Developing policies is a cornerstone of effective Application Portfolio Management (APM) governance. Policies establish the rules, guidelines, and standards necessary to manage the application portfolio consistently and effectively. They provide a framework for decision-making, ensure alignment with organizational goals, and promote compliance with regulatory and internal standards.
This section outlines the key steps, components, and best practices for developing policies for APM.
1. Importance of Policy Development in APM
- Why It Matters:
- Policies create consistency in how applications are managed across their lifecycle, reducing ambiguity and inefficiencies.
- They ensure compliance with regulatory requirements, industry standards, and organizational goals.
- Policies guide stakeholders in making informed, aligned decisions about the application portfolio.
- Key Outcomes:
- Improved transparency in application-related decisions.
- Standardized processes for onboarding, managing, and retiring applications.
- Clear expectations for all stakeholders involved in APM.
2. Key Principles for Effective APM Policies
- Clarity and Simplicity:
- Policies should be easy to understand and actionable, avoiding overly technical language.
- Alignment with Business Goals:
- Policies must reflect the organization’s strategic objectives, such as cost optimization, risk reduction, or digital transformation.
- Flexibility and Scalability:
- Policies should be adaptable to changes in technology, business priorities, and organizational growth.
- Enforceability:
- Policies must include clear mechanisms for enforcement, monitoring, and accountability.
3. Core APM Policies to Develop
- a. Application Onboarding Policy:
- Defines the criteria and process for adding new applications to the portfolio.
- Includes data collection requirements (e.g., cost, usage, ownership, compliance).
- b. Application Lifecycle Policy:
- Establishes guidelines for managing applications throughout their lifecycle (onboarding, maintenance, upgrades, retirement).
- Includes triggers for lifecycle transitions (e.g., end-of-life support, low usage).
- c. Rationalization and Retirement Policy:
- Provides criteria for identifying redundant, obsolete, or underperforming applications.
- Outlines the steps for decommissioning applications, including data migration and stakeholder communication.
- d. Data and Reporting Policy:
- Specifies the type of data to be collected, stored, and analyzed for APM.
- Includes guidelines for data quality, accuracy, and security.
- e. Compliance and Risk Management Policy:
- Ensures that applications adhere to regulatory, security, and internal standards.
- Includes processes for regular compliance audits and risk assessments.
- f. Cost Management Policy:
- Establishes rules for tracking and optimizing application costs.
- Includes guidelines for budgeting, chargeback, and cost-benefit analysis.
4. Steps to Develop APM Policies
Step 1: Identify Stakeholders
- Who to Involve:
- CIO, application owners, IT architects, finance, business unit leaders, and compliance officers.
- Why It Matters:
- Involving stakeholders ensures that policies are comprehensive and address the needs of all relevant parties.
Step 2: Define Objectives
- How to Proceed:
- Align policies with organizational goals such as reducing technical debt, improving application performance, or enhancing compliance.
- Example Objectives:
- Reduce redundant applications by 15% within a year.
- Ensure all applications meet compliance standards by a set deadline.
Step 3: Draft Policy Guidelines
- What to Include:
- Purpose: The reason for the policy.
- Scope: What the policy applies to (e.g., all applications or specific categories).
- Roles: Who is responsible for implementing and enforcing the policy.
- Procedures: Steps and processes to follow.
- Metrics: KPIs to measure policy effectiveness.
- Example:
- Purpose: Reduce application redundancy.
- Scope: All applications in the finance department.
- Roles: Application owners (Responsible), Governance Committee (Accountable).
Step 4: Review and Validate Policies
- Who Reviews:
- Governance committees, legal teams, and executive sponsors.
- How to Validate:
- Ensure policies are realistic, enforceable, and aligned with organizational priorities.
- Conduct pilot testing on a subset of applications.
Step 5: Communicate and Train Stakeholders
- Why It Matters:
- Policies are only effective if stakeholders understand their purpose and how to implement them.
- How to Proceed:
- Conduct training sessions and provide documentation for easy reference.
- Use real-world scenarios to illustrate policy application.
Step 6: Implement and Monitor
- What to Do:
- Roll out policies in phases to ensure smooth adoption.
- Use tools such as dashboards or CMDBs to track compliance and progress.
- Example:
- Monitor adherence to the application rationalization policy through quarterly portfolio reviews.
Step 7: Iterate and Improve
- Why It Matters:
- Policies must evolve to address changes in technology, regulations, and organizational priorities.
- How to Proceed:
- Collect feedback from stakeholders.
- Review and update policies annually or as needed.
5. Common Challenges in Policy Development
- Challenge: Resistance to new policies from stakeholders.
- Solution: Emphasize how policies align with organizational goals and benefit stakeholders.
- Challenge: Overly complex or rigid policies.
- Solution: Keep policies simple and scalable, starting with essential guidelines.
- Challenge: Lack of enforcement or accountability.
- Solution: Define clear roles and monitoring mechanisms to ensure compliance.
6. Best Practices for APM Policy Development
- Start with a Pilot: Test policies on a smaller subset of applications before rolling them out organization-wide.
- Align with Standards: Leverage existing frameworks (e.g., ITIL, COBIT) for policy inspiration and alignment.
- Use Templates: Create reusable templates for policy documentation to ensure consistency.
- Communicate Benefits: Regularly highlight the value of policies to stakeholders, such as cost savings or improved compliance.
- Integrate with Tools: Automate policy enforcement and monitoring using APM tools and dashboards.
7. Case Studies: Policy Success in APM
- Example 1: A mid-sized company implemented an application rationalization policy and reduced technical debt by 25% in one year by retiring redundant applications.
- Example 2: A healthcare organization adopted a compliance policy that ensured 100% adherence to HIPAA regulations, reducing risk and improving audit readiness.
8. Conclusion
Policy development is a foundational element of APM governance. Well-defined policies establish the rules and guidelines necessary for managing applications effectively, ensuring alignment with organizational goals, and promoting compliance. By involving stakeholders, starting with clear objectives, and iterating based on feedback, organizations can create policies that drive value, streamline processes, and support long-term success in APM.
