Engagement Options

Application Portfolio Spending Assessment

Application portfolio management (APM) is a set of processes for managing software applications and software projects as assets. APM encompasses application rationalization and also includes processes for controlling the acquisition of software applications, managing the portfolio of projects that information technology (IT) undertakes, and handling the demand for IT services.

Using a financial metaphor as the foundation, portfolio management enables organizations to categorize, evaluate, prioritize and manage their project-based investments. It also enables organizations to align spending with current and future business needs to achieve an acceptable balance of risk and reward.

Demonstrating business value is a challenge for most IT organizations. Bottom-up annual budgeting typically creates a first-cut IT budget that represents a mix of strategic business needs and a functionality wish list. The challenge is to determine which-is-which so that the budget can be trimmed in a consistent and meaningful way. Across the board, indiscriminate cost cutting can result in an organization becoming too heavily invested in technologies that are not essential to the business, while starving core necessities. Therefore, application portfolio investments need to be represented in a way that engages the business in priority setting discussions where both the business priorities emerge and the less valuable projects drop from the budget.

Portfolio Categorization and Prioritization: A Critical First Step to a Tuned Portfolio

To begin tuning an application portfolio, Burton Group can perform an Application Portfolio Spending Assessment. The assessment categorizes application spending so that departments, divisions and enterprise executives can see budget allocation by function and according to maintenance versus new development.

This analysis serves as a foundation to drive discussions about IT spending transparency, cost cutting, spending reallocation from low value to higher value outcomes, and as a means to create a baseline portfolio profile.

What category an investment falls into depends on the criterion established to categorize investments during an onsite project kickoff session. Categorization develops the baseline investment percentage for each category that can be used to monitor trends and to determine if one investment type occupies too much of the total budget. Categorization also provides the portfolio structure to localize investment analysis and decision making – permitting an “apples to apples” comparison.

To perform the assessment, Burton Group consultants work with your team to:

• Develop an investment categorization approach
• Define the investment profile schema to develop a consistent picture of all the proposed projects – critical information for the spending assessment
• Analyze the application portfolio information captured in the survey

After receiving the completed surveys, Burton Group will provide you with an executive summary report that segments your application spending. The report will include the schema used for data collection, the survey results, and the analysis results. The duration of the engagement is typically four weeks.

To baseline your IT spending, support cost cutting, or to begin reallocating spending to high value projects, call Homan Farahmand at 905.952.0966.