What is APO & APM?
We consider Application Portfolio Optimization (APO) to be a subset of a broader Application Portfolio Management (APM) framework & practice.
Application Portfolio Management (APM) is a capability (process, information and systems), that enables organizations to actively manage their application landscape and spend, much like an organization would manage its physical assets through a lifecycle. An effective APM practice sets you free from the guesswork involved with trying to understand your application inventory, costs and savings opportunities.
Application Portfolio Optimization relates to specific cost and app count optimization activities meant to tangibly reduce operational spend & complexity in the short and longer term.
APM is often viewed as more of a sustaining practice, while APO can be considered more of a “one-time project”.
The Many APM/APO Drivers
Mergers & acquisitions, cloud migration, true cost optimization, operational excellence, cyber security. There are many reasons why you should be looking at APM & APO.
Many companies need assurance that they will achieve synergy targets related to M&A work. Others simply are trying to unwind a history of duplicate spend decisions made in the past. Others just know that there is real opportunity to consolidate IT systems to enable direct and indirect savings and efficiencies
A lot of consulting firms claim they have an APM tool-kit. We have cleaned up after them a lot (especially “the big firms”). We move our clients from shelf-ware to real results. Our proof is simply in our pudding.
Ask us for CIO references. Our clients across North America range from those with 200 applications seeking an APM framework or solution, to us assessing over 4000 server based business applications as part of multi-billion dollar Mergers & Acquisitions.
Beniva averages a 13% reduction in annual, direct software spend and 19% reduction in software titles across all clients to-date.
“The APO WhitePaper”
A 3-Phase sprint to cost optimization. BIG results.
Gather and Consolidate
Most IT departments have data related to the management of their applications maintained in numerous lists and systems. Information related to Financials, contracts, technical support, metering and usage, user groups, etc., are often not consolidated for ongoing portfolio analysis and optimization.
Additionally, more often than not, we see a significant gap in IT departments in their mapping and reconciliation of application financials and contracts (IT budget, vendor invoices) to individual software titles. While not a trivial task, this reconciliation in of itself often results in real savings identification from erroneous data and administrative errors.
Specific data to be gathered is dependent on the desired outcomes of the APM initiative, of which there can be several. As part of Beniva’s APM IP Framework, we have pre-defined metadata packs to enable different analysis outcomes including Cost Rationalization, Cloud Readiness and Business Investment strategies.
In performing the first three phases of an APM Initiative as outlined above, Beniva Consulting Group tends to spend up to 70% of its time and effort alone on Phase 1 – namely, on a coordinated data gathering, consolidation and reconciliation effort. We build a centralized and significantly enhanced Software Asset Inventory data set for analysis and ongoing use. Not only valuable for APM itself, this data set is tremendously useful for administrative, operational and IT planning staff who will all realize enduring value. These teams always end up speaking to these benefits once they realize what has been delivered, even though the value of this exercise may not be as well understood up-front. Phase 1 sets up your organization and future APM initiative phases for greater success and tangible savings outcomes.
By default, we build and house this data in a SharePoint site template we provide to you from our Beniva owned APM IP Framework. Alternatively, we work with your ITSM teams to load the information properly into a toolset like ServiceNow to provide increased assurance of enduring leveragability. We have the data load templates to ensure data table structure is effective and sustainable within ServiceNow.
Model & Analyze
We employ a Business Capability Modelling centric approach.
Not just a paper-exercise. We create powerful Capability Heat models with heat maps combined with our application IP (which measures into the many thousands of discreet applications with peer user costing insights) and other proven analytic deliverables to tangibly reduce your cost profile. CIO references across North America prove our results.
In parallel to the data gathering work being performed in Phase 1, we coordinate the build or enhancement (as needed) of a Business Capability Model specific to your enterprise. We leverage industry models and our experience building pragmatic capability models that balance the perfect mix of depth to enable application mapping while not getting too deep into the process weeds. Some IT leaders wish to spear-head this work in conjunction with their business partners directly. Other IT leaders wish this exercise to be performed within the walls of IT only. We can work with a wide variety of approaches.
Once the Business Capability Modelling and Data Gather work is complete, Beniva applies its analysis in line with the defined APM objectives.
Cloud Readiness assessment includes more involvement from IT technical staff, and includes an analysis of the best-fit replatforming strategy for each application, including a recommendation on most suitable Cloud Providers based on the application’s specific architecture, technical complexity and overall risk profile.
