WHITE PAPER The Definitive Guide to Application Portfolio Management · Application Portfolio Management (APM) is the practice of governing and optimizing inventories of software

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The Definitive Guideto Application PortfolioManagement

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CONTENT

P2 Introduction

P3 APM Objectives

P7 Answering Questions with APM

P11 Conclusion

The Definitive Guideto Application PortfolioManagement

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Application Portfolio Management (APM) is the practice of governing and optimizing inventories of software applications to achieve precise business objectives. This is accomplished by creating transparent overviews of IT application landscapes to evaluate IT costs, standardize software throughout business units and promote agility and innovation. Of note, APM is used in modern organizations to map how applications relate to business capabilities and processes to orchestrate targeted improvements.

In recent years, the practice of APM has largely evolved 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 availabilityof 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.

Dedicated enterprise architecture (EA) and cloudnative tools are utilized to scale these APM processes for use by diverse stakeholders. Featuring dynamic inventories and configurable reports based on data collected and maintained by distributed users, these tools contextualize the business value of applicationsto streamline vendor analysis and risk management while revealing opportunities for technology adoption. In particular, modern EA and cloud native tools augment IT system analysis by augmenting functionality during a “TIME Strategy” (Tolerate, Invest, Migrate, Eliminate) review.

Introduction to Application Portfolio Management

White Paper The Definitive Guide To Application Portfolio Management

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Enable cloud native strategies A dynamic catalog of applications is a pre-requisite for securely upgrading core IT processes according to business criticality and implementing tailored yet efficient cloud native development standards. A practical resource for EAs and cloud architects, APM exposes organizational roadblocks when iteratively expanding cloud environments and integrating agile principles.

Mitigate security and compliance vulnerabilities Compliance issues stemming from end-of-life application service lifecycles can be forecasted using IT portfolios either integrated to vendor information databases or distributively maintained. Further, all applications handling customer data yet running on time-sensitive software licenses can be tracked to support audit management.

APM Objectives

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LeanIX Application Landscape

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

Source: LeanIX GmbH

Tool-based APM programs like the LeanIX Enterprise Application Suite and LeanIX Cloud Native Suite generate end-to-end visibility to support operations and monitor modernization strategies. This clarity is commonly used to accomplish the following:


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Optimize cloud and hybrid costs and resources IT leaders must support business in analyzing cloud costs and investments. Doing so while strategically splitting workloads between on-site data centers and

Upgrading processes with lean principles and the Technology Business Management (TBM) frameworkData from APM programs is leveraged to measure enterprise-wide adoptions of the TBM framework.By documenting cloud vendor-specific services

Source: LeanIX GmbH

Source: LeanIX GmbH

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Leanix Multi-Cloud Cost Overview

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

public cloud spaces requires contextualized, automated updates on cloud cost trends across multiple accounts and business units—the likes of possible with application inventories directly integrated to cloud vendors.

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Leanix Warnings By TBM Category

A LeanIX Warnings By TBM Category report displaying cloud component violations by warning type.

according to their ability to help IT optimize run-the-business and change-the-business spending, APM is a natural companion to IT and business leaders wishing to scale services in cost-effective manners.


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Secure the adoption of strategic platformswith holistic insights using powerful reportingAPM offers enterprise architects and executive-level stakeholders alike the oversight to monitor large-scale IT transformation projects. In particular, many companies use automated and configurable reporting mechanisms to measure, in real time, the impact of their evolving application landscapes.

Promote collaboration between businessand IT to react faster to business needs APM is rooted in a close collaboration between IT and business. The sooner development can diagnose business needs, the sooner solutions can be tailored to relevant security, software and market standards. Quite often this involves identifying where and with what data sources to most effectively apply autonomous development cycles.

Reduce IT complexity and improve efficiencyIT landscapes in billion-dollar enterprises usually contain thousands of interdependent entities—the majority of which are disconnected from their anchoring business capability. APM systematically untangles this IT complexity by categorizing applications and pinpointing redundancy. This organization helps when coordinating implementations of technologies and processes.

Rationalize application costs and lowertotal cost of ownershipServer license optimization, application retirement, standardizing common technology platforms—APM is an engine for maximizing IT budgets through highly-scoped value assessments. For every application, a total cost of ownership (TCO) is recorded alongside other sets of criteria such as strategic value, available skills, user satisfaction and availability of alternatives.

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LeanIX BusinessCapability CostA breakdown of IT costs according to key business services in a LeanIX Business Capability Cost report.

Source: LeanIX GmbH


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Improve IT visibility and control acrossscaling hybrid cloud environmentsEnterprises rely on APM methodology to guarantee the exact visibility they have on traditional, on-premises IT with granular assets deployed on cloud platforms. By detecting violations that affect cloud landscapes while validating architecture, infrastructre and deployments against established best practices, APM ensures that hybrid IT environments are documented and controlled.

Strengthen business processes by uncovering technological gaps and data redundanciesA fully-delineated application portfolio offers a clear path to the technological gaps and redundancies likely to be slowing business processes. APM outlines feasible improvements while incorporating the knowledge of stakeholders with close ties to the technology.

