Application Portfolio Strategy aids all IT decisions by providing a business oriented framework. It does so by analyzing the current IT estate and pushes the business to comprehend the business value of IT. On this basis, customized application strategies are constructed for specific lines of business and this helps the estate to progress towards its goals. This gives business a vision as to how it can incorporate management of the IT estate for entrepreneurial advantage. It also throws light on the correct methodologies and contractual models to guarantee success.
Why Application Portfolio Strategy is necessary?
Research reveals that almost 40 per cent of the total IT expenditure yields zero return to the organizations. This has been attributed to a variety of underlying issues, both structural as well as strategic. Some examples include replication of processes across different lines of business, the structure and adopted applications are not in sync with the actual business model and there is decentralization as well as underutilization of the hardware which is used. Due to all of the above and various other reasons, projects require re-structuring and re-planning so that there is alignment between the skill sets and the changing business environment. This need is met by Applications Portfolio Strategy.
Major aim of Application Portfolio Strategy
A lot of expenditure goes into managing the ongoing IT applications. So, the major or foremost goal of Application Portfolio Strategy is managing the consumption of resources and ensuring transparency in the utilization of the inventory of applications. This helps organizations in several ways. For instance, they are able to get rid of applications which are redundant. The applications can be analyzed in terms of quality, stability and maintenance. Organizations can also study the degree of influence of application in generating business value and so, allocating resources appropriately to applications as per their importance. Application Portfolio: Modernization approach The business actually needs to adopt the strategy of thinking globally and acting locally. This means viewing all applications in the business context and at the same time managing them at the level of the enterprise. Common applications and services need to be encouraged and reuse of already existing applications needs to be promoted in the organization.
Funding options or approaches
There is a three-pronged approach to funding under modernization of application portfolio:
- Ministry funding for remediation of Applications
- Enabling MAPS, i.e. organizational systems such as IFIS
- Enterprise funding for remediation of Applications