However, IT leaders may not have perfect visibility into their application portfolio. They are unable to determine the ones to keep or the ones to eliminate because they don’t know exactly how each supports the business and they can’t assess the impact of removing an application.
The COVID-19 pandemic underscores the importance for organizations to plan and prepare for such large-scale crises that can span months and expand all over the world. This type of crisis can be potentially more disruptive to an organization’s continuity of operations than cybersecurity threats or natural disasters. It is therefore essential that IT departments engage in a process of IT rationalization to get better visibility into their portfolio and ensure operational resiliency. Not only will application rationalization enable companies to respond quicker, but it will also provide flexibility to undertake new IT projects.
The process of managing and rationalizing the application portfolio is a proven methodology that entails three main steps:
This first step consists of making the inventory of the entire IT portfolio. This inventory can be facilitated by connecting to third-party applications that contain relevant information on applications as well as underlying technology components. The inventory can also be enriched with other perspectives such as application lifecycles, deployments, costs, and risks. Using an enterprise architecture approach, the business can be mapped into business capabilities representing the building blocks of the business. Technology components can then be linked to applications, that in turn are linked to business capabilities. All the links created between technologies, applications and business capabilities enable IT leaders to perform impact analysis that we’ll detail further on.
This step consists of getting visibility into the business value of an application as well as its technical fitness. In addition to its functional fit (i.e. is the business user satisfied by this application?), it is worth mentioning that business value also identifies the criticality of an application for the business, especially in case of disaster recovery. Technical fitness allows users to assess how well the application is supported by underlying technology components (i.e. applications can be supported by obsolete technologies or non-standard technologies, and on the contrary by recommended and up-to-date technologies). The assessment of the business value and technical fitness is performed through questionnaires sent to business and IT stakeholders. Based on their assessments, architect can rank applications and decide whether to eliminate, modernize, invest or tolerate them based on their technical fitness and business value.
Once the applications to be removed or modernized have been identified, IT departments can initiate the corresponding projects. To build these projects, IT leaders need to define the business case, costs, potential risks and strategic alignment of each project in order to prioritize them.
The prioritization of these projects can be further enhanced by performing impact analysis on the IT portfolio:
The execution of these rationalization projects will ensure to consolidate the application portfolio, reduce risks and drive down costs.
Application portfolio management is key to ensure business continuity in case of a disaster or any other large-scale crisis because it brings an enhanced visibility into the application portfolio. It helps understand which applications are critical for the business and which ones bring real business value. It allows IT leaders to perform what-if scenarios based on impact analysis and clearly understand what happens if this application is removed or shut down. It allows them to take better decisions faster which is particularly critical when a crisis occurs.
If you want to learn more on application portfolio management, download our white paper on Application Portfolio Management: Key Principles & Best Practices: