Application Portfolio Management: a practical starting guide.

TLDR: Application Portfolio Management – A Practical Starting Guide

The Problem: Enterprise application landscapes are growing uncontrollably, creating redundancy, increased costs, security risks, and complexity.

The Approach: Start with a lightweight “minimum viable” APM practice that delivers immediate value without complex tools or extensive documentation.

Four Essential Components:

  • Essential Application Catalog (know what you have)
    • Basic Interconnection & Impact Mapping (understand relationships)
    • Application Intake Process (begin controlling unmanaged application growth)
    • Accessible Portfolio Insights (make information easily available and digestible)

Best Practices:

  • Start small with focused proof-of-value in one business area
    • Prioritize breadth over depth in data collection
    • Balance governance with business agility
    • Make insights accessible to all stakeholders

Welcome to the first article in our three-part series on Application Portfolio Management (APM).

With technology advancing at an unprecedented pace, enterprises frequently find themselves managing an ever-growing forest of hundreds or even thousands of applications. This application growth tends to happen naturally as businesses solve immediate problems, acquire companies, or adopt new technologies. Without proper management, this leads to significant challenges: overlapping capabilities, rising maintenance costs, fragmented data, security vulnerabilities, and increased complexity when implementing change.

APM is the essential first step toward regaining control of your enterprise application landscape. Before rationalizing or modernizing your portfolio, you must first understand what you have. This guide helps you establish a lightweight, minimum viable APM practice: a practical foundation that delivers immediate value without requiring heavy tools or complex governance upfront.

By establishing this effective APM foundation that delivers immediate value while also addressing how to manage the inflow of new applications, you’ll prevent your landscape challenges from further escalating and set the stage for more sophisticated practices as your organization matures.

The business case for Application Portfolio Management

The consequences of an unmanaged application portfolio goes far beyond IT complexity. Organizations typically spend 70-80% of their IT budgets just maintaining existing applications, leaving minimal resources for innovation and transformation. Costs also rise due to redundant licenses, overlapping tools and inefficient support.

Unmanaged applications also create significant risk exposure. Shadow IT applications procured without IT oversight – often lack proper security controls, compliance adherence, and integration with enterprise systems. When critical processes rely on undocumented systems, disruptions become likely.

Perhaps most importantly, APM creates the visibility needed for strategic decision-making. Without a clear understanding of your current landscape, rationalization and modernization efforts become guesswork rather than data-driven decisions.

APMprovides strategic insight for stakeholders across the business:

  • CIOs gain transparency into technology spending and risks.
  • Business leaders understand application support for their capabilities
  • Enterprise architects obtain visibility into technology patterns
  • Security teams identify vulnerabilities and compliance gaps
  • Finance departments uncover cost optimization opportunities

Four core components of a lightweight APM practice

A successful APM initiative doesn’t require complex tools or extensive resources to delivering immediate value. The minimum viable product (MVP) starts by implementing these four essential elements, which form the foundation of an effective lightweight APM practice:

  1. Accessible Portfolio Insights: Makes application data easily available and usable for stakeholders to support decision-making
  2. Essential Application Catalog: Provides the fundamental visibility of what applications exist across your enterprise
  3. Basic Interconnection & Impact Mapping: Reveals critical relationships between applications for basic impact analysis
  4. Application Intake Process: Establishes controls to prevent further growth while you gain control of your existing landscape

1. Essential application catalog

Before optimizing or modernizing, organizations need an accurate inventory of their applications. Start small by documenting applications in one business area to prove value and refine your methodology before expanding.

Next, focus on capturing essential metadata for each application. At minimum, capture the application name, description, business purpose, and both business and technical owners. Expand gradually to include additional context such as business capabilities supported, core technology components, lifecycle status, basic cost information, and business criticality classification.

Prioritize breadth over depth early on: catalog all relevant applications first with basic data over deep technical detail, and enrich details later. If you already have a CMDB or APM tool, avoid blindly importing low-quality data; even a spreadsheet is a good starting point if the data is clean.

2. Basic interconnections & impact mapping

The next logical step is understanding how these applications interact with each other and connect to your business functions. Knowing what applications exist is helpful. Understanding how they connect is critical.

Keep it “lightweight”:

  • Focus on your most critical applications and their direct connections.
  • Document relationships without exhaustive technical detail.
  • Link applications to the business processes or capabilities they support.

Start by asking these simple questions for each core application:

  1. Which other applications does this system send data to or receive data from?
  2. Which key business capabilities or processes does this application support?
  3. How critical is this application to those business capabilities (primary, supporting, or incidental)?

This basic two-dimensional mapping (application-to-application and application-to-business) creates a lightweight foundation for impact analysis without the burden of comprehensive documentation.

3. Application intake process

The application intake process serves two essential purposes: generating awareness of new applications entering your landscape and providing transparency about existing capabilities that might already meet business needs. 

Start with transparency over control:

  • Make the application catalog searchable, so teams can check existing tools before buying new ones.
  • Use a simple notification system, not a complex approval flow, for new applications.
  • Position the APM function as an advisor, not a gatekeeper.
  • Require formal review only for high-cost or high-risk additions.

A short form asking, “Have you checked if we already have an application that does this?” can prevent duplication without slowing innovation. The goal is to make informed decisions with full landscape awareness, not to prevent all new applications.

4. Accessible portfolio insights

The value of your application inventory is only realized when the information is easily accessible to stakeholders. Focus on two key approaches to sharing this data:

  • Make application details easily searchable: through a shared portal, wiki, or even a well-maintained spreadsheet.
  • Develop basic reports highlighting key issues: Create straightforward visualizations that reveal actionable insights, such as:
  • Applications without formal owners
  • Business-critical shadow IT
  • Redundancies and aging technologies
  • High-dependency systems

Start with simple metrics and visuals. Most collaboration and spreadsheet tools offer built-in reporting to turn raw inventory data into useful insights. This helps build executive buy-in and organizational support.

Sustaining and evolving your APM practice

Once the foundation is in place, focus on sustaining what you’ve built while gradually enhancing your capabilities.

  • Regularly verify data quality, perhaps quarterly.
  • Connect APM to existing workflows like procurement or project intake.
  • As engagement grows, expand metadata and introduce more structured governance.

You’ll know you’re ready to scale when:

  • Inventory coverage hits 80–90%
  • Portfolio insights are actively used in decision-making
  • You’ve resolved simple redundancies or risks using your data

At this stage, your practice is ready for advanced capabilities like application rationalization and modernization planning.

What’s next?

Application Portfolio Management is key to managing complexity and unlocking efficiency. By starting with a lightweight, practical approach, you gain visibility and control without overwhelming your teams.

Remember:

  • Actionable insights that drive better business decisions – not perfect documentation – are the true measure of success.
  • Focus on value delivery, iterate gradually, and scale as your organization matures.

In the next article of our series, we’ll explore how to mature this initial MVP approach into a robust APM solution with sustainable governance processes, enhanced data quality practices, and expanded coverage across your organization. The third and final article will cover advanced topics like application rationalization and modernization.d modernization planning.

Stay tuned as we continue to build on this foundation to help you transform your application landscape into a strategic business asset.

Need help getting your application landscape under control? Contact us to see how we can support your APM journey