Application Portfolio Management (APM) is crucial for organizations striving to enhance productivity and efficiency. As businesses increasingly invest in various applications, their burgeoning application portfolio presents numerous operational challenges. APM is a strategic approach to manage and optimize these applications, ensuring a high return on investment.
APM helps decision-makers better assess risks and prioritize investments. This post will highlight its key benefits and illustrate why it should be a key consideration for any business with a substantial technology stack.
Jump to:
- Application Portfolio Management (APM) in Brief Terms
- 10 Application Portfolio Management Benefits
- Application Portfolio Management Tools
- Harness Your Most Powerful Data With Ardoq’s Approach to Application Portfolio Management
Application Portfolio Management (APM) in Brief Terms
A typical modern business relies on many applications to function, using them to cover areas such as communication, accountancy, resource allocation, and customer support. An application portfolio is a comprehensive collection of all these software applications and related services used within an organization. It usually encompasses details such as the functionalities of each application, their business value, cost, performance, and the interdependencies among them. The application portfolio serves as a critical resource for managing and optimizing the software assets of a company, aiding in strategic decision-making and cost management, and ensuring that the technology stack aligns with business goals.
The Application Portfolio Management process involves the following key steps to effectively manage and optimize an organization's collection of software applications:
- Inventory and Assessment: The first step must be an exhaustive application portfolio assessment. This requires cataloging all applications in use within the organization and evaluating each one based on its functionality, cost, usage, performance, and alignment with business objectives.
- Categorization: Once applications have been cataloged, they must be grouped into categories (e.g. strategic, support, or obsolete) based on the value they provide and roles they serve. This works to identify applications that need work or should be replaced.
- Analysis: Detailed analysis of the full application inventory reveals interdependencies, highlights actual or potential application integration points, and details the risks they pose to security and/or compliance.
- Rationalization: After all the information has been collected and analyzed, the rationalization process can proceed. Decision-makers must agree on which applications should be consolidated, retired, upgraded, or replaced—and in what order.
- Optimization: The goal here is to improve the efficiency and economy of the application stack, and the work involves actioning the decisions made in the previous step while minimizing disruption to daily operations. Done correctly, this step will result in clear trackable improvements.
- Governance: Because application portfolio management is an ongoing process, there’s a need for governance rules to determine how this will be handled. This step should cover the definition of roles, responsibilities and policies covering all aspects of application management.
- Monitoring and Reporting: Organizations should continuously collect application data (including costs, usage, and outputs) and maintain updated reports and dashboards showing key insights and overall portfolio health.
- Continuous Improvement: Effective application portfolio management is an ongoing process, not a one-time initiative. Businesses should ensure that their approach to application portfolio management adapts and evolves with changes to overall organizational strategy. This requires engagement with stakeholders to maintain buy-in and gather feedback for refinement.
Get our ultimate guide to Application Portfolio Management Process.
10 Application Portfolio Management Benefits
There are many benefits for businesses that effectively manage their application portfolios, but the following 10 are the top ones we have observed from our customers:
1. Cost Reduction
Application stacks are expensive, racking up huge subscription and licensing costs. Redundant systems often linger long after they’ve stopped seeing use and/or begun being outperformed by alternatives, as organizations often lack a thorough, up-to-date overview of their application portfolio
Through APM, organizations can get a clearer, more complete overview of its applications. With application rationalization, they can identify opportunities to remove outdated, redundant, or inadequate applications, lowering IT costs and improving the efficiency of their tech stack.
2. Risk Mitigation
APM aids risk mitigation by providing a structured approach to assessing and managing an organization's entire suite of applications. It identifies vulnerabilities, ensures compliance with security standards, and eliminates outdated or unsupported applications.
By maintaining a streamlined and well-managed application portfolio, APM minimizes potential security threats and exposure, ensuring a more resilient IT environment.
3. Improved Governance
Getting transparency over IT infrastructure is particularly challenging at enterprise levels of complexity. It can take teams of experts across multiple departments to ensure an organization’s IT systems align with overarching goals.
APM enhances governance by establishing a clear structure for managing IT assets, creating a single source of truth for all departments, and making it more straightforward for decision-makers to get the information they need to make the right calls.
