
Apdex = (65 + (25/2) + (10 × 0))/100 = 0.775
The
Apdex equation is used to calculate a score.
7. Average response time
The average response time is calculated by averaging the response times
for all requests over a specified period of time. A low average response

41. time implies better performance, as the application or server has taken less
time to respond to requests or inputs.
The average response time is determined by dividing the time taken to
respond to the requests in a given time period by the total number of
responses during the same period.
8. Error rates
This performance metric measures the percentage of requests that have
errors compared to your total number of requests in a given time frame.
Any spike in this number will indicate that you'll likely encounter a major
failure soon.
You can track application errors using the following indicators:
 Logged exceptions. This indicator represents the number of unhandled
and logged errors.
 Thrown exceptions. This indicator represents the total of all exceptions
thrown.
 HTTP error percentage. This indicator represents the number of web
requests that were unsuccessful and that returned error.
In essence, you can take advantage of error rates to monitor how often
your application fails in real time. You can also keep an eye on this
performance metric to detect and fix errors quickly, before you run into
problems that can bring your entire site down.

42. Build
a solid KPI strategy.
9. Garbage collection
Garbage collection can cause your application to halt for a while when the
GC cycle is in progress. Additionally, it can also use a lot of CPU cycles, so
it's imperative that you determine garbage collection performance in your
application.
To quantify garbage collection performance, you can use the following
metrics:
 GC handles. This metric counts the total number of object references
created in an application.
 Percentage time in GC. This is a percentage of the time elapsed in
garbage collection since the last GC cycle.
 Garbage collection pause time. This measures the time the entire
application pauses during a GC cycle. You can reduce the pause
time by limiting the number of objects that need to be marked -- i.e.,
objects that are candidates for garbage collection.
 Garbage collection throughput. This measures the percentage of the
total time the application has not spent on garbage collection.
 Object creation/reclamation rate. This is a measure of the rate at
which instances are created or reclaimed in an application. The higher

43. the object creation rate, the more frequent GC cycles will be,
consequently increasing CPU utilization.
KPIs for APIs
API analysis and reporting are important aspects of app development, and APIs have their own set of
KPIs that development teams need to track.
Some of the most important KPIs for APIs to pay attention to include:
 Usage count. This indicates the number of times an API call is made over a certain period of time.
 Request latency. This indicates the amount of time it takes for an API to process incoming
requests.
 Request size. This indicates the size of incoming request payloads.
 Response size. This indicates the size of outgoing response payloads.
10. Request rates
Request rate is an essential metric that provides insights into the increase
and decrease in traffic experienced by your application. In other words, it
provides insights into the inactivity and spikes in traffic that your application
receives. You can correlate request rates with other application
performance metrics to determine how your application can scale. You
should also keep an eye on the number of concurrent users in your
application.
Conclusion
Managing and reviewing application metrics makes meaningless bits of
technical info into an easy-to-understand narrative that reveals the
system's reliability and gives insight into the user experience.
For more information on application performance monitoring, read 5
benefits of APM for businesses and Using AI and machine learning for
APM.

44. In this blog post, we’ll explore APM statistics to help you understand the importance of
managing your company’s application portfolio.
Key Application Portfolio Management Statistics – MY
Choice
 According to a study by Gartner, organizations that implement Application Portfolio
Management (APM) can reduce their IT costs by up to 30%.
 A survey conducted by Forrester Research found that 72% of organizations use some form of
APM to manage their applications.
 Another study by Gartner found that only 5% of organizations have a complete inventory of
their applications, highlighting the need for better APM practices.
 A survey by Deloitte found that 85% of CIOs believe that APM is important or very important
to their organizations.
 According to a report by MarketsandMarkets, the global APM market is expected to grow
from $1.25 billion in 2017 to $3.11 billion by 2022, at a compound annual growth rate
(CAGR) of 19.0%.
 A study by McKinsey & Company found that companies that effectively manage their
application portfolios can increase their business agility by up to 20%.
 According to a report by TechValidate, 81% of companies that implement APM report
improved visibility into their application portfolio.
 A survey by IDG found that 45% of IT leaders believe that their application portfolio is not
aligned with their business goals, indicating the need for better APM practices.
 A study by Accenture found that companies that effectively manage their application
portfolios can reduce their IT maintenance costs by up to 50%.
 According to a survey by Capgemini, 84% of organizations have experienced challenges in
managing their application portfolios, highlighting the need for better APM practices.
Application Portfolio Management Statistics
1. 50% of organizations have 50 to 500 applications in their portfolio.
2. Only 29% of organizations are satisfied with their APM capabilities.
3. 68% of organizations plan to increase their APM investment in the next two years.
4. 82% of organizations believe that APM is critical to their digital transformation strategy.
5. 61% of organizations use spreadsheets to manage their application portfolio.
6. 60% of organizations do not have a complete view of their application portfolio.
7. 72% of organizations say that APM improves their ability to manage risks and compliance.
8. 88% of organizations say that APM improves their ability to manage costs.
9. 59% of organizations have a dedicated APM team or role.
10. 70% of organizations have experienced cost savings from APM.
Application Portfolio Management Facts
1. APM enables organizations to optimize their application portfolio and reduce costs.
2. APM provides a comprehensive view of the applications in use, their cost, and their
alignment with business objectives.
3. APM helps organizations to manage risks and compliance.

45. 4. APM enables organizations to prioritize their applications and focus on the most critical
ones.
5. APM improves collaboration between IT and business stakeholders.
6. APM enables organizations to make data-driven decisions about their application portfolio.
7. APM is essential for digital transformation.
8. APM is a complex process that requires a combination of technology, processes, and people.
9. APM is an ongoing process that requires continuous monitoring and adjustment.
10. APM is a strategic investment that can deliver significant business value over time.
Application Portfolio Management Benefits
1. Improved visibility and control over the application portfolio.
2. Increased collaboration between IT and business stakeholders.
3. Reduced costs and improved cost management.
4. Improved risk management and compliance.
5. Better alignment of the application portfolio with business objectives.
6. More effective prioritization of applications.
7. Increased agility and flexibility in responding to changing business needs.
8. Improved decision-making through data-driven insights.
9. Increased innovation through the identification of new opportunities.
10. Improved customer satisfaction through better application performance.
Application Portfolio Management Trends
1. APM is becoming more critical as organizations accelerate their digital transformation
efforts.
2. APM is increasingly being viewed as a strategic investment rather than a tactical one.
3. APM is moving from manual processes to automated ones, leveraging AI and machine
learning.
4. APM is becoming more integrated with other IT management processes, such as IT service
management and IT asset management.
5. APM is becoming more focused on user experience and performance rather than just cost
optimization.
6. APM is becoming more cloud-focused, with organizations increasingly adopting cloud-based
APM solutions.
7. APM is becoming more data-driven, with organizations leveraging analytics to gain insights
into their application portfolio.
8. APM is becoming more focused on business outcomes, with organizations aligning their
application portfolio with business objectives.
9. APM is becoming more agile, with organizations adopting agile development methodologies
and DevOps practices.
10. APM is becoming more collaborative, with IT and business stakeholders working together to
manage the application portfolio.
Importance of Application Portfolio Management
1. The average company has 464 custom applications in its portfolio. (Flexera)
2. 35% of IT budgets are spent on application support and maintenance. (IDC)
3. 50% of companies have difficulty aligning their applications with business strategies.
(CIO.com)
4. 80% of organizations plan to increase their application portfolios in the next two years. (IDC)

