7. Managing Applications Portfolio

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7. Managing Applications Portfolio

• Key questions for management
• Key demand issues
• Key supply issues
• Generic management strategies
• Evolution of management strategies
• Portfolio management strategies
• Portfolio management principles
• Portfolio management styles
• Portfolio management over time

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Key Questions for Management
Strategic applications
High potential applications

• Why do?
• Types of strategic advantage
• What to do?
• Business activities to create or remove
• How to do?
• Best ways to achieve goals

• Why do?
• Not clear
• What to do?
• Not certain
• How to do?
• Not yet known

Key operational applications
Support applications

• Why do?
• Types of process effectiveness
• What to do?
• Business activities to improve
• How to do?
• Best ways to achieve goals

• Why do?
• Types of process efficiency
• What to do?
• Business activities to automate
• How to do?
• Best ways to achieve goals

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Key Demand Issues

• Strategic applications
• Market requirement or competitive pressure
• Business objective
• Obtain advantage

• High potential applications
• New business idea or technology opportunity
• Individual initiative
• Demonstrate value

• Key operational applications
• Improve activity effectiveness
• Integration effort
• Avoid disadvantage

• Support applications
• Improve activity efficiency
• Cost reduction
• Legal requirement

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Key Supply Issues

• Strategic applications
• Rapid applications development
• Flexible applications
• Link to business initiative

• High potential applications
• Rapid prototype evaluation
• Avoid wasting resources
• Identify way to proceed

• Key operational applications
• Quality applications development
• Balance costs with benefits
• Evaluate options

• Support applications
• Low cost applications development
• Careful cost control
• Compromise needs

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Generic Management Strategies
Strategy
Centrally planned
Leading edge
Management rationale

• Central coordination of all requirements will
  produce better decisions

• Technology can create business advantages and
  risks are worth taking

Organizational requirements

• Knowledgeable top management
• Integrated IS and business planning processes

• Commitment of resources and funds
• Innovative management and strong technical skills

Role of IS

• Push forward boundaries of technology usage

• Provide services to match business demands

Role of managers and users

• Identify applications to meet business needs

• Use technology and identify the advantages

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Generic Management Strategies
Strategy
Free market
Monopoly
Management rationale

• Market makes the best decisions and users are
  responsible for business results

• Information is a corporate good and an integrated
  resource for users to employ

Organizational requirements

• Knowledgeable and accountable users
• Willingness to duplicate efforts with lose budget
  control

• Acceptance of policy on single sourcing
• Good forecasting of resource usage

Role of IS

• Satisfy requirements of users and non-directive
  in IS usage

• Profit oriented to achieve a return on resources

Role of managers and users

• Identify, source, and control applications
  development

• Understand business needs and present them to
  obtain resources

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Generic Management Strategies
Strategy
Scarce resource
Management rationale

• Information is a limited resource and its
  development must be clearly justified

Organizational requirements

• Tight budget control of all IS expenses
• Policies to control and justify IS usage

Role of IS

• Control costs tightly to optimize use of limited
  resources

Role of managers and users

• Identify and justify applications using costs and
  benefits

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Evolution of Management Strategies
Increasing IS usage
Free market
Leading edge
Monopoly
Centrally planned
Scarce resource or free market
DP era
MIS era
SIS era
Time
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Portfolio Management Strategies
Demand

• Strategic
• applications
• Centrally planned

• High potential
• applications
• Leading edge
• Free market

• Key operational
• applications
• Monopoly

• Support
• applications
• Scarce resource
• Free market

Supply
Centralized
Decentralized
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Portfolio Management Principles

• Strategic applications
• (stars)
• Continuous innovation
• Vertical integration
• High value added

• High potential applications
• (wild cats)
• Process development
• Minimal integration
• Cost control

• Key operational applications
• (cash cows)
• Defensive innovation
• Effective resource usage
• High quality

• Support applications
• (dogs)
• Divest or rationalize
• Efficient resource usage
• Sustained quality

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Portfolio Management Styles

• Strategic applications
• (developer)
• Seeks organizational goals
• Accommodates risks

• High potential applications
• (entrepreneur)
• Seeks personal goals
• Takes risks

• Key operational applications
• (controller)
• Seeks lasting quality solutions
• Reduces risks

• Support applications
• (caretaker)
• Seeks immediate efficient solutions
• Avoids risks

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Portfolio Management Over Time
Strategic applications
High potential applications
Management ownership, IS involvement, and project
management
Individual ownership and freedom
Fully integrated with other applications
for effectiveness
Re-engineer for long-term use
Re-evaluate costs and benefits, and return
to standards
Evaluate lower cost options to meet core needs
Key operational applications
Support applications