What is Application Portfolio Management (APM)?

A definition of application portfolio management

Application Portfolio Management (APM) is an important framework used for managing both enterprise software applications and services. It aims to reduce costs and improve IT application portfolios.


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Application Portfolio Management (APM) is a framework for managing enterprise IT software applications and software-based services. APM provides interested stakeholders with an inventory of the company’s software applications as well as the metrics to illustrate the utility associated with each application. Essentially, it lets management measure the financial benefits of an application in comparison to the cost of its maintenance and operations.

This endeavour is very relevant, especially when you consider that organizations spend two thirds of their IT budgets on ongoing operations and maintenance. Corporate mergers and acquisitions, or failed attempts to adopt a new tool are but a few reasons why an enterprise might be supporting (and, therefore, paying for) multiple applications that perform the same, or a very similar function. This ultimately translates into an increased operating cost, due to maintaining and periodically upgrading multiple applications separately, but also an unnecessarily high level of complexity.

As a result, APM is very concerned with the transparency of the application inventory and resource consumption. In practice, good APM will enable organizations to:

  • identify and eliminate applications overlap either partially or wholly with another application
  • objectively measure an application’s status taking into consideration its stability, quality and maintainability
  • objectively measure the business value and impact of an application
  • facilitate the optimum assignment of resources

As you can see, APM is a powerful technique that can be used to optimize your application portfolio, align business and IT strategies, and ultimately make better financial decisions; all of which combine to reduce your costs and make your organization more successful.

Learn more about how a practical approach to application portfolio management could benefit you and your organization.

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