46. 5. 73% of organizations use spreadsheets to manage their application portfolios. (Gartner)
6. 37% of organizations have limited visibility into their application portfolios. (Gartner)
7. 82% of IT decision-makers say their application portfolios need to be rationalized. (IDC)
Benefits of Application Portfolio Management
8. Companies can save up to 25% on application support and maintenance costs with proper
APM. (IDC)
9. APM can increase an organization’s application efficiency by up to 40%. (Accenture)
10. Companies can reduce their application failure rates by up to 90% with APM. (Gartner)
11. 85% of organizations with strong APM capabilities report better alignment between IT and
business goals. (IDC)
12. APM can reduce the number of software applications by up to 30%, leading to cost savings.
(Gartner)
Challenges of Application Portfolio Management
Twitch Studio vs Streamlabs CPU utilization comparison
13. 60% of organizations have difficulty tracking the financial metrics of their application
portfolios. (Gartner)
14. 57% of organizations struggle with outdated and redundant applications. (Flexera)
15. 49% of IT decision-makers face resistance from business stakeholders when trying to retire
applications. (IDC)
16. 39% of organizations have difficulties identifying and eliminating redundant applications.
(Gartner)
17. 32% of IT decision-makers struggle with creating a roadmap for application retirement. (IDC)
Application Portfolio Management Tools
18. The global Application Portfolio Management market size is expected to reach $3.1 billion by
2026. (MarketsandMarkets)
19. The Application Portfolio Management market is projected to grow at a CAGR of 12.5% from
2020 to 2025. (MarketsandMarkets)
20. Cloud-based APM tools are expected to have a CAGR of 23.8% from 2020 to 2025.
(MarketsandMarkets)
21. The top APM vendors include IBM, Broadcom, Micro Focus, and ServiceNow. (Gartner)
Application Portfolio Rationalization
22. Application Portfolio Rationalization is the process of identifying redundant and
underperforming applications to reduce costs and increase efficiency. (Gartner)
23. 70% of organizations plan to implement Application Portfolio Rationalization in the next two
years. (Gartner)
24. Companies can save up to 30% on their IT budgets through Application Portfolio
Rationalization. (Gartner)
25. 89% of organizations report significant benefits from Application Portfolio Rationalization.
(Gartner)

47. abdalslam
According to the latest statistics, more than two-thirds of all companies complain about
having too many applications in their portfolio. In addition, the majority assumes that most of
their applications generate little to no value for the organization (see Info-Tech Research
Group). One reason behind such negative perceptions is the lack of a process for
rationalization and harmonization of the company applications in use.
Due to complex architectural landscapes, IT today is primarily concerned with maintaining
existing operational systems and keeping them running. Thus, it is becoming increasingly
difficult to develop new strategies for the future and drive innovations from within the IT.
A guide to setting up your Application Portfolio
Management efficiently
Streamlining of the application landscape helps to reduce costs and resource requirements
across the IT, and therefore simultaneously creates more room for innovation. Minimizing the
complexity and, as a result, the overall risk of the portfolio is what in the end drives the
transformation of your company.
In order to declutter your application landscape, your applications must first be measured and
assessed on the basis of various dimensions – like their business value contribution, technical
fitness or compliance conformity. Based on this assessment, you can decide whether to
further invest in such applications, replace them, consolidate them with others, or simply
tolerate them. Gartner describes these different investment strategies as the T(olerate)-
I(nvest)-M(igrate)-E(liminate) model (see Gartner’s Application Portfolio Management:
TIME for the Application Masses).
 Tolerate
 Invest
 Migrate
 Eliminate
If you create an overview of the applications and their assignment to the respective
investment strategies, application roadmaps can then be defined which will help the business
units reflect on their needs and requirements, as well as optimize or even fundamentally
transform the business processes they support.
The applications of your organizations therefore play a decisive role, and represent a starting
point of many transformation initiatives. In order to effectively transform your application
landscape, you must first gain an extensive understanding of it and collect this knowledge
centrally. A neatly documented application portfolio (see our application portfolio e-
learning) promises to be of great help here and describes the set of already existing and
planned applications.

48. It is advisable to not only maintain this portfolio in the form of a list, but also collaboratively
document it in an enterprise architecture tool so that this information can be maintained
quickly and viewed at any time. This way, the so-called “shadow ITs” can be easily
uncovered, functional and data redundancies investigated, and responsibilities and concrete
lifecycle data properly captured.

49. Summary

50. As you can see, building an application portfolio is a powerful driver for the transformation
and innovation of your enterprise. Being part of your digital twin, the portfolio can help you
gain a competitive edge over your rivals. Setting up such an application portfolio can be done
in small steps, and the first results can be already achieved with little effort.
In our free APM poster, you will find a summary of actionable insights and essential tips on
setting up a solid application portfolio. And what’s more, we have also included a selection
of other related content surrounding APM to help you leverage its full potential in driving
your transformation forward. Download our poster to start with your APM initiatives today!
DOWNLOAD FREE POSTER
If you want to run an application efficiently, do you update each application separately?
Wouldn’t it be better if a business process allowed you to manage all your applications in one
location?
Something that would keep your applications up-to-date with operating systems, browsers,
plugins, and other enhancements so you can focus on business priorities. You certainly need a
way to monitor all this day in and day out. And we are here to discuss the solution –
Application Portfolio Management.
What is Application Portfolio Management?
Application portfolio management is a set of processes and tools to help organizations
manage their applications. The term “applications portfolio” refers to all company or
department applications. Applications portfolio might include products like CRM systems,
ERP systems, and custom-built web apps.

51. In a gist – Application portfolio management (APM) manages a collection of business
applications as a single entity, which can help create a more streamlined enterprise.
Application portfolio management involves the ongoing review, analysis, and selection of
software to best meet the needs of an organization. What is an application management
process
APM is often used in conjunction with application management or software asset
management. The goal is to develop an efficient and effective application environment that
supports business requirements while minimizing risk, cost, and other factors such as
licensing fees.

52. Why is Application Portfolio Management Important?
As organizations become more agile and move away from traditional waterfall project
management, they need to know what applications and how they are used. Application
portfolio management helps you do that. It allows you to track your software licenses, see
who’s using what applications for what purpose, and ensure that your company isn’t paying
for redundant or unnecessary permits.
Application portfolio management is also critical because it allows you to ensure that your
company can easily upgrade its software without worrying about whether it will work with
the other applications it uses.
By using Application Portfolio Management, organizations can:
1. Application rationalization, IT costs reduction, and IT agility

53. App portfolio management helps to rationalize the application portfolio by eliminating low-
value applications or unused licenses and consolidating similar applications into fewer
environments.
This improves efficiency and reduces IT software costs, and enables faster development
cycles for new applications which result in increased agility for the organization’s business
operations. It also provides a mechanism for managing the risk of technology obsolescence
by ensuring that all software remains current with vendor updates and patches so that it is
supported over its full lifecycle without any gaps between releases or patches being missed.
2. Technology obsolescence, risk reduction and standardization

54. Technology obsolescence risk reduction and standardization. IT departments spend a
significant amount of time dealing with outdated software systems. App portfolio
management provides visibility into the software portfolio, allowing organizations to plan for
upgrades and replacements.
3. Improved IT transformation roadmap
As companies move toward a more agile approach to IT development, they need a way to
manage complex projects that include multiple applications and teams. App portfolio
management can help identify what needs to be done and when it must be completed.
4. Facilitates outsourcing of IT operations, IT audits, and compliance
App portfolio management tools provide transparency into how applications are functioning
so they can be managed more effectively by third parties. This allows organizations to
outsource their IT operations without putting their businesses at risk from poor performance
or security breaches due to a lack of visibility into how applications are being used within
their environments.
The Two Approaches to Application Portfolio
Management

55. When managing your application portfolio, you must understand that there are two
approaches you can take: the top-down approach and the bottom-up approach.
Top-down: In this approach, you start with the essential applications in your portfolio and
work your way down until you’ve covered everything in your portfolio. The benefit of this
approach is that it’s easy to follow, but it can be time-consuming if you have many
applications in your portfolio.
Bottom-up: With this method, you start at the bottom—the most miniature applications in
your portfolio—and work your way up to cover all of them. This method is quicker than the
top-down method but requires more effort because each application must be analyzed
separately before moving on to the next one.
What is Application Portfolio Management Lifecycle?
Applications are complex systems that affect multiple organizational functions. Managing
multiple business functions efficiently requires a holistic approach to managing applications.
This holistic approach extends beyond just software development lifecycles and includes
infrastructure, security, change management, integration, maintenance, and support
processes.

