Why Your Enterprise App Portfolio Strategy Needs a Reality Check

Expert advice on how to get real about managing your enterprise application portfolio.

After all that's happened during the past two years, it'd sure be nice to go through one of those periods with lots of predictable, sustained business growth—when the Dow is always going up, this quarter is better than the last, and budget requests are approved without hesitation.

The reality today is much different: Not much inside businesses moves in a linear fashion. And even when trying to "expect the unexpected," it seems that your CEO will announce a surprise merger ("Make our systems work with theirs"); or a supply-chain partner will go under ("Well, get us another one and sync up with the new one's procurement data"); or one industry's bad bets will crash the global economy ("Let's talk about 'bare bones' IT").

For IT, then, there has to be a more strategic and practical way to think about enterprise application portfolio management, since those apps that power various business lines will rarely move at the same pace. And it's high time to start waving the white flag, because most integration and middleware technologies have proven no match for geographic, vendor-specific and architectural boundaries.

In other words, it's a fool's errand to expect and command an entire application portfolio to act the same way, to move on similar timelines, to rely on architectural commonalities. The complex computing systems running today's businesses have become as malleable as a granite slab.

That's the thrust of a smart blog post by Dennis Gaughan, a managing VP within Gartner's enterprise software research team: Is It Time to Rethink Your Enterprise Application Portfolio Strategy?

First up, Gaughan writes, companies must realize that all apps should not be created equal:

Too many organizations have built their application strategies on a flawed premise: having a single, integrated application portfolio that's managed against a common set of criteria and evolves on a common timeline. But this has led to the mess many companies are in. Any changes to systems require a tremendous amount of effort because even simple modifications have far-reaching implications to foundational systems.

After brainstorming with his fellow Gartner team members, Gaughan says that they identified a three-tiered system to classify corporate applications based on the role they play. The goal is "to help develop a level of abstraction that can accelerate the pace of change for IT," he adds. The three:

  • Systems of Record. Think of these as your foundational, critical apps that run your business. "They're transaction oriented and are core to financial reporting and regulatory compliance," Gaughan writes. "Their pace of change is slow, with their life span measured in decades. They're most likely delivered on premises."
  • Systems of Differentiation. These give you a leg up on competition. "They connect to customers and trading partners, as well as help speed time to market and overall agility," he writes. "They're more collaborative in nature, and while they leverage data from systems of record, they capture and maintain additional information. They're relatively stable and have a life span of anywhere from three to 10 years. Many of these systems will be deployed on premises, but some may be delivered as a cloud application."
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