What Are the Goals of an Application Portfolio Manager?

Enterprise application portfolio management (APM) is challenging because it’s a job filled with many questions with difficult-to-obtain answers. CIOs, enterprise architects, and product owners—depending on the size of the organization—are often the ones tasked with managing application portfolios. They’ll find themselves asking:

• Is IT delivering the right solutions to the business?
• Is everything aligned to the organization’s strategic goals?
• Do they have visibility into every application in the landscape?
• Do their stakeholders have visibility?
• Are the right people involved in the application development process?

But there’s a bigger question, and it’s one where the answer gets more complicated by the day: How do they stay in control? Ultimately, the goal of application portfolio management is to gain and maintain control of your application landscape and making sure it’s aligned to the business strategy.

The challenges of application portfolio management

APM challenges stem from a lack of alignment between the IT teams developing the applications and the business who generally make the requests. They also arise from legacy software and processes

The misalignment between the application-building IT and the strategy-setting business can beget many problems. When organizations separate the two, miscommunication around requirements erupts. With a gap in communication, IT is not delivering the solutions that the business requested, wasting time and money.

Miscommunicated requirements aside, another challenging reality is that—due to a worldwide shortage of developers—IT simply does not have the resources to keep up with the software demand that the business is creating.

The results of this misalignment are a proliferation in shadow IT, either homegrown or purchased COTS solutions that can sink resources. When shadow IT grows, it’s tougher and tougher for the application portfolio manager to rationalize the app landscape—the solutions that the organization is using to manage mission-critical processes ; interact with customers, partners, and suppliers; or provide field services.

Some of those homegrown applications are spreadsheet based, which, unless properly governed can wreak havoc on your organization’s data hygiene. Given that, according to Forrester, 63% of enterprises are still partially relying on Excel-type programs to run processes, this is a problem.

Legacy processes and software also drum up APM challenges. Legacy software often requires specialized skillsets to maintain and use. This often drives organizations to use other similarly-functioning applications, but this can create app redundancy, where unused apps are still being maintained or paid for. This is a big deal, especially when 75-80% of IT budgets are spent on managing legacy applications.

Unmanaged applications are tough to integrate with other systems, making the application landscape tougher to  for application portfolio managers.

Application portfolio management goals

Organizations all over the world are in various stages of digital maturity. Startups clearly have different goals for digitalization than centuries-old insurance companies. Company to company, size to size, industry to industry–even though digital transformation needs are different application portfolio management is a must. It’s just a matter of different tactics.

Your first step in app portfolio rationalization is to organization’s objectives and strategy.

For example, a small startup (100-200 employees) may only have one portfolio of applications that run all business functions. A larger company may have multiple portfolios organized by function, department, or even business goals.

If, for instance, a business’s goal is to improve customer experience, the application portfolio manager would evaluate the technical and functional purpose of applications that affect the customer’s journey. That could be applications that run order management systems, customer portals, or chat bots.

Application rationalization can reveal duplicates and gaps in portfolios. Application portfolio managers also assess the ROI, TCO and value of each application and portfolio. According to Infosys, APM can help organizations yield $2M in costs savings. Culling out licenses of unused software alone can net organizations 30% in savings, according to Gartner.

No matter the goal, the job of the application portfolio manager is to ensure strategic alignment between the applications and the goals of the business. To do this, they’ll need to monitor transformation projects and oversee software or platform implementation. With stronger alignment means greater visibility into business and customer demands. With greater visibility comes delivering business outcomes on time (or faster) and on budget (or more cost effectively.) Delivering outcomes faster—creating value quicker—equals accelerating your digital transformation.