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Reducing Cost and Complexity with Application Portfolio Management

Mergers and Acquisitions

Reducing Cost and Complexity with Application Portfolio Management

In business, as in science, we are bound by basic principles that are immutable. Among them, there’s the notion that nothing is free. In physics it’s known as the law of conservation of energy; in business it’s known by the adage, time is money. Actively managing your application portfolio is a discipline vital to your business.

Large enterprises typically have a portfolio of new, existing, and legacy applications, and the cost of managing them on an individual basis is often significant. Training, support, upgrades, and infrastructure are not free and can create significant overhead, not to mention purchases of similar software intended to replace outdated software.

Your application portfolio: The lifeblood of your business

Your business plan is tied directly to your project portfolio, which is driven and supported by your application portfolio. It’s no surprise that large enterprises tend to accumulate applications over time and often in large numbers.

Unchecked, that bloat can become, at best, cumbersome and, at worst, a liability.

The siloed nature of departments, coupled with the passage of time, can cause redundancies among departments. Different departments may have similar activities but use different applications to facilitate those activities. Further, within departments, some teams and individuals might resist the transition to new and more modern applications as they are onboarded.

This reality is compounded by mergers and acquisitions (M&A); no two institutions will have an exact set of applications. What typically happens, though, is that merged organizations will have significant overlap in the functions these applications enable. It also tends to make things more complicated than necessary.

APM Merger and Acquisition Example:

The company:

A multinational brewing company discovered the complexities associated with M&A first-hand when it acquired another brewing company.

The challenge:

With the new complexities of the acquisition, the joint business needed to understand the applications they had across both entities, how best to cut costs, and where they could unify or improve processes and efficiencies.

The solution:

Planview Enterprise One – Capability and Technology Management. The EA team shows business leaders the health of the portfolio and exposes outdated applications, giving them an understanding of the risks incurred if applications were not upgraded. With a combined application portfolio, the unified organization can visualize obsolete technologies by the manufacturers’ recommendations as well as those that will go into end-of-life and require sunsetting protocol in the next 18 months, helping the team better prioritize and plan future technology spend and anticipated impact to projects.

The benefits:

  • Once the brewing company started dynamically tracking internal apps across the enterprise, management identified and eliminated approximately 5,000 superfluous technologies. This move saved days of manual work, reduced risk, and produced significant cost savings. Investing in application and portfolio management technology and best practices, the brewing company:
  • Created a single source of record for viewing thousands of applications across entities, enabling a better understanding of the application portfolio contents;
  • Provided an enhanced application assessment and retirement process that reduced risk, decreased costs, and improved planning and prioritization; and
  • Produced advanced solution compliance with defined technical standards that are tracked and measured.

The investment in a centralized view will continue to provide future benefits. As new technologies come online, and as subsequent M&A events occur, the brewing company will be able to apply this management technology to throttle and grow their application portfolio in a way that supports their business strategy.

To learn more about this topic, read: Top 10 Application Portfolio Management Best Practices to learn how to get your portfolio in order.

Emergence of the Strategic Enterprise Architect

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Leyna O’Quinn
Written By

Leyna O’Quinn is the editor of the Planview Blog and responsible for its overall strategy. She writes about portfolio management news and industry trends as well as information related to portfolio and resource management, project collaboration, and enterprise architecture. She has more 10 years of experience writing about technology and trends. She earned a Bachelor of Science in Business with a concentration in Marketing.