Application Portfolio Management Framework & Application Rationalization Approach

Application Portfolio Management (APM) is a framework for managing enterprise software applications and software-based services.  APM allows an organization to optimize its inventory of software applications by collecting and analyzing metrics in order to illustrate the business benefits of each application.  APM is based on a scoring algorithm which determines the value of each application and the health of the IT infrastructure as a whole.  By gathering metrics like an application’s age, how often it’s used, the cost it takes to maintain it, and its interrelationships with other applications, the organization can determine whether or not a particular application should be kept, updated, retired or replaced.  APM is a formal and repeatable process, usually aligned with an organization’s business cycle, to assess what the organization has, and determine if an application is not performing or does not meet its business and enterprise architectural requirements, thus eliminating it and replacing it with a better performing application.  The goal of the organization is to reduce the spend on maintaining existing applications which don’t perform well, and free up financial resources to invest in new and better performing applications in support of future business requirements.


Application Rationalization (AR) often occurs after an IT organization accumulates an unmanaged collection of applications over time, through erratic business strategies, or as a result of a merger and acquisition.  This rationalization of applications can include replacing, retiring, modernizing or consolidating applications.  The AR approach must perform the following:

• Assess the maturity, risk and technical viability of applications, as well as determine how well the application meets business needs and identify options for remediation.

• Identify business-enabling and business-funded initiatives that require process and technology changes.

• Identify vendors, platforms, integrations, and system configurations for reliable, serviceable and highly available applications.

• Refactor legacy applications into new emerging technologies supporting business requirements brought on by market changes such as cloud, big data, social and mobile.

An important goal of AR is to eliminate redundant and non-value-adding applications, and free up future budget for new, business-critical applications and emerging technologies.


IT Architects provides a service to establish an Application Portfolio Management (APM) framework and conduct an Application Rationalization (AR) using a proven approach leveraging the TIME (Tolerate, Invest, Migrate, Eliminate) model to measure and map the business value of applications.  An organization’s application portfolio is evaluated against four primary measures: business value/impact, IT quality & alignment, technical feasibility, and economic justification.  This approach allows an organization to readily assess the applications’ ability to meet business goals versus the technical integrity of the application landscape (which of course are both important). 

Applications are also categorically evaluated based on the PACE model and distinguishing applications as:

1) System of Record,

2) System of Differentiation, and

3) System of Innovation.