Application Portfolio Management

Abstract: Maintaining a sound and meaningful portfolio of applications is a struggle for many organizations. Applications are developed in-house, bought in and added through mergers and acquisitions in a continuous and often uncontrolled manner. The scientific literature on the subject of Application Portfolio Management (APM) is mainly focused on matrices, which are adequate for obtaining an overview but not sufficient for reaching informed decisions about how to deal with an application. The goal of this study has been to find key principles which can be used to successfully manage an application portfolio and to find out how these principles can support decisions about the destiny of an application. Our investigation has showed (I) That Business Value, Functional Value, Technical Quality and Cost are key principles for deciding the destiny of an application. (II) That decisions related to Application Portfolio Management imply transforming information about the state of the application into action while the key principles give a notion of state. The relevant actions that occur are to remove the application completely (Remove), to leave the application as it is (Remain), to transform the application (Redevelop), or to replace the application with an alternative (Replace). (III) The key principles have been used as a foundation for the design of the Framework for Application Destiny Determination (FADD) which, in a functional and intelligable way can decide the destiny of an application. The intention of the framework is to help managers reach better informed decisions about the destiny of applications in the portfolio, and the usefullness, and integrity of the framework was evaluated on two applications which implied that the framework is satisfying for decision-makers in the organization where this assessment was carried out.