What is a cost-benefit analysis in the context of APM?

In the context of Application Portfolio Management (APM), a cost-benefit analysis is fundamentally a comparison of the expected costs of an application against its anticipated benefits. This analysis is crucial in decision-making processes regarding which applications to retain, improve, or retire within an organization's portfolio.

The essence of this analysis lies in determining whether the investment in an application is justified by the value it brings to the organization. It helps stakeholders understand the financial implications of maintaining and managing applications, ensuring that resources are allocated efficiently. By weighing the costs, such as licensing, support, and operational expenses, against the benefits, including functionality, productivity improvements, and overall contribution to business goals, organizations can make informed decisions about their application portfolio.

In contrast, other options focus on different aspects of application management. For instance, a review of application performance over time pertains to how well the application operates and meets user needs, while a breakdown of application development expenses zooms in on the costs associated specifically with building applications. An evaluation of user satisfaction metrics looks at how well the application meets user expectations but does not directly consider costs or benefits in financial terms. Thus, these options do not capture the comprehensive financial analysis that defines a cost-benefit analysis in APM.