In an era of unprecedented change, catering to business needs in a faster, efficient and effective manner is critical. Organisations are always in the process of procuring applications to meet these requirements to unlock higher business value. Companies are also looking to enter new markets and / or introduce new products and services to create more value for stakeholders. As a result, the application portfolio continues to grow over a period. This creates a need to identify, analyse and unlock value through standardisation, rationalisation and consolidation.
It is critical to evaluate the existing business application inventory for two reasons:
The IT function over the years has moved from a standalone, independent function to a strategic asset that offers business value. It has been pivotal in driving change and placing organisations in the digital transformation trajectory. Business value is the benefit that ensues to various stakeholders customers, employees, leadership, suppliers, partners, etc. in the form of reduced costs or increased revenues that align to the strategic objectives of the organisation.
Hence, it is key for business IT to focus on rationalisation to improve the bottom line, create a lean organisation and increase operational efficiency. Application Portfolio Management (APM) is a way to standardise, rationalise and consolidate IT investments to deliver business value for the organisation.
This can be a business and / or IT driven journey. The following reasons make it a critical aspect for APM
| IT focussed parameters | Business focussed parameters |
| Availability of alternatives Does the organisation have alternate applications in the global IT portfolio that can support similar processes/ activities? |
Application integration How many processes/ value streams does the application support across the organisation? |
| Application lifecycle Which stage does the application fall under test, production or de commissioning? |
Application criticality Which specific strategic, regulatory and legal aspects are the applications solving? |
| Legacy application Which legacy systems/ applications support various processes and their criticality? |
Business users How many users/ licenses are using the applications? |
These key parameters can help the global IT team in assessing the current portfolio that align with the current and future demands. Additionally, application contract details and application management services’ data must be evaluated to help the IT team and vendor management office to deal with future contracts and procurement.
Most importantly, this assessment must consider the current and future IT and business needs to achieve the desired application rationalisation to deliver on cost and effort savings for the business .
It is imperative to realise that the foundation to attain short and long term goals rests on a strong business strategy and a robust IT strategy. Also, it is critical to sustain global and regional agility and business/ customer needs.
In this journey, global organisations face challenges such as lack of application portfolio visibility, AMS details, obsolete application inventory and clear Total Cost of Ownership (TCO) calculation of their current application portfolio. Navigating through these hurdles helps the organisation get a clearer picture of the future direction.
In this manner companies can achieve simplification, standardisation and consolidation of their application portfolio.