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The Definitive Guide

to Application Portfolio
Management

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WHITE PAPER

The Definitive Guide

to Application Portfolio
Management

CONTENT

P2 Introduction

P3 APM Objectives

P7 Answering Questions with APM

P11 Conclusion
White Paper The Definitive Guide To Application Portfolio Management

Introduction to Application
Portfolio Management

Application Portfolio Management (APM) is the practice Dedicated enterprise architecture (EA) and cloud
of governing and optimizing inventories of software native tools are utilized to scale these APM processes
applications to achieve precise business objectives. for use by diverse stakeholders. Featuring dynamic
This is accomplished by creating transparent overviews inventories and configurable reports based on data
of IT application landscapes to evaluate IT costs, collected and maintained by distributed users, these
standardize software throughout business units and tools contextualize the business value of applications
promote agility and innovation. Of note, APM is used in to streamline vendor analysis and risk management
modern organizations to map how applications relate while revealing opportunities for technology adoption.
to business capabilities and processes to orchestrate In particular, modern EA and cloud native tools
targeted improvements. augment IT system analysis by augmenting functionality
during a “TIME Strategy” (Tolerate, Invest, Migrate,
In recent years, the practice of APM has largely evolved Eliminate) review.
to help manage mixed portfolios of on-premises and
cloud-based IT applications. By generating clear,
actionable metrics on decentralized applications
and monitoring rapid software development cycles,
enterprise architects and cloud architects perform
APM via increasingly automated means to evaluate
enterprise-wide services and ensure the availability
of diverse supporting technologies.

Many of today’s enterprises utilize APM to drive faster

technical and functional assessments of entities when
migrating applications to the cloud, integrating IT
systems, and acquiring/retiring technologies. Further,
in multi-cloud environments, APM is leveraged to
drive real-time awareness of cloud components and
determine ownership over decentralized assets.

APM in large-scale enterprises typically involves the

following:

• Documenting past, present, and future applications

deployed, or planned to be, inside an organization.
• Identifying and/or automating changes to
application service lifecycles.
• Organizing applications according to business
capabilities.
• Arranging IT components into technology stacks.

• Grading the technical and functional value of

applications.

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White Paper The Definitive Guide To Application Portfolio Management

APM Objectives
Tool-based APM programs run with solutions like LeanIX give users end-to-end visibility to
support operations and monitor modernization strategies. This clarity is commonly used to
accomplish the following:

Enable cloud native strategies Mitigate security and compliance vulnerabilities

A dynamic catalog of applications is a pre-requisite Compliance issues stemming from end-of-life
for securely upgrading core IT processes according application service lifecycles can be forecasted using
to business criticality and implementing tailored IT portfolios either integrated to vendor information
yet efficient cloud native development standards. A databases or distributively maintained. Further, all
practical resource for EAs and cloud architects, APM applications handling customer data yet running on
exposes organizational roadblocks when iteratively time-sensitive software licenses can be tracked to
expanding cloud environments and integrating agile support audit management.
principles.

Image 1
LeanIX Application Landscape

Source: LeanIX GmbH

A LeanIX Application Landscape report listing the GDPR risks of assorted applications.

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White Paper The Definitive Guide To Application Portfolio Management

Optimize cloud and hybrid costs and resources public cloud spaces requires contextualized, automated
IT leaders must support business in analyzing cloud updates on cloud cost trends across multiple accounts
costs and investments. Doing so while strategically and business units—the likes of possible with application
splitting workloads between on-site data centers and inventories directly integrated to cloud vendors.

Image 2
Leanix Multi-Cloud Cost
Overview

A LeanIX Multi-Cloud
Cost Overview report
showing the cloud costs of
organizational units.

Source: LeanIX GmbH

Upgrading processes with lean principles and the according to their ability to help IT optimize run-the-
Technology Business Management (TBM) framework business and change-the-business spending, APM is a
Data from APM programs is leveraged to measure natural companion to IT and business leaders wishing to
enterprise-wide adoptions of the TBM framework. scale services in cost-effective manners.
By documenting cloud vendor-specific services

Image 3
Leanix Warnings By
TBM Category

A LeanIX Warnings By TBM

Category report displaying
cloud component violations
by warning type.

