What is APM

Application Portfolio Management (APM) is a formal IT management discipline that provides the frame-work for capturing the necessary input to strategic systems planning and application modernization. At least for the core systems portfolio, relevant information and key metrics about applications is typically obtained by the direct parsing of production source code.

APM was first introduced to denote emerging management practices aimed at an organization’s application systems portfolio. Many shops with a large portfolio elect to start – simply out of logistical necessity – with a top-down, high level approach. This approach entails the creation of an Application Inventory and the gathering of a variety of attributes about each and every application. The process of collecting the information is largely manual, and the supporting tool-set is often home-grown, in many cases using Excel. The advantage of a top-down approach to APM is that, within a relatively short time, the entire application portfolio can be enumerated (including package applications) and assessment and planning can commence.

The bottom-up approach is fundamentally based on parsed source code. The Application Inventory is built from the underlying source code by parsing out every component of every application and all their intra- and inter-application relationships. Once the repository is built, additional information (that cannot be captured from source code or other electronic footprint) may have to be added in order to support assessment and planning initiatives. The repository needs to be kept fresh always reflecting the current production state. The Application Knowledge Base supports regular, day-to-day application development and maintenance activities, as well as, application management initiatives.

In most organizations the application portfolio consists of dozens, hundreds or perhaps even thousands of applications. Applications vary widely in terms of size, technology, business value, volatility and life span. Some are in-house built, some are vendor supplied (some with source code, some without), some are developed by third party and brought in-house for maintenance and support, some are outsourced. Not every application is the same. There is usually a core systems portfolio – maybe 15% to 20% of all applications – that is central and critical to the day-to-day operation of the business and which attracts up to 70% to 80% of the annual maintenance and support budget.

The bigger and more heterogeneous the portfolio, the more likely it is that a combination of the top-down and the bottom-up approaches will be the most effective in terms of logistics and costs.

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