Application Portfolio Management (APM) Best Practices

Overview

Not all inventories in the APM ecosystem are equal in terms of governance ownership, implementation complexity, or the organizational infrastructure required to build and maintain them. A three-tier model provides a practical framework for understanding which inventories to prioritize, which to share with other disciplines, and which require organizational maturity beyond early-stage APM programs.

Best Practice

Organize the APM inventory ecosystem into three tiers based on governance ownership and implementation readiness.

Tier 1 — Directly Governed Inventories: these are the inventories that APM owns and governs directly, that deliver the most immediate portfolio intelligence, and that do not require organizational infrastructure beyond the APM program itself to build. The three Tier 1 inventories are the Applications Inventory, the Integrations Inventory, and the Capabilities Inventory. Every APM program should begin with these three. They are the generative core of the ecosystem — the inventories from which significant portions of the Tier 2 inventories can be reverse engineered over time.

Tier 2 — Derivable and Shared Inventories: these are inventories that are either largely derivable from Tier 1 inventory records or shared with and co-governed by other IT Management disciplines. Technologies, Environments, Data and Information Assets, and a family of derived entity inventories (Databases, Message Queues, File Systems, External Entities, Human Roles and Actors) can all be seeded and continuously enriched from the Tier 1 inventories — particularly from the Integrations Inventory. Vendor and Supplier information also belongs in this tier, partially derivable from application vendor attributes. Tier 2 inventories are Walk and Run maturity targets.

Tier 3 — Organizational Infrastructure Inventories: these are inventories that require access to systems, relationships, and organizational processes beyond the APM program’s direct control — contracts and legal agreements, software license entitlements and consumption data, workforce and HR records, compliance and policy registries, and risk management systems. These inventories are governed by other organizational functions (Legal, Finance, HR, Compliance) and consumed by APM as a data consumer rather than a data owner. Tier 3 inventories are Run maturity targets requiring cross-functional organizational investment.

Benefit(s)

The three-tier model prevents the most common APM expansion failure: attempting to build all inventories simultaneously, overwhelming implementation capacity, and delivering nothing well. By establishing clear tiers, the APM program can sequence its inventory build-out intelligently — maximizing early value from Tier 1, growing into Tier 2 as capacity develops, and connecting to Tier 3 as the organization matures.