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On average, more than 35% of IT budgets are consumed by applications. Furthermore, approximately 50% of that spend is used to maintain a complex set of legacy systems which fail to align with business needs. With pressure to “do more with less,” many IT leaders are adopting Application Portfolio Management (APM) to rationalize operational costs and modernize their portfolios so they have the agility needed to successfully meet changing business demands. These slides are from a UMT360 webinar during which Ben Chamberlain discussed how UMT360 helps companies establish a repeatable process for rationalizing their application portfolios, and: *Build an application catalog, capture cross portfolio relationships and maintain key assessment metrics *Derive cost of ownership of each application *Identify potential redundancies across the portfolio *Use TIME analysis techniques to rationalize the portfolio *Capture lifecycle decisions in powerful roadmaps *Initiate and manage demand in Project Server Webinar now available at http://bit.ly/1drpFpQ.
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Rationalize & Get More Business Value from your Applications
Ben ChamberlainUMT360 – Chief Product & Marketing [email protected]
2010
Partner of the
YearIn Program and
Portfolio Management
2012
Visionary
In the Magic Quadrant
for Integrated IT Portfolio Analysis
2012
Cool Vendor
In Program andPortfolio
Management
2013
Visionary
In the Magic Quadrant
for Integrated IT Portfolio Analysis
Leaders in Enterprise Portfolio ManagementDigitalizing investment planning and controls across portfolios to
drive smarter business decisions.
2013
Partner of the Year
In Project and Portfolio
Management
Agenda & Key Takeaways
• What is Portfolio Management?• Establishing a Framework for APM• Synergies between APM & PPM• Building an Application Catalog• Cost of Ownership• Segmentation• Analysis & Decisions• Transformation Roadmaps
• UMT360 Demo… APM in Action• A Phased Approach• Next Steps• Questions & Answers
Takeaways:1. Portfolio integration is the key to
rationalizing and modernizing your application portfolio and realizing more business value.
2. The PPM & APM disciplines both get stronger when integrated.
3. UMT360 is built on SharePoint helping companies quickly implement an APM framework and gain more ROI from their Microsoft platform investment.
What is Portfolio Management?A question I have struggled with over the years!
Aggregate reporting across one or more portfolios?Alignment of spend with strategic priorities?
Portfolio Management is…Integration of all Portfolios to drive better business
decisions and value… Better business decisions require Financial due diligence.
Is It…
Portfolio Integration
Financial Intelligence
Roadmap Synchronization
Measure Performance
Enterprise Portfolio ManagementImportant Foundational Principles
Gartner Statistics…Drivers for Starting an APM Initiative
35%
92%
46%
1.37
of IT spend is associated with running and evolving applications
of the total application spend is dedicated to maintaining applications
of an application’s total cost of ownership occurs after it has been implemented
Is the average application portfolio mgmt. maturity level for companies
What is an application?
How should I calculate cost of
ownership for each application?
How often should I analyze my application
portfolio?
What data & metrics should I
maintain / collect?
How should I derive business
value & segment my portfolio?
Common Questions…As You Start Architecting an APM solution
Do I need to integrate my APM & PPM processes?
….
Integrated APM & PPMImportant Synergies Between APM & PPM
APMMaintain Catalog
Analyze Portfolio
Build Roadmaps
Measure Portfolio
PPMExecute Projects
Create Business Case
Select Portfolio
Plan Portfolio
Drive Higher Quality of IT Demand
Update Application Inventory & Track Results
Governance Controls
Descriptive Data
Portfolio Relationships
TCO & Budgeting
Assessment Metrics
Segmentation Approach
Resource Requirements
IT Service Consumption
Application Portfolio Inventory
The trick is to keep in mind that APM should be recurring process not a one time event.
Data collected must be be maintained on regular basis.
