Application Portfolio Management Foundations

Ensure your application portfolio delivers the best possible return on investment.

Analyst Perspective

You can’t outsource accountability.

Many lack visibility into their overall application portfolio, focusing instead on individual projects or application development. Inevitably, application sprawl creates process and data disparities, redundant applications, and duplication of resources and stands as a significant barrier to business agility and responsiveness. The shift from strategic investment to application maintenance creates an unnecessary constraint on innovation and value delivery.

With the rise and convenience of SAAS solutions, IT has an increasing need to discover and support all applications in the organization. Unmanaged and unsanctioned applications can lead to increased reputational risk. What you don’t know WILL hurt you.

You can outsource development, you can even outsource maintenance, but you cannot outsource accountability for the portfolio. Organizations need a holistic dashboard of application performance and dispositions to help guide and inform planning and investment discussions. Application portfolio management (APM) can’t tell you why something is broken or how to fix it, but it is an important tool to determine if an application’s value and performance are up to your standards and can help meet your future goals.

Hans Eckman
Principal Research Director
Info-Tech Research Group

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Research Navigation

Managing your application portfolio is essential regardless of its size or whether your software is purchased or developed in house. Each organization must have some degree of application portfolio management to ensure that applications deliver value efficiently and that their risk or gradual decline in technical health is appropriately limited.

Executive Summary

Info-Tech Insight: You can’t outsource strategy.

Modern software options have decreased the need for organizations to have robust in-house application management capabilities. Your applications’ future and governance of the portfolio still require a centralized IT oversight to ensure the best return on investment.

The top IT challenges for SE come from app management

A hidden and inefficient application portfolio is the root cause of so many pains experienced by both IT and the business.

• Demand/Capacity Imbalance
• Overspending
• Security and Business Continuity Risk
• Delays in Delivery
• Barriers to Growth

APM comes at a justified cost

The benefits of APM

APM identifies areas where you can reduce core spending and reinvest in innovation initiatives.

Other benefits can include:

• Fewer redundancies
• Less risk
• Less complexity
• Improved processes
• Flexibility
• Scalability

APM allows you to better understand and set the direction of your portfolio

Application Inventory

The artifact that documents and informs the business of your application portfolio.

Application Rationalization

The process of collecting information and assessing your applications to determine recommended dispositions.

Application Alignment

The process of revealing application information through interviewing stakeholders and aligning to business capabilities.

Application Roadmap

The artifact that showcases the strategic directions for your applications over a given timeline.

Application Portfolio Management (APM):

The ongoing practice of:

• Providing visibility into applications across the organization.
• Recommending corrections or enhancements to decision makers.
• Aligning delivery teams on priority.
• Showcasing the direction of applications to stakeholders.

Create a balanced approach to value delivery

Enterprise Agility and Value Realization

Product Lifecycle Management

Align your product and service improvement and execution to enterprise strategy and value realization in three key areas: defining your products and services, aligning product/service owners, and developing your product vision.

• Make the Case for Product Delivery
• Deliver on Your Digital Product Vision
• Build a Better Product Owner

Product Delivery Lifecycle (Agile DevOps)

Enhance business agility by leveraging an Agile mindset and continuously improving your delivery throughput, quality, value realization, and adaptive governance.

• Agile/DevOps Research Center
• Implement Agile Practices That Work
• Spread Best Practices With an Agile Center of Excellence
• Implement DevOps Practices That Work
• Perform an Agile Skills Assessment
• Define the Role of Project Management in Agile and Product-Centric Delivery

Application Portfolio Management

Transform your application portfolio into a cohesive service catalog aligned to your business capabilities by discovering, rationalizing, and modernizing your applications while improving application maintenance, management, and reuse.

Every organization experiences some degree of application sprawl

Causes of Sprawl

• Poor Lifecycle Management
• Turnover & Lack of Knowledge Transfer
• Siloed Business Units & Decentralized IT
• Business-Managed IT
• (Shadow IT)
• Mergers & Acquisitions

Problems With Sprawl

• Redundancy and Inefficient Spending
• Disparate Apps & Data
• Obsolescence
• Difficulties in Prioritizing Support
• Barriers to Change & Growth

Application Sprawl:

Inefficiencies within your application portfolio are created by the gradual and non-strategic accumulation of applications.

You have more apps than you need.

Only 34% of software is rated as both IMPORTANT and EFFECTIVE by users.

Source: Info-Tech’s CIO Business Vision

Build your APM journey map

Application rationalization provides insight

Directionless portfolio of applications	Info-Tech’s Five Lens Model					Assigned dispositions for individual apps
	Application Alignment	Business Value	Technical Health	End-User Perspective	Total Cost of Ownership (TCO)	Maintain: Keep the application but adjust its support structure. Modernize: Create a new initiative to address an inadequacy. Consolidate: Create a new initiative to reduce duplicate functionality. Retire: Phase out the application. Disposition: The intended strategic direction or implied course of action for an application.
	How well do your apps support your core functions and teams?	How well are your apps aligned to value delivery?	Do your apps meet all IT quality standards and policies?	How well do your apps meet your end users’ needs?	What is the relative cost of ownership and operation of your apps?
Application rationalization requires the collection of several data points that represent these perspectives and act as the criteria for determining a disposition for each of your applications.

APM is an iterative and evergreen process

APM provides oversight and awareness of your application portfolio’s performance and support for your business operations and value delivery to all users and customers.

Repeat according to APM cadence and application changes

Executive Brief Case Study

INDUSTRY: Retail

SOURCE: Deloitte, 2017

Info-Tech’s application portfolio management methodology

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals.

Application Portfolio Management Foundations Playbook	Application Portfolio Management Snapshot and Foundations Tool
This template allows you to capture your APM roles and responsibilities and build a repeatable process.	This tool stores all relevant application information and allows you to assess your capability support, execute rationalization, and build a portfolio roadmap.

Key deliverable:

Blueprint Storyboard

This is the PowerPoint document you are viewing now. Follow this guide to understand APM, learn how to use the tools, and build a repeatable APM process that will be captured in your playbook.

Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation

What does a typical GI for on this topic look like?

Note: The Guided Implementation will focus on a subset or group of applications depending on the state of your current APM inventory and available time. The goal is to use this first group to build your APM process and models to support your ongoing discovery, rationalization, and modernization efforts.

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our right-sized best practices in your organization. A typical GI, using our materials, is 3 to 6 calls over the course of 1 to 3 months.

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Note: The workshop will focus on a subset or group of applications depending on the state of your current APM inventory and available time. The goal is to use this first group to build your APM process and models to support your ongoing discovery, rationalization, and modernization efforts.

Workshop Options

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Blueprint Pre-Step: Get the right stakeholders to the right exercises

APM Lead/Owner (Recommended) ☐ Applications Lead or the individual responsible for application portfolio management, along with any applications team members, if available Key Corporate Stakeholders Depending on size and structure, participants could include: ☐ Head of IT (CIO, CTO, IT Director, or IT Manager) ☐ Head of shared services (CFO, COO, VP HR, etc.) ☐ Compliance Officer, Steering Committee ☐ Company owner or CEO Application Subject Matter Experts Individuals who have familiarity with a specific subset of applications ☐ Business owners (product owners, Head of Business Function, power users) ☐ Support owners (Operations Manager, IT Technician) Delivery Leads ☐ Development Managers ☐ Solution Architects ☐ Project Managers

Understand your APM tools and outcomes

1.Diagnostic	5. Foundations: Chart
2. Data Journey	6. App Comparison
3. Snapshot	7. Roadmap
4. Foundations: Results

Examples and explanations of these tools are located on the following slides and within the phases where they occur.

Assess your current application portfolio with Info-Tech’s APM Diagnostic Tool

One of the primary purposes of application portfolio management is to get what we know and need to know on paper so we can share a common vision and understanding of our portfolio. This enables better discussions and decisions with your application owners and stakeholders.

APM worksheet data journey map

Interpreting your APM Snapshot results

Interpreting your APM Foundations results

Interpreting your APM Foundations chart

Compare application groups

Group comparison can be used for more than just redundant/overlapping applications.

Apply Info-Tech’s 6 R’s Rationalization Disposition Model

Disposition Description Reward Prioritize new features or enhancement requests and openly welcome the expansion of these applications as new requests are presented. Refresh Address the poor end-user satisfaction with a prioritized project. Consult with users to determine if UX issues require improvement to address satisfaction. Refocus Determine the root cause of the low value. Refocus, retrain, or refresh the UX to improve value. If there is no value found, aim to "keep the lights on" until the app can be decommissioned. Replace Replace or rebuild the application as technical and user issues are putting important business capabilities at risk. Decommission application alongside replacement. Remediate Address the poor technical health or risk with a prioritized project. Further consult with development and technical teams to determine if migration or refactoring is suited to address the technical issue. Retire Cancel any requested features and enhancements. Schedule the proper decommission and transfer end users to a new or alternative system if necessary.

TCO, compared relatively to business value, helps determine the practicality of a disposition and the urgency of any call to action. Application alignment is factored in when assessing redundancies and has a separate set of dispositions.

Populate roadmap example

ARE YOU READY TO GET STARTED?

Phase 1

Lay Your Foundations

This phase involves the following participants:

Applications Lead

Key Corporate Stakeholders

Additional Resources

• Build a Value Measurement Framework

APM supports many goals

Building an APM process requires a proper understanding of the underlying business goals and objectives of your organization’s strategy. Effectively identifying these drivers is paramount to gaining buy-in and the approval for any changes you plan to make to your application portfolio.

After identifying these goals, you will need to ensure they are built into the foundations of your APM process.

“What is most critical?” but also “What must come first?”

Assess your current application portfolio with Info-Tech’s APM Diagnostic Tool

One of the primary purposes of application portfolio management is to get what we know and need to know on paper so we can share a common vision and understanding of our portfolio. This enables better discussions and decisions with your application owners and stakeholders.

1.1 Assess your current application portfolio with Info-Tech’s diagnostic tool

Estimated time: 1 hour

1. This tool provides visibility into your application portfolio and APM practices.
2. Based on your assessment, you should gain a better understanding of whether the appropriate next steps are in application discovery, rationalization, or roadmapping.
3. Complete the “Data Entry” worksheet in the Application Portfolio Management Diagnostic Tool (Excel).
4. Review the “Results” worksheet to help inform and guide your next steps.

Download the Application Portfolio Management Diagnostic Tool

1.1 Understanding the diagnostic results

Managed Apps are your known knowns and most of your portfolio. Unmanaged and Unsanctioned Apps are known but have unknown risks and compliance. Bring these under IT support. Unknown Apps are high risk and noncompliant. Prioritize these based on risk, cost, and use.		APM is more than an inventory and assessment. A strong APM program provides ongoing visibility and insights to drive application improvement and value delivery. Use your Sprawl Factors to identify process and organizational gaps that may need to be addressed.
Your APM inventory is only as good as the information in it. Use this chart to identify gaps and develop a path to define missing information.		APM is an iterative process. Use this state assessment to determine where to focus most of your current effort.

Understand potential motivations for APM

The value of APM is defined by how the information will be used to drive better decisions.

Different motivations will influence the appropriate approach to and urgency of APM or, specifically, rationalizing the portfolio. When rationalizing is directly related to enabling or in response to a broader initiative, you will need to create a more structured approach with a formal budget and resources.

1.2 Determine narrative

Estimated time: 30 minutes-2 hours

1. Open the “Narrative” tab in the APM Snapshot and Foundations Tool.
2. Start by listing your prevailing IT pain points with the application portfolio. These will be the issues experienced predominantly by the IT team and not necessarily by the stakeholders. Be sure to distinguish pain points from their root causes.
3. Determine an equivalent business pain point for each IT pain point. This should be how the problem manifests itself to business stakeholders and should include potential risks to the organization is exposed to.
4. Determine the business goal for each business pain point. Ideally, these are established organizational goals that key decision-makers will recognize. These goals should address the business pain points you have documented.
5. Determine the technical objective for each business goal. These speak to the general corrections or enhancements to the portfolio required to accomplish the business goals.
6. Use the “Narrative - Matrix” worksheet to group items into themes if needed.