4. Enhancing Operational Efficiency
Legacy software can be slow, inflexible, and a poor fit for the needs of organizations today Time spent on trying to make ill-suited applications integrate or newer systems could be better spent elsewhere in the organization while maintaining redundant applications is a waste of manpower, and money. All of these things harm an organization’s efficiency.
APM streamlines the application landscape, contributing to smoother processes and greater user output. It allows organizations to get things done more quickly and cost-effectively. By aligning applications with business needs and improving integration, APM minimizes downtime and enhances productivity, enabling smoother, more efficient operations across the organization.
5. Resource Optimization
Maintaining bloated, inefficient application portfolios is a luxury businesses today cannot afford if they want to stay nimble and competitive. Resources wasted on overlapping or redundant applications could be used for many other things that contribute to the organization’s productivity and growth.
With APM, organizations can ensure a full overview of all needed applications and maintain only the essential, high-performing ones. APM refocuses IT spending on applications with critical roles and strong ROI, reallocating resources from less impactful applications to prove more beneficial elsewhere.
6. Strategic Alignment
Goals within an IT department don’t always match those of the business in general, and this can result in an application portfolio that doesn’t yield clear ROI or otherwise justify its ongoing investment.
APM ensures applications are assessed according to their alignment with the organization’s needs and objectives.
7. Increased Agility
APM enables organizations to quickly adapt their application landscape to changing business needs. By regularly assessing and updating the application portfolio, APM ensures that only relevant, flexible, and efficient applications are used. This reduces the time and effort required to implement changes, supports rapid innovation, and enhances the organization's ability to respond to market dynamics swiftly.
8. Application Lifecycle Refinement
Without a clear overview of all applications, organizations can easily lose track of application lifecycles. This means that they lack insight into the potential security risks, cost risks, and technology risks that arise as applications age or are improperly maintained.
APM establishes a clear rhythm and process for tracking application lifecycle stages, prompting the relevant teams to take action to update, replace, renew, or retire the applications as needed.
9. Smarter Spends When Investing in IT
With the insights and overview from APM, organizations will be better placed to understand which applications are high-quality and good fits for their needs. This means a data-driven understanding of where to invest further in its application portfolio, potentially upgrading a given application or expanding its use to more teams across the business.
10. Standardizing Technology
Inconsistencies within an application stack can cause a significant slowdown. Attempting to rely on various systems that may not be well integrated can cause frustration and inefficiencies.
APM helps chart a path for standardization by identifying sources of friction and finding more optimal solutions.
%20For%20Businesses%20in%202024.png?width=1600&height=900&name=10%20Key%20Benefits%20of%20Application%20Portfolio%20Management%20(APM)%20For%20Businesses%20in%202024.png)
Application Portfolio Management Tools
To ensure success with APM, it's important to choose a tool or platform that best suits your organization’s needs.
Enterprise Architecture tools such as Ardoq, Hopex, LeanIX, and ServiceNow Application Portfolio Management support the key processes and information needs for APM. Applications such as Torii, Zluri, and Productiv are geared toward managing software-as-a-service (SaaS) application stacks. At the same time, Flexera One aims squarely at hybrid operations looking to streamline their systems.
Ardoq is a powerful data-driven and digital-native platform that offers organizations the holistic view they need of their application portfolio and more. While many organizations begin with APM, Ardoq’s flexibility means that it can be expanded to provide more insights about the company’s capabilities, data, IT infrastructure, and ability to deliver on its strategic objectives.
Another key differentiator for Ardoq is its suite of Engagement features that allow EA and IT teams to crowdsource critical information from across the organization. Instead of conducting manual interviews, surveys, and analysis, Ardoq can collate crowdsourced information into dashboards and visualizations. These then serve to inform key stakeholders on the state of the application portfolio and the required next steps to improve cost efficiency and productivity. This is game-changing, shortening what could be a tedious two-month process of application portfolio optimization to as short as half that time.
Learn more about the ROI of the Ardoq platform in speeding up time to insights and optimization.
Harness Your Most Powerful Data With Ardoq’s Approach to Application Portfolio Management
Application Portfolio Management offers tremendous benefits for modern organizations, and Ardoq is the most accessible, flexible, and powerful platform for implementing APM. Managing an application portfolio through Ardoq empowers lean IT or EA teams to focus on delivering strategic insights instead of tedious data collection.
Book a demo today to learn more about the Ardoq platform and see how it can help enhance the Application Portfolio Management process.