Source: LeanIX GmbH

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White Paper The Definitive Guide To Application Portfolio Management

Secure the adoption of strategic platforms Reduce IT complexity and improve efficiency
with holistic insights using powerful reporting IT landscapes in billion-dollar enterprises usually contain
APM offers enterprise architects and executive-level thousands of interdependent entities—the majority
stakeholders alike the oversight to monitor large-scale IT of which are disconnected from their anchoring
transformation projects. In particular, many companies business capability. APM systematically untangles this IT
use automated and configurable reporting mechanisms complexity by categorizing applications and pinpointing
to measure, in real time, the impact of their evolving redundancy. This organization helps when coordinating
application landscapes. implementations of technologies and processes.

Promote collaboration between business Rationalize application costs and lower

and IT to react faster to business needs total cost of ownership
APM is rooted in a close collaboration between IT Server license optimization, application retirement,
and business. The sooner development can diagnose standardizing common technology platforms—APM is
business needs, the sooner solutions can be tailored to an engine for maximizing IT budgets through highly-
relevant security, software and market standards. Quite scoped value assessments. For every application, a total
often this involves identifying where and with what cost of ownership (TCO) is recorded alongside other sets
data sources to most effectively apply autonomous of criteria such as strategic value, available skills, user
development cycles. satisfaction and availability of alternatives.

Image 4
LeanIX Business
Capability Cost
A breakdown of IT costs
according to key business
services in a LeanIX Business
Capability Cost report.

Source: LeanIX GmbH

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White Paper The Definitive Guide To Application Portfolio Management

Improve IT visibility and control across Prioritizie IT projects

scaling hybrid cloud environments APM prioritizes projects and their associated
Enterprises rely on APM methodology to guarantee the applications according to business value and available
exact visibility they have on traditional, on-premises IT resources (personnel and technological). This high-level
with granular assets deployed on cloud platforms. By clarity is directly used to support the decisions of CIOs
detecting violations that affect cloud landscapes while and CFOs when charting organizational targets.
validating architecture, infrastructre and deployments
against established best practices, APM ensures that Map data flows and application dependencies
hybrid IT environments are documented and controlled. By integrating networks of applications and their shared
interfaces, APM provides the groundwork for seeing
Strengthen business processes by uncovering the implications of service lifecycle phase-outs across
technological gaps and data redundancies the wider application landscape. The reliability of any
A fully-delineated application portfolio offers a clear particular interface and dependency can accordingly
path to the technological gaps and redundancies likely be scrutinized by operations teams.
to be slowing business processes. APM outlines feasible
improvements while incorporating the knowledge of
stakeholders with close ties to the technology.

Image 5
LeanIX Interface
Circle Map
Interface clusters and
associated business
capabilities within a LeanIX
Interface Circle Map report.

Source: LeanIX GmbH

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White Paper The Definitive Guide To Application Portfolio Management

Answering Questions with APM

APM supports the informational needs of diverse stakeholders (CIOs, CTOs, IT managers,
enterprise architects, cloud architects and more). If practiced with a dedicated tool, the
following can be addressed:

Which applications Image 6 LeanIX Application Portfolio

deserve investment— A LeanIX Application Portfolio report showing the functional and technical
fit of applications.
and which need to be
shown the door?
After mapping applications, an
IT manager must decide which
applications to support and which
to abandon altogether. To do so,
they must determine both the
technical and functional fit of
the application. This information
can be collected by sending out
surveys to the actual users of the
applications.

Once feedback is returned, it will

be clear which applications are fit
for an organization. The next step
Source: LeanIX GmbH
is then to divest.

Which applications Image 7 LeanIX Application Landscape

are not adequately A LeanIX Application Landscape report showing the functional fit of applications
and their associated business capabilities.
supporting business
capabilities?
Enterprise architects manage
both sides of the business and
IT coin. A business program
manager might naturally
be interested in finding out
how current applications
are supporting the business
capabilities of the office. In the
below example, we can see
that many applications do not
functionally support customer
service. This is a perfect occasion
to remove these applications and
balance the application portfolio.
Source: LeanIX GmbH

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White Paper The Definitive Guide To Application Portfolio Management

Which applications are Image 8 LeanIX Application Matrix

A LeanIX Application Matrix report showing which applications support which Business
necessary? Are there
Capabilities alongside their geographical user group.
gaps or overlaps?
A difficulty encountered in big
corporations is streamlining
applications across an entire
organization. In Image 8,
we can see that there are
no applications being used
by China to support human
resources (HR). On the other
hand, Europe is using nine
applications to support HR.
Here we could propose to
streamline application access
across all user groups.

