Application portfolio management: A strategic approach to IT optimization
The surge in software applications has added to the complexity and redundancy in IT departments. It is primarily attributed to factors such as mergers and acquisitions, globalization, or organic growth. Learn how application portfolio management can help your IT department and leadership tackle this widespread and complex issue by enabling them to make informed, data-backed decisions.
Managing hundreds of applications requires a programmatic approach; spreadsheets won’t cut it.
Without a well-planned strategy, your IT infrastructure can become burdened with redundant and unused applications that drain your company's resources and pose security risks. However, optimizing your application portfolio will:
- Save you resources and therefore, costs
- Lower security risks
- Present promising opportunities
By implementing a robust application portfolio management strategy, you ensure that your IT infrastructure is optimized to support your company’s objectives.
In this blog post, you’ll learn how application portfolio management enables you to make effective investments in the applications that align with your business goals.
What is application portfolio management?
Application portfolio management is a framework that enables IT companies to strategically plan the roadmap for their application investments, accelerating your decision-making and reducing costs and risks.
Application portfolio is a list of all the software applications you need to run a business.
Managing these applications means making a decision based on core objectives, such as eliminating redundant applications, merging similar applications, retiring outdated applications, and optimizing security controls.
An APM tool that adheres to these core objectives can effectively manage your application portfolio for success.
Why is application portfolio management important?
As you grow, your IT landscape also evolves. More applications means there will be more complex processes to manage.
Application portfolio management allows you to align your IT applications with your business goals, ensuring that each application is delivering value and supporting the company's objectives.
Application portfolio management helps companies address several key challenges:
- Growth entails complexity: Your IT team can manage the growing complexity of their application landscape by providing a structured approach to managing applications. This can improve flexibility by enabling the team to make informed decisions about their application portfolio and respond quickly to changing business needs.
- Lack of application visibility: You can reduce IT costs and risks by providing visibility into your application portfolio and enabling you to make data-driven decisions about your investments. This can help you optimize your application portfolio, reduce redundancies, and minimize risks associated with outdated or unsupported applications.
- Lack of a centralized system: Application portfolio management tools often include a central repository that stores information about your company’s applications, including their characteristics, dependencies, and usage. This allows you to maintain an updated and accurate inventory of your application portfolio.
- Shadow IT flourishes in an unregulated IT landscape: With a robust application portfolio management strategy in place, you can identify and track all applications being used within the company, including the unapproved ones.
All of these challenges can be resolved using an efficient application portfolio management strategy.
Benefits of application portfolio management
APM enables you to keep a track of all your applications and eliminates risks. This allows complete visibility into the application portfolio so that you make data-driven decisions for your investments.
- Enhance visibility of your IT landscape
Companies have limited visibility into their applications and face challenges when trying to integrate new resources into their current infrastructure. Application portfolio management can comprehensively assess your applications from multiple perspectives, encompassing aspects like your lifespan, costs, deployments, and the business capabilities that you support.
- Eliminates risks
Using an inventory of applications in the application portfolio management strategy allows IT teams to oversee the variety of technology assets required in the company. Incorporating a large number of IT products poses more threats. Your IT teams can use application portfolio management software to connect with external libraries that contain information about lifecycles, including end-of-life dates.
- Improves agility with leaner application portfolio
A leaner application portfolio means better understanding of its applications. This allows you to make informed decisions about which applications to retain, refurbish, or eliminate. By utilizing application portfolio management dashboards, IT application managers can optimize applications, cut down on IT expenses, and enhance IT agility as they have a better understanding of the business value of their applications.
- Streamlines IT audits and certifications
Companies are often advised or mandated by external consulting firms to monitor their IT assets. Implementing an application portfolio management practice can assist you in supporting your IT roadmap or minimizing capital expenditure to mitigate IT risks.
How to get started with application portfolio management
Getting started with application portfolio management is a simple process if you break it down in the following steps.
- Get visibility into all applications used in the company
The first step can be achieved by conducting an inventory of all the IT assets and their characteristics within the company. The process includes:
- Establishing the roles and responsibilities of the stakeholders involved
- Devising a plan for data collection by specifying the required data
- Collecting data
- Enriching application data inventory
- Defining the approval process for new technology products.
