Application Portfolio Management: How to Cut Software Waste

 

What is Application Portfolio Management?

Application Portfolio Management (APM) is the discipline of evaluating and governing all applications in use across the organisation to make sure they are cost-effective, strategically aligned, and technically sustainable.

Unlike a CMDB (Configuration Management Database) - which tracks technical components for operational use - APM is a strategic tool. It gives CIOs and CFOs the bird’s eye view they need to make informed decisions about software spend, lifecycle planning, and enterprise architecture.

Why Software Waste Happens in the First Place

In most enterprises we work with at Metrics, application sprawl isn’t a sudden event - it’s a slow accumulation of:

• Overlapping solutions performing the same function
• Siloed decision-making within departments
• Legacy systems that never got decommissioned
• SaaS contracts with no usage monitoring
• Uncontrolled additions to the IT stack during M&A or transformation

These symptoms lead to rising costs without delivering proportional business value. Even worse, they’re hard to detect without a structured portfolio view.

The Real Problem: Complexity Without Control

At Metrics, we assess portfolio positioning using a framework that maps maturity against cost and complexity - helping IT leaders visualise where they are today and what it would take to reach an optimised, cost-effective state.

Many are stuck in the danger zone: high costs and high complexity - without the maturity or governance structures to manage it.

A complex portfolio can be justified - but only if it’s fully understood and deliberately managed.
Without that, you're driving a truck like it’s a race car - and paying the price.

 

Metrics’ Proven Approach to APM

Here’s how we help C-level leaders reduce waste and take back control.

1. Baseline: Portfolio Assessment & Benchmarking

We start with a detailed “as-is” analysis:

• What applications exist today?
• What are the direct and indirect costs?
• What value does each app deliver?
• How does your portfolio compare to industry peers?

This often reveals massive savings potential. In one client engagement, a straightforward assessment uncovered £1.5M in avoidable spend.

2. Clean-up: Identify Redundancies and Waste

Red flags we often uncover:

• Multiple business application systems doing the same job
• Premium support tiers for low-value applications
• Over-provisioned licensing (e.g. "power users" with basic usage)
• SaaS bundles hiding unused functionality

We identify what can be eliminated without disrupting operations - and back it with clear data.

3. Control: Standardise SLAs and Service Variants

Many clients are surprised to discover gold-tier SLAs applied to non-critical apps. We help rationalise service levels based on actual business need - balancing risk with cost.

We also consolidate service variants, eliminate redundant modules, and streamline licensing.

4. Optimise: Align Strategy, Sourcing and Roadmap

Once the portfolio is cleaned up, it’s time to optimise:

• What apps should be outsourced?
• What should be kept in-house?
• Can certain workloads shift to nearshore or offshore models?

We help clients build an agile roadmap with clear quick wins, long-term savings plans, and realistic timelines - all aligned to their IT strategy.

What’s the Difference Between APM and Enterprise Architecture?

While Enterprise Architecture (EA) provides the blueprint for how IT systems support business goals, APM focuses specifically on governing the application layer – making sure it’s fit for purpose, financially sustainable, and delivering measurable value.

In many of our projects, APM feeds into EA initiatives - offering tangible data to guide transformation plans, cloud migrations, or tech modernisation strategies.

How to Tell If You Need Application Portfolio Management

You don’t need a crisis to benefit from APM. But here are signs it’s overdue:

• Software costs keep rising - without clear reasons
• No single view of the entire application landscape
• Application owners can’t say where data lives
• You’ve gone SaaS or cloud-first - but haven’t re-evaluated old contracts
• IT and business strategy are out of sync

Sound familiar? You’re not alone - and the fix isn’t another tool. It’s visibility, alignment, and process.

From Truck to Race Car: The Metrics Model

Our clients don’t just want to cut costs - they want clarity and control. That’s why our APM projects focus on three outcomes:

1. Transparency - Clear insights into application usage, cost drivers, and overlap
2. Alignment - Ensuring every app supports both IT and business goals
3. Governance – Processes and accountability to sustain improvements over time

It’s not just portfolio management. It’s portfolio leadership.

Ready to Cut Software Waste?

If your IT costs are climbing - can you confidently demonstrate the value the business is receiving for that spend? If not, APM may be the most valuable project you run this year.

📞 Let’s schedule a 30-minute conversation to map your current state and uncover where the waste really sits.

FAQs about Application Portfolio Management

What is Application Portfolio Management?

A strategic discipline for evaluating and optimising the software applications in use across an organisation, with the aim of reducing cost, improving efficiency, and aligning with business goals.

What is the difference between APM and CMDB?

CMDBs are operational tools tracking IT components. APM is a strategic layer focused on business value, cost, and application governance.

What are the 4 types of portfolio management?

In general financial terms: Active, Passive, Discretionary, and Non-Discretionary. But in IT, APM focuses on optimisation, rationalisation, governance, and transformation.

How does APM relate to enterprise architecture?

APM focuses specifically on the application layer, often feeding into broader EA efforts by providing actionable insights into software use and alignment.