Do you know how many applications are running in your company? Do you know how much money are being put into keep end of life applications running? Do you know whether your users are happy with your applications?
These are basic IT health check questions. However, most IT support cannot give you the answer straight away. You are lucky to get an answer within a week’s time, especially in a big company. Are they not doing their job well? Of course not. They know their area inside out but not the others. To get the full picture, you may have to involve half of your staff to pass on specific information in their areas and usually with subjective recommendation. Is this approach effective?
Application portfolio analysis is an IT discipline to objectively analyse the current IT environment. It is an effective tool to manage IT asset life cycle and align IT spending with business needs. It uses top down analysis to evaluate an application’s business value and technical condition in order to determine whether the application should be evolved/maintained, modernised, retired/consolidated or repositioned. It is not just an IT exercise. It should involve both business and IT teams to get an objective result. The wider the participation, the more accurate the analysis.
The analysis is usually based on 4 dimensions – business value, application risk, operational cost and technical condition. Business value measures application value to the business, such as business criticality, competitive advantage, etc. Application risk evaluates the vulnerabilities of the application across multiple risk categories, such as regulatory compliance, data sensitivity, etc. Operational Cost shows the annual costs to support the application, such as application development staff cost, licensing cost, infrastructure cost, etc. Technical condition assesses the technical conditions and system qualities of the application, such as reliability, scalability, etc.
Application portfolio analysis is a simple and effective approach to evaluate the current IT application environment. It should be done regularly to plan for application life cycle management. Remember, this is for the current application analysis. If you want to check the application’s future capability, business operation model mapping exercise should be done in addition to this.