Application Program Management in the Government

1. Application Portfolio Management
at the Manitoba Government
Larry Phillips
Director Applications Management Services
Business Transformation and Technology
Government of Manitoba
October 17, 2011

2. Agenda
• Background
• Work completed
• Analysis of Manitoba’s application inventory
• Manitoba’s APM model
• Pilot results
• Top 50 applications analysis
• Lesson learned & next steps
• Questions
APM at the Manitoba Government – 2011 SDEC 2

3. APM: A Definition
• Using concepts from investment portfolio
management gather and analyze:
– the cost to build and maintain the application,
– the business value produced
– the technical quality of the application
– and the expected lifespan
APM at the Manitoba Government – 2011 SDEC 3

4. APM Objectives
• Identify and eliminate partially and wholly redundant
applications
• Quantify the condition of applications in terms of stability,
quality, and maintainability
• Quantify the business value / impact of applications and
the relative importance of each application to the
business
• Allocate resources according to the applications'
condition and importance in the context of business
priorities
APM at the Manitoba Government – 2011 SDEC 4

5. APM Principles
• Treat applications as assets
• Manage assets as a portfolio
• Perform ongoing health assessments of
applications
• Use the information to strategically
determine future application investment
decisions
“Gartner research has shown that, on average, the cost to go live is
only 8% of the 15-year TCO of an application”
APM at the Manitoba Government – 2011 SDEC 5

6. IT Investment Lifecycle
I. Strategic Planning,
III. Operation, Investment Selection, and
Maintenance, and Planning – IPM
Determine which assets to acquire.
Renewal/Retirement/
Replacement – APM
Maintain and operate assets in the right
ways and renew, retire, or replace them at
the right times.
II. Project Implementation – PPM
Buy, build and implement assets in the right manner.
Source: State Government of North Carolina
APM at the Manitoba Government – 2011 SDEC 6

7. How Did We get Here?
• Right technology then but wrong technology
today
• Too many technologies
• Total life cycle costs not considered
• Applications stretched beyond original intent
• Growing backlog of application vitality needs
• Expired warranties and support agreements
• Inability to run on modern infrastructure
APM at the Manitoba Government – 2011 SDEC 7

8. What Are The Impacts?
• Impedes new service delivery models
• Inability to meet regulatory requirements
• Cannot handle increased usage or data volumes
• Inefficient ICT resource utilization
• Unable to meet security, privacy, confidentiality
requirements
• Overlapping and duplicate application functionality
• Makes disaster recovery and business continuity efforts
difficult and expensive
• Leads to data quality issues
• Dependency on individuals, ―heroic‖ support efforts
APM at the Manitoba Government – 2011 SDEC 8

9. APMI Work Completed To Date
• Scope is all applications that BTT is directly responsible for
supporting
• Developed inventory of 550 Manitoba applications including
information on:
– Deployment date
– Business owner
– Primary, secondary and database technologies
– Line of business category
– Application support costs
• Completed high level analysis of portfolio inventory data
• Developed Manitoba tool kit to capture APM data
• Worked with departments on APM pilot of six applications
• Completed APM assessment and analysis of top 50 applications
APM at the Manitoba Government – 2011 SDEC 9

10. Application Inventory Analysis
I. General statistical
A. What apps consume our time?
B. How many apps do we have by Technology?
C. How many apps do we have by Technology Type?
D. How many apps do we have by Department?
II. Age based
E. Most apps deployed since 1999.
F. Most time spent on apps <= 11 years old.
G. What is the average age of apps?
H. When did departments deploy apps?
III. Cost based
I. Where do we invest?
J. How much time is spent on old technologies?
IV. Risk based
K. What services have most technical risk?
APM at the Manitoba Government – 2011 SDEC 10

11. General Statistical
A - Current Situation
• 550 applications in portfolio
– Applications defined as those requiring a server to
operate
– Does not include desktop/minor COTS applications
• Some key findings...
– Top 15 (3%) consume 50% of support resources
– Top 45 (8%) consume 75% of support resources
– Top 90 (16%) consume 90% of support resources
– Only 20 (4%) applications consume more than 1 FTE
– 239 (43%) either required or received no AMS
support in period from April 1 to December 31, 2010.
APM at the Manitoba Government – 2011 SDEC 11

