1. Managing the Application Portfolio
Chapter 7
Managing the Application Portfolio

2. 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

3. 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?

4. 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?

5. 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

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

7. 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

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

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

10. 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

11. 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

12. 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

13. Generic Strategies Centrally planned Leading edge Free market Monopoly
Scarce recource

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

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