1. Chapter 11 11-1 © 2012 Pearson Education, Inc. Publishing as Prentice Hall

2. 11-2 APM is the ongoing management process of categorization, assessment, and rationalization of the IT application portfolio. APM allows organizations to identify which applications to maintain, invest in, replace, or retire (i.e., avoid maintaining applications quagmire).

3. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-3 Built-over-time application systems that support the key operations of the organization. They are often obsolete and unsupported by any vendor; host to countless “workarounds”; remain poorly undocumented; are often duplicated.

4. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-4 More than 80% of IT spending is used in these applications. Line-of-business managers are reluctant to change these applications to avoid the agony of change. They restrict the enterprise vision of IT.

5. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-5 This perspective evaluates the existing applications (i.e., the applications portfolio) against a set of potential applications that can be used across business units (i.e., the project portfolio).

6. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-6 Application portfolio – identifying the value of existing applications against corporate profitability, stability, usability, and technical obsolescence.

7. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-7 Project portfolio – identifying the value of future spending on applications, attempting to balance IT cost-reduction efforts and investments to develop new IT capabilities.

8. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-8 Visibility into where money is being spent, which provides the baseline to measure value creation. Prioritization of applications across multiple dimensions – value to the business, urgency, and financial return. A mechanism to ensure that applications map directly to business objectives.

9. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-9 To deliver value with APM, three interrelated capabilities are needed: Capability 1: Strategy and governance. Capability 2: Inventory management. Capability 3: Reporting and rationalization.

10. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-10 “If strategy is the destination, then governance is the map” Application portfolio governance answers this: What decisions need to be made? Who should make these decisions? How are these decisions made?

11. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-11 Positioning APM within an enterprise IT governance framework

12. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-12 Common barriers during initial phases of APM: Lack of accountability in the governance process (i.e., what governance practices should be applied). Application assessments are not taken seriously. Business managers lack awareness and accountability.

13. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-13 Identification of applications to be included in the portfolio to be managed (e.g., limiting the portfolio to business-critical applications). The inventory is determined by the strategy and governance outlined in capability #1.

14. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-14 The identification can start by gathering the following information about applications: General application information (i.e., functionality). Application categorization (e.g., business capability provided, life cycle status)

15. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-15 Technical condition (e.g., development language, operating system, architecture). Business value (e.g., business criticality, user base, effectiveness). Support cost (i.e., maintenance and upgrades).

16. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-16 A set of standard parameter-driven reports should complement the application inventory. Reports help to monitor the status of all existing applications so that management can ascertain the health of the portfolio applications.

17. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-17 Reports should compare applications on the basis of business value, technical condition, and cost.

18. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-18 The reports should provide information to meet the needs of various stakeholders. IT organization Mapping and assessing business functionality against applications Risk, audit, and security teams Assessing regulatory compliance and risk management Business teams Assessing the costs and business value of the applications used

19. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-19 Balance demand and supply – regulate enhancements and releases for APM reporting. Look for quick wins – identify immediate and visible wins that impact the bottom line. Capture data at key life stages – capture data in the approval, testing, production, modification and retirement of applications.

20. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-20 Tie APM to TCO initiatives together The information captured by the APM initiative should support the total cost of ownership (TCO). Provide application “end-state” view Current and future information about applications are key for business planning.

21. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-21 Communicate APM benefits Communicating the goal of the APM initiative, the results, and the next stages are essential for the effectiveness of the APM.

22. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-22 APM promises significant benefits to adopting organizations. The benefits require the development of three mutually reinforcing capabilities: Development of a strategy but reinforced with governance procedures. Creation of an application inventory. Reporting capability built to align the application portfolio with the strategy.

23. © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11-23 Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall