Actually, many IT departments simply lack a framework to properly evaluate their assets. A simple method would consist of three phases: The first phase would be about identifying IT assets by building an inventory of the IT portfolio. Then comes the second phase which consists of assessing assets and lastly the third phase would be about how to transform the IT landscape once the inventory and assessment have been done.
Let’s focus today on how to evaluate your IT portfolio - This can been done in 5 ways:
To properly assess an application, you need to get a comprehensive view of all the parameters characterizing an application such as its cost and its lifecycle. But an application does not stand by itself and has multiple ties with the business and IT environments. For example, an application can support multiple business processes or business capabilities.
The links you actually create between an application and its environment will help you better understand your IT landscape. For example, by listing all the business processes an application can support, you will view all the applications tied to a specific business process reciprocally. This will help you determine application costs required to support a business process, and therefore support well-informed decision-making about the evolution of your portfolio.
Understanding your operating costs is key to helping you better plan your budget and future investments. But being able to bring application costs and application business value together is even better. It will give you a greater visibility into your application landscape and it will help you decide to keep or remove some of these applications from your portfolio. Application costs do not necessarily fit into one category. They can be associated with licensing, maintenance, labor and infrastructure costs, and you need to track them to understand how you can balance these costs. You also need to monitor the evolution of these costs over time to identify any abnormal increase or decrease of these costs.
Through business capability maps, you can accurately map how applications support business activities. With simple color coding, you can quickly view applications which cost you the most in a given business capability, or applications with the lowest business value. You can even view applications that are about to become obsolete and thus threatening one or multiple business activities. It also helps you identify redundant applications and therefore streamline your portfolio.
Business applications actually rely on other software technology components such as Oracle database or MySQL. You need to ensure these technology components are up to date and comply with your company’s policy. To do so, you need reports that keep track of technology lifecycles and compliance. Vendor dependency on your technology portfolio can also be critical, especially if some of your vendors are unreliable, or if you decide to get rid of some vendors for company policy reasons.
Lastly, thanks to evaluation criteria such as business value, costs and risks, you are able to rank your IT assets and get the most out of your IT portfolio. For example, IT leaders may consider removing assets with low business value and high costs, while keeping assets with high business value and low costs. While these criteria are particularly important, you may also need to define other custom criteria, more relevant to your organization, to better assess your IT landscape.
Want to know more about the assessment phase of IT portfolio management, download our eBook, “5 Ways to Evaluate your IT Portfolio”.
Further updates are on their way: another blog post presenting the transformation of the IT portfolio is coming up shortly. To be continued…