As enterprises grow — whether this growth comes from expanding, merging, or branching out — so do their IT needs. To meet these needs, IT departments or employees may buy software without considering the company’s overall Enterprise Architecture. In fast-paced working environments, hastily bought applications become overlooked and underused. Some applications are bought as a quick fix to a short-term problem but are never uninstalled afterwards.
Different departments or branches buy several applications that serve the same purpose, without referring to the application portfolio in advance. As this goes on, the organization’s portfolio crowds with redundant software. The IT budget becomes drained from operational costs, leaving few resources (if any) for innovation. Instead of investing in software and services that add value, IT departments struggle to maintain an ineffective system.
What can be done?
Managing the IT Landscape
Businesses should have a comprehensive inventory of their software services. To better analyze what investments would help the company reach its objectives, CTOs, CIOs and IT managers must have an excellent grip of the Enterprise Architecture. This involves mapping all the applications and services used within the enterprise. This is where Application Portfolio Management (APM) comes in.
APM is a practice for evaluating and managing the IT resources within an enterprise. What applications and services exist in the inventory? When do their licenses expire? Are there any gaps or overlaps in the portfolio? Which outdated applications need replacing by newer versions? APM simplifies overseeing application service lifecycles and helps identify applications that are redundant, underused, or no longer fit for purpose. Effective management of IT always reflects on the enterprise’s business end.
The goal is to translate IT quality into business value.
APM facilitates the assessment of IT resources in relation to the business capabilities they support. Each application is mapped in terms of relevance for reaching business objectives. How essential is it? Are there any capabilities that are already covered by another application?
User experience is another key factor. Quality of the applications influences the productivity of staff. Through APM tools, employees get viewer access to application inventory; they can report incidents on disruptions in quality of service. Is maintenance becoming too costly or time-consuming? Is it affecting employee productivity? Does it no longer generate revenue or deliver cost savings? Any application that is doing more harm than good is draining company resources.
APM bases its application rating system on Gartner’s TIME model, measuring success by two factors: business value and IT quality. TIME stands for Tolerate, Invest, Migrate, and Eliminate.
Business quality is about the degree to which an application helps a company reach its business goals. Factors are:
- Efficiency
- Ease of use
- Revenue generation or cost savings
- Indispensability of capabilities
IT quality refers to the following:
- Technical integrity
- Source code quality and availability
- Data accuracy
- Reliability
- Security
- Ease of change
In light of all the feedback and evaluation compiled from users and data analytics reports, IT managers or enterprise architects can make informed, systematic decisions about the fate of an application. Here’s the course of action to take according to Gartner…
Tolerate applications that don’t have great business value but serve their purpose without much cost or effort. Invest in applications that add great value to your company, present no technical problems, have high-quality source code, and are cost-effective. Migrate applications that provide good business value but have become too costly or difficult to maintain. Eliminate low-quality applications that have little to no business value.
Ideally, you should strive to have all your applications in the “invest” group. Realistically, this is probably not going to happen. Aim for a good balance of applications deemed “tolerable” and “investment worthy.”
With the TIME model approach, your business wins threefold. You free up resources for innovative solutions by eliminating redundancies. You increase productivity by regularly optimizing your company’s software use. And last but not least, you up your budgeting game by having a clear overview of application lifecycles and licenses.
Wrapping Up
Whether your business is a small startup or a multinational corporation, effective Application Portfolio Management will help you maintain a high-value IT landscape. If you have doubts about APM, converse with your staff about their day-to-day IT use. What is the overall user experience for company software? How do your IT managers evaluate the technical integrity? Do you think your business is making the most out of its IT budget?
For more insight on Application Portfolio Management, check out our blog where we discuss what APM means for businesses.