56. Here’s how each phase of the application portfolio management lifecycle contributes to better
performance monitoring and optimization of your applications
1. Planning phase: This includes establishing clear goals and objectives, defining KPIs and
metrics, developing a strategy, identifying risks and opportunities, specifying roles and
responsibilities, creating a budget and time frame, evaluating options, and selecting the right
toolsets.
2. Implementation phase: In this phase, the selected solution is deployed in a pilot
environment to ensure it meets expectations. The answer is then rolled out across all
relevant departments in the organization. Finally, the project team monitors performance
and makes adjustments as necessary until the system is optimized for maximum
performance.
3. Operations phase: In this phase, IT staff members manage ongoing operations while
ensuring that they’re aligned with strategic goals set out by senior management. This
includes monitoring performance KPIs to ensure that systems are running optimally. They
also conduct periodic audits to ensure compliance with regulatory requirements such as

57. GDPR or HIPAA.
4. Evaluation & Feedback: Understanding how well your APM solution is performing and
providing feedback on how it can be improved to meet your needs better.
5. Retirement & Disposal: Decommissioning an existing APM solution when it is no longer
needed or no longer meets your needs
In other words, the APM lifecycle is a process that begins with the planning phase and ends
with the disposal phase. As you move through each stage, there are opportunities to evaluate
and improve your APM solution to meet your business requirements more effectively.
7 Application Portfolio Management Best Practices
As the application portfolio manager, you will manage the application portfolio and ensure
that your organization’s applications are aligned with business strategy. The following
Application portfolio management best practices can help you do this successfully:

58. 1. Get To Know Your Internal Customers
Determine what questions your customers are asking, and then determine how you can help
them answer those questions.
Ask your customers what they’re trying to do and why. What are their goals? How will they
know if the project is successful? Who else will be involved in the project? What resources
do they have access to? What obstacles might prevent them from achieving those goals?
Once you’ve identified these questions, you can start thinking about how to help them.
2. Create and Share a Target Output List

59. The target output list contains the most critical metrics and business goals used to evaluate
the health of the application portfolio. Therefore, the target output list should be kept up-to-
date by adding new metrics as they become relevant, removing old metrics that are no longer
relevant, and adding new ones as they become essential. This ensures that all stakeholders
can easily understand what they’re trying to accomplish with each application in the
portfolio.
3. Define Your Terms
Defining your terms is one of the most critical steps in application portfolio management.
What does it mean to “manage” an application? What does it mean to “improve”? How do we
measure these things? Before you start gathering data from your various applications, make
sure everyone involved understands what these terms mean and how they’ll be measured.
This will help ensure everyone is on the same page when deciding which applications should
be cut or improved and which ones should receive additional funding or resources.
4. Load Data in Distinct Phases

60. When you begin a new APM project, it is essential to have the correct data available.
Therefore, the first step is to acquire the data in a valid format and at the right time. For
example, if your APM system requires data from your network devices to be provided in a
certain way, it must be available when your APM system needs it. The best practice here is to
load your data in distinct phases as opposed to trying to load all of your historical data at
once. This will help you avoid having an incomplete or corrupt dataset.
5. Conduct “Pilot” Training for Data Suppliers
Data providers are often reluctant to share their precious information with others, especially
when unsure how their data will be used. If possible, try conducting pilot training sessions
with some of your potential suppliers before making any commitments or signing any
contracts. The goal of these sessions should be two-fold: First, they should help build trust
between you and your potential suppliers; Second, they should allow you to demonstrate the
value of sharing information with others so that both parties can see how this arrangement
benefits them both.
6. Develop a Communication Plan

61. To better align your organization’s applications and technology with its business strategy,
you need to have a communications plan that includes regular meetings with key
organizational stakeholders. These meetings should consist of business unit leaders, IT staff,
end users, and others directly involved with the IT department’s products or services.
7. Broadcast Your Success
You can help create a culture of continuous improvement by sharing successes within your
organization. You should also share lessons learned from projects or other initiatives within
your company so that others can benefit from these experiences.
Best Application Portfolio Management Tools
1. MProfit

62. Source
Alt-text: Portfolio Management Application – MProfit
MProfit is easy-to-use portfolio management & share accounting software. M Profit is a
preferred choice for the investment community across investors, traders, family offices,
financial advisors, and chartered accountants. Data can be easily imported from shared digital
contract notes, mutual fund statements, bank statements, and F&O contract notes.
Pros
1. Easy to use
2. Client-centric approach
Cons
1. Cannot directly accept reports and statements
Pricing: Available on request
2. InvestPlus

63. Source
Alt-text: Portfolio Management Application – Invest Plus
InvestPlus is a financial portfolio management application that helps you manage all your
accounting, investments, and income tax-related requirements. It has modules like Personal
Accounting, Assets Management, Loan Management, Investment Management, Income Tax
Preparation, and Personal Organizers.
Pros
1. Extensive features
2. Excellent customer support
Cons
1. Limited accessibility
Pricing: Available on request
3. Quantis – Asset and Wealth Management

64. Source
The Quantis platform provides functionality that supports all aspects of Investment
Management Operations: surveillance, risk management, investment management, and
reporting. Quantis enables users to create, manage and monitor their portfolios across
multiple currencies and markets. The platform also provides a complete set of reporting tools
to support regulatory reporting requirements and detailed analytics regarding portfolio
performance against critical benchmarks or peer groups over time.
Quantis is used by leading asset managers and financial institutions worldwide who want to
improve their trading operations while simultaneously reducing costs associated with manual
tasks such as trade processing, reconciliations, and netting processes through automation
provided by Quantis’ powerful technology platform.
Pros
1. Easy to use
2. Real-time updates
3. Great support
Cons
1. Offers Limited capabilities

65. Pricing: Available on request
4. PORTFOLIO VISTA
Source
Portfolio Vista view gives complete Portfolio Management solutions for all kinds of
investors. It has an inbuilt algorithm that provides triggers for order generation,
Receivables/payables fees computation and can be used for both Discretionary and Non-
Discretionary portfolios.
Pros
1. It’s a great way to see your entire portfolio simultaneously.
2. You can set it up to automatically rebalance your portfolio over time.
3. Makes it easy to track your performance over time.
Cons
1. Not suitable for active trading—you can’t buy and sell based on market movements or the
news like you would with a brokerage account.
What Is Application Portfolio Analysis?

66. Application portfolio analysis is a process that enables you to assess your applications,
understand their value, and prioritize them based on the impact they have on your
organization. The application portfolio analysis aims to determine whether the applications in
your environment are adding value or simply taking up space.
What Are Key Metrics of Application Portfolio Management?
Key metrics can be used to measure the effectiveness of an application portfolio management
program:
1. Application Technical Performance: This metric measures an application's stability,
performance, and reliability. It can also include user experience and satisfaction
metrics, security, and industry standards compliance.
2. Application-Business Accord: This metric measures how well an application aligns
with business goals and objectives. If it doesn't align with those goals, it's not
providing value for the business—and therefore isn't worth keeping around.
3. Application Cost-Business Value: This metric measures how much money a company
saves by using an application over other alternatives combined.
What Can You Achieve With Application Portfolio Management?
APM enables companies to:
1. Eliminate duplicate licenses by tracking license usage and assigning rights based on
actual utilization.
2. Streamline license purchasing by being able to negotiate better pricing with vendors.
3. Reduce costs by eliminating unused applications and eliminating unnecessary
licenses.
4. Improve productivity by ensuring that employees have access only to the applications
they need.
5. Monitor compliance by ensuring that all applications are used per company policies
and regulations.
How to Get Started With Application Portfolio Management?
The first step to getting started with application portfolio management is to determine your
current situation. For example, do you have applications running in the cloud or on-premises?
Are you already using a third-party vendor to manage your application portfolio? What are
the costs associated with each of these options? Once you've gathered this information, it's
time to start thinking about how APM will improve your organization's ability to deliver
business value.
What Is an Application Portfolio Management Example?
An application portfolio is a group of applications used to accomplish a specific business
goal. The applications in an application portfolio are often linked together or dependent on
each other. For example, you may have an accounting application to process invoices and
payments. You also have a customer relationship management (CRM) application that keeps
track of your customers’ contact information and history. The accounting system needs to
pull data from the CRM system to charge customers correctly and track their invoices. In this

