Monday, December 11, 2006

Management Lite & Ezy 18 – Application Portfolio

Can't decide whether to make a purchase for your company? Not sure if introduction of a new process to the company is worth the cost and time? Application Portfolio can help you to make decision.

Proposed by John Ward and Joe Peppard, Application Portfolio was originally conceived as a planning tool for information Systems. It categorizes information systems based on their business contribution. The four categories are:

Strategic. Applications that are critical to future business success. They create or support change in how the organization conducts its business, with the aim of providing competitive advantage. Note that whether the technology used is 'leading edge' does not indicate that the application is strategic – assessment must be based on business contribution.

Key Operational. Applications that sustain the existing business operations, helping to avoid any disadvantage. It can be argued that, in many industries, substantial numbers of applications – e.g. EPOS (electronic point of sale), ATM (automated teller machines) – have become so pervasive that they have become 'mandatory' for survival.

Support. Applications which improve business efficiency and management effectiveness but, in themselves, do not sustain the business or provide any competitive advantage.

High Potential. Innovative applications which may create opportunities to gain a future advantage, but are as yet unproven.

The four quadrants below illustrate the four categories of the Application Portfolio. (For some unknown reasons, management gurus like to use 2x2 matrices to explain their points.)

Ward, J., Peppard, J. (2002). Strategic Planning for Information System Harvard, 41-43.

No comments:

Post a Comment