Record the results in the APM Snapshot and Foundations Tool

Connect your pains to what the business cares about to find the most effective narrative

1.3 Define goals and metrics

Estimated time: 1 hour

1. Determine the motivations behind APM. You may want to collect and review any of the organization’s strategic documents that provide additional context on previously established goals.
2. With the appropriate stakeholders, discuss the goals of APM. Try to label your goals as either:
   1. Short term: Refers to immediate goals used to represent the progress of APM activities. Likely these goals are more IT-oriented
   2. Long term: Refers to broader and more distant goals more related to the impact of APM. These goals tend to be more business-oriented.
3. To help clearly define your goals, discuss appropriate metrics for each goal. Often these metrics can be expressed as:
   1. Leading indicators: Metrics used to gauge the success of your short-term goals and the progress of APM activities.
   2. Lagging indicators: Metrics used to gauge the success of your long-term goals.

Record the results in the APM Snapshot and Foundations Tool

1.3 Define goals and metrics: Example

“Application” doesn’t have the same meaning to everyone

	Code: A body of code that's seen by developers as a single unit.
	Functionality: A group of functionality that business customers see as a single unit.
	Funding: An initiative that those with the money see as a single budget.
	?: What else?

“Essentially applications are social constructions.”

Source: Martin Fowler

APM focuses on business applications.

“Software used by business users to perform a business function.”

– ServiceNow, 2020

Unfortunately, that definition is still quite vague.

You must set boundaries and scope for “application”

Set boundaries on what is an application or the individual unit that you’re making business decisions on. Also, determine which categories of applications are in scope and how they will be included in the activities and artifacts of APM. Use your product families defined in Deliver Digital Products at Scale to help define your application categories, groups, and boundaries.

1.4 Define application categories

Estimated time: 1 hour

1. Review the items listed on the previous slide and consider what categories provide the best initial grouping to help organize your rationalization and dispositions. Update the category list to match your application groupings.
2. Identify the additional categories you need to manage in your application portfolio.
3. For each category, establish or modify a description or definition and provide examples that exist in your current portfolio.
4. For each category, answer:
   1. Will these be documented in the application inventory?
   2. Will these be included in application rationalization? Think about if this item will be assigned a TCO, value score, and, ultimately, a disposition.
   3. Will these be listed in the application portfolio roadmap?
5. If you completed Deliver Digital Products at Scale, use your product families to help define your application categories.

Record the results in the APM Snapshot and Foundations Tool

1.4 APM worksheet data journey map

1.4 Define application categories: Example

The roles in APM rarely exist; you need to adapt

Corner-of-the-Desk Approach

• No one is explicitly dedicated to building a strategy or APM practices.
• Information is collected whenever the applications team has time available.
• Benefits are pushed out and the value is lost.

Dedicated Approach

• The initiative is given a budget and formal agenda.
• Roles and responsibilities are assigned to team members.

The high-level steps of APM present some questions you need to answer

Build Inventory

Create the full list of applications and capture all necessary attributes.

• Who will build the inventory?
• Do you know all your applications (Shadow IT)?
• Do you know your applications’ functionality?
• Do you know where your applications overlap?
• Who do you need to consult with to fill in the gaps?
• Who will provide specific application information?

Collect & Compile

Engage with appropriate SMEs and collect necessary data points for rationalization.

• Who will collect and compile the data points for rationalization?
• What are the specific data points?
• Are some of the data points currently documented?
• Who will provide specific data points on technical health, cost, performance, and business value?
• Who will determine what business value is?

Assess & Recommend

Apply rationalization framework and toolset to determine dispositions.

• Who will apply a rationalization tool or decision-making framework to generate dispositions for the applications?
• Who will modify the tool or framework to ensure results align to the goals of the organization?
• Who will define any actions or projects that result from the rationalization? And who needs to be consulted to assess the feasibility of any potential project?

Validate & Roadmap

Present dispositions for validation and communicate any decisions or direction for applications.

• Who will present the recommended disposition, corrective action, or new project to the appropriate decision maker?
• Who is the appropriate decision maker for application changes or project approval?
• What format is recommended (idea, proposal, business case) and what extra analysis is required?
• Who needs to be consulted regarding the potential changes?

1.5 Determine APM steps and roles (SIPOC)

Estimated time: 1-2 hours

1. Begin by comparing Info-Tech’s list of common APM roles to the roles that exist in your organization with respect to application management and ownership.
2. There are four high-level steps for APM: build inventory, collect & compile, assess & recommend, and validate & roadmap. Apply the SIPOC (Supplier, Input, Process, Output, Customer) model by completing the following for each step:
   1. In the Process column, modify the description, if necessary. Identify who is responsible for performing the step.
   2. In the Inputs column, modify the list of inputs.
   3. In the Suppliers column, identify who must be included to provide the inputs.
   4. In the Outputs column, modify the list of outputs.
   5. In the Customers column, identify who consumes the outputs.
3. (Optional) Outline how the results of APM will be consumed. For example, project intake or execution, data or platform migration, application or product management, or whichever is appropriate.

Record the results in the APM Snapshot and Foundations Tool

1.5 Determine steps and roles

Planning your APM modernization journey steps

Phase 2

Improve Your Inventory

This phase involves the following participants:

• Applications Lead
• Applications Team

Additional Resources

Document Your Business Architecture

Industry Reference Architectures

Application Capability Template

Pre-step: Collect your applications

1. Consult with your IT team and leverage any existing documentation to gather an initial list of your applications.
2. Build an initial working list of applications. This is just meant to be a starting point. Aim to include any new applications in procurement, implementation, or development.
3. The rationalization and roadmapping phases are best completed when iteratively focusing on manageable groups of applications. Group your applications into subsets based on shared subject matter experts. Likely this will mean grouping applications by business units.
4. Select a subset to be the first group of applications that will undergo the activities of rationalization and roadmapping to refine your APM processes, scoring, and disposition selection.

