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How Much Are Your Applications Really Costing You?

Application Portfolio Management

Published By John Sims
How Much Are Your Applications Really Costing You?

Many organizations spend a significant amount of time managing product and project portfolios. After all, it’s what drives innovation and strategic changes to the business. Usually 30 to 40 percent of the IT budget is dedicated to it. But how are we managing the remaining 60 percent? One area that is consuming a large portion of the IT budget is the applications that support the business. IT organizations should invest more of their time managing their application portfolios from a business value, technical value, and risk and cost perspective. Can you put a dollar figure on how much each of your applications cost each year? Do you know if you have multiple applications that provide the same functions and benefits to the organization but add significant IT infrastructure cost? What kind of Application Portfolio Management (APM) process do you have in place to ensure that figure is accurate?

We use hundreds of applications to run our businesses. When two businesses merge, you get even more, many of which are redundant. Applications also have a useful shelf life, as do the platforms they run on. Companies pour money into managing all of these applications when many could be consolidated, retired, or upgraded. It’s a complicated process to manage, yet many still use manual spreadsheets to attempt to track it all. What you get are critical business decisions based on best guesses.

So how do you begin such a monumental task of determining the total cost of ownership of your applications? Gartner not only recommends an automated APM process, but a top-down analysis technique to triage subsets of the applications into one of four classifications: tolerate, invest, migrate or eliminate.¹ By using an automated tool that takes a large application portfolio and breaks it down into smaller departmental subsets, such as all of the applications in finance only, you can filter your applications and set parameters to measure value. Each quarter, you can tackle another subset, making the entire application review much simpler.

So what are the biggest benefits of APM? It improves the analyzing of application portfolios with the top-down approach, eliminates redundant applications and infrastructure that supports those apps, and reduces expenses by eliminating non-strategic apps. Simply put, you finally gain control.

Creating a process that helps you perform application analyses provides an accurate picture of your entire product, project, and resource, and application portfolios.

I’m excited about the enhancements in the latest software release of Planview Enterprise; we have enhanced the APM capabilities and reporting to help our customers achieve complete insight into their application portfolios.

I want to hear from you. What are your methods for analyzing applications? Share your experiences and best practices – leave a comment below.

¹ Gartner, Inc. (Jim Duggan), “Application Portfolio Triage: TIME for APM,” July 2010.

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Written by John Sims

John Sims is the Planview Product Manager for Analytics and Reporting, Service Portfolio Management, Brand Impact Analysis, and Ideation Management. John came to Planview from Business Engine, where he was in product management and consulting for 14 years, specializing in project portfolio management and IT financial performance measurement. John’s passion is to understand the market and customer needs for reporting and analytics. He was part of the Planview team that released Insight Analytics and continues to focus on how companies publish their project and financial performance to their internal and external customers.