67. example, the two applications are linked to accomplishing a specific business goal:
processing invoices and payments.
What Is Application Portfolio Analysis?
Application portfolio analysis is a process that enables you to assess your applications,
understand their value, and prioritize them based on the impact they have on your
organization. The application portfolio analysis aims to determine whether the applications in
your environment are adding value or simply taking up space.
What Are Key Metrics of Application Portfolio Management?
Key metrics can be used to measure the effectiveness of an application portfolio management
program:
1. Application Technical Performance: This metric measures an application's stability,
performance, and reliability. It can also include user experience and satisfaction
metrics, security, and industry standards compliance.
2. Application-Business Accord: This metric measures how well an application aligns
with business goals and objectives. If it doesn't align with those goals, it's not
providing value for the business—and therefore isn't worth keeping around.
3. Application Cost-Business Value: This metric measures how much money a company
saves by using an application over other alternatives combined.
Building an effective framework for
application portfolio management
18 February 2015
1
3
0
Many banks have accumulated a vast array of applications over the years and face the
challenge of modernizing them to drive future business growth. Application portfolio
management (APM) has become a key strategy for deciding which applications to modernize
and how. It is all about continuous application improvement to meet evolving business needs.
Through APM, banks gain an in-depth understanding of their applications, including their
functions, interdependencies, business value and required support skills. APM helps banks to
align their business and technology objectives and assess the costs and risks of their current
application portfolios. It gives them a broad view of their applications, which is essential to
making decisions about their future evolution.
While APM is a valuable business and IT strategy, there are several challenges to its
successful execution, including a lack of organizational readiness, application information
and APM project management skills. In addition, it is not always easy to identify duplication

68. among applications. For example, even if two applications are performing the same
functions, they might perform those functions in different ways.
Developing a comprehensive, ongoing and governance-based approach to APM can help to
overcome these challenges. An APM framework (APMF) is the foundation for effective
APM.
Ideally, this framework will include a solid methodology combined with a powerful software
toolkit. It will ensure the right people are involved and the right information is collected.
Other key attributes include the following:
Scalability: To address small, medium, large and massive portfolios
Flexibility and adaptability: To meet the needs of different industries and markets
Transparency: To ensure accountability and to support ongoing audits
Simplicity: To ensure streamlined information collection, analysis and reporting
A strong APMF will support a number of key APM services, including the following:
Application inventory: Inventory of applications across the organization
Risk landscape assessment: Review and assessment of risks that threaten sustainability of
the application portfolio
Application metrics development: Determines which metrics are relevant and easy to
collect
Application portfolio assessment: Comprehensive assessment of the application portfolio
Application rationalization: Focuses on reducing the overall application footprint and
operating costs
Application transformation roadmap: A roadmap for transforming the application
portfolio
Application portfolio management office: To provide ongoing governance and project
management
The ideal supporting APMF toolkit will automate information gathering, portfolio analysis
and reporting. It should be flexible and configurable to adapt to varying client and project
requirements. Overall, an effective toolkit will lower the cost, effort and risk for delivering
APM services and ensure consistent, high-quality client deliverables.

69. Implementing an effective APMF requires the right expertise. It is important to find a strong
partner—one with extensive experience in delivering APM projects, broad APM capabilities
and partnerships with leading solution providers.
By investing in a solid APMF framework, banks can preserve and get the most value possible
from their legacy investments, positioning themselves for long-term growth and success.
Defining the business value of solving the
problem
 Article

 2 minutes to read

Business value falls into one of four categories, easily remembered as REVO:
 Revenue: This solution brings in revenue that wouldn't otherwise be realized, through
a new line of business or a service that hasn't been offered before.
 Efficiency: Efficiency is effectively cost savings. This solution allows participants
who execute the process to do it faster.
 Volume: Cost avoidance is achieved by enabling current users to process more
transactions, in turn avoiding the cost of additional resources.
 Other: The solution helps the organization comply with its "must do" requirements,
which may result in avoiding financial penalties.
After the category has been defined, we need to define the value that we'll achieve:
 Revenue
o Determine what will be charged for the service
o Determine how many customers will buy the service or product
o Determine the time horizon to measure (monthly, quarterly, annually)
o Revenue = (price × customers) for the time horizon
 Efficiency
o Determine the number of people doing the job today
o Determine the amount of direct time they take to do the job today ("old time")
o Determine the number of people who will do the job after the Microsoft Power
Platform solution has been built
o Determine the amount of direct time it will take to use the new solution ("new
time")
o Time savings = old time – new time (To convert this to dollars, multiply the
time savings by the fully loaded cost of the people for the time unit you're
measuring in (for example, hours).)
 Volume

70. o Determine the volume of transactions that a single person can process for a
certain unit of time ("transactions per person")
o Determine the volume of transactions that the new solution will be able to
process in that time ("new transactions per person")
o Determine the volume of transactions that need to be processed in that time
("volume")
o Cost avoidance = (volume ÷ transactions per person) – (volume ÷ new
transactions per person)
This calculates the number of people who won't have to process transactions
to achieve the volume processed by the solution.
 Other
o Determine the penalty that can be avoided by having the information captured and
available in the solution
If the business value you'll receive by automating the process doesn't compare favorably to
the cost of doing nothing, you must ask yourself whether this is the right business problem to
focus on.
However, if the business value you receive by solving the business problem is greater than
the cost of doing nothing—plus your development time and the monthly cost of any software
license—it makes sense to automate the process.
Example: The business value of automating the expense
process
In the case of our example app, the main category of business value is efficiency. The new
app will reduce the amount of time it takes to process the same number of expense reports
each week, month, and year. We reviewed the new process and what we'd like the app to
accomplish with our future users. We asked them how much time they expect to save with
the new process and being able to build in some of the rules in the expense report app.
 We'll still have 140 expense reports being submitted each week; that hasn't changed.
However, when we talked with the people submitting reports, we found that we'd be
able to reduce the time they spent down to 20 minutes—by their being able to enter
information immediately and take pictures of receipts when a receipt was required.
The fully loaded cost also remains the same.
(140 expense reports a week × 20 minutes) × $90/hr = $4,158 a week = $216,216 a
year
 Nick will be reviewing the expense reports of his team (roughly 100 salespeople) and
estimated that it will take roughly 5 minutes to review each expense report. His
review is limited to the type of expenses being submitted, recognizing that the need
for receipts—and the need to include the names of guests at meals and distribute hotel
expenses into the appropriate categories—will be controlled by the app.
(100 expense reports a week × 5 minutes) × $90/hr = $750 a week = $39,000 a year

71.  Other managers will review and approve the expense reports from their departments
going forward, so the remaining 40 expense reports will cost $15,600 a year.
 The work for Abhay and his team has now shifted to spot checking reports. They
shouldn't need to do any rework; in fact, Abhay's team might be able to be tasked with
other activities due to the reduction in effort needed for reviewing expense reports.
 We optimized the process to associate the correct general ledger accounting code to
each of the expense categories. Now Abhay and his team can extract the data to create
the payment journal, reducing the 40.3 (16.5 for coding + 23.8 for posting) hours a
week down to a few minutes, saving $188,604 ($77,220 for coding and $111,384 for
posting) a year. Abhay might be able to task some of his team with other, more
important, work in his department.
 With the new process, Abhay and his team can consider posting the expense reports
every day, which will provide Charlotte with an updated view of the budget each day
and allow her to respond more quickly as budget constraints approach.
 The new cost to the company using the automated app is roughly:
$216,216 + $39,000 + $15,600 = $270,816 a year
Saving the company roughly $777,738 each year

73. Next step: Measuring success
Calculating Business Value of Application
Modernization — A Pragmatic Approach
By Greg Hintermeister and Eric Herness
Application modernization business value can be calculated by measuring the specific impact
modernization has on a number of behavioral variables.
Introduction
In working with dozens of clients this past year, we at the Cloud Engagement Hub started
refining how we can more quickly help clients calculate the holistic, end-to-end business
value of modernizing their applications. What we found is that while past conversations
focused on cost savings found on a financial spreadsheet (infrastructure savings, licensing
savings, etc), our Cloud Engagement Hub conversations with clients included many other
aspects, including development, deployment, and operational behaviors that are altered when
an application is modernized. A lot of these aspects can be measured with great accuracy
since they are done today in more traditional forms, and equally as measurable after an
application is modernized.
The following describes our current progress on how we calculate business value of
modernization by measuring (or projecting) changes to many standard variables clients
measure every day.
Our goal is to show that working with IBM to modernize applications isn’t a technical
experiment, isn’t a science project, but is a solid business decision that will provide a visible
return on investment, and will improve revenue in tangible, measurable ways.

