In separate bills in 2004, the legislature of a state with over $750 million in IT spending, directed the State Chief Infor-mation Officer (SCIO) to determine the “health” of the state’s software applications and prepare a long-term plan for the management of those assets. Under increasing fiscal pressures for obtaining greater results from taxpayer dollars, state government must continually explore opportunities to innovate and maximize business benefits and public value through technology. A significant opportunity for value creation and cost-effectiveness in spending is through the un-derstanding, leveraging, extending, and rationalizing of existing technology investments, specifically legacy applica-tions.

1. Challenge
The legislature of a state with over $750 million in IT spending, directed the State Chief Information Officer (SCIO) to
determine the “health” of the state’s software applications and prepare a long-term plan for the management of those
assets. Under increasing fiscal pressures for obtaining greater results from taxpayer dollars, state government must
continually explore opportunities to innovate and maximize business benefits and public value through technology. A
significant opportunity for value creation and cost-effectiveness in spending is through the understanding, leveraging,
extending, and rationalizing of existing technology investments, specifically legacy applications.
Following up on the heels of the successful statewide PPM rollout, the state looked to implement an Application
Portfolio Management (APM) process as the next step in an end-to-end portfolio management solution. The state com-
pleted a one time study in 2005 to capture legacy application information. While the study identified a number of appli-
cations which needed attention, a process was never established within the agencies to follow up on the remediation
plans and continue the analysis. The APM implementation aimed to build upon this one time effort to implement an
ongoing management program for applications and educate agencies on conducting analysis to make fact based trans-
formation decisions on their application inventory.
Solution
UMT was asked to put an APM process and the Microsoft Project Server in place to assist the state in better planning,
budgeting, decision making and management of applications. The first step was to define requirements to build the
application inventory. Initial efforts focused on refining the initial data collected using UMT’s best practices. The results
were further refined through a series of sessions with an agency advisory committee, which included not only technical
staff, but business and program personnel as well. The sessions produced a consensus framework that included basic
State Government Implements Application
Portfolio Management Solution
Reducing application costs and aligning portfolio to business strategy
A UMT Case Study

2. application attributes, an application cost structure with allocation and estimation guidelines to produce annual cost
of ownership figures, application alignment to business strategy and assessments for architectural fit, operational
performance and application risk.
The solution, including Microsoft Project Server, was initially piloted by several beta agencies and, after incorporating
their feedback, rolled out to the remaining agencies in waves. Agency personnel attended multiple training sessions
by UMT on APM theory and best practices, hands-on tool use and portfolio analysis utilizing comprehensive charting
and reporting functionality within the tool. A key component of the agency education was to explain the relation-
ships and synergies between the application and project portfolios. Communication with agencies was critical
through all stages of the implementation; initially to lay out their involvement and responsibilities, and later to pro-
vide updates on project progress and communicate key dates and deadlines.
Results
The APM implementation created a centralized, consolidated repository of over 1,000 applications with robust re-
porting and charting capabilities. Over 150 users from 27 agencies were trained on APM theory and use of the tool to
build their application inventories. An ongoing APM framework was established within the agencies to conduct anal-
ysis of their application portfolios to make fact based transformation decisions on an ongoing basis. The linkages to
the project portfolio now allow the state to produce total cost of ownership for applications for the first time. The
APM efforts were also tied into the development of annual statewide and agency IT plans, requiring the agencies to
develop management plans for each application, and allowing the SCIO to coordinate agency efforts with statewide
initiatives. The state plans to build on the APM & PPM initiatives focusing efforts on portfolio alignment/optimization
and evaluating the use of Microsoft Project Server and SharePoint.
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