Application Portfolio Management (APM) Best Practices

Overview

The most common single-dimensional assessment approach - assessing applications only on their technical quality - produces rationalization recommendations that are technically logical but organizationally inappropriate. A technically obsolete application that supports a critical, high-volume business process is not a straightforward retirement candidate - its business importance must be the primary consideration in the rationalization decision. A technically excellent application that supports a deprecated business capability is not a straightforward investment candidate regardless of how well it is built. Business value and technical fitness are two distinct dimensions that must be assessed independently and combined thoughtfully to produce sound portfolio recommendations.

Best Practice

Assess every application on two primary dimensions and treat each as independent until they are combined in the rationalization matrix. Business value assessment addresses how important the application is to the organization: does it support a current and critical business capability? Does it have a significant user base that depends on it? Would its absence materially affect business operations or customer experience? Is it a source of competitive differentiation or merely operational necessity? Technical fitness assessment addresses how well the application is built and maintained: is it running on current, supported technology? What is the extent and cost of its technical debt? Is it secure, compliant, and maintainable by the current team? Can it be evolved to meet foreseeable future requirements without prohibitive investment?

Benefit(s)

Assessing business value and technical fitness as distinct dimensions produces assessment results that are both technically sound and organizationally sensible. High-business-value applications with poor technical fitness are identified as modernization or migration priorities rather than retirement candidates. Low-business-value applications with good technical fitness are identified as rationalization candidates rather than investment priorities. The assessment produces a nuanced, actionable portfolio map that reflects the full complexity of the rationalization challenge rather than collapsing it into a single dimension that misses most of the relevant information.