What applications is your association using today? Do you know? Do you really know? And do you understand their impact?
Many organizations place little to no emphasis on managing their application portfolio. This is often because you think you need to focus solely on operations---"keeping the lights on”--- usually at the cost of strategic efforts.
Inevitably, application sprawl puts any organization in a position where they have more applications than they need, can afford, or can adequately support. Paradoxically, abandoning strategic competencies only adds to the high demands of keeping the organization running.
Others believe business-managed or purchased applications do not warrant the same governance or strategic oversight demand. In this article, we will detail how to know when it’s time to beef up your portfolio management strategy and how to do that to ensure your applications are providing significant ROI and adding value to your mission.
Is your organization suffering from application sprawl?
Application sprawl is the gradual non-strategic accumulation of applications. Overall, users rated only 34% of organizational software as both important and effective. Application sprawl can be caused by a variety of factors:
Every organization experiences some degree of application sprawl; if you have more applications than you need, it has an effect. It can mean unnecessarily high costs and additional burden on the teams who support them. This is added pressure the IT team can’t afford, especially in the case of small organizations.
A poorly maintained portfolio will eventually hurt the business more than it hurts the IT department. Legacy systems, complex environments, or anything that leads to a portfolio that can’t adapt to changing business needs will eventually become a barrier to business growth and accomplishing objectives. IT is often blamed when this happens.
A proactive IT team can plan to upgrade the software or add the additional functionality needed or lead the project team to switch to a new tool. Application Portfolio Management (APM) is the ongoing practice of providing visibility into applications across the organization, recommending corrections or enhancements to decision-makers, aligning delivery teams on priority, and showcasing the direction of applications to stakeholders. APM allows you to better understand and set the direction of your portfolio.
With application portfolio management, return on investment (ROI) is generated by reducing the number of applications and operational costs. Other benefits can include:
APM implies a holistic approach. It can be challenging to compile multiple priorities and perspectives. Furthermore, organizations may have limited time to act strategically and proactively on APM initiatives. You can address these challenges by right-sizing your APM process. Think low priority over no priority. Break the process down into tasks that can be integrated into your team’s workload and be sure that your roadmap works to improve communication between those who own, manage, and support an application.
Uncertainties on business value can prevent IT from successfully advising software decision-making. While IT knows its technical debt, it can struggle to get the business to act on technical risks. Attempts at exposing APM problems rarely gain buy-in and discourage the push for improvement. For this reason, it is essential to rationalize your applications in accordance with business priorities and communicate risks in their terms.
There are four steps to practicing effective software management: application alignment, application inventory, application rationalization, and application road mapping.
To gather information about what applications are actually in use in your organization, interview folks from departments across the organization to ask about tools they need to do their job and what tools they are actually using. Begin to categorize that information to align it to your business capabilities.
Create an application inventory document to inform the business of your application portfolio. List each software in use, the version, which department, or users have licenses to the software, and who manages the licenses.
Understand that there will be applications that IT does not manage. Quite often, users take advantage of commercial applications (i.e., Dropbox, Vimeo, Calendly), that can be obtained and managed outside of IT. This can be referred to as “shadow IT,” and it is important to include these in your inventory.
Now that you have the information in hand, assess your applications to determine recommended direction. You should decide whether each application should be maintained, modernized, consolidated, or retired. Consider if any applications pose a security risk. Look for applications with overlapping or duplicative functionality. Begin conversations to determine if they can be consolidated or if one set of licenses can be dropped.
With inventory and understanding of use cases in hand, you can now create an application roadmap to showcase the strategic direction for your applications over a given timeline. This should highlight cost savings and benefit, and don’t forget to include where training will improve use of the applications that remain in your portfolio.
Associations often consider software management a low priority, and application portfolio knowledge is low. No single source of truth is available to support informed decision-making when there is no dedicated or centralized effort to manage the application portfolio. If your organization is not practicing effective portfolio management, it will acquire more applications over time, creating redundancy, waste, frustration on the part of users and potentially members, and the need for additional support.
Remember, you can outsource development, you can even outsource maintenance, but you cannot outsource accountability for the portfolio. Someone needs to capture the holistic picture to determine if an application’s value is worth its cost.
If you're ready to get started on your association's application portfolio management, check out our Software Assessment.