Info-Tech Best Practice

The more information you plan to capture, the larger the time and effort, especially as you move along toward advanced and strategic items. Capture the information most aligned to your objectives to make the most of your investment.

If you completed Deliver Digital Products at Scale, use your product families and products to help define your applications.

Learn more about automated application discovery:
High Application Satisfaction Starts With Discovering Your Application Inventory

Discover your applications

2.1 Populate your inventory

Estimated time: 1-4 hours per group

1. Review Info-Tech’s list of application inventory attributes.
2. Open the “Application Inventory Details” tab of the APM Snapshot and Foundations Tool. Modify, add, or omit attributes.
3. For each application, populate your prioritized data fields or any fields you know at the time of discovery. You will complete all the fields in future iterations.
4. Complete this the best you can based on your team’s familiarity and any readily available documentation related to these applications.
5. Use the drop-down list to select Enabling, Redundant/Overlapping, and Dependent apps. This will be used to help determine dispositions and comparisons.
6. Highlight missing information or placeholder values that need to be verified.

Record the results in the APM Snapshot and Foundations Tool

2.1 APM worksheet data journey map

Why is the business capability so important?

For the purposes of an inventory, business capabilities help all stakeholders gain a sense of the functionality the application provides.

However, the true value of business capability comes with rationalization.

Upon linking all the organization’s applications to a standardized and consistent set of business capabilities, you can then group your applications based on similar, complementary, or overlapping functionality. In other words, find your redundancies and consolidation opportunities.

Important Consideration

Defining business capabilities and determining the full extent of redundancy is a challenging undertaking and often is a larger effort than APM all together.

Business capabilities should be defined according to the unique functions and language of your organization, at varying levels of granularity, and ideally including target-state capabilities that identify gaps in the future strategy.

This blueprint provides a simplified and generic list for the purpose of categorizing similar functionality. We strongly encourage exploring Document Your Business Architecture to help in the business capability defining process, especially when visibility into your portfolio and knowledge of redundancies is poor.

For a more detailed capability mapping, use the Application Portfolio Snapshot and the worksheets in your current workbook.

What is a business capability map?

A business capability map (BCM) is an abstraction of business operations that helps describe what the enterprise does to achieve its vision, mission, and goals. Business capabilities are the building blocks of the enterprise. They are typically defined at varying levels of granularity and include target-state capabilities that identify gaps in the future strategy. These are the people, process, and tool units that deliver value to your teams and customers.

Info-Tech’s Industry Coverage and Reference Architectures give you a head start on producing a BCM fit for your organization. The visual to the left is an example of a reference architecture for the retail industry.

These are the foundational piece for our Application Portfolio Snapshot. By linking capabilities to your supporting applications, you can better visualize how the portfolio supports the organization at a single glance. More specifically, you can highlight how issues with the portfolio are impacting capability delivery.

Reminder: Best practices imply that business capabilities are methodologically defined by business stakeholders and business architects to capture the unique functions and language of your organization.

The approach laid out in this service is about applying minimal time and effort to make the case for proper investment into the best practices, which can include creating a tailored BCM. Start with a good enough example to produce a useful visual and generate a positive conversation toward resourcing and analyses.

We strongly encourage exploring Document Your Business Architecture and the Application Portfolio Snapshot to understand the thorough methods and tactics for BCM.

Why perform a high-level application alignment before rationalization?

Having to address redundancy complicates the application rationalization process. There is no doubt that assessing applications in isolation is much easier and allows you to arrive at dispositions for your applications in a timelier manner.

Rationalization has two basic steps: first, collect and compile information, and second, analyze that information and determine a disposition for each application. When you don’t have redundancy, you can analyze an application and determine a disposition in isolation. When you do have redundancies, you need to collect information for multiple applications, likely across departments or lines of business, then perform a comparative analysis.

Most likely your approach will fall somewhere between the examples below and require a hybrid approach.

Benefits of a high-level application alignment:

• Review the degree of redundancy across your portfolio.
• Understand the priority areas for rationalization and the sequence of information collection.

2.2 Align apps to capabilities and functions

Estimated time: 1-4 hours per grouping

The APM tool provides up to three different grouping comparisons to assess how well your applications are supporting your enterprise. Although business capabilities are important, identify your organizational perspectives to determine how well your portfolio supports these functions, departments, or value streams. Each grouping should be a consistent category, type, or arrangement of applications.

1. Enter the business capabilities, from either your own BCM or the Info-Tech reference architectures, into the Business Capability column under Grouping 1.
2. Open the “Group 1 Alignment Matrix” worksheet in the APM Snapshot and Foundations Tool.
3. For each application’s row, enter an “X” in the column of a capability that the application supports.
4. Optionally, repeat these steps under Grouping 2 and 3 for each value stream, department, function, or business unit where you’d like to assess application support. Note: To use Grouping 3, unhide the columns on the “Application and Group Lists” worksheet and unhide the worksheet “Grouping 3 Alignment Matrix.”

Record the results in the APM Snapshot and Foundations Tool

2.2 APM worksheet data journey map

2.2 Aligning applications to groups example

Alignment Matrix: Identify applications supporting each capability or function.

In this example:

BC 1 is supported by App A

BC 2 is supported by App B

BC 3 is supported by Apps C & D

BCs 4 & 5 are supported by App E

BC 6 is supported by Apps F-G. BC 6 shows an example of potential redundancy and portfolio complexity.

The APM tool supports three different Snapshot groupings. Repeat this exercise for each grouping.

