Building an effective framework for application portfolio management

Many banks have accumulated a vast array of applications over the years and face the challenge of modernizing them to drive future business growth. Application portfolio management (APM) has become a key strategy for deciding which applications to modernize and how. It is all about continuous application improvement to meet evolving business needs.

Through APM, banks gain an in-depth understanding of their applications, including their functions, interdependencies, business value and required support skills. APM helps banks to align their business and technology objectives and assess the costs and risks of their current application portfolios. It gives them a broad view of their applications, which is essential to making decisions about their future evolution.

While APM is a valuable business and IT strategy, there are several challenges to its successful execution, including a lack of organizational readiness, application information and APM project management skills. In addition, it is not always easy to identify duplication among applications. For example, even if two applications are performing the same functions, they might perform those functions in different ways.

Developing a comprehensive, ongoing and governance-based approach to APM can help to overcome these challenges. An APM framework (APMF) is the foundation for effective APM.

Ideally, this framework will include a solid methodology combined with a powerful software toolkit. It will ensure the right people are involved and the right information is collected. Other key attributes include the following:

Scalability: To address small, medium, large and massive portfolios

Flexibility and adaptability: To meet the needs of different industries and markets

Transparency: To ensure accountability and to support ongoing audits

Simplicity: To ensure streamlined information collection, analysis and reporting

A strong APMF will support a number of key APM services, including the following:

Application inventory: Inventory of applications across the organization

Risk landscape assessment: Review and assessment of risks that threaten sustainability of the application portfolio

Application metrics development: Determines which metrics are relevant and easy to collect

Application portfolio assessment: Comprehensive assessment of the application portfolio

Application rationalization: Focuses on reducing the overall application footprint and operating costs

Application transformation roadmap: A roadmap for transforming the application portfolio

Application portfolio management office: To provide ongoing governance and project management

The ideal supporting APMF toolkit will automate information gathering, portfolio analysis and reporting. It should be flexible and configurable to adapt to varying client and project requirements. Overall, an effective toolkit will lower the cost, effort and risk for delivering APM services and ensure consistent, high-quality client deliverables.

Implementing an effective APMF requires the right expertise. It is important to find a strong partner—one with extensive experience in delivering APM projects, broad APM capabilities and partnerships with leading solution providers.

By investing in a solid APMF framework, banks can preserve and get the most value possible from their legacy investments, positioning themselves for long-term growth and success.