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Application Portfolio Management: Are You Getting the Most from your Enterprise Software?

Written By: Neil Stolovitsky
Published On: May 15 2006

Introduction

Today's information technology (IT) organizations are faced with the challenge of managing a host of commercial off-the-shelf (COTS) applications, legacy systems, and in-house custom applications. The reality of many of today's IT departments is complex, as they have the immense task of maintaining, managing, integrating, and supporting these business-critical applications. Tracking upgrades and providing first level support, as well as troubleshooting, represent a fraction of the application management challenges. In addition, the applications running a business require consistent inventory tracking, along with monitoring of their performance and the value they bring to the business. Consequently, application portfolio management (APM) has emerged as a critical component of IT governance.

In light of this reality, most IT departments have adopted some form of APM. Managing the development, implementation, training, and support of enterprise applications is central to every IT department. Decisions must be made in terms of prioritizing application projects and tracking their success. However, implementing a governance framework and a product portfolio management (PPM) solution to formalize decisions is still a novel concept to many IT organizations. Consequently, PPM vendors have embraced APM as a key differentiator in their efforts to assist IT organizations in managing their applications as business investments.

Defining Application Portfolio Management

APM provides a framework for an organization's enterprise software portfolio. Using PPM methodologies, APM focuses on the application lifecycle to determine which applications should be maintained, retired, or replaced. APM treats enterprise applications as investments, and evaluates their effectiveness based on business needs, client usage, performance, and client satisfaction. APM also takes inventory of an organization's applications, and evaluates their costs, risks, and value.

Like PPM, APM is a methodology for streamlining IT management processes. Thus, APM solutions aim at facilitating the tracking and monitoring of the following business objectives:

  1. Inventory management
    This requires the identification of applications assets, including technology, versions, upgrades, and customizations. APM software should assist in developing business data, priorities, and categories to track in-house, purchased, and hosted applications.

  2. Monitoring and tracking of metrics
    This includes the tracking of the cost, quality, and performance of the different applications within an organization. APM software should provide a systematic approach to the tracking of metrics in order to facilitate sound decision-making with respect to IT investments. Many best-of-breed APM solutions, such as CAST Software and HAL Knowledge Solutions, track code-level metrics for in-house applications.

  3. Portfolio analysis
    This includes the ability to view high-level data of the portfolio of applications to determine their relevance within an organization. APM tools should provide dashboard capabilities and multiple reports (such as bubble graphs) for quick business decisions in terms of the relative importance of applications.

  4. Visibility into exceptions
    This includes the monitoring of key metrics, such as customer satisfaction, price, and so on. APM solutions typically provide intuitive views and triggers or alerts to carry information about thresholds and changes in these metrics.

  5. Help desk management
    An important component of APM is its relationship with the help desk application and methodology within an organization. Tracking the day-to-day activities of an organization's help desk (in conjunction with the applications it supports) provides great insight into an application portfolio. APM solutions should be able to extract the appropriate metrics from their help desk solutions.

  6. Monitoring and testing of applications
    This includes the tracking of the quality and performance of the applications. Once again, APM's relationship to the metrics generated by testing tools will impact the decision-making process as far as the business contribution is concerned (with respect to investment in an application). Tracking these metrics will help organizations to identify issues that will impact their daily operations, such as downtime.

The Role of Application Portfolio Management in Information Technology

While mining tools and testing tools are still critical to managing applications, IT's shift towards treating their assets as business investments has changed the way applications are managed. Where once testing tools were key performance indicators (KPIs) for an organization's enterprise applications, today the metrics from testing tools are viewed as a subset of the group of metrics used to monitor application performance. In fact, according to Forrester Research, the APM market is projected to grow from approximately $15 million (USD) in 2003 to more than $400 million (USD) in 2008. At the same time, the testing and mining tools market is projected to decline from $82 million (USD) to $15 million (USD) from 2003 to 2008 (see Application Portfolio Management Tools for more information about these figures). With the continual involvement of non-IT executives with IT and application decision-making, IT has recognized the need to provide a more comprehensive tracking of its applications via the implementation of APM software and methodologies.

For larger IT organizations, implementing an IT governance framework entails tracking new projects through PPM, evaluating existing enterprise applications through APM, and tracking all IT assets through enterprise asset management (EAM).

Due to the importance, magnitude, and complexity of tracking applications, APM has developed into a major category in evaluating an organization's IT business investments. Organizations are looking beyond the mere functionality of their applications, and are evaluating the total impact of the applications running their business. Organizations are tracking metrics such as customer satisfaction, maintenance, usage, and performance, all in order to determine the value of their applications.

APM Software Vendors

There are two types of APM software vendors: best-of-breed APM solutions, which focus primarily on organizations with legacy systems; and PPM solutions, which offer APM modules as part of their offering.

