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Application portfolio management (APM) is an IT management technique that applies cost benefit analysis and other business analytics to IT decision-making. Application portfolio management looks at each program and piece of equipment as an asset within a company’s overall portfolio, giving it a score based on factors like age, importance, number of users and so on. Under APM, further investment in upgrades or changes in the portfolio mix must be justified by projected returns and other measurable factors.
IT management is often viewed as a constant battle to put out fires on a day-to-day basis. APM is meant to look beyond the day-to-day and evaluate an organization’s IT infrastructure to decide when and where improvements should be made. To be effective, APM must follow a structured and repeatable process as far as making evaluations and recommendation. By standardizing the process, APM can be scaled up to meet the needs of larger organizations.
The concepts of application portfolio management have been integrated into business and enterprise software to help organizations automate these practices.