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LeanIX InterfaceCircle MapInterface clusters and associated business capabilities within a LeanIX Interface Circle Map report.

Source: LeanIX GmbH

Prioritizie IT projects APM prioritizes projects and their associated applications according to business value and available resources (personnel and technological). This high-level clarity is directly used to support the decisions of CIOs and CFOs when charting organizational targets.

Map data flows and application dependencies By integrating networks of applications and their shared interfaces, APM provides the groundwork for seeing the implications of service lifecycle phase-outs across the wider application landscape. The reliability of any particular interface and dependency can accordingly be scrutinized by operations teams.


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Answering Questions with APM

Which applications deserve investment—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 is then to divest.

Source: LeanIX GmbH

Image 6 LeanIX Application Portfolio A LeanIX Application Portfolio report showing the functional and technical

fit of applications.

Which applications are not adequately 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

Image 7 LeanIX Application LandscapeA LeanIX Application Landscape report showing the functional fit of applications

and their associated business capabilities.


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:

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Which applications are necessary? Are there 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

Image 8 LeanIX Application MatrixA LeanIX Application Matrix report showing which applications support which Business

Capabilities alongside their geographical user group.

Is our application portfolio developing 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 applications are up-to-date to avoid attacks on obsolete apps; the CTO needs to know what the application roadmap looks like).

Image 9 LeanIX Application RoadmapLeanIX Application Roadmap report showing the lifecycles of applications and their

associated projects.

Source: LeanIX GmbH


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Getting started with APM

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

Identify the affected stakeholders (users) of the applications. During this 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 becoming, totally unused.

Compilea list of applications

Identify whoowns the application

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Once a technology is activated, its value increases and its potential risks go down. As it reaches its end-of-life, however, IT management has to confront challenges such as integration issues, limited functionality, 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.

Identify the lifecycle of the application

Misused applications can be identified by conducting a thorough application rationalization. Applications are not often used to their full potential or can be easily exploited when used incorrectly.

Assess the usage of applications


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

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Business leaders, IT heads and EAs should gather to review the recommended actions of each application and design an implementation roadmap for moving forward. Involving various 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.

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

Map the total concept onto the landscape

Make application rationalization a continuous process

Determine the total cost and business value of every single application–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 capabilities. Business capabilities define what a business is doing right now and what it needs to be doing in order to meet current and 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.

Establish the application’sbusinessvalue, quality,and costs

One best practice is to develop a framework of your application architecture by defining a set of business, information, and application concepts that your organization would like to see reflected in the long-term. LeanIX, by providing an easily referenceable, tangible, visual 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.

Create anapplication architecture framework


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ConclusionOperating an agile landscape is key in today’s business climate. With digital transformation driving customer demand, an IT architecture must dynamically adapt to the rapidly changing needs of the market. Most businesses spend 70-80% of their IT budgets on supporting aging, low-value legacy applications, leaving very little money to invest in optimizing business processes. The goal of Application Portfolio Management is to articulate a

This document is current at the time of its initial publication. LeanIX GmbH reserves the right to alter it at any time.THE INFORMATION CONTAINED IN THIS DOCUMENT IS PROVIDED AS IS, WITH NO WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLICIT.

singular architectural vision to enable business goals, respond effectively to strategic drivers, conform with architectural principles and standards, and address the concerns and objectives of key stakeholders. APM efforts help you optimize your application stack, establish transparency between stakeholders and deliver true value to your business leaders.

Interested in practicing APM witheither the LeanIX Enterprise Architecture Management Suite or the LeanIX Cloud Native Suite?

Contact us at [email protected] to book a product demonstration tailored to your precise APM needs.

LEARN MORE

LeanIX offers a Software-as-a-Service (SaaS) application for driving Enterprise Architecture and Cloud Governance, enabling companies to accelerate their IT transformation. From on-premises to cloud native and microservices, architecture teams using LeanIX have the power to strategically support their business and take decisions faster. More than 250 global brands including Volkswagen, Adidas, Bosch, DHL, Santander, Atlassian, and Zalando rely on LeanIX to improve transparency, visibility, and drive real-time efficiencies. LeanIX addresses IT’s critical need to ensure high-quality, real-time data is accessible to stakeholders whenever needed. Use cases include Cloud Governance, Application Portfolio Management, and Technology Risk Management. LeanIX was founded in 2012 by Jörg Beyer and André Christ. The company is headquartered in Bonn, Germany, with U.S. headquarters in Boston, Massachusetts. Copyright© LeanIX GmbH. All rights reserved. LeanIX and the LeanIX logo are trademarks or registered trademarks of LeanIX GmbH in Germany and/or other countries. All other productsor services are trademarks of their respective companies.

Copyright© LeanIX GmbH. All rights reserved. LeanIX and the LeanIX logo are trademarks or registered trademarks of LeanIX GmbH in Germanyand/or other countries. All other products or services are trademarks of their respective companies.


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WHITE PAPER The Definitive Guide to Application Portfolio Management · Application Portfolio Management (APM) is the practice of governing and optimizing inventories of software

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