Application Portfolio Management

The fundamental pillars of the conversation between IT and business

Why should we manage our application portfolio?

Nowadays, almost every business depends on IT support and the quality of its IT 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. If you are in a highly competitive industry and your IT is better than your competitors’, it can lead to larger market share and a winning position.

IT is generally only good if its well aligned with business operations and strategic initiatives.
Business  and IT people should be able to understand each other and work together efficiently and effectively.
Applications are typically the fundamental pillars of this conversation.

Applications are the only visible elements of IT, from the Business point of view

They are the interface of Business and IT encapsulating the underlying complexity of IT components. The number of applications in a typical enterprise can range from between a few hundred a to a few thousand. 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?

There are various forms of software found everywhere in an enterprise. 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), but not all software is considered as an enterprise application. Every enterprise application has a function. They produce some type of value (information, calculation, etc.) which is 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 these activities should be considered as enterprise applications.

How to manage enterprise application portfolio?

There are three fundamental properties of an application that must be decided and administered when the application is added to the portfolio:    


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


What is the enterprise functionality (value chain or enterprise support) that the application provides.


The responsible person or team who will manage all other 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

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