Application Portfolio Management (APM) Best Practices

Overview

Organizations that treat the application portfolio as an IT inventory produce technically competent but organizationally marginal APM capabilities. The inventory gets built, the data gets collected, the reports get generated - and then the portfolio sits in a tool that no one outside of IT architecture consults when making significant business or investment decisions. The portfolio becomes an artifact of IT governance rather than an input to enterprise strategy, and its influence on organizational decisions is negligible despite the investment made in building it.

Best Practice

Position the application portfolio as a strategic enterprise asset and manage it accordingly. A strategic asset has a defined owner with organizational authority. It is governed by explicit policies that apply across the enterprise. Its performance is measured and reported to leadership. Its composition is actively managed in response to strategic priorities. Its value is understood and communicated in business terms, not technology terms. Treat every portfolio management decision as a business decision that happens to involve technology - not a technology decision that business leaders do not need to understand.

Benefit(s)

Treating the portfolio as a strategic asset elevates APM from a technical discipline to an organizational one. Business leaders engage with portfolio decisions because they understand the stakes and see the connection to outcomes they care about. The portfolio earns a seat at the strategic planning table. Investment decisions are made with full visibility into the technology implications, and technology decisions are made with full visibility into the business implications. The organization develops the integrated business-technology decision-making capability that digital transformation requires.