Align application to capabilities – tool view

Phase 3

Rationalize Your Applications

This phase involves the following participants:

• Applications Lead
• Application SMEs

Additional Resources

• Build a Value Measurement Framework
• Value Calculator
• Application Portfolio Assessment Diagnostic
• Application TCO Calculator
• Application Rationalization Tool

Phase pre-step: Sequence rationalization assessments appropriately

Use the APM Snapshot results to determine APM iterations

• Application rationalization requires an iterative approach.
• Review your application types and alignment from Phase 2 to begin to identify areas of overlapping or redundant applications.
• Sequence the activities of Phase 3 based on whether you have a:
  • Redundant Portfolio
    • Use the APM Snapshot to prioritize analysis by grouping.
    • Complete the application functional analysis.
    • Use the “Application Comparison” worksheet to aid your comparison of application subsets.
    • Update application dispositions and roadmap initiatives.
  • Non-Redundant Portfolio
    • Use the APM Snapshot to prioritize analysis by grouping.
    • Update application dispositions and roadmap initiatives.

Phase pre-step: Are the right stakeholders present?

Make sure you have the right people at the table from the beginning.

• Application rationalization requires specific stakeholders to provide specific data points.
• Ensure your application subsets are grouped by shared subject matter experts. Ideally, these are grouped by business units.
• For each subset, identify the appropriate SMEs for the five areas of rationalization criteria.
• Communicate and schedule interviews with groups of stakeholders. Inform them of additional information sources to have readily available.
• (Optional) This phase’s activities follow the clockwise sequence of the diagram to the right. Reorder the sequence of activities based on overlaps of availability in subject matter expertise.

Rationalize your applications

One of the principal goals of application rationalization is determining dispositions

Disposition: The intended strategic direction or course of action for an application.

Directionless portfolio of applications	Assigned dispositions for individual apps High-level examples:
	Maintain: Keep the application but adjust its support structure. Modernize: Create a new project to address an inadequacy. Consolidate: Create a new project to reduce duplicate functionality. Retire: Phase out the application.

Application rationalization provides insight

Directionless portfolio of applications	Info-Tech’s Five Lens Model					Assigned dispositions for individual apps
	Application Alignment	Business Value	Technical Health	End-User Perspective	Total Cost of Ownership (TCO)	Maintain: Keep the application but adjust its support structure. Modernize: Create a new initiative to address an inadequacy. Consolidate: Create a new initiative to reduce duplicate functionality. Retire: Phase out the application. Disposition: The intended strategic direction or implied course of action for an application.
	How well do your apps support your core functions and teams?	How well are your apps aligned to value delivery?	Do your apps meet all IT quality standards and policies?	How well do your apps meet your end users’ needs?	What is the relative cost of ownership and operation of your apps?
Application rationalization requires the collection of several data points that represent these perspectives and act as the criteria for determining a disposition for each of your applications. Disposition: The intended strategic direction or implied course of action for an application.

3.1-3.4 APM worksheet data journey map

Assessing application business value

First, the authorities on business value need to define and weigh their value drivers that describe the priorities of the organization.

This will then allow the applications team to apply a consistent, objective, and strategically aligned evaluation of applications across the organization.

In this context…business value is the value of the business outcome that the application produces and how effective the application is at producing that outcome.

Business value IS NOT the user’s experience or satisfaction with the application.

Review the value drivers of your applications

	Financial vs. Human Benefits Financial benefits refer to the degree to which the value source can be measured through monetary metrics and are often quite tangible. Human benefits refer to how an application can deliver value through a user’s experience. Inward vs. Outward Orientation Inward orientation refers to value sources that have an internal impact and improve your organization’s effectiveness and efficiency in performing its operations. Outward orientation refers to value sources that come from your interaction with external factors, such as the market or your customers.

3.1 Assess business value

Estimated time: 1 -4 hours

1. Review Info-Tech’s four quadrants of business value: increase revenue/value, reduce costs, enhance services, and reach customers. Edit your value drivers, description, and scoring on the “Rationalization Inputs” worksheet. For each value driver, update the key indicators specific to your organization’s priorities. When editing the scoring descriptions, keep only the one you are using.
2. (Optional) Add an additional value driver if your organization has distinct value drivers (e.g. compliance, sustainability, innovation, and growth).
3. For each application, score on a scale of 0 to 5 how impactful the application is for each value driver. Use the indicators set in Phase 1 to guide your scoring.
4. For each value driver, adjust the criteria weighting to match its relative importance to the organization. Start with a balanced or low weighting. Adjust the weights to ensure that the category score matches your relative values and priorities.

Record the results in the APM Snapshot and Foundations Tool

3.1 Weigh value drivers: Example

For additional support in implementing a balanced value framework, refer to Build a Value Measurement Framework.

Understand the back end and technical health of your applications

Technical health identifies the extent of technology risk to the organization.

MAINTAINABILITY (RAS)

RAS refers to an app’s reliability, availability, and serviceability. How often, how long, and how difficult is it for your resources to keep an app functioning, and what are the resulting continuity risks? This can include root causes of maintenance challenges.

• Optimize Systems Management to Improve IT Resilience and Proactivity and Establish a Program to Enable Effective Performance Monitoring

SECURITY

Applications should be aligned and compliant with ALL security policies. Are there vulnerabilities or is there a history of security incidents? Remember that threats are often internal and non-malicious.

• Build an Information Security Strategy

ADAPTABILITY

How easily can the app be enhanced or scaled to meet changes in business needs? Does the app fit within the business strategy?

• Deliver on Your Digital Product Vision

INTEROPERABILITY

The degree to which an app is integrated with current systems. Apps require comprehensive technical planning and oversight to ensure they connect within the greater application architecture. Does the app fit within your enterprise architecture strategy?

• Design an Enterprise Architecture Strategy

BUSINESS CONTINUITY/DISASTER RECOVERY

The degree to which the application is compatible with business continuity/disaster recovery (BC/DR) policies and plans that are routinely tested and verified.

• Create a Right-Sized Disaster Recovery Plan

Unfortunately, the business only cares about what they can see or experience. Rationalization is your opportunity to get risk on the business’ radar and gain buy-in for the necessary action.