74. Further, by focusing on variables that clients are familiar with, we can set up dashboards to
provide real-time weekly progress on the value they are achieving…where based on these
facts, can push their teams, or IBM, or both, to achieve the business value they deserve.
As you study this, provide any feedback in the comments. We’d love to discuss this in depth
with you.
Variables Used
These are the variables in our pragmatic approach to calculating modernization business
value. Each can be measured individually. The idea is that they should be measured before
App Mod, and then either projected or measured after App Mod. They should be calculated
for the level of modernization you choose: Containerize, Repackage, Refactor, Externalize.
Based on your target, the variables will hold different values. The goal is to obtain the change
of these variables; the delta. The delta will then be used in the formula to calculate business
value.
Note: For some clients, not all variables are relevant. That’s OK. If you don’t have a way to
measure, or don’t some of variables will change much when doing App Mod, then leave the
change as zero.
Time-Based Behavioral Variables
These time-based variables can be divided into two categories: Development Focused, and
Operations Focused. I know…a true DevOps environment doesn’t separate the two, but most
enterprise shops are on a transformation journey and many still separate dev and operations.
As will be described in the details section, to calculate these variables, think about the tasks
you perform, how many times you do each task, and what it would mean to automate these
tasks.
Development Focused:
 Provisioning (P) Time to stand up dev/test environments (clusters, middleware, pipeline,
etc.)
 Deployment (D) Time to deploy new app instances on an existing environment for dev/test
 Extensibility (E) Time to add new function based on user needs, market changes
 Testing (T) Time to test deployable units
Operations Focused:
 Provisioning (P) Time to stand up pre-production or production environments (clusters,
middleware, pipeline, etc.)
 Deployment (D) Time to deploy new app instances on an existing environment for
production
 Scaling Speed (Ss) Time to scale application to necessary levels to respond to demand
 Resiliency (R) Time to recover from a datacenter/environment outage
 Maintenance (M) Time to maintain running environments
 Time to Market (Tm) Time to deliver new revenue-generating feature to market

75. Cost Variables
 Infrastructure (I) Cost of Infrastructure (VMs, Bare Metal, Kubernetes Clusters) including
what’s needed for ‘ready reserve’ for future scaling needs
 Labor (La) Cost of labor per unit of measure
 License (Li) Cost of licensing for app runtime/middleware
 Feature Revenue (Rf) Revenue of a feature / unit of measure
 AppMod Cost (Am) Cost to modernize to target level (containerize, repackage, refactor)
multiplied by cost per unit of measure
Calculations
To calculate the business value, each element of the equation needs to be measured. Below,
the elements represent the changes (delta) of each variable before and after modernization. If
you don’t have the “after” measurement, the details section below will offer some suggested
defaults based on real client feedback.
Time Saved in Modernization (Vt)
Vt is the aggregated time saved across all time-based variables above. The variables
represent the App Lifecycle stages by containerizing, repackaging, or refactoring the
application.
Vt = ΔP + ΔD + ΔE + ΔSs + ΔR + ΔM + ΔT
Costs Saved in Modernization (Vc)
Vc is the costs saved based on the time saved that was calculated above. This variable is
simple the time saved (Vt) multiplied by labor costs per unit measured.
Vc = Vt · La
Feature Value (Vf)
Vf is the value of delivering a revenue-generating feature earlier due to the time saved
modernizing the application. (Feature value) equals the time saved delivering a revenue-
generating feature multiplied by revenue per unit measured. This should be run for every
feature to reinforce that if a feature can be delivered 6 months early due to modernization,
then future delivered features will see that benefit as well. It’s up to each client to determine
how many Vf’s should be included into the final business value calculation. Generally, all
planned features over the next two years should be used for accurate business value
understanding.
Vf1 = ΔTm1 · Rf // Feature one, time saved with modernization, multiplied by estimated
revenue of that feature
Vf2 = ΔTm2 · Rf // Feature two, time saved with modernization, multiplied by estimated
revenue of that feature
Vf3 = ΔTm3 · Rf // Feature three, time saved with modernization, multiplied by estimated
revenue of that feature
See the details section below for examples.

76. Calculate Modernization Business Value
Calculate the business value by adding all of the above together, then subtract the cost of
modernizing the application itself.
Bv (Business Value) equals the costs saved with modernization (Vc), the infrastructure costs
saved (ΔI), the licensing costs saved (Δli), The Feature Value for each planned feature (Vf),
and then subtracting the investment to perform the target application modernization
techniques (Am)
Bv = Vc + Vf1 + Vf2 + Vf3 + ΔI + ΔLi — Am
One final thought before we move onto the details: Since modernization moves the teams to
an agile culture, many of these calculations should have a multiplier to reflect frequency.
While teams may provision new environments today only once every 4 months, that may be
because its too complicated. If it can be done in 2 hours, then there will be more than 3
provisions per year! There could be 100’s…magnifying the productivity of teams in the new,
fully automated, agile culture.
Details: How to Calculate Each Variable
The following sections provide scenarios and suggestions on how we are working to obtain
the changes of time due to modernizing the application.
Provisioning (P)
Definition: Time to stand up environments (clusters, middleware, pipeline, etc.)
Scenario: A development team needs an environment to enhance an application with a new
feature. They need to stand up an application runtime, Db2, and MQ. This variable will
measure how much time it takes from the initial request to when the developer can start
working with that environment.
How to get measurements:
Simply asking experienced developers will give you a good estimate
 What is being provisioned, and how long does it take before you can use it? (DB, runtime
(WebSphere), middleware instances (MQ, IIB, …)
 What is it’s purpose (Sandbox, dev, test, prod)
 Who needs to approve, authorize, manage the environments?
 What automation is used to provision?
It is quite common that a VM will take 2 weeks to become available for developers. While
the actual provisioning can be done much more quickly, the approvals, validation, and
exceptions result in most provisioning times to be measured in weeks, not hours.
Examples:

77. For initial estimates, the value of P would equal 6 weeks. If you don’t have an estimate for
“After Containers”, then we can use these estimates or values from other client’s experiences
we have worked with.
You will notice that you actually have two choices for estimating the delta: 1) effort to
accomplish, or 2) linear time to accomplish. In the example above using the low-end
estimates (and 8 hours per day), the time saved for provisioning would be as follows:
Before:
 Effort to accomplish: 7 weeks (35 days, or 280 hours)
 Linear time to accomplish: 3 weeks (15 days, or 120 hours)
After
 Time to accomplish: 2:41 hours (assuming some manual authentication)
ΔP = 117.3hours of linear time saved per provisioning instance (even more “effort” saved!)
Deployment (D)
Definition: Time to deploy new app instances on an existing environment
Scenario: An application needs to be deployed onto an existing environment. A test team and
support education team need to run a new instance of the application. The assumption is that
development is complete, and the application components are ready for deployment.
How to get measurements:
Measurements for this can be gathered from asking devs/testers/operations teams
 When you get a request to add an application to an existing environment, how long does it
take?
 What tools do you use to deploy applications?
 What configuration is required to connect the application to the dependent resources?
 What load balancing and network changes need to happen to get the application running?
In our experience, adding applications to VM-based platforms can take quite some time,
whereas a containerized application, using kubectl apply deploy.yaml could take 1–2
minutes.

