Introduction

About the Organization

ADNOC Onshore is one of the 15 subsidiaries of the Abu Dhabi National Oil Company (ADNOC) Group, a major Oil & Gas producer based in the Middle East region, and primarily operating in the onshore upstream Exploration and Production (E&P) segment within the large-scale Oil & Gas production business domain.

Background About the Industry Segment of the Case Study Organization

In the Oil & Gas industry, exploration, development, and production are collectively referred to as E&P or the upstream, while transportation is referred to as the midstream, and processing through supply as the downstream. The upstream sector includes searching for potential underground or underwater crude oil and natural gas fields, drilling exploratory wells, and subsequently operating the wells that recover and bring the crude oil or raw natural gas to the surface.

Thus, this industry segment is very asset-intensive and a high-risk business because a lot of investment is made for many years in the exploration before realizing the results by recovering crude oil or natural gas which may sometimes be uncertain. Hence, any kind of optimization of operations is always welcome.

Context and Significance of APM in Organizations

Application Portfolio Management (APM) is a systemic evaluation of the portfolio of applications in any organization to achieve objectives such as cost optimization, business agility, and improved customer satisfaction.[1] The practice of APM became mainstream in the late 1980s.[2] Enterprise Architecture (EA) and APM offer a wide range of benefits to practicing organizations.[3].] APM for rationalization of the application portfolio is a widely used practice, and hence we often come across the term Application Portfolio Rationalization (APR). However, there is a subtle difference between APM and APR that is important to understand. A one-time exercise of optimizing the applications is APR, while an ongoing activity to repeatedly execute APR projects including a setup for governance and management of applications constitutes APM. There are many organizations that carry out APM/APR projects leveraging consulting companies, while other organizations may do this in-house, as in this case study from ADNOC. Project-executing organizations have developed their own frameworks for this purpose or adopted industry-leading frameworks for AMP/APR initiatives [TOGAF 2022] [Gartner TIME].

This document features a project executed by an in-house team. The general principles of APM/APR projects remain the same even if carried out by external consultants, except for the frameworks that will be used in the project. The organization in this document leverages the TOGAF ADM as the framework for the APM. Even some government organizations have published guidelines on how to go execute APR engagements [CIO Playbook].

A general overview of an APR assessment project is provided for reference in Figure 1. After the assessment, as per the recommendation roadmap, the organizations take up the implementation initiatives. In the authors’ experience it has been observed that most organizations start with APR and one of the recommendations will be to institutionalize the process via APM by means of tools, methods, and governance for ongoing management of the application portfolio.

However, some organizations prefer to set up the APM platform and framework and then carry out APM projects (assessment followed by implementation) one after the other, as has been observed in the subject case study.

One of the key activities of any such exercise is to improve the understanding of the applications and digitize it. Applications are better understood when viewed through the lens of business capabilities. During the process of application analysis, understanding of the applications is attained via study of existing documents (if any) and/or data gathering via questionnaires and/or workshops with the stakeholders of the applications. The data obtained is digitized into a knowledge repository called a Configuration Management Database (CMDB).[4] The CMDB could either be custom-built or built using any commercially available tools. A common trend observed today is to integrate CMDB into the Service Management platform. Another trend being observed is to digitize the information into EA Tools. Thus, CMDB can be considered as an extract of the relevant information from such EA Tools.

Figure 1: General Overview of an APR Assessment Project
Figure 1: General Overview of an APR Assessment Project

It would be also beneficial to understand the general principles of the APM/APR methodology which are common but tailored by each executing service and/or beneficiary organization. Over the last two decades there has been tremendous progress in application architecture and modeling business functionality via application components as services that lead to a service-oriented journey with business technology within most organizations. This has led to the evolution from establishing a capability-based business model aligned with a Service-Oriented Architecture (SOA), evolving to a business expressed in terms of business services via a Service-Oriented Enterprise (SOE) [SOA]. These principles were integrated/adopted into the EA domain for transformation of application landscape via business and technology enablement and alignment in three pillars: strategy, operational, and operating model, as shown in Figure 2.

Figure 2: Pillars of Business/Technology Alignment and Organizational Business Service Enablement
Figure 2: Pillars of Business/Technology Alignment and Organizational Business Service Enablement [SOA, Figure 5]

For those who wish to have a detailed understanding of the fitment of SOA into operating models, refer to SOA for Business Technology §3.6.2 [SOA].

Best Practices for APM/APR Projects from the Authors’ Experience

The authors have observed that in the last decade APR has taken center-stage because all the organizations wanted to clean up their existing application portfolios before embarking on transformation initiatives like Cloud Adoption and Digital Transformation. The use of EA Tools thus helps in a natural progression towards Digital Transformation in conjunction with APM activity for any such organization [EA Tools].

There are some best practices to be followed when taking up APM/APR projects. Some such best practices are:

  • While there are many kinds of benefits possible from such projects, it is essential to finalize on an optimal set of objectives as target goals, else the project becomes unmanageable and eventually unsuccessful

  • Select a manageable set of applications (as a pilot) out of the hundreds or thousands of applications in the organization landscape (as authors observed in every organization) as scope for the project; once the framework is tested and established with the pilot portfolio, it can be institutionalized

  • Even after taking up such projects on a large scale after institutionalizing, it is essential to take a portfolio-based approach for each project instead of scoping all the applications of the organization into the project

    The top-down approach and business capability-based approach are some of the commonly employed approaches to arrive at the right portfolio of applications. Based on the specific context, the right approach can be selected; however, the key is not to take all applications in a single project.

1. See the TechTarget description of Application Portfolio Management at: https://www.techtarget.com/whatis/definition/application-portfolio-management-APM.
2. See https://en.wikipedia.org/wiki/Application_portfolio_management.
3. Refer to Collaboration Holistic Enterprise Architecture and Asset Management System for Power Generation `[Setiyowati et al.
4. See the TechTarget description of Configuration Management Database at: https://www.techtarget.com/searchdatacenter/definition/configuration-management-database.