- Assess the application portfolio
Once you have a clear understanding of the applications in use, you can assess the application portfolio to identify redundancies, inefficiencies, and opportunities for optimization. You can do so by:
- Running objective analysis
- By leveraging the gathered data, applications can be evaluated against objective KPIs including their lifecycle, cost, risk, supporting technologies, and vendor dependency.
- Synchronize applications with business capabilities to ascertain that the IT roadmap aligns with the organization’s objectives and facilitates the achievement of business goals.
- Pinpoint redundancies and applications that warrant attention in business capability maps.
- Running subjective analysis
Stakeholders who assess the business value of applications and technical efficiency perform subjective analysis. Companies send questionnaires to business and IT owners who agree to provide the required information.
- Scoring and ranking applications
You can rank applications by assigning scores to the applications and consolidating them followed by cross-validating the KPIs. This process ensures that the most significant investments and resources are concentrated on the vital applications, which are prioritized as the foremost recommendations for enhancing the portfolio.
- Consolidate the application landscape
You consolidate the application landscape by eliminating redundant and unused applications, merging similar applications into one new application and retiring outdated and costly-to-maintain applications.
Application portfolio management: Best practices to achieve results using an strategy
Here are some application portfolio management best practices that can help organizations:
- Aim for comprehensive monitoring
To get the most out of your efforts, you need a comprehensive picture. This means building a dedicated core application portfolio management team who has defined roles to regularly report on key metrics.
- Build rapport with internal teams
Identify and get to know your colleagues who are taking initiatives in building the strategy and planning roadmaps to digital transformation within the company. This includes program managers, resource managers, portfolio managers, and the finance team.
- Finalize key metrics and transactions
Identify key metrics that are crucial to run the show. You may add more metrics to improve analysis when required.
- Build a communication plan
It’s mandatory to have a communication plan for all stakeholders for future correspondence and reference. This plan should involve decision makers and data owners, who have complete visibility of your application portfolio management process. If issues arise, they can respond quickly and effectively.
- Develop clear terminology for audit and surveys
You should have clear definitions of the terminology used in the surveys to collect data pertaining to the primary research from data suppliers. It’s time-saving when you explain what you want.
- Start with training a small group of data suppliers
Avoid scaling and deploying any plan before testing. Start by conducting a pilot project with friendly data suppliers for your surveys. Implement their feedback and fix the bottlenecks within the small project before you send it out to a larger group.
- Broadcast the outcome of every step in building your application portfolio management
Share success and failures with all stakeholders at every step building your application portfolio management strategy. Keep them informed of the progress, which will enhance their understanding of the process holistically.
Application portfolio management for SaaS tools
Considering the state of businesses today, more and more applications are moving to the cloud—mostly SaaS. Access to applications is easier, so is their adaptation.
You must catch up with the latest release to stay competitive and functional. This dynamic nature of SaaS complicates application portfolio management and stresses its criticality.
SaaS sprawl and lack of a centralized system makes it crucial for SaaS companies to have a SaaS-conscious application portfolio management. This entails incorporating SaaS into enterprise application portfolio management, allowing companies to have complete visibility and control over their application portfolio.
However, the decentralization of SaaS solutions has given rise to shadow IT, where employees can easily purchase and upgrade SaaS tools for productivity and efficiency as needed. Without oversight and approval from IT teams, it becomes challenging for them to effectively manage costs and address vulnerabilities in their security systems.
To address this issue, the SaaS application portfolio should have a consistent program in place. This should be an ongoing process integrated into the company’s operations to ensure continuous management. This process ensures that all applications, including SaaS, comply with the rules and provide the best value for money.
Use Spendflo as a SaaS Solution for managing your application portfolio
Spendflo is an all-encompassing SaaS procurement platform. It enables companies to establish effective application portfolio management systems that tackle the challenges posed by SaaS.
Spendflo enables you to:
- Gain full visibility of your SaaS portfolio
- Streamline existing and available licenses
- Optimize your SaaS portfolio to save costs
- Oversee renewals to weed out redundant applications
- Implement a governance and compliance framework across your business.
You can harness data-backed insights to realize better ROI without compromising on the benefits offered by SaaS.
Wondering how you do that? Book a call today and get a free analysis.
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