78. Examples:
Extensibility (E)
Definition: Time to add new function based on user needs, market changes
Scenario: Product leader defines a new capability to add to an existing application based on
user feedback. This variable measures the time it takes to add that capability to a production
application.
How to get measurements:
This is intended to measure the productivity of the development team when reacting to a
customer request or problem. To get the measurement, it’s important to understand the
developer workflow. Some teams may be in a modified waterfall with dependencies and
approval boards, while other teams are sprint-based and deliver as soon as the content is
ready.
Examples:
Scaling Speed (Ss)
Definition: Time to scale application to necessary levels to respond to demand
Scenario: As demand increases for an application, it needs to scale up (or down) to meet
those demands. Additional compute, storage, networking needs to be added for additional
instances. This variable will measure the time it takes to activate that scaling. For WebSphere
JavaEE applications, scaling includes acquiring more VMs, add a node to a WAS cell,
federate that node, then add a cluster member that lives on that node.
In the end, the expected value will be around what it takes to provision an environment and
deploy an application (P + D).
How to get measurements:
This is measured because auto-scaling is not a reality for many applications. “Predictive
scaling” is what many application and operations teams perform, predicting the demand, and

79. setting up enough spare capacity to handle that additional demand, well before that demand
appears.
To get the measurement, look to past events to see how long it took to set up the compute,
storage, network, and application communication so that 3x-50x additional demand could be
handled.
Examples:
Resiliency (R)
Definition: Time to recover from a data center/environment outage
Scenario: When an environment (or entire data center) has an outage, applications are
obviously impacted, but the impact to end users is what’s most concerning. Current
operations teams, regardless of technology used, have a resiliency plan to recover from an
outage. Some operations teams go to great lengths to ensure applications running on older
technology are resilient. Depending on your situation, you may want to measure a number of
activities to come to your Resiliency number.
How to get measurements:
Here are questions you can ask your operations teams:
 (Server outage) How much time does it take to recover from a server outage to get the
application back to its “normal” state?
 (Data Center outage) How much time does it take to recover from a complete data center
outage to get the application back to its “normal” state?
There are a number of secondary questions that can add precision to this value. These
questions revolve around how much time it takes to prepare an application for an outage so
that the time to recover is near zero:
How much time does it take to prepare your application architecture to minimize downtime in
the event of an outage?
 Are you replicating data to a secondary data center?

80.  Are you keeping the application up to date on a secondary data center?
 Are you keeping the that environment hot?
 Do you have load balancing that routes to multiple data centers/environments?
 How much detection/reaction of an outage is automated?
 How much infrastructure is in “ready but idle” state just in case of an outage?
The reality is that after containerizing some applications will still run as “pets” and need
application-level synching while others, if architected for cloud, can run as “cattle” and be
much more resilient. Either way, running in Kubernetes will automate many of the
preparation activities, or at least make them far simpler. (Example: creating a Kubernetes
cluster that spans data centers will make worker nodes run in multiple availability zones;
greatly increasing application resiliency)
Examples:
Maintenance (M)
Definition: Time to maintain running environments
Scenario: An application has been running in production, and a variety of issues have been
collected ranging from operating system patches, application defects, and middleware
patches. The application team needs to maintain the running environment to comply with
customer demands, regulations, and security policies.
How to get measurements:
This measurement is all about keeping the environment running properly in leu of patches,
found defects, etc. As we all know, with existing VM-based applications (or bare metal),
there are VM images to prepare, operating system patches to process, dependent middleware
patches to process, application defects to fix and push out into production, changes in security
policies to honor, and much more, depending on the application and depending on the
company. Here is a list of examples to consider.
Note: The time here does not include development time to code a patch, only the time to push
the patch into production.
Examples:

81. Testing (T)
Definition: Time to test deployable units
In traditional development shops, testing is general a separate activity. The move to cloud-
native and a DevOps culture is primarily driven by test-driven development which make
testing an embedded and natural element of the DevOps process. However, to get there takes
effort and investment. This variable is to measure how long it takes to test an application unit
before that unit is deployed into production.
Scenario: A test team receives a deployable unit to test for the next round of application
enhancements. They previously provisioned the environment and have provisioned the
application. Once testing has completed, the application moves to staging for additional
integration testing, and finally to production.
How to get measurements:
This measurement is all about capturing the time it takes to fully test the deployable unit. In
traditional cases, the deployable unit is the entire application, but once an app is modernized,
the deployable unit is an individual container.
This is also capturing the time it takes to prepare for tests that require real-time feedback.
While current platforms like Kubernetes log, monitor, and provide health checks for the
container, many traditional environments required user interaction, break points, or exit
points to achieve the desired scenario.
As a result, this “Testing” measurement is not only measuring time to test, but time to prepare
and maintain the tests and the testing environments.
Examples:

82. Time to Market (Tm)
Definition: Time to deliver new revenue-generating feature to market
This variable is focused on “If you estimate you can generate $1M of revenue over a year,
and by modernizing you can push out the feature 6 months earlier, you can achieve $0.5M in
business value in modernizing that application for each revenue-generating feature”.
Scenario: A product team determines a new “visual recognition” system will generate $1M
per year in additional revenue for their approval system. The dev team has created sprint
plans across 5 dev teams to code necessary changes to the UI, backend, data systems, and
new “visual generator” AI algorithms.
How to get measurements:
This measurement can be found by asking an application leader to sketch out this scenario
and estimate how long it would take to deliver. Initially they would know “it will take one
year”, and those skilled with Kubernetes, DevOps, and cloud-native architecture, could
estimate as well “it will take us 6 months”
We also have existing client examples where they saw 30% speed increase.
Examples:
Infrastructure (I)
Definition: Cost of Infrastructure (VMs, Bare Metal, Kubernetes Clusters) including what’s
needed for ‘ready reserve’ for future scaling needs
This is a basic measurement of infrastructure costs needed to support the application. No real
scenario here is needed, just adding up all the infrastructure needed across Dev, Test, Staging,
and Production.

83. How to get measurements:
Infrastructure costs vary greatly depending on the type of application. For this measurement,
keep things simple and ask your IT teams:
 How many VMs does it take to run the application across Dev, Test, Staging, and
Production?
One recent client we were at counted 23 VMs to run a fairly basic WAS/JavaEE application
with the need of multiple environments, and resiliency, and scaling planning.
The “After containers” is a bit trickier. Obviously, it takes VMs to run Kubernetes clusters, so
in some cases we bundle the applications to say “while it took 55 VMs to run these eight
applications across environments, it only takes 20 VMs to run the same containerized
applications across two Kubernetes clusters”. In this case, two clusters because many clients
are fine combining Dev/Test/Staging into one cluster, but still want to keep production
separate.
Finally, once your count is obtained, find the cost per VM and find the cost of infrastructure.
Examples:
Labor (La)
Definition: Cost of labor per unit of measure
This is a basic measurement of labor costs per day/month/year, based on the unit of measure
the time-based calculations were in.
The goal here is to transform the time savings from the first set of variables to a numeric
count.
How to get measurements:
List the different roles involved in the time-based calculations and their cost. This will vary
based on role and if the labor is contractors or employees.
Also, there is no real “before/after” in this. Developer skills are precious so while some may
see as “reducing labor costs” as a downsizing topic, it should be viewed as a way to make
your skilled developers more productive.
License (Li)
Definition: Cost of licensing for app runtime/middleware

84. Modernizing an application can result in reduce licensing costs from a variety of sources, but
accuracy in the calculations is essential. For example, some VM hypervisors have a higher
licensing cost than others, but the lower licensed hypervisors may have higher support
subscriptions.
How to get measurements:
Add up the number of licenses in use on VMs, and then the number of licenses of VMs
running in containers.
Feature Revenue (Rf)
Definition: Revenue of a feature / unit of measure
This is an estimate of how much revenue a feature would add over a period of time. This is
related to the Time to Market where you can determine “if a feature will bring in an estimated
$1M over a year, and I reduce my time to market from 1 year to 6 months, I will have gained
$500K in revenue”
Vf (Feature value) = ΔTm · Rf
How to get measurements:
This really comes from the product management team and the market team. This should be
known before you are developing a major feature anyway, so should not be a lot of time to
calculate.
Here’s what’s important: Even if your team only delivers a subset of the new feature in 6
months, that’s still revenue-generating content out in production faster. Think of it like
paying for a loan every week vs. once every 6 months. The sooner you deliver, the more
valuable your modernization becomes.
AppMod Cost (Am)
Definition: Cost to modernize to target level (containerize, repackage, refactor) multiplied by
cost per unit of measure
This is estimating how much it will take to modernize the target application.
How to get measurements:
The estimating will vary based on the composition and complexity of the application. For
JavaEE workloads, using tools like Transformation Advisor will provide a “xyz Developer
Days” estimate based on binary scanning of the .ear and .war files. In addition, further
analysis of Transformation Advisor’s findings will optimize the estimate to account for
duplicate counting, etc.

