Build an Enterprise Application Strategy That Drives Value

Informed by value stream models that closely align to business objectives, an enterprise applications strategy guides the most important application roadmap and architecture decisions. It includes the guiding principles and path for evolving the application portfolio, processes and organization. It supports the strategic needs of the operational, customer and employee experience objectives while minimizing the cost of building and maintaining the portfolio.

Enterprise application leaders must create an application strategy that aligns to business outcomes, particularly during times of economic headwinds. To meet these objectives, application leaders require clear metrics to track progress and articulate the value of enterprise application investments.

Gartner estimates that IT leaders who successfully communicate their organizations’ business value will maintain 60% higher funding levels than their market peers. Enterprise application leaders often try to set their strategy without fully understanding business priorities. All application organizations need an application strategy to ensure the most important work gets done and the “nice-to-haves” or limited-value work are tackled last.

An “enterprise application leader” refers to the leadership role that has the primary enterprise accountability for at least one major technology portfolio within a business. This means that they own the strategy, selection, implementation and operational considerations for that portfolio of applications. An application, in this context, is a commercial software package that automates a discrete set of internal business processes.

The enterprise application leader is not necessarily an IT-only role. Gartner clients report this role in business, IT and matrixed centers of excellence. In a recent Gartner survey, 56% of application leaders stated that they worked in a matrix environment where they report to both an IT executive and a business leader. One way to simplify and scale application ownership is to designate a “domain” chairperson and governance team responsible for a “cluster” of applications sharing a common set of demand-side stakeholders.

The domain grouping ideally should be based on business function or capability (e.g., a cluster of finance, HR and procurement applications). This approach may help split the entire application portfolio into six to eight domains with the chairperson acting as the effective “application leader” for each. In choosing this route, be sure that each domain includes applications from all pace layers — systems of record, differentiation and innovation — because each evolves at different rates.

Application leaders are responsible for application fitness through the entire lifecycle — including all capital and operating expenditures. Critical to this is ensuring the participation of all legitimate stakeholders in both strategy and evaluation of application options. This individual must coordinate with solution architects, business analysts and PPM organizations regularly to formulate application-related recommendations for management decisioning. As a result, the key skills and competencies of strong demand-side application owners include conflict management, proven ability to moderate a range of issues and success at forging effective relationships across diverse teams.

Organizations are planning for a more volatile future that demands an increasingly flexible enterprise applications strategy — whether in a service or product-centric business environment. Enterprises need agility from their applications to respond quickly to customer needs and be able to transform their business as part of a composable applications strategy. To deliver on this transformation, organizations need applications that can be readily assembled, reassembled and extended. IT and professional developers are not the only drivers of technological innovations. Business technologists, such as citizen developers and citizen data scientists, deliver business automation through a variety of technologies.

Application delivery is the practices and processes for developing and deploying applications within an enterprise applications portfolio. This includes DevOps, agile delivery and product management practices.