As business users and executives demand modern applications, enterprise architects are finding bloated application portfolios are slowing down the works. According to a report from Cambridge, Mass.-based Forrester Research, resource-hogging legacy applications are driving modernization. However, experts say, without a thorough, ongoing application portfolio assessment, the risk of reintroducing redundancy to the portfolio is great. Enterprise architects instead should view the assessment as an ongoing effort, rather than a one-time project.
"There really is little point on setting out on an application portfolio assessment if you think it's something you're going to do for a couple of months and then go back to business as usual," said Andy Kyte, research fellow at Stamford, Conn.-based research firm Gartner. Instead, application portfolio management needs to be proactive and become a central discipline of IT that involves the organization's stakeholders, not just the enterprise architects, he said.
To do that, Kyte recommends choosing a couple of application domains, like human resources or finance, instead of the entire organization. Then, assess the top 10 or 15 applications by their size and cost to the organization, as well as identify the stakeholders necessary to the assessment, he adds.
Always start with a plan
Application portfolio assessment can seem like a daunting task nevertheless, particularly if there isn't sound reasoning behind it. "I would start with 'What are we doing and why?'" said Phil Murphy, vice president and research director for application development and delivery at Forrester Research.
Andy Kyteresearch fellow, Gartner Inc.
Application portfolio assessment can take two distinct flavors, Murphy said:
- Internal IT department assessments: Internal portfolio assessments are concerned with how many software tools the company owns and how to condense them.
- Business-facing applications: These assessments typically take on applications themselves and are handled by the applications group.
Tackle the assessment in phases
Application portfolio assessment typically happens in three phases, according to Dan Caron, principal consultant at Boston-based consultancy MEGA:
- Inventory: The inventory phase is where enterprise architects collect data surrounding the role different applications play in the organization and their interdependencies. Then the architects build a central repository for the data. "This will give us a comprehensive view of all our applications and their dependencies, and that's the baseline for the next phase, which is evaluation," Caron said.
- Evaluation: Depending on the criteria that are important for the organization -- cost, upgrading legacy applications or reducing functional overlap -- the evaluation phase will be used to assess the current application portfolio and determine which ones will be nurtured and which will be retired.
- Transformation: The goal of this phase is to understand what the impact of retiring applications will be, Caron said. The idea is to view the transformation in different scenarios, such as the impact of investing heavily in the enterprise resource planning software or moving from legacy applications to cloud-based technology, he said.
Consider capability-based assessment
One technique used in business architecture is capability-based portfolio analysis, which lets enterprise architects group applications by functions instead of business units, according to Andrew Guitarte, AVP and business architect at San Francisco-based Wells Fargo Bank and chairman of the Business Architecture Society. "Some of these applications do not just enable specific departments or divisions; they enable a specific set of business capabilities, like human resources management, financial management, or sales and marketing," he said.
Once enterprise architects rationalize applications based on capabilities, they are able to align applications to business capabilities and benchmark against the industry, Guitarte said. For example, a bank's business capability is moving around money. Startups have enabled users to send and receive money with their mobile phones, and traditional banks may be lagging behind. By aligning the applications that enable banks to offer mobile phone access, they can prioritize building mobile applications to grow their business capabilities, he said.
Use TCO models for decisions and change behaviors
However, each application investment should come with a total cost of ownership model, according to Gartner's Kyte, who likened building applications based on the initial cost to getting a puppy. "It's cute, and it's not very expensive. But you're never really buying a puppy, are you? You're buying a dog," he said. "People say, 'Can we have the mobile app? It'll be gorgeous.'" However, that mind-set ignores the stark reality of upgrades, maintenance, help desk support and other expenses, he said.
During the assessment, architects need to realistically assess how much longer a legacy application will be in use, as well as the changes needed to keep it compliant, including what adding to that application will do to the portfolio. "Complexity is the cholesterol of the application environment. If you keep adding more complexity, you're going to slug its performance and make it harder to change in future years," Kyte said. Enterprise architects may need to sponsor application redevelopment to reduce existing complexity and implement management techniques, he said.
Finally, since the outcome of a portfolio assessment is to reduce the number of applications, enterprise architects also need to address behaviors that led to a bloated portfolio, Kyte said. "If you are going through an assessment -- and you should -- you also have to commit to a roots-and-branch review of the business case process and investment management process so you don't recreate the situation," he said.
Christine Parizo is a freelance writer specializing in business and technology. She focuses on feature articles for a variety of technology and business-focused publications, as well as case studies and white papers for business-to-business technology companies. Prior to launching her freelance career, Parizo was an Assistant News Editor for searchCRM.com.