3.2 Assess technical health

Estimated time: 1-4 hours

1. Review Info-Tech’s suggested technical health criteria. Edit your criteria, descriptions, and scoring on the “Rationalization Inputs” worksheet. For each criterion, update the key indicators specific to your organization’s priorities.
2. For each application, score on a scale of 1 to 5 on how impactful the application is for each criterion.
3. For each criterion, adjust the weighting to match its relative importance to the organization. Start with a balanced or low weighting. Adjust the weights to ensure that the category score matches your relative values and priorities.

Record the results in the APM Snapshot and Foundations Tool

End users provide valuable perspective

Your end users are your best means of determining front-end issues.

Data Quality

To what degree do the end users find the data quality sufficient to perform their role and achieve their desired outcome?

Effectiveness

To what degree do the end users find the application effective for performing their role and desired outcome?

Usability

To what degree do the end users find the application reliable and easy to use to achieve their desired outcome?

Satisfaction

To what degree are end users satisfied with the features of this application?

What else matters to you?

Tune your criteria to match your values and priorities.

Info-Tech Best Practice

When facing large user groups, do not make assumptions or use lengthy methods of collecting information. Use Info-Tech’s Application Portfolio Assessment to collect data by surveying your end users’ perspectives.

3.3 Assess end-user perspective

Estimated time: 1-4 hours

1. Review Info-Tech’s suggested end-user perspective criteria. Edit your criteria, descriptions and scoring on the “Rationalization Inputs” worksheet. For each criterion, update the key indicators specific to your organization’s priorities.
2. For each application, score on a scale of 1 to 5 on how impactful the application is for each criterion.
3. For each criterion, adjust the weighting to match its relative importance to the organization. Start with a balanced or low weighting. Adjust the weights to ensure that the category score matches your relative values and priorities.

Record the results in the APM Snapshot and Foundations Tool

Consider the spectrum of application cost

An application’s cost extends past a vendor’s fee and even the application itself.

LICENSING AND SUBSCRIPTIONS: Your recurring payments to a vendor.

Many commercial off-the-shelf applications require a license on a per-user basis. Review contracts and determine costs by looking at per-user or fixed rates charged by the vendor.

MAINTENANCE COSTS: Your internal spending to maintain an app.

These are the additional costs to maintain an application such as support agreements, annual maintenance fees, or additional software or hosting expenses.

INDIRECT COSTS: Miscellaneous expenses necessary for an app’s continued use.

Expenses like end-user training, developer education, and admin are often neglected, but they are very real costs organizations pay regularly.

RETURN ON INVESTMENT: Perceived value of the application related to its TCO.

Some of our most valuable applications are the most expensive. ROI is an optional criterion to account for the value and importance of the application.

Info-Tech Best Practice

The TCO assessment is one area where what you are considering the ”application” matters quite a bit. An application’s peripherals or software components need to be considered in your estimates. For additional help calculating TCO, use the Application TCO Calculator from Build a Rationalization Framework.

3.4 Assess total cost of ownership

Estimated time: 1-4 hours

1. Review Info-Tech’s suggested TCO criteria. Edit your criteria, descriptions, and scoring on the “Rationalization Inputs” worksheet. For each criterion, update the key indicators specific to your organization’s priorities.
2. For each application, score on a scale of 1 to 5 on how impactful the application is for each criterion.
3. For each criterion, adjust the weighting to match its relative importance to the organization. Start with a balanced or low weighting. Adjust the weights to ensure that the category score matches your relative values and priorities.

Record the results in the APM Snapshot and Foundations Tool

Phase 4

Populate Your Roadmap

his phase involves the following participants:

• Applications Lead
• Delivery Leads

Additional Resources

• Disposition Prioritization Tool
• Application Rationalization Tool

Review your APM Snapshot

4.1 Review your APM Snapshot results

Estimated time: 1-2 hours

1. The APM Snapshot provides a dashboard to support your APM program’s focus and as an input to demand planning. Unhide the “Group 3” worksheet if you completed the alignment matrix.
2. For each grouping area, review the results to determine underperforming areas. Use this information to prioritize your application root cause analysis and demand planning. Use the key on the following slide to guide your analysis.
3. Analysis guidance:
   1. Start with the quartile grouping to find areas scoring in Remediate or Critical Need and focus follow-up actions on these areas.
   2. Use the lens/category heat map to determine which lenses are underperforming. Use this to then look up the individual app scores supporting that group to identify application issues.
   3. Use the “Application Comparison” worksheet to select and compare applications for the group to make your review and comparison easier.
   4. Work with teams in the group to provide root cause analysis for low scores.
   5. Build a plan to address any apps not supported by IT.

Record the results in the APM Snapshot and Foundations Tool

Interpreting your APM Snapshot

4.1 APM worksheet data journey map

Review your APM rationalization results

4.2 Review your APM Foundations results

Estimated time: 1-2 hours

The APM Foundations Results dashboard (“App Rationalization Results” worksheet) provides a detailed summary of your relative app scoring to serve as input to demand planning.

1. For each grouping, review the results to determine underperforming app support. Use this information to prioritize your application root cause analysis using the individual criteria scores on the “Rationalization Inputs” worksheet.
2. Use guidance on the following example slides to understand each area of the results.
3. Any applications marked as N/A for evaluation will display N/A on the results worksheet and will not be displayed in the chart. You can still enter dispositions.
4. Use the column filters to compare a subset of applications or use the “App Comparison” worksheet to maintain an ongoing view by grouping, redundancy, or category.
5. Any applications marked as N/A for evaluation will display N/A on the results worksheet and will not be displayed in the chart. You can still enter dispositions.

