Making Application Portfolios Lean
December 2011
Application Portfolio Management (APM) practitioners deal with hundreds of applications and the ever-increasing complexity of the application portfolio inhibits its effective management. Despite the successful adaptation of Lean Principles in service industries, little is known about their applicability in APM. SIG decided to shed light on the issue.
Application Portfolio Management (APM) practitioners deal with hundreds of applications and the ever-increasing complexity of the application portfolio inhibits its effective management. Despite the successful adaptation of Lean Principles in service industries, little is known about their applicability in APM. SIG decided to shed light on the issue.
| Organisations today are facing a challenge: despite employing highly qualified IT professionals, IT costs seem to be skyrocketing. Such disconnect stems from the inability to deal with a complex mix of applications and technologies – an unwanted gift left by heavy investments in what we today call “legacy” technology. As organizations intertwined their processes with such technology, new applications need to interact with this cocktail, further necessitating more and more integration overhead. After years of organic growth, organisations are left with complex, fragmented and highly redundant application landscapes. |
Application Portfolio Management – a structured approach to managing applications – targets this problem and promises to reduce complexity by strictly tying application-related decision making to business strategy. However, for many companies, the approach has not yielded what it had promised – practitioners cannot execute without the support of senior management and researchers are yet to provide tools specific enough to be grasped by a wider audience. At the same time, as IT matures and starts to resemble infrastructural technologies by commodisation [1], gaining a competitive advantage solely through IT investments is becoming increasingly difficult. Therefore, organisations whose IT is not a core competence, should instead focus on eliminating wasteful spending.
Terms “lean” and “waste” were coined by the Japanese automotive industry along its endeavours to become competitive in the global automobile market. It was Toyota, who radically questioned the way of doing business in the industry, by taking a blunt, pragmatic look at their production process to find vast opportunities for improvement. Success breeds success, and after bringing numerous improvements in terms of lead time, cost, quality and product customization, attempts have been made to adapt Lean Principles to service industries. The result: software services, as well as banking already reap the benefits brought by “going lean” [2,3]. Given the proliferation of lean thinking in various industries, SIG set out to investigate, how lean could be used to help clients reduce the complexity of their application portfolios.
Since the beginning of 2011, SIG has researched the compatibility of lean and APM. After conducting an explorative study documenting problems and practices in APM, an analytical framework was created to enable structuring the problem of waste in application portfolios. The framework currently consists of two components: a taxonomy of waste and a set of questionnaires aimed at different APM stakeholders. The former is used during the assessment phase of IS/IT strategy formulation process [4], and the latter is used to more precisely identify sources of waste. Since we identified possible uses of the framework in our consulting practice, a follow-up work is now in progress with the aim of creating quantitative metrics of waste.
If you are interested in identifying, quantifying, and removing waste in your Application Portfolio, please contact us.
Martin Janek, MSc
Martin is consultant at SIG and recently concluded his MSc research at Utrecht University on Applying Lean Principles to Application Portfolio Management.
References:
Martin Janek, MSc
Martin is consultant at SIG and recently concluded his MSc research at Utrecht University on Applying Lean Principles to Application Portfolio Management.
References:
- Carr, N. G. (2003). IT Doesn’t Matter. Harvard Business Review, 81(5), 41–49.
- Staats, B. (2008). Lean principles, learning, and software production: Evidence from Indian software services. Harvard Business School.
- Upton, D. M., & Staats, B. R. (2008). Radically Simple IT. Harvard Business Review, 118–124.
- Ward, J., & Peppard, J. (2002). Strategic Planning for Information Systems (Third Edition). Wiley.