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Presentation on the APM - Application Portfolio Rationalization/Management methodology
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Application Portfolio Management
1.
Application Portfolio Rationalization
Methodologybase on”IT Portfolio Rationalization: 1” by PrashantHalari, SushilPaigankar, Hitesh Salla, RajaramVengurlekar Presented by: Alain Charpentier
2.
Table of content
Origin of the methodology Objectives Present the methodology Lessons learned Recommendation Questions Copyright © 2009 by Alain Charpentier Page: 2
3.
The methodology is
based on the book: “IT Portfolio Rationalization: 1” by PrashantHalari, SushilPaigankar, Hitesh Salla, RajaramVengurlekar. IT Application Portfolio Rationalization/Management(APM) is a practice that has emerged in mid to large size organizations in the mid 1990s. It attempts to use the lessons of financial portfolio management to justify and measure the financial benefits of each application in comparison to the costs of the application's maintenance and operations. Origin of the methodology Copyright © 2009 by Alain Charpentier Page: 3
4.
5.
Ensure proper Business-IT
alignment (i.e., IT is working on those things that business values the most)
6.
Prioritize the applications
that need attention
7.
Determine the several
management options for undertaking the application value improvement initiativesObjectives Page: 4 Copyright © 2009 by Alain Charpentier
8.
Copyright © 2009
by Alain Charpentier The methodology Participant selection Planning Data collection Roadmap Validation Analysis Category Page 5
9.
10.
Business owners
11.
Application owners
12.
Application support teams
13.
IT development teamsPage:
6
14.
Copyright © 2009
by Alain Charpentier Step 2 : Filtering & Data collection Overall Portfolio Application List Appln 3 Appln 4 1000 Appln 2 Appln 5 Appln n Appln 1 1 Filter Criteria – Filter out non-applications, unused applications and applications under rewriting 1 700 Step 1 Step 1 Filer out unused and applications under rewriting Filer out Non-applications 2 Filter Criteria – Filter out applications which are not under the responsibility of IT or supported by other parties 2 Step 2 Filter out Applications not under IT 500 3 Filter Criteria – Filter out applications for which we don't have maintenance investment information 3 Step 3 Filter out based on Maintenance investment 150 4 Filter Criteria – Filter based on the data gathering exercise 4 Step 4 Filter on data gathering 100 Note: The number of applications is representative of a large organization. Final “In Scope” Application List “In scope” application list Page: 7
15.
Copyright © 2009
by Alain Charpentier Step 3 : Analysis Conduct analysis on dimensions of cost vs benefit, current capability vs. future capability, etc. Page: 8
16.
17.
*Technology Appreciation includes
application owner and technical scores and covers aspects of
18.
Application stability
19.
Performance
20.
Flexibility
21.
Technical complexity
22.
Technical documentation
23.
**Business Appreciation score
covers aspects of
24.
Current functional capability
25.
Future functional capability
26.
IT delivery
27.
28.
Low Business Appreciation
29.
High Technology Appreciation
30.
31.
High Business Appreciation
32.
Low Technology Appreciation
33.
Low Business AppreciationLow
High Low Business Appreciation** Copyright © 2009 by Alain Charpentier Page: 9
34.
Copyright © 2009
by Alain Charpentier Step 4 : Categorization example 29/100 Applications 51/100 Applications 10/100 Applications 20/100 Applications Note: The number of applications is representative of a large organization. Page: 10
35.
Maintenance Spending Copyright
© 2009 by Alain Charpentier Step 5: Validation – Detail analysis example Distribution and Assessment Number of Applications Percentage Spend Page: 11
36.
Copyright © 2009
by Alain Charpentier Step 5: Validation of Business alignment Funding of initiatives depends on their alignment with critical business drivers Initiative; size of the bubble indicates estimated cost of initiative Page: 12
37.
Copyright © 2009
by Alain Charpentier Step 6: Roadmap development Immediate Near term Long term To ensure proper Business-IT alignment the roadmap is develop after proper validation with the key stakeholder Savings Timeline Page: 13
38.
Managing “projects” and
managing “applications” are not the same Change the organization’s culture — from the top down Establish an enterprise architecture framework to provide focus Include APR as part of a broader decision-making process Have a destination in mind and communicate it throughout the organization Use tools as productivity aids, but they do not replace tough human decisions Measure operation of the application over its life cycle APR is not just an IT decision Copyright © 2009 by Alain Charpentier Lessons Learned Page: 14
39.
Establish a strong
baseline Agree on how to measure “value” Identify operational “costs” Ensure fairness throughout the process Match decision making to organizational style — edict or democracy? Institutionalize the process, not the event Copyright © 2009 by Alain Charpentier Recommendations Page: 15
40.
Questions ? Copyright
© 2009 by Alain Charpentier Page: 16
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