Record the results in the APM Snapshot and Foundations Tool

4.2 APM worksheet data journey map

Interpreting your APM Foundations results

Interpreting your APM Foundations chart

Modernize your applications

Apply Info-Tech’s 6 R’s Rationalization Disposition Model

Disposition Description Reward Prioritize new features or enhancement requests and openly welcome the expansion of these applications as new requests are presented. Refresh Address the poor end-user satisfaction with a prioritized project. Consult with users to determine if UX issues require improvement to address satisfaction. Refocus Determine the root cause of the low value. Refocus, retrain, or refresh the UX to improve value. If there is no value found, aim to "keep the lights on" until the app can be decommissioned. Replace Replace or rebuild the application as technical and user issues are putting important business capabilities at risk. Decommission application alongside replacement. Remediate Address the poor technical health or risk with a prioritized project. Further consult with development and technical teams to determine if migration or refactoring is suited to address the technical issue. Retire Cancel any requested features and enhancements. Schedule the proper decommission and transfer end users to a new or alternative system if necessary.

TCO, compared relatively to business value, helps determine the practicality of a disposition and the urgency of any call to action. Application alignment is factored in when assessing redundancies and has a separate set of dispositions.

4.3 Determine dispositions

Estimated time: 1-4 hours

1. The Recommended Disposition and Priority fields are prepopulated from your scoring thresholds and options on the “Disposition Options” worksheet. You can update any individual application disposition or priority using the drop-down menu and it will populate your selection on the “Roadmap” worksheet.
2. Question if that disposition is appropriate. Be sure to consider:
   1. TCO – cost should come into play for any decisions.
   2. Alignment to strategic goals set for the overarching organizational, IT, technology (infrastructure), or application portfolio.
   3. Existing organizational priorities or funded initiatives impacting the app.
3. Some dispositions may imply a call to action, new project, or initiative. Ideate and/or discuss with the team any potential initiatives. You can use different dispositions and priorities on the “App Rationalization Results” and “Roadmap” worksheets.
4. Note: Modify the list of dispositions on the “Disposition Options” worksheet as appropriate for your rationalization initiative. Any modifications to the Disposition column will be automatically updated in the “App Rationalization Results” and “Roadmap” worksheets.

Record the results in the APM Snapshot and Foundations Tool

4.3 APM worksheet data journey map

Redundancies require a different analysis and set of dispositions

Solving application redundancy is a lot more complicated than simply keeping one application and eliminating the others.

First, you need to understand the extent of the redundancy. The applications may support the same capability, but do they offer the same functions? Determine which apps offer which functions within a capability. This means you cannot accurately arrive at a disposition until you have evaluated all applications.

Next, you need to isolate the preferred system. This is completed by comparing the same data points collected for rationalization and the application alignment analysis. Cost and coverage of all necessary functions become the more important factors in this decision-making process.

Lastly, for the non-preferred redundant applications you need to determine: What will you do with the users? What will you do with the data? And what can you do with the functionality (can the actual coding be merged onto a common platform)?

Compare groups of applications

4.4 Assess redundancies (optional)

Estimated rime: 1 hour per group

This exercise is best performed after aligning business capabilities to applications across the portfolio and identifying your areas of redundancy. At this stage, this is still an information collection exercise, and it will not yield a consolidation-based disposition until applied to all relevant applications. Lastly, this exercise may still be at too high a level to outline the full details of redundancy, but it is still vital information to collect and a starting point to determine which areas require more concentrated analysis.

1. Determine which areas of redundancy or comparisons are desired. Duplicate the “App Comparison” worksheet for each grouping or comparison.
2. Extend the comparison to better identify redundancy.
   1. For each area of redundancy, identify the high-level features. Aim to limit the features to ten, grouping smaller features if necessary. SoftwareReviews can be a resource for identifying common features.
   2. Label features using the MoSCoW model: must have, should have, could have, will not have.
   3. For each application, identify which features they support. You can use the grouping alignment matrix as a template for feature alignment comparison. Duplicate the worksheet, unlock it, and replace the grouping cell references with your list of features.

Record the results in the APM Snapshot and Foundations Tool

4.4 Assess redundancies (optional)

4.5 Determine dispositions for redundant applications (optional)

Estimated time: 1 hour per group

1. Based on the feature-level assessment, determine if you can omit applications if they don’t truly overlap with other applications.
2. Make a copy of the “App Comparison” worksheet and select the applications you want to compare based on your functional analysis.
3. Determine the preferred application(s). Use the diagram to inform your decision. This may be the application closest to the top right (strong health and value). However, less expensive options or any options that provide a more complete set of features may be preferable.
4. Open the “App Rationalization Results” worksheet. Update your disposition for each application.
5. Use these updated dispositions to determine a call to action, new project, or initiative. Ideate and/or discuss with the team any potential initiatives. Update your roadmap with these initiatives in the next step.

Record the results in the APM Snapshot and Foundations Tool

Compare application groups

Group comparison can be used for more than just redundant/overlapping applications.

Roadmaps are used for different purposes

Roadmaps are used for different communication purposes and at varying points in your application delivery practice. Some use a roadmap to showcase strategy and act as a feedback mechanism that allows stakeholders to validate any changes (process 1). Others may use it to illustrate and communicate approved and granular elements of a change to an application to inform appropriate stakeholders of what to anticipate (process 2).

The steps between selecting a disposition and executing on any resulting project will vary based on the organization’s project intake standards (or lack thereof).

This blueprint focuses on building a strategic portfolio roadmap prior to any in-depth assessments related to initiative/project intake, approval, and prioritization. For in-depth support related to intake, approval, prioritization, or planning, review the following resources.

Determine what makes it onto the roadmap

A roadmap should not be limited to what is approved or committed to. A roadmap should be used to present the items that need to happen and begin the discussion of how or if this can be put into place. However, not every idea should make the cut and end up in front of key stakeholders.

4.6 Prioritize initiatives

Estimated time: 1-4 hours

1. This is a high-level assessment to provide a sense of feasibility, practicality, and priority as well as an estimated timeline of a given initiative. Do not get lost in granular estimations. Use this as an input to your demand planning process.
2. Enter the specific name or type of initiative.
   1. Process Initiative: Any project or effort focused on process improvements without technical modification to an app (e.g. user migration, change in SLA, new training program). Write the application and initiative name on a blue sticky note.
   2. App Initiative: Any project or effort involving technical modification to an app (e.g. refactoring, platform migration, feature addition or upgrade). Write the application and initiative name on a yellow sticky note.
   3. Decommission Initiative: Any project and related efforts to remove an app (e.g. migrating data, removal from server). Write the application and initiative name on a red sticky note.
3. Prioritize the initiative to aid in demand planning. This is prepopulated from your selected application disposition, but you can set a different priority for the initiative here.
4. Select the Initiative Phase in the timeline to show the intended schedule and sequencing of the initiative.

