Application Portfolio Management (APM) Best Practices

Overview

The organizational home of APM determines its scope of authority, its access to data, its credibility with stakeholders, and ultimately its effectiveness. APM placed within a single business unit or a purely operational technology team has neither the cross-organizational authority nor the strategic perspective needed to govern an enterprise-spanning portfolio. It becomes a departmental capability dressed as an enterprise one, and its recommendations carry only the weight of the function that houses it.

Best Practice

Locate APM in a function with genuine enterprise-wide scope and cross-organizational authority, operating explicitly on behalf of IT leadership. Three organizational homes are strongly recommended. Enterprise Architecture is the preferred home: it already has the cross-organizational mandate, the architectural perspective, and the governance relationships that APM requires. A centralized Engineering function is equally viable where it has the technical depth and enterprise-spanning operational authority to enforce portfolio standards across all technology domains. The IT equivalent of a COO organization - an enterprise-spanning operational function with a mandate to govern how IT operates across all units - is a strong alternative where EA and Engineering do not have sufficient organizational standing. In all cases, APM ownership should be an explicitly named responsibility of the function, not an assumed one.

Benefit(s)

Placing APM in an enterprise-spanning function with appropriate authority produces a capability that can actually govern the portfolio rather than merely observe it. Portfolio standards are enforced because the owning function has the authority to enforce them. Portfolio data is complete because the owning function has the organizational standing to require contributions from all business units. Portfolio decisions are credible because they come from a function that leadership trusts to represent the enterprise perspective rather than a departmental one.