In a lot of critical portfolio initiatives, including application modernization, the overall vision gets everyone excited. However, in that excitement, important questions get sidelined – questions such as: What is the ‘legacy’ that should be modernized? How do you modernize - is everything the same priority and will make the same impact on the business? Is there a compelling business case?
Application portfolio assessment, if carried out in a balanced fashion, can be of immense value before a modernization initiative and approach are finalized. It brings clarity on where most value risk anomalies are and how to objectively prioritize and create modernization sequence to effectively address business and IT concerns. Let us look at the reasons why it happens – after all the stakeholders strive for these initiatives to succeed.
The first major reason is that significantly few organizations know the real ‘as-is state’ of their application portfolio. At a strategic and operating level, there are visible, mostly aggregated symptoms of the problems, but nobody ever gets the priority and time to objectively break it down at the application level. It is like having a map, knowing where you want to be but without that “you are here” point on the map so you cannot work out your route options (traffic conditions, weather), budget and timelines. In the context of an application portfolio this “you are here” point is determined by several factors such as Total Cost of Ownership, value and risk of an application in the strategic and operating continuum, operating model for IT development and support, and degree of alignment between bsiness and IT strategy.
The second reason is lack of or inadequate portfolio governance in various degrees and dimensions. Application Portfolio Management (APM) can effectively address these deficit areas. Lack of or insufficient portfolio governance creates value risk anomalies and complexities, multiple sources of truth for portfolio information and severely limits the ability to quickly respond to business needs.
APM is a strategic IT management approach for managing risks and costs of IT assets to maximize its value to business. It provides a management framework to support a continuous process of portfolio optimization covering the complete IT investment lifecycle (refer to image below) where it starts with strategic objectives and business priorities driving the portfolio assessment recommendations which, when integrated with budgeting process, leads to the right portfolio priorities and their most effective execution sequence.
Another factor is the view that major stakeholders maintain towards their business applications portfolio. This view, to a large extent, influences how and at what level portfolio-related issues are articulated and addressed (i.e., a technology problem, an IT operations problem or a business problem).
A mature portfolio assessment and rationalization approach establishes a single source of truth of your applications portfolio, providing insights that help you rebalance your IT assets to optimize value-risk and cost equation. Once achieved, this baseline helps in a ‘fact-based’ rather than ‘assumption-based’ determination of the ‘What’ and ‘How’ of portfolio initiatives, including application modernization.
Post Date: 12/20/2013