Cost optimization analysis involves assessing for difficulty and aligning to a recommended approach (of which there are many) to reduce spend on a specific software title or suite. We include peer spend comparison for major platforms where applicable, on a per-user basis. We always enable validation of our analysis results from your IT Business Partners as an initial check on feasibility prior to any business conversation. Cost optimization recommendations are not limited to specific application reduction, but also license optimization, software right-to-use/perpetual license strategies, and potential support cost reduction opportunities.
Scope for Investment Planning is more dependent on specific client objectives. Generally however, investment analysis involves specific scope for industry research to asses for potential industry solutions, new digital strategies and/or technologies that could be applied to deliver improved, specific business capabilities. This more comprehensive review of what industry trends and technologies could be further leveraged to enable specific business outcomes can include leveraging enterprise DevOp solutions as part of redeveloping legacy platforms.
Reporting & Metrics
Beniva leverages Analysis and Presentation materials from its internal knowledge base and proven delivery tool-kit, as well as presents additional analysis in a fit for purpose manner. We leverage Microsoft PowerBI to enable deeper analysis and drill-down within our enhanced visual reporting. We include recommendation difficulty rankings and initial-level cost estimates for pursuing recommended next steps.
Now the fun begins - armed with this information, there are many opportunities for optimizing the portfolio - we've highlighted below common next steps and where our clients have seen real value and return.
Cost-focused initiatives are pursued in conjunction with business clients where required. Most IT clients express some level of risk-aversion and concern over this business engagement process. However, Beniva enables a highly collaborative and empowered approach. A series of facilitated meetings where Beniva either A) leads the discussion or B) trains your IT business partners to engage the business independently are carefully planned for, trained for and delivered. Beniva has developed a Decision Framework and facilitation process specific to APM that enables positive and engaging interactions where, more often than not, the business will identify additional optimization opportunities not previously identified.
There is substantial data management and coordination of various stakeholders to ‘close-loop’ or deliver the realization of cost savings. Procurement, IT Finance, IT Operations and IT management for vendor negotiations all require effective coordination and action tracking through to resolution. Beniva does not put hands on keyboards to decommission applications and servers, but coordinates and manages this complex end-to-end process and ensures savings results are traced through to tangible realization.
Beniva also recommends employing an intranet website on APM progress with consistently updated dashboard and metrics on savings realized through this process to build engagement and share successes.
Cloud & Investment
APM is not all about cost savings. Microsoft and Amazon both promote APM as a precursor to successful cloud migration. Cloud programs require careful planning and delivery to be successful. Beniva has published specific materials on cloud migration strategies that are enabled with a strong APM foundation. Please refer to our website for content on Cloud Strategy and migration best practice.
APM however is becoming ever increasingly recognized by Cloud providers such as Amazon and Microsoft as being a necessary precursor to enabling an effective cloud migration strategy.
Investment focused APM initiatives, once the analysis is complete on the application of new or emerging technologies available to your industry, or specific business capability, include facilitated business engagement, potential system selection and sourcing, as well as project/investment planning support. Pilots of new technologies are frequently preferred and Beniva supports the effective application of new technologies to deliver business results.
Sustain the Practice
APM, regardless of the desired outcome, is not a one-time project. It is a lifestyle that needs to be maintained in order to provide enduring benefits. A project focus to perform the initial heavy lift is a good strategy that then needs to be operationalized.
In our experience, IT professionals simply don’t enjoy managing the day-to-day details of financials, contracts, support agreements, and updating metadata related to their applications. Additionally, potential IT application road-mapping quality is largely dependent on the specific IT architect or system owner that is accountable for the task.
Thus, while a sustaining APM practice can be performed using internal staff, Beniva delivers an APM-as-a-Service model that reduces this administrative and portfolio analytics burden from staff. We find value in working with an internal “IT Business Office” staff who manages the day-to-day tasks of application renewals and contract updates with some enhancements to their daily processes based on our IP and best practice framework. Then, timed to your budget process, Beniva recommends an annual data audit/clean-up, reconciliation, and re-mapping of our findings and recommendations in conjunction with emerging industry trends, costs and technologies to provide ongoing annual insight.
Regardless of the approach leveraged, Beniva cannot recommend enough the need for ongoing focus so that value delivered by an APM project does not degrade and need to be holistically re-executed a few years down the road.
Beniva’s Application Lifecycle Framework, with an underlying ToolKit. The industry’s best and consistently proven APM framework moves you to a sustainable practice while thinking through all the important details.