12. General Statistical
B – How Many Apps By Technology?
60
Number of Applications
50
40
30
20
10
0
APM at the Manitoba Government – 2011 SDEC 12

13. General Statistical
C – How Many Apps By Tech Type?
140
Number of Applications
120
100
80
60
40
20
0
Technology Type
APM at the Manitoba Government – 2011 SDEC 13

14. General Statistical
D – How Many Apps By Department?
50
45
Number of Applications
40
35
30
25
20
15
10
5
0
APM at the Manitoba Government – 2011 SDEC 14

15. Apps Deployed Per Year
10
20
30
40
50
60
70
80
0
1985
1987
1989
1990
1991
1992
1993
1994
1995
1996
APM at the Manitoba Government – 2011 SDEC
1997
1998
1999
2000
2001
Age Based
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
100
200
300
500
400
600
15
Cumulative Number of Apps
Deployed
E - Most Apps Have Been Deployed Since 1999

16. Age Based
F - Most Time Spent on Apps <= 11 Years Old
AMS Hours : April – December 2010
30%
82% of time spent on
apps deployed since 1999
25%
Percent of Time
20%
15%
10%
5%
0%
1985
1987
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Year Application Was Deployed
APM at the Manitoba Government – 2011 SDEC 16

17. Age Based
G – What Is Average Age of Apps?
16
14
12
10
Years
8
6
4
2
-
APM at the Manitoba Government – 2011 SDEC 17

18. Age Based
H – When Did Departments Deploy Apps?
60
Less Than 5 Years
50
Number of Applications
5 - 10 Years
10 - 15 Years
40
15 - 20 years
30 More than 20 years
20
10
0
FIN
AEL
CHT
FSCA
HCD
SAP
JUS
MAFRI
MH
CON
COR
LIM
MIT
WSD
BTT
CSC
EDU
ETT
IEM
MLG
ANA
HLYS
APM at the Manitoba Government – 2011 SDEC 18

19. Cost Based
I – Where Do we Invest?
AMS Hours : April – December 2010
25%
51% in preferred technologies
20%
15%
10%
5%
0%
APM at the Manitoba Government – 2011 SDEC 19

20. Cost Based
J - Half of Time Spent in Old Technologies
AMS Hours : April – December 2010
40%
51% in Standard Technologies
30%
20%
10%
0%
APM at the Manitoba Government – 2011 SDEC 20

21. Risk Based
K - What Services Have Most Technical Risk?
AMS Hours : April – December 2010
25%
Current Standard
20%
Containment
Retire
15%
Percent of Time
Unclassified
10%
5%
0%
APM at the Manitoba Government – 2011 SDEC 21

22. From Inventory to Portfolio Management
• Assess applications using balanced scorecard
approach:
– Business Value
– Risk (Technical Integrity)
– Cost (AMS support hours today, holistic application
TCO in future)
• Application Scorecard
– Complete in collaboration with departments
– Measures value of application—not value of program
area
APM at the Manitoba Government – 2011 SDEC 22

23. APM Model
Performance
Indicators
Aspect
Business Business Process Support
Business Value
Data and Information Quality/Timeliness
Business Robustness
Life Cycle Position
Operational Complexity
Reliance on Subject Matter Experts
Maintenance Factors
Supportability
Availability and Cost of Support Skills
Technical Architectural Alignment
Foundational Technology Quality
Extensibility
Technical Performance
Vendor Capability
APM at the Manitoba Government – 2011 SDEC 23

24. APM Analysis Framework (TIME)
High
Tolerate Innovate/Invest
(Re-evaluate/ (Maintain/
Reposition Asset) Evolve Asset)
?
Technical
Integrity
Eliminate Migrate
(Retire/Replace) (Re-engineer/
Modernize Asset)
Low
Low High
Business Value
APM at the Manitoba Government – 2011 SDEC 24

25. Pilot Methodology
• Indicators rated zero to two for each app:
2 – Fully meets requirement
1 – Mostly meets requirement
0 – Fails to meet requirement
• Business Indicators scored jointly with
business area responsible
• Operational and Technical indicators
scored by BTT staff
APM at the Manitoba Government – 2011 SDEC 25