Record the results in the APM Snapshot and Foundations Tool

4.6 APM worksheet data journey map

Populate roadmap example

Create a recurring update plan

• Application inventories become stale before you know it. Build steps in your procurement process to capture the appropriate information on new applications. Also, build in checkpoints to revisit your inventory regularly to assess the accuracy of inventory data.
• Rationalization is not one and done; it must occur with an appropriate cadence.
  • Business priorities change, which will impact the current and future value of your apps.
  • Now more than ever, user expectations evolve rapidly.
  • Application sprawl likely won’t stop, so neither will shadow IT and redundancies.
  • Obsolescence, growing technical debt, changing security threats, or shifting technology strategies are all inevitable, as is the gradual decline of an app’s health or technical fit.
• An application’s disposition changes quicker than you think, and rationalization requires a structured cadence. You need to plan to minimize the need for repeated efforts. Conversely, many use preceding iterations to increase the analysis (e.g. more thorough TCO projections or more granular capability-application alignment).
• Portfolio roadmaps require a cadence for both updates and presentations to stakeholders. Updates are often completed semiannually or quarterly to gauge the business adjustments that affect the timeline of the domain-specific applications. The presentation of a roadmap should be completed alongside meetings or gatherings of key decision makers.
• M&A or other restructuring events will prompt the need to address all the above.

Build your APM maturity by taking the right steps at the right time

Info-Tech’s Build an Application Rationalization Framework provides additional TCO and value tools to help build out your portfolio strategy.

APM is an iterative and evergreen process

APM provides oversight and awareness of your application portfolio’s performance and support for your business operations and value delivery to all users and customers.

Repeat according to APM cadence and application changes

4.7 Ongoing APM cadence

Estimated time: 1-2 hours

1. Determine how frequently you will update or present the artifacts of your APM practice: Application Inventory, Rationalization, Disposition, and Roadmap.
2. For each artifact, determine the:
   1. Owner: Who is accountable for the artifact and the data or information within the artifact and will be responsible for or delegate the responsibility of updating or presenting the artifact to the appropriate audience?
   2. Update Cadence: How frequently will you update the artifact? Include what regularly scheduled meetings this activity will be within.
   3. Update Scope: Describe what activities will be performed to keep the artifact up to date. The goal here is to minimize the need for a full set of activities laid out within the blueprint. Optional: How will you expand the thoroughness of your analysis?
   4. Audience: Who is the audience for the artifact or assessment results?
   5. Presentation Cadence: How frequently and when will you review the artifact with the audience?

Record the results in the APM Snapshot and Foundations Tool

4.7 Ongoing APM cadence

Appendices

• Additional support slides
• Bibliography

The APM tool provides a single source of truth and global data sharing

The table shows where source data is used to support different aspects of APM discovery, rationalization, and modernization.

Common application inventory attributes

Common application inventory attributes

Bibliography

”2019 Technology & Small Business Survey.” National Small Business Association (NSBA), n.d. Accessed 1 April 2020.
“Application Rationalization – Essential Part of the Process for Modernization and Operational Efficiency.” Flexera, 2015. Web.
“Applications Rationalization during M&A: Standardize, Streamline, Simplify.” Deloitte Consulting, 2016. Web.
Bowling, Alan. “Clearer Visibility of Product Roadmaps Improves IT Planning.” ComputerWeekly.com, 1 Nov. 2010. Web.
Brown, Alex. “Calculating Business Value.” Agile 2014 Orlando, 13 July 2014. Scrum Inc. 2014. Web.
Brown, Roger. “Defining Business Value.” Scrum Gathering San Diego 2017. Agile Coach Journal. Web.
“Business Application Definition.” Microsoft Docs, 18 July 2012. Web.
“Connecting Small Businesses in the US.” Deloitte Consulting, 2017. Accessed 1 April. 2020.
Craveiro, João. “Marty meets Martin: connecting the two triads of Product Management.” Product Coalition, 18 Nov. 2017. Web.
Curtis, Bill. “The Business Value of Application Internal Quality.” CAST, 6 April 2009. Web.
Fleet, Neville, Joan Lasselle, and Paul Zimmerman. “Using a Balance Scorecard to Measure the Productivity and Value of Technical Documentation Organizations.” CIDM, April 2008. Web.
Fowler, Martin. “Application Boundary.” MartinFowler.com, 11 Sept. 2003. Web.
Harris, Michael. “Measuring the Business Value of IT.” David Consulting Group, 2007. Web.
“How Application Rationalization Contributes to the Bottom Line.” LeanIX, 2017. Web.
Jayanthi, Aruna. “Application Landscape Report 2014.” Capgemini, 4 March 2014. Web.
Lankhorst, Marc., et al. “Architecture-Based IT Valuation.” Via Nova Architectura, 31 March 2010. Web.
“Management of business application.” ServiceNow, Jan.2020. Accessed 1 April 2020.
Mauboussin, Michael J. “The True Measures of Success.” HBR, Oct. 2012. Web.
Neogi, Sombit., et al. “Next Generation Application Portfolio Rationalization.” TATA, 2011. Web.
Riverbed. “Measuring the Business Impact of IT Through Application Performance.” CIO Summits, 2015. Web.
Rouse, Margaret. “Application Rationalization.” TechTarget, March 2016. Web.
Van Ramshorst, E.A. “Application Portfolio Management from an Enterprise Architecture Perspective.” Universiteit Utrecht, July 2013.
“What is a Balanced Scorecard?” Intrafocus, n.d. Web.
Whitney, Lance. “SMBs share their biggest constraints and great challenges.” Tech Republic, 6 May 2019. Web.