Building an Application CatalogStandardizing Data & Metrics across Applications
Portfolio Analysis & CollaborationAnalyze & Identify Transformation AlternativesUtilize powerful Business
Intelligence & Analytics to finalize transformation alternatives. Identify:• Poor Performing Applications• Redundant Applications• Low Architectural Fit• Expensive Applications• Infrastructure Optimization
Alternatives• Etc…
Tolerate Invest
MigrateEliminate
TIME Analysis
2014
2012
Business Fit
Risk
2013
Transformation RoadmapsCapture Demand & Gauge Cross Portfolio Impact
An Application
ProjectsProjectsProjects
Lifecycle Decisions
Portfolio Roadmap by Application
Application Transformation
Roadmap
Lifecycle Decisions
An Application
Transformation Projects
Related Applications
Business Capabilities
Application Catalog
Portfolio Analytics & Decisions
Cost Takeout's &
Benefits Realization
Performance Metrics & Surveys
Application Portfolio Mgmt.
Cost Tracking &
Chargeback Reporting
Budgeting, TCO &
Funding
Demand Generation
& Roadmaps
Change Mgmt.
Dashboards & Reports
Investment Governance & Controls
UMT360- Integrated APM Get More Business Value from your Applications
Segmentation & Capability
Mapping
Cross Portfolio
Mappings
Demo
A Phased Approach to APM Nirvana
Build Application Catalog & Analyze
Establish Application Centric Planning
Phase 1 Phase 2 Phase 3 Phase 4
APM
Mat
urity
Lev
el (1
to 5
)
- Level 5
- Level 4
- Level 3
- Level 2
- Level 1
Integrate Portfolios, Derive TCO &
Provide Roadmaps
Map to Business Capabilities (PACE
Layer)
APM Maturity Level (1 to 5)
Action PlanWhat Should I Do Next?
• Next 7 Days – Assess how your company is currently managing project financials & application portfolios
• Next 30 Days – Schedule an APM envisioning workshop with UMT360 experts
• Next 90 Days– Kick off an APM Proof of Concept to start rationalizing your portfolios
Thank You
Visit www.umt360.com to learn more
CRM Application
Other Applications
Projects Maintenance Activities
IT Services
Business Capabilities
Understand Portfolio RelationshipsAn Integrated View of your Application Portfolio is Key!
$ $ $
$
$
An application is a container of related assets, systems, projects and maintenance activities that
implements logic and rules to automate and optimize business
capabilities.
What is an Application?
Build - Project Work
Operate - Recurring Costs
Application Costs & BudgetingExpense Types & Planning Horizons
15%
30%55%
New Development Enhancement Operate
201620152014
Application Costs & BudgetingExpense Types & Planning Horizons
Application 1
Project 1 Project 2
O&M 2014
Indirect Costs
O&M 2015 O&M 2016
Application 2
Project 3O&M 2014 O&M 2015 O&M 2016
Application 3
Project 4O&M 2016
Indirect Costs Indirect Costs $
$
$
$
Create a multi-year roadmap of all expenses (i.e. maintenance, infrastructure and projects) by
application to streamline budgeting and drive complete
cost transparency.
Application Centric Planning
Systems of Record
Systems of Differentiation
Systems of Innovation
BusinessProcesses
Integrated, commoditized, stable
Highly configurable and customizable
Experimental, ambiguous, dynamic, ad
hoc
Pace of ChangeSlow, infrequent,
incremental (every 6 to 12 months)
Moderate, more frequent (every 3 to 6 months)
Rapid, very frequent, ad hoc (weekly, sometimes
daily)
Software Processes
Mostly waterfall (timeboxed).
Mostly incremental anditerative. Mostly agile.
Lifetime 10+ years 2 to 5 years 3 to 12 months
Strategic Focus Standardization;operational efficiency
Agility/flexibility;competitive differentiation
Disruptive thinking;alternative business
models
Stakeholders/Ownership
High executive engagement;
low end-user engagement
High LOB executive engagement;
moderate end-user engagement
Moderate executive engagement;high end-user engagement
Funding Capex and opex; annual budget
Capex and opex;IT budget or departmental
Departmental opex;innovation fund
Segmentation ApproachDon’t take a one size fits all approach to APM
Systems of Record
Systems of Differentiation
Systems of Innovation
Pace-Layered Application Strategy™
© 2012 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