Several vendors feature prominently as far as best-of-breed APM solutions are concerned:

  • CAST Software provides an application intelligence platform in which technical metrics can be extracted from a knowledge base. These metrics are displayed on a governance dashboard and work well primarily for in-house or customized outsourced applications. Working with different programming languages, scripts, and source codes, CAST develops a "DNA blueprint" to track the quality and performance of enterprise applications. However, broader APM functionality, such as inventory management and support, are not strong in its offering.

  • HAL Knowledge Solutions provides a complete end-to-end APM solution, including an intelligence platform that works with source codes, inventory management, software quality management, outsourcing management, and technical document management. In addition, it offers an APM competency center, where organizations have access to experts in APM methodologies, training, and governance.

  • BluePhoenix Solutions offers an enterprise-wide IT warehouse management solution for tracking IT assets and inventory. It enables both chief information officers (CIOs) and chief technology officers (CTOs) to obtain a "big picture" view of an organization's IT assets, as well as more granular views to evaluate source code changes. In addition, it offers a solution that manages changes in an organization's legacy system.

  • SEEC provides organizations with the functionality to manage, support, maintain, and test their legacy systems. Designed primarily for developers, SEEC's solution offers granular tracking of application metrics, and documentation for efficient maintenance, support, and decision-making concerning legacy systems.

There are also broad PPM vendors who feature prominently in terms of APM solutions:

  • Compuware Changepoint offers an APM solution that works better in organizations that have hosted or purchased off-the-shelf applications (as opposed to legacy systems). Providing complete inventory management and metric tracking for maintenance and performance, Changepoint gives detailed insight into application portfolios for IT investment business decision-making with respect to maintaining, upgrading, or eliminating applications. However, Changepoint is weak in tracking source-code-level metrics within in-house or legacy systems.

  • UMT (recently acquired by Microsoft) claims to have pioneered the fusion of PPM and APM solutions. Its offering is similar to other general PPM vendors, in the sense that it delivers APM-specific functionality within the context of its PPM offering. It provides organizations with a central IT repository and decision management system which looks at lifecycle, inventory, and application redundancies. In addition, UMT offers a forecasting module that looks at the total cost of ownership (TCO) of applications. As with most PPM vendors in the APM space, UMT's offering is not designed for legacy systems requiring the tracking of code-level metrics.

  • Pacific Edge offers its APM solution in conjunction with its Maturity-Based Accelerator methodology, allowing organizations to incorporate their governance framework in stages. Pacific Edge's standard PPM solution offers APM functionality in portfolio management and lifecycle management. However, it does not offer strong APM-specific functionality for inventory management or tracking of code-level metrics.

  • Prosight offers its APM clients a combination of portfolio management and application rationalization (in its Fast Track AR module). Its application rationalization module includes application evaluation, a user community survey, new application proposal, "what-if" analysis and reports, and integration with portfolio management for decision execution. Although weak at tracking code-level metrics, it does provide a strong offering for the government market.

  • Planview's approach to APM integrates PPM functionality to monitor the investment of applications, in conjunction with its partnership with HAL Knowledge Solutions, which enables tracking of code-level metrics for legacy systems. This "best of both worlds" approach provides organizations with high maintenance. Legacy applications gain the most from an APM solution because it tracks the necessary code-level metrics for analysis. However, it is challenging to consolidate metrics in a single view.

  • Mercury Interactive provides an APM solution that offers modules in application performance management, business service management, infrastructure management, and change management. Mercury's APM focus is on the performance of enterprise applications, and their impact on service and support. Mercury also provides solutions in the testing market, which strengthens its understanding, and the functionality of APM. However, presently APM and testing solutions are delivered as separate product lines.

  • IBM Rational Portfolio Manager (formerly Systemcorp's PMOffice) has the benefit of being used by IBM's APM Global Services. It also offers integration with Tivoli, thus allowing support of the information technology information library (ITIL) governance framework. As part of the Rational product line, IBM Rational Portfolio Manager provides similar functionality to Mercury Interactive.

User Recommendations

Depending on the IT infrastructure, organizations should carefully evaluate the different APM solutions available in the marketplace. Organizations with legacy systems typically have more work attached to the support and maintenance of their enterprise applications. The tracking of metrics at the source code level is a key factor in managing these applications as well as in tracking their performance. Both high-level and granular tracking of applications are required if developers and executives are to make quick and informed decisions on the value their applications are delivering. As a result, when searching for an APM solution for legacy systems, it is worth considering best-of-breed vendors.

Currently, broader PPM solutions offering APM modules and functionality are typically weaker in delivering granular metrics at the code level. Consequently, these systems are better for managing COTS enterprise applications that require more tracking at the support and client performance level. In any case, as IT organizations continue to treat their applications as business investments, PPM vendors will continue to strengthen their efforts in providing stronger APM-specific functionality in their offerings.

 
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