26. Pilot Ratings
• Scorecard utilizes comprehensive, objective
framework for each criteria to aid in quality and
consistency of application ratings
3.3 Extensibility The design, construction, integration and implementation of • 2 (Good) — The application
the application ease changes. Indicators include: is adaptive in all aspects of
• Addition of business functionality. extensibility and scalability.
• Growth in number of users or volume of data.
• Addition, deletion or modification of interfaces and • 1 (Fair) — The application
integration to/from other applications. is adaptive in the most-
• Adaptation to infrastructure changes.
frequent changes (add
• Collaborative interaction with external applications business function, growth,
or services. interfaces and integration).
• Evolution to new development languages and
methods. • 0 (Poor) — The application
• Gather data through discussions with key experts is generally difficult to extend
in each area (design, construction, integration and or scale.
implementation) for each bulleted item.
APM at the Manitoba Government – 2011 SDEC 26

27. Pilot Ratings
Performance Indicators
App 1
App 2
App 3
App 4
App 5
App 6
Aspect
Business Business Process Support 0 0 0 0 0 1
Business Importance 2 2 2 1 2 2
Data and Information Quality/Timeliness 0 1 0 0 2 0
Business Robustness 0 2 0 0 2 0
Life Cycle Position 0 1 1 0 0 2
BUSINESS VALUE 2 6 3 1 6 5
Operational Complexity 1 2 1 0 1 1
Reliance on Subject Matter Experts 1 1 1 0 0 0
Maintenance Factors 2 1 2 2 1 1
Supportability 0 2 2 0 2 2
Availability and Cost of Support Skills 0 2 2 0 0 0
Technical Architectural Alignment 0 1 1 0 0 0
Foundational Technology Quality 0 2 1 0 0 1
Extensibility 0 2 1 0 1 1
Technical Performance 1 2 1 1 2 1
Vendor Capability 0 0 0 0 0 0
TECHNICAL INTEGRITY 5 15 12 3 7 7
APM at the Manitoba Government – 2011 SDEC 27

28. Application Heat Map
Note: Object size
represents operational
cost
APM at the Manitoba Government – 2011 SDEC 28

29. APM Phase 1
• Assess top 50 applications.
– Business Value
– Technical Integrity
• Completed September 2011
APM at the Manitoba Government – 2011 SDEC 29

30. How Many Top 50 Apps in Each Quadrant?
Migrate, 2 Tolerate, 4
Eliminate, 8
Invest, 36
Number of Top 50 Applications By Quadrant
APM at the Manitoba Government – 2011 SDEC 30

31. How do Costs Compare Across Quadrants?
$250,000 40
35
$200,000
30
$150,000 25
20
$100,000 15
10
$50,000
5
$0 0
Eliminate Invest Migrate Tolerate
Average Annual Cost per Application Number of Applications
APM at the Manitoba Government – 2011 SDEC 31

32. Observations
• Positive feedback from participants on APM to address
concerns about application viability, risk and escalating
costs
• Most support investment devoted to apps deployed in
last 10 years, not older legacy apps, but..
• Often at expense of vitality of overall portfolio
• Acceptable number in standard technologies, but...
• Lots of disparate, boutique technologies and a high
number in containment technologies
• Most applications are maintainable—today—but vitality
deficit is increasing, vitality debt growing
APM at the Manitoba Government – 2011 SDEC 32

33. Lessons Learned
• Business area involvement is essential but
engagement was challenging
• Significant effort required (2 to 4 hours per
application)
• Application inventory information is
valuable and must be maintained
• Program must be ongoing to be effective;
change is constant
APM at the Manitoba Government – 2011 SDEC 33

34. Next Steps
• Proposed next steps
– Operationalize APM as an ongoing BTT
program
– APM analysis as input to capital planning
– Continue to work though application inventory
to completion
• Complete Top 100 by end of 2011
• Complete all apps by end of 2012
– Expand to include all costs (e.g. hardware,
system software, services, etc.)
APM at the Manitoba Government – 2011 SDEC 34

35. Application Portfolio Management
APM at the Manitoba Government – 2011 SDEC 35