85. The final variable should be the number of developer days for an application to be
containerized, multiplied by the Labor costs.
Future Variables
There are three other variables to consider, but so far we are not including them because our
goal is to focus on variables that can clearly be measured. Scaling Granularity was added as
an initial variable, but it overlaps with other variables. One consideration would be to add a
“Dependency (Dp)” variable to measure how much time a dev team’s enhancement/patch
waits to be deployed so that a dependent team can update their code. Stability (St) is a
measurement that we will add later since it will measure how people manually add Istio-like
capabilities using traditional networking vs Kubernetes-specific capabilities like Istio.
• Scaling Granularity (Sg) Time to scale smaller components after repackaging apps to
smaller, feature-focused containers
• Dependency (Dp) Time waiting for another team to commit their changes before your
already-coded changes can be tested/deployed into production.
• Stability (St) Time to write automation to manually create circuit breakers, retry logic,
advanced observability (BYO Kubernetes)
Summary
As you can see, while this is still a work in progress, we are quite excited to have the
beginning of a framework to measure the business value of Modernization using the
behaviors a Dev and Ops team currently uses, with the ability to measure time and cost
savings as the application is modernized. To be honest, it’s also exciting to see that when this
work progresses, the clients’ culture changes as well to a true DevOps organization…and
that’s when savings really accelerate.
We’d love to hear your feedback…see you in the comments!
Modernization
Business Value
Kubernetes

86. Containers
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Methods and measures for evaluating applications[edit]
There are many popular financial measures, and even more metrics of different (non-financial or
complex) types that are used for evaluating applications or information systems.
Return on investment (ROI)[edit]
Return on Investment is one of the most popular performance measurement and evaluation
metrics used in business analysis. ROI analysis (when applied correctly) is a powerful tool for
evaluating existing information systems and making informed decisions on software acquisitions
and other projects. However, ROI is a metric designed for a certain purpose – to evaluate
profitability or financial efficiency. It cannot reliably substitute for many other financial metrics in
providing an overall economic picture of the information solution. The attempts at using ROI as
the sole or principal metric for decision making regarding in-formation systems cannot be
productive. It may be appropriate in a very limited number of cases/projects. ROI is a financial
measure and does not provide information about efficiency or effectiveness of the information
systems.[10]
Economic value added (EVA)[edit]
A measure of a company's financial performance based on the residual wealth calculated by
deducting cost of capital from its operating profit (adjusted for taxes on a cash basis). (Also
referred to as "economic profit".)
Formula = Net Operating Profit After Taxes (NOPAT) - (Capital * Cost of Capital)

92. Total cost of ownership (TCO)[edit]
Total Cost of Ownership is a way to calculate what the application will cost over a defined period
of time. In a TCO model, costs for hardware, software, and labor are captured and organized into
the various application life cycle stages. An in depth TCO model helps management understand
the true cost of the application as it attempts to measure build, run/support, and indirect costs.
Many large consulting firms have defined strategies for building a complete TCO model.
Total economic impact (TEI)[edit]
TEI was developed by Forrester Research Inc. Forrester claims TEI systematically looks at the
potential effects of technology investments across four dimensions: cost — impact on IT; benefits
— impact on business; flexibility — future options created by the investment; risk — uncertainty.
Business value of IT (ITBV)[edit]
ITBV program was developed by Intel Corporation in 2002.[11]
The program uses a set of financial
measurements of business value that are called Business Value Dials (Indicators). It is a
multidimensional program, including a business component, and is relatively easy to implement.
Applied information economics (AIE)[edit]
AIE is a decision analysis method developed by Hubbard Decision Research. AIE claims to be
"the first truly scientific and theoretically sound method" that builds on several methods from
decision theory and risk analysis including the use of Monte Carlo methods. AIE is not used often
because of its complexity.
TOP 10 APPLICATION
PORTFOLIO
MANAGEMENT BEST
PRACTICES
Application portfolio management (APM) has evolved into a critical
discipline. With businesses increasingly depending upon technology to
create new products and services, having the right mix of applications to
support business objectives is a necessity.

93. As the stewards of APM, enterprise architects can be the catalysts of digital
transformation programs that drive revenue and growth. This requires
acting as a modern-day Socrates, asking the right questions to an ever-
expanding, multi-disciplinary list of roles in an organization to translate
needs into actionable plans and outputs.
To help you be successful, here are 10 application portfolio management
best practices to follow.
Application Portfolio Management
Emerges as a Discipline
APM developed in the late 1990s when organizations began creating
inventories of applications, primarily as a response to the Y2K problem.
Over time, companies added cost data, categorization, and business
process linkage information to the inventories, providing new insight into
how applications support business operations.
As the use of technology in business increased, the application “inventory”
process emerged as a more focused discipline, with dedicated people and
tools to manage it. Applications were now key resources in implementing
strategy, and represented a significant cost and potential risk area.
In addition, applications were more interconnected, adding more
complexity. This drove a requirement for increased visibility and analysis
beyond what could be provided in spreadsheets. To respond to these
trends, purpose-built application portfolio management software started to
appear a few years after Y2K and have continued to mature.
Application portfolio management software was deployed to help:
 Identify and eliminate redundant and unused applications

94.  Consolidate similar applications into a single new application
 Retire older and more expensive-to-maintain applications
 Determine which data flows through which applications to optimize security
controls
Application Portfolio Management
Drivers
The early drivers for application portfolio management frameworks were to
lower costs and risks. Mitigating costs and risks are still important, but
today’s organizations are also using APM to drive growth and revenue.
With an increased number of mergers and acquisitions as well as pressure
to create new, interconnected products and services, companies are
constantly reassessing their business capabilities and striving to embed
technology into everything. To support these initiatives, IT leaders and
specifically enterprise architects must identify and fill capability gaps, which
requires making better decisions about application and technology
portfolios.
This job is more challenging than ever, considering the state of applications
today. Applications are getting simpler but more numerous, with vendors
using cloud services to create and release new ones faster than ever.
Companies must evaluate these technologies quickly to respond to
customer demands, or else risk getting behind the competition.
In addition, businesses are moving more and more applications to the
cloud. Rather than running applications, they can spend more time and
money delivering continuous innovation and change. Meanwhile,
enterprises are still running lots of legacy systems along with cloud, and the

95. integration between applications in these hybrid IT infrastructures is
complex and critical to understand.
Application Portfolio Management
Best Practices
Today, application portfolio management is more important yet more
complex than ever. Companies are under pressure to drive growth and
revenue with digital transformation initiatives, requiring an optimized
application portfolio.
Increasingly, enterprise architects must work with multi-disciplinary teams
consisting of executives, line of business managers, planning
professionals, and those involved in execution. Only by collaborating with
these different roles across an organization can one understand the
capability gaps and requirements, and then deliver the right outputs.
Here are the ten best practices for success with APM, which Planview has
gleaned from working with its customers over the past 15 years.
1. Get to Know Your Internal Customers
The top key to success with application portfolio management is to develop
relationships with your colleagues who are making decisions involving
applications and technology. These are your primary customers. They are
working on the most important initiatives in various digital transformation
roles. To start, target:
 All executives sponsoring large change programs or initiatives, especially
those who are delivering against corporate strategy

