Application Portfolio Management (APM) Best Practices

Overview

Most enterprise application portfolios contain significant redundancy - multiple applications that perform similar or identical functions for different organizational units, typically because each unit independently selected tools without awareness of what other units were already running. Redundancy multiplies cost: each instance requires its own license, support, maintenance, and integration investment. It multiplies risk: each instance creates its own security footprint and compliance exposure. And it multiplies operational complexity: data that should be consistent is maintained independently in each system, creating reconciliation challenges and data quality problems that affect every process that depends on the data.

Best Practice

Systematically analyze the application portfolio for functional redundancy. Group applications by business function and capability, and within each group identify applications that perform overlapping or identical functions for potentially consolidable user populations. For each redundancy cluster, assess whether consolidation is feasible, what the net financial and operational benefit of consolidation would be after accounting for migration cost and user disruption, and which application is the strongest consolidation candidate based on the assessment framework. Develop a consolidation plan that sequences the elimination of redundant applications in order of net financial and operational benefit. Prioritize consolidation of existing capabilities over net new application acquisition wherever a rationalized existing application can serve the business need.

Benefit(s)

Eliminating application redundancy produces compounding financial and operational benefits. License costs fall as redundant applications are retired. Security and compliance risk falls as the attack surface and compliance footprint shrink. Operational complexity falls as integrations are simplified and data consolidation reduces reconciliation work. The portfolio becomes leaner, more coherent, and more economical - and the resources freed by redundancy elimination can be redirected to the higher-value investments that the rationalization program is designed to fund.