Managing the Application Portfolio Chapter 7 Managing the Application Portfolio

Agenda Key questions on application portfolio management IS/IT management methods IS/IT environments & application portfolios Key issues in application portfolio Generic strategies Portfolio management principals

Key Questions on application Portfolio Management - I High potential Why: not clear What: not certain How: not yet known Strategic Why: do we want to do it in strategic terms? What: does the system need to do to gain the advantage? How: best to do?

Key Questions on application Portfolio Management - II Key operational Why: to improve performance and avoid disadvantage What: how much improvement? How: best to do it Support Why: to reduce costs by improving efficiency What: of existing necessary tasks How: best to do it?

IS/IT Management Methods - I Demand management Opportunity seeking CSFs High potential & strategic IS Supply Management Opportunity taking Current problem solving Key operational & support IS

IS/IT Management Methods - II High potential (beware) Local Competitive focus (proactive) Technology driven Federation – business led, decentralized, entrepreneurial

IS/IT Management Methods - III Strategic (attack) Corporate Competitive/effectiveness focus Business issue driven Complex – Organizational planning, ideal multiple methods based on goal seeking Coalition

IS/IT Management Methods - IV Key operational (explore) Backbone: integrated (top down) planning & centralized control Reactive: current & effectiveness focus Business issues driven

IS/IT Management Methods - V Support (safe) Traditional: stage of growth, isolated applications, & decentralized control Reactive: efficiency focus IT issue driven

IS/IT Environments & Application Portfolios Traditional: support Backbone: key operational, support, & little strategic Opportunistic: High potential, support, little key operational, & little strategic Complex: high potential, strategic, key operational, & support

Key Issues in Application Portfolio - I High potential Driving forces: new business idea or technological opportunity Requirements: rapid prototyping, identify potential, & the best method Strategic Driving forces: Market requirements or competitive pressures Requirements: rapid development

Key Issues in Application Portfolio - II Key operational Driving forces: improving performance, data integration, & avoiding disadvantages Requirements: data management, & cost/benefit analysis Support Driving forces: legal requirements, & improving productivity/efficiency, Requirements: packaged software, & cost control

Generic Strategies Centrally planned Leading edge Free market Monopoly Scarce recource

Centrally Planned Management: central Organization: knowledgeable senior management, & integration of IS/IT and business planning process IT: services matching business demands Line management: identifying IS/IT to meet business needs IS: strategic

Leading Edge Management: technology creating business advantages Organization: sufficient funding, innovative IS/IT management, & strong IT IT: IT push Line management: using & identifying IT advantages IS: high potential

Free Market Management: end users Organization: knowledgeable end users, duplication,& no budget control IT: competitive & profit centric Line management: identifying source & control IS/IT development IS: high potential, & support

Monopoly Management: corporate integration Organization: users acceptance of centralized policies, & good usage of resources IT: satisfying users needs Line management: understanding needs and get resources from central IS: key operational

Scarce Resource Management: justifying development Organization: tight budgetary IT: making and justifying the best use of limited resource Line management: identifying and justifying business needs IS: support

Portfolio Management Principals High potential (wild cat - entrepreneur): process R & D, minimal integration, & cost control Strategic (stars – developer or empire builder): continuous innovation, vertical integration, & high value added Key operational (cash cows - controller): defensive innovation, effective resource utilization, high quality Support (dogs - caretaker): disinvest/rationalize, efficiency, & sustained quality

Points to Remember Key questions on application portfolio management IS/IT management methods IS/IT environments & application portfolios Key issues in application portfolio Generic strategies Portfolio management principals

Question How do you apply these application portfolio management methods or principle to an e-business?