As Application Rationalization Grows Hotter In 2011 – Vendors Will Play Catch-up

In his report on the top technology trends to watch in 2011 to 2013, my colleague Gene Leganza called out application portfolio management (APM) as one of a number of “planning and analysis tools to manage the future.” Forrester clients seem to agree with Gene, in fact they aren’t even waiting until 2011, their interest has been building steadily throughout the second half of 2010.

One case in point – thousands of unique client hits in Q3 alone on a new report entitled Assessing Your Applications — Metrics That Matter Drive Better Rationalization Decisions . I noted similar levels of interest in the companion workbook Forrester’s Application Scoring Workbook  in Q3. Together they indicate that clients have a strong interest in educating themselves on how to streamline and rationalize their application portfolios.

The volume of client inquiry offers additional proof points but focused more on the “how to’s” of APM, application assessments, and rationalization – they indicate to me that organizations are turning interest into action so they can adapt to anticipated growth as the economy recovers in 2011 and beyond. I expect firms that rationalize their portfolios will emerge as leaner, meaner stronger competitors – ready to win market share from those who don’t.  Why?

• Application portfolio costs are excessive. The ongoing operations and maintenance costs consume 65% of IT budgets on average – with some firms admitting  that costs exceed the 90^th percentile.
• IT can’t explain why resource consumption is so high. Decades of accumulation in an effort to keep pace with business change have created duplication, waste and bloat, yet IT can’t tie the size, cost, and resource consumption characteristics to specific applications – we tend to treat it as one large bucket of cost.
• Business leaders view the combination in an unfavorable light. IT expenditures that don’t have clear business value are no longer getting funded, and business leaders are increasingly suspicious of IT spending habits and accountability.

So client organizations are turning their attention to the processes that will help them:

• Inventory what they own
• Quantify its business value
• Quantify its technical and functional health
• Devise a plan to rationalize and streamline.

Vendors – opportunity is knocking – it is time to join the dance and stop watching from the sidelines. Some opportunities include:

• More robust APM tooling – with more robust data models, stakeholder surveys,  and role-based views
• More complete service offerings – assessment services within a repeatable framework and “leave-behind” repository
• Expose and share portfolio information – with PPM, Operations, and service portfolio information tools

Yes, there’s a lot to do to fulfill the demand I see from clients – who’s game?

by Phil Murphy