Application Portfolio Management

Why should we manage our application portfolio?

Today almost every business is dependent on IT and its quality directly affects the success of the enterprise. Even if you have a great business model, it can easily die a slow death due to poor IT support. However, if you are in a highly competitive industry and your IT is better than your competitors’, it can a lead to a larger market share and to a winning more business.

IT is generally only good if it’s well aligned with business operations and strategic initiatives.

Business and IT people should be able to communicate and understand each other to work efficiently and effectively.

Applications are typically the fundamental pillars of this conversation, as they are the only visible IT elements from the Business point of view

They act as a bridge between Business and IT, encapsulating the underlying complexity of technological components. The number of applications in a typical enterprise can range from between a few hundred a to a few thousand. Also, this is usually a constantly changing portfolio, which needs to be managed carefully to ensure the success of the enterprise.

What is an enterprise application?

Enterprises are filled with diverse types of software utilized across various functions and processes. They run on your notebook, on mainframes, on your phone, even on your watch. An enterprise application is a software (or a set of software components), but not all software is considered an enterprise application. Every enterprise application has a function. An enterprise application is a specialized software or collection of software components designed for specific business purposes. However, not all software qualifies as an enterprise application, as each one must serve a distinct function within the organizatio. They produce some type of value (information, calculation, etc.) which is then used by others in the enterprise. In order to maintain its value chain, each enterprise needs to have internal supporting functions. If you break down these value chains and their supporting functions into smaller parts, you can identify the activities that are important for the enterprise. The software that are applied for such activities should be considered as enterprise applications.

How to manage an enterprise application portfolio?

When adding an application to the portfolio, three core attributes must be determined and managed effectively:

NAME
A good and expressive name should be provided. A good name summarizes both the software solution and its function.

FUNCTIONAL DESCRIPTION
What is the enterprise functionality (value chain or enterprise support) that the application provides?

IT RESPONSIBILITY
Who is the responsible person or team that will manage all of the properties (components, integrations, functions, etc.) of the application.

A well-established application portfolio is the basis of almost all processes in IT:
• Operations
• Solution delivery planning and tracking
• Security
• Compliance/Audits
• Internal communication
• Budgeting