Microsoft IT Experience in Application Portfolio Management

This is a guest post from Paul Slater, an intellectual property development architect from the Enterprise Strategy team within Microsoft’s Services organization. In part 1, he’ll discuss the background and strategy to Microsoft’s internal line-of-business application portfolio management. In part 2, he’ll discuss important considerations for successful application portfolio management.
Through the Enterprise Strategy program, Microsoft provides enterprise customers with dedicated enterprise architects armed with specific methods, dedicated IP, and access to subject matter experts. The program focuses on business needs, and helps our customers maximize their investment in Microsoft products and services. Our Enterprise Strategy Program architects work closely with Microsoft IT, because we recognize that our own IT organization is a valuable source of information for our customers. As a multinational tech company, providing products and services to many different types of customers, Microsoft is a complex organization, and Microsoft IT addresses many of the business and technology challenges our enterprise customers are encountering. One area of close collaboration has been application portfolio management.
The goal of application portfolio management is pretty simple –to increase the value of the application portfolio over time. But application portfolio management continues to be a challenge for an organization like Microsoft. We were built on the premise that any of us can change the world through software development. In that kind of environment, applications may spring up from anywhere, and may well start life on somebody’s laptop or under somebody’s desk. We want to enable that kind of innovation culture, but how do we do so and still ensure that our risks are kept in check, and our investments generate the most business value?
Microsoft IT has been wrestling with application portfolio management in some shape or form since 1998. At that time, like many large organizations, our focus was the Y2K issue. We needed to know what applications we had, so that we could assess our overall risk, and rewrite or replace problem applications. In the following years Microsoft continued to track all of its internal applications, and by 2005 we had identified and registered many thousands. It was time for a shift in focus towards rationalization, and as a result the Enterprise Architecture application portfolio management team was formed. Since 2005 that team has, through a combination of more effective people, process and technology measures, driven a reduction in application count by more than 50%. During the same period, additional priorities emerged for the team to drive new application portfolio management capabilities. IT optimization plans have included reduction in physical servers through virtualization, storage optimization, and reducing the number of service tickets, and reducing the amount of time it takes for a new application to become stable. Now, as Microsoft IT is moving to the cloud, and towards more real-time enterprise services, an in-depth understanding of the application portfolio is again essential.
While the Microsoft IT team continues to make progress, challenges remain. One challenge is getting and maintaining good data. If Microsoft IT requests too little data, it cannot provide the right level of detail to the business for effective decision making. Requesting too much data leads to unnecessary overhead to the server and application owners in the business, and this may eventually result in a reduction in data quality. This is actually a surprisingly complex challenge, as it deals not only with what data is required, but the process used to obtain it, and the value proposition for collecting it. However, over time, this and other problems are being addressed, and as a result Microsoft is getting a clearer picture of the costs associated with maintaining the application portfolio, and the value associated with that portfolio. These improved capabilities are the path to providing improved IT decision making capabilities and enhancing the value of IT to the business, without impacting the innovation culture we must preserve.
While the Microsoft IT team continues to make progress, challenges remain. One challenge is getting and maintaining good data. If Microsoft IT requests too little data, it cannot provide the right level of detail to the business for effective decision making. Requesting too much data leads to unnecessary overhead to the server and application owners in the business, and this may eventually result in a reduction in data quality. This is actually a surprisingly complex challenge, as it deals not only with what data is required, but the process used to obtain it, and the value proposition for collecting it. However, over time, this and other problems are being addressed, and as a result Microsoft is getting a clearer picture of the costs associated with maintaining the application portfolio, and the value associated with that portfolio. These improved capabilities are the path to providing improved IT decision making capabilities and enhancing the value of IT to the business, without impacting the innovation culture we must preserve.
In the second part of this series, I will discuss the key lessons learned, and discuss a high level approach for effective application portfolio management.
Paul Slater