Source: LeanIX GmbH

Is our application Image 9 LeanIX Application Roadmap

portfolio developing LeanIX Application Roadmap report showing the lifecycles of applications and their
associated projects.
in the right direction
to support future
strategic goals?
In large and complex
organizations, one can quickly
lose sight of application
lifecycles. When an application
reaches its end-of-life stage, a
successor for the application
must be in place, especially if it
is depended upon by projects
or others. This information
is pertinent to numerous
stakeholders in a company
(e.g., the security officer needs
to know that all underlying
Source: LeanIX GmbH
applications are up-to-date to
avoid attacks on obsolete apps;
the CTO needs to know what the
application roadmap looks like).

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White Paper The Definitive Guide To Application Portfolio Management

Getting started with APM

Now that you know the value of APM, here is an eight-step process to get started:

1. Compile Compile a list of past, present and future applications deployed on your
a list of system. This should include all users and offices worldwide.

applications

2. Identify who Identify the affected stakeholders (users) of the applications. During this
owns the discovery period, it is common to find out that very few people are using
certain applications. You may also find that some applications are, or are
application
becoming, totally unused.

3. Identify the Once a technology is activated, its value increases and its potential
lifecycle of the risks go down. As it reaches its end-of-life, however, IT management has
to confront challenges such as integration issues, limited functionality,
application
varying service levels, lack of available skills and missing support from
vendors. Many experienced executives are quite good at managing risk
at an early stage but may nonetheless still ignore the risks of technology
at the end-of-life stage.

4. Assess the Misused applications can be identified by conducting a thorough

usage of application rationalization. Applications are not often used to their full
potential or can be easily exploited when used incorrectly.
applications

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White Paper The Definitive Guide To Application Portfolio Management

5. Establish the Determine the total cost and business value of every single application–
application’s even the ones barely used. Compare this cost to the TCO of similar
applications being used in the industry. At this stage, it is best to use
business
business capabilities. Business capabilities define what a business is doing
value, quality, right now and what it needs to be doing in order to meet current and
and costs future challenges. They outline “what” a business does rather than “how”
it is done. Additionally, business capabilities help to identify redundancies
in IT, spot risks and develop innovative technology solutions.

6. Create an One best practice is to develop a framework of your application

application architecture by defining a set of business, information, and application
concepts that your organization would like to see reflected in the long-
architecture
term. LeanIX, by providing an easily referenceable, tangible, visual
framework display of the application landscape, can establish an overview of which
parts of the organization are being fulfilled by the current application
stack in order for you determine what is truly needed.

7. Map the total Business leaders, IT heads and EAs should gather to review
concept onto the recommended actions of each application and design an
implementation roadmap for moving forward. Involving various
the landscape
business leaders while creating a supporting architecture will help
to establish transparency and properly align business to IT. Though
some consolidation efforts will be easier to implement than others, it
is best to unite applications within one business domain (e.g. Human
Resources, Financials, etc.) to achieve a shared business model.

8. Make Once an application portfolio is officially inventoried and optimized, it is

application imperative to continually maintain the landscape. One-time application
rationalization endeavors might save the organization money in the
rationalization
beginning, but they lack the long-term value that continuous application
a continuous rationalization promises. Application rationalization improves the overall
process effectiveness of IT by regularly ensuring that the IT landscape is actively
aligning to business goals and objectives.

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White Paper The Definitive Guide To Application Portfolio Management

Conclusion
Operating an agile landscape is key in today’s business singular architectural vision to enable business goals,
climate. With digital transformation driving customer respond effectively to strategic drivers, conform with
demand, an IT architecture must dynamically adapt to architectural principles and standards, and address the
the rapidly changing needs of the market. Most businesses concerns and objectives of key stakeholders. APM efforts
spend 70-80% of their IT budgets on supporting aging, help you optimize your application stack, establish
low-value legacy applications, leaving very little money transparency between stakeholders and deliver true
to invest in optimizing business processes. The goal of value to your business leaders.
Application Portfolio Management is to articulate a

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Management?

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to your precise APM needs.

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