Article by Frank Wood, guest blogger.
Any analysis of an application portfolio is, in part, performed to identify areas in which cost reductions and streamlining of a bloated inventory can be realized, allowing a client to answer critical questions such as:
- What applications are in use supporting the business?
- How well do applications map to current business operating functions?
- How many applications provide redundant functionality?
- Where are the best opportunities to control cost?
- What applications should be retired, consolidated or extended?
The application inventory is analyzed by (1) business perspective; (2) technical perspective and; (3) financial perspective. The business perspective looks at how well an application supports the business. This requires two inputs: documented business processes and a complete application inventory including detailed functional descriptions. The output is an application-to-functional decomposition (see below).
With analysis, several parameters can be identified to use in strategic planning:
- Applications that don’t support the business: Identification of candidates for retirement and, when implemented, resultant decrease in annual OpEx (operating expense).
- Processes not supported by any application: Indicator of manual processes – processes that can be slow, time-consuming, prone to error and significant security issues, therefore costly. In addition, identification of opportunity areas for potential IT solutions such as interfacing, etc.
- Redundant support for a process: Provides focus into functional areas that could be candidates for consolidation, thus reducing OpEx and portfolio complexity
- Redundant coverage by an application: Identification of ‘champion’ applications in a particular functional area can provide insight into which enterprise applications are candidates for expansion, upgrade, etc.
Application coverage & gaps can be identified at the level 2 or even level 3 process level. With validation from the business, the mapping can be used to construct a process architecture as shown in the figure below. This additional layer of detail can provide added insight into the complexity, gaps in application process support, and subsequent opportunity areas to close those gaps.
Following a portfolio assessment, the application-to-functional decomposition map can be an added tool in the enterprise architecture toolbox. A tool that can be used to govern, manage, and optimize one of the largest and costliest assets, its application portfolio.