96.  Roles involved in technology planning such as Portfolio Managers,
Program Managers, Resource Managers, and Finance
 The Project Management Office, Project Managers, Solution Architects,
and any others involved in the execution of projects and initiatives
 Application Architects, especially as applications and their configurations
are continuously moved through a DevOps pipeline
These individuals can derive the most value from APM, but only if you can
help them make better decisions. You can only get what you need by
talking to them. Get used to it, since you will be spending a lot of time with
them. If you are not already, something is wrong.
2. Discover What Questions Your Customers Are Asking
Your answers to your customers’ essential questions will help them
execute on their transformation projects faster and with less risk. Find out:
 What their questions are
 The scope of the questions
 What form the answers should take
 How often to provide status updates
 What the priority is
You may need to translate each question by abstracting it further or making
it more concrete. Often, you must dig for the question behind the question.
For example: A decision maker may say, “Why is our branding so varied
across our web site, mobile app, and retail store kiosks?” What he or she
may really be asking is, “How can we achieve a single view for the
customer across all touch points?”

97. Beyond understanding these questions, you must determine what
decisions your customers will make with the answers. This information is
necessary to ensure you deliver outputs that allow for streamlined decision-
making processes.
In the graphic below, you can see that different roles will make different
decisions based on the same question. You need to change the scope and
level of detail of your answers accordingly.
3. Create and Share a Target Output List
When inquiring about what decision makers want, you will often get this
answer:
“I can’t describe what I need, but I will know it when I see it.”
So, let them see it! To answer your customers’ questions, document the set
of outputs you propose:

98.  Produce outputs from your application portfolio management software,
such as graphics, drawings, visualizations, reports, and dashboards.
 Save time by choosing out-of-the-box, well-tested outputs that can be
produced quickly.

99.  Create visual mockups showing what the finished result will look like. This
will make it easier to get buy-in. Top tip: When a mockup contains
recognizable items by name, it is easier for your internal customer to see
the value. For example, if the visualization is displaying business units, use
your company’s actual business unit names.
The target output list becomes the milestones for delivery. Depending on
the size of your organization and degree of transformation occurring, the
total target output list can take from six months to a few years to deliver.
Successful APM programs regularly re-prioritize this list and deliver a small
set of the highest priority outputs in regular, short, 30-60 day intervals.
4. Create a Target Data List
The most effective APM programs deliver value with the smallest set of
data possible. Your internal customer determines what the value is by

100. telling you what questions need to be answered, and what outputs will
answer those questions.
What data should be managed in an APM solution? Only what is essential
to generate your target output list (see #3 above).
Thus, it is critical to maintain a list of the data items required for chosen
outputs. This will help you limit the scope of work associated with
maintaining your APM solution. Avoid this step at your peril.
It takes resources and dedication to identify data sources, cleanse the data,
and keep it up to date. Don’t use these resources to capture and manage
data that might be valuable. You only want to collect what is needed for
outputs that you know will be valuable. How do you know? See best
practices one and two!
5. Determine Data Owners
Data ownership is important for a successful APM program. If your users
do not trust the data, they will stop using it for decision making.
A data owner has the responsibility to manage a subset of data items from
the Target Data List. The data owner identifies the source, method of
collection, and processes to follow that ensure the captured data follows
the three Cs:
 Completeness: Do we have the scope of data needed to answer the
question without missing important aspects?
 Correctness: Is the data correct and accurate?
 Consistency: Is the data consistent with itself? For example, do all data
items that describe a capacity use the same units? If multiple fields on

101. multiple objects refer to the same concept, is the concept spelled the
same? Are there multiple components representing the same entity?
The data owner is not necessarily responsible for doing these tasks
himself, though more often than not it is the same person.
There are three primary methods of collecting needed data for APM:
 Automatic collection through an integration with a separate data source
 Manual collection using the APM software data entry capabilities
 Manual collection through modeling
6. Define Your Terms
To obtain the necessary data, you must explain exactly what you want.
However, people sometimes get stuck on crafting definitions. As an
example, enterprise architects have been arguing for years about the exact
definition of an “application,” but the understanding of the definition is more
important than the definition itself.
For instance, if you need to ask folks to provide you with all the
“applications” they use, be very specific about what you mean by
application. Provide examples from your environment of what is and is not
an application.
Whatever your definition, don’t seek a consensus agreement on the
definition of a particular term. You aren’t putting together a dictionary!
Instead, seek to gain complete understanding of what you mean by that
term.
7. Load Data in Distinct Phases

102. APM failures often occur due to data management. Two common problems
are:
 Loading data until something useful comes out of it: Most application
portfolio management tools have built-in data models. Some are very
robust, containing objects to represent virtually any kind of technology and
business concept. To derive value quickly, some organizations attempt to
load every data item they can find. This approach lacks a plan (and
ownership). APM best practices two, three, and four address this issue.
 Treating all data loads as the same: There is a difference between the
initial (from empty) loading of data in an APM solution and the ongoing
management of that information. The former involves more bulk loading of
readily available information and typically takes a concentrated effort over
a short period of time. The latter is a steady state, process-driven activity.
This problem is addressed by identifying distinct phases of data
management. The best results occur when people use the following
phases:
o Initial Data Load Phase: One-time bulk loading of readily available data
o Transitory Phase: One-time phase for cleaning data and training of “steady
state” data providers, and configuring automated data source integrations
o Steady State Phase: Ongoing maintenance of data
8. Conduct “Pilot” Training for Data Suppliers
Another challenge in APM is that you will require effort from folks outside of
your own team to supply data and to maintain it on a regular basis. Even
though most APM software provides built-in workflow systems to help
manage your data suppliers, it is important to train this team. Since this is
not their “day” job, you must make it as simple as possible for them. The
best practices for this include:

103. 1. Train a small, friendly “pilot” set of data suppliers and have them work
through the process while you observe;
2. Incorporate their feedback and the lessons learned into the training plan;
and
3. Then train the remaining data suppliers.
9. Develop a Communication Plan
Organizations with excellent communication have the best APM programs:
 They develop a communication plan for all stakeholders, including:
o Decision Makers: Internal customers
o Data Owners and Data Suppliers
 Communication plan deliverables include key messages for all phases of
the project
10. Broadcast Your Success
If you follow these best practices, you will deliver your program as a series
of small successes. Every stakeholder should know about these. Make an
announcement for each one, letting all involved know:
 What kinds of questions were answered and with what kinds of outputs
 For what decision makers
 What kinds of decisions it helped them make
 What data was required to make that output possible

104. An Application Portfolio Management Template for
Success
As IT and the business become more intertwined to achieve revenue
targets, enterprise architects have an opportunity to be key facilitators of
digital transformation programs. These best practices provide a tested
application portfolio management template to follow.
Start by understanding what you want to get out of your application portfolio
management program first. Data is critical, but it comes from people who
don’t work for you. Make it easier for them to help you by answering their
questions and helping them execute on their initiatives. Target short 30- to
60-day time frames for delivering value. Then, communicate continuously
as you work with your colleagues to deliver the products and services that
meet strategic business objectives.
About the Planview Solution for
Capability and Technology
Management
The Planview solution for Capability and Technology Management enables
enterprise organizations to advance business capabilities by connecting
technology with business outcomes. By engaging cross-functionally with
stakeholders, EAs can create enterprise architecture plans and roadmaps
that achieve strategic objectives.
Application Portfolio Management is a part of Planview’s Capability and
Technology Management solution, first released in 2003 as a core feature
of the legacy Troux product line. APM best practices are supported through
15 years in partnership with over 300 deployed customers. The Planview

105. solution for Capability and Technology Management helps you understand
the dependencies between your organization’s program and application
portfolios, the underlying technology stack, and business capabilities,
projects, and products.