What is application portfolio management

At its core, application portfolio management (APM) is a framework for managing enterprise IT software applications and software-based services. APM involves evaluating, rationalizing and planning applications to ensure they align with business objectives. The goal is to balance the portfolio for optimal performance, risk management and return on investment.

In an era where technology is a crucial part of business strategy, understanding APM is essential for large companies looking to optimize their technological investments. This article aims to help organizations harness APMs potential by providing an in-depth look into APM, its evolution and its role in the modern business environment.

The concept of APM emerged as a response to the growing complexity of business IT environments. In the early days of corporate computing, IT portfolios were relatively simple. With the digital revolution, however, organizations found themselves navigating a sea of applications, each serving different business needs. The need for a systematic approach to managing these applications led to the birth of APM.

The integration of IT asset management software in the early stages of APM was a game-changer. It provided organizations with the tools they needed to catalog and manage their IT assets more effectively. This revolution laid the groundwork for more sophisticated APM practices.

Application portfolio management comprises several critical processes, including:

• Application inventory: Cataloging existing applications and their functions
• Performance analysis: Assessing how applications perform and contribute to business goals
• Rationalization: Identifying redundancies and gaps in the application portfolio
• Lifecycle management: Managing applications from inception to retirement

Today, APM plays a pivotal role in guiding IT investment decisions and ensuring that the technology used by a business aligns with its strategy. APM’s relevance extends to many fields, including:

• Digital transformation: APM is critical in steering digital transformation initiatives, ensuring that new technologies integrate seamlessly with existing applications.
• Cost management: Effective APM helps companies identify underperforming or redundant applications, leading to cost savings and more efficient resource allocation.
• Risk management: By providing a comprehensive view of the application landscape, APM helps identify and reduce potential risks.

Application portfolio management is closely tied to cyber security assessment and management (CSAM). A well-managed application portfolio reduces security risks by ensuring that all applications are up-to-date and comply with security standards. This synergy is crucial to protecting an organization's data as well as its IT infrastructure.

The role of APM is likely to become even more integral to businesses as organizations continue to navigate digital transformation. The rise of cloud computing, AI and machine learning will further enhance the complexities of the digital world, but they will also improve the capabilities of APM, offering new opportunities for application management.

Application portfolio management is not just an IT function–it's a business imperative. By focusing on their APM, organizations can ensure their portfolios are not just a collection of software, but a strategic asset driving success and innovation.