Application Portfolio Management - PowerPoint PPT Presentation

1 / 16
About This Presentation
Title:

Application Portfolio Management

Description:

... awareness of the strategic role of IT in their organisations' FW McFarlan ... see work of Porter, Wiseman, McFarlan etc. strategic collaboration ... – PowerPoint PPT presentation

Number of Views:133
Avg rating:3.0/5.0
Slides: 17
Provided by: compu354
Category:

less

Transcript and Presenter's Notes

Title: Application Portfolio Management


1
Application Portfolio Management
  • An organisation will tend to develop a range of
    IS/IT applications over time
  • data processing systems
  • clerical support systems
  • customer service applications
  • just-in-time systems
  • strategic information systems
  • This is rather like a product portfolio
  • each has its place purpose
  • each will have current future value

2
Application Portfolio Management
  • Application portfolio management is about
  • improving the contribution of existing systems
  • allocating organisational resources more
    effectively
  • ensuring that the best approach is adopted for
    new applications
  • enables managers (IS/IT and otherwise) to make
    more informed consistent judgements about IS/IT
    resources

3
Characteristics of IS/IT applications
  • Any IS/IT application in the portfolio may
  • have high future potential that is currently
    under exploited
  • have potential to be developed to give more value
    to the organisation
  • have more value if integrated with other
    applications
  • be critical but suffer from poor quality
  • need to be altered to suit changes in the
    organisation
  • need transfering to newer technology
  • have no current or future value at all

4
The Strategic Grid - an APM Tool
  • The Strategic Grid measures the organisations
  • level of dependence on IT systems
  • high essential to organisations survival
  • low may improve operations, but not essential
  • strategic impact on business
  • high a critical success factor, mission
    critical
  • low useful, but low business potential

5
Strategic Grid Quadrants
  • Strategic
  • company depends on IT system now in future
  • Turnaround
  • not critical at the moment, may be in future,
    could be made so. May become less critical
  • Factory
  • core systems, critical but are unlikely to
    affect organisations position or create new
    opportunities
  • Support
  • useful but not critical

6
The Strategic Grid
High
factory
strategic
Dependency
support
turnaround
Low
Impact
High
Low
7
Using Application Portfolio Management
  • Application Portfolio Management helps
  • see the balance of IS/IT investment in terms of
    organisational resources funds
  • see where IS/IT management effort is being
    deployed where it is planned
  • APM is needed because
  • most organisations want to focus effort money
    on strategic factory applications
  • but
  • they often waste effort money on generic
    applications in the support quadrant
  • and
  • dont invest sufficient effort or money in
    (future) turnaround applications

8
Identifying Strategic Applications of IT
  • Six useful questions (after Michael Porter)
  • can IT create sustain barriers to entry to
    industry or market segment?
  • can we create switching costs for our strategic
    target?
  • can IT change the basis of competition?
  • can IT change competition from cost leadership to
    differentiation or focus?
  • can IT lock-in suppliers or customers?
  • can IT be used as a product or service?

9
Interpreting the Strategic Grid
  • To help managers develop a greater awareness
    of the strategic role of IT in their
    organisations FW McFarlan
  • As a tool for managing the IS/IT applications
    portfolio Ward et al
  • 1980s emphasis on factory support
  • 1990s emphasis on strategic
  • 2000s solving the turnaround problem
  • There will always be a role for factory support
  • applications and they should be valued

10
Using the Strategic Grid
  • The process of using the grid is important...
  • creates agreement between stakeholders
  • focuses management action
  • tool of communication
  • The grid may be used for
  • systems development/improvement
  • IT investment
  • opportunity spotting
  • IT requires management action to be effective

11
Identifying Opportunities to Use IT Strategically
  • competitive advantage
  • see work of Porter, Wiseman, McFarlan etc.
  • strategic collaboration
  • business alliances based on shared technology
  • diversification
  • new products/services, new uses for existing P/Ss
  • marketing focus
  • target intelligence communication
  • management improvement
  • new methods, organisational forms, processes

12
Characteristics of turnaround applications
  • Driving force Requirements
  • New opportunity Evaluation, selection
  • for organisation rejection of ideas
  • Individual initiative Managers
    appreciate potential of idea(s)
  • Obtaining full value Policy on how to
  • for IS/IT investment proceed

13
Characteristics of support applications
  • Driving force Requirements
  • Improved productivity Packaged software,
  • operational efficiency user compromises
  • Legal requirements Evolve to latest versions
    of packages
  • Cost effective use of Use of cost/benefit
  • IS/IT funds resources risk analysis

14
Characteristics of factory applications
  • Driving force Requirements
  • Improve performance Effective information
  • of existing activities management, stable
  • long-term systems
  • Integrate systems Business process
  • Streamline processes re-engineering (BPR)
  • Avoid duplication Cost benefit analysis
  • wastage Value chain analysis

15
Characteristics of strategic applications
  • Driving force Requirements
  • Opportunities Rapid IS applications
  • Environmental pressure development
  • Organisational vision, Flexible IT platforms,
  • objectives, CSFs IS applications
  • Spreading benefits Organisational networks

16
Management action to balance portfolio
  • buy cheaper off-the-shelf packages to service
    support applications
  • point out importance of factory applications -
    prevent legacy systems
  • develop champions for turnaround applications
  • ensure management budgetary support for
    strategic applications
  • Understanding the forces that drive systems
    is the key to managing them
Write a Comment
User Comments (0)
About PowerShow.com