Assessing Application Value – APM

When dealing with hundreds or thousands of applications across the enterprise, an organization will inevitably face the question of “What are my most valuable applications?”. This is a difficult question to answer, but mostly because it’s a vague question as “value” has a lot of different meanings.

I would categorize application value in two ways:

  1. Business Impact – What is the risk or impact to the business if this application were to be unavailable for a period of time or permanently?
  2. Ongoing Return on Investment (ROI) – What is the on-going efficiency gain, resource savings, or risk reduction of this application? This would typically be the savings in dollars minus the recurring cost (licensing + operating cost).

These two methods of assessing value are different and the one you choose depends a lot on your end goal.

When looking at applications from an application rationalization standpoint, you are typically interested more in your ongoing ROI for these applications as you’ll want to choose to keep the applications where your investment is still generating ongoing returns, and eliminate the applications which cost more than the returns they generate or have a high degree of risk associated with them (such as no longer being supported by a vendor). For this measure, the “ongoing” value is the important part. You need to ensure you think about how much money it would cost the business on an ongoing basis if you removed this application. This might be lost revenue, this might be the cost of hiring additional staff to manually do the work that is currently automated, or any other ongoing cost to the business.

If you are however looking to understand which of your applications would be the biggest problem for your business if they were to go offline for a day, that is a different question and in this case you’ll want to look at your apps from a “Business Impact” perspective. This is typically use for determining what type of availability targets your app might need, or the disaster recovery requirements which should be applied for your business continuity planning.

In a future article, we will dive a bit deeper on these two measurements and talk more about how to calculate them.

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