What is Application Portfolio Management?

Critical for competitiveness

Application Portfolio Management is an essential strategic planning capability of an IT organization. It ensures that investments in the application landscape are in line with business strategy and that investments are made in a way that minimizes cost and risk, while at the same time delivering the required functionality and flexibility to fulfill business goals. An Application Portfolio Management tool should follow these core objectives:

  • Improve application alignment to business strategy and to required business capability
  • Reduce business risk exposure caused by threats related to applications in the portfolio
  • Increase the agility and flexibility of the application portfolio in responding to changes
    in business requirements
  • Reduce the running and project costs of the application portfolio—often primarily by
    reducing the number of applications.

Why application portfolio management?

As business grows and your IT evolves, your application portfolio will most likely increase in size and complexity. What happens then? Application portfolio management becomes quite the chore with a portfolio that’s difficult to manage and cumbersome to maintain especially with a consistent feed of application upgrades and new systems additions. Clearly the overall health and efficacy of your applications are crucial for supporting business needs. Applications play a central role as the underpinning of critical business processes. And that can suffer if an application portfolio isn’t managed properly.

Your IT makes or breaks its reputation on the quality of the applications it provides. Learn how to plan and manage them effectively with application portfolio management tool from Software AG’s Alfabet.

The benefits of application portfolio management?

Applications are what runs the business. They need to be aligned with business goals, cost-effective, and risk-free. In a dynamic business environment, good application portfolio management means constant assessment, prioritization and cleaning out – all in collaboration with involved and/or affected stakeholders. Good application portfolio management brings:

Elements of an Application Portfolio Management practice

Business’ dependency on healthy applications makes it essential to have a robust, effective and efficient Application Portfolio Management (APM) practice, which:

  • Provides current and reliable information on applications to the relevant stakeholders
  • Supports rapid analysis of the application portfolio regarding impact, resulting from business events such as acquisitions, divestitures, product launches and entry into new markets
  • Has the analytical power to support delivery of programs to increase agility, reduce costs, and improve application health
  • Can support IT management processes that require reliable application information, such as IT risk assessments and project design

When application portfolio managers can make the right decisions on the application strategy, regularly as part of an application portfolio management process and ad-hoc as required, they can play a critical role in maintaining competitive advantage and profit margins.

An integrated approach to Application Portfolio Management

Application portfolio management on its own delivers significant benefits. It is, however, more effective when integrated with other IT disciplines. For example:

Software AG’s application portfolio management solution, Alfabet, delivers support for these IT disciplines in a tightly integrated IT portfolio management platform. Find out more below.