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IT Portfolio Management

IT Portfolio Management is enjoying a period of renewed interest on the part of many business decision-makers interested in or needing a holistic view into the organization's spending relative to its investments (assets, projects, systems, innovation research). You may be asking many of the same questions:

• Are we working on the right activities that benefit our organization?
• Which projects and programs are we investing in this month? This quarter? Remainder of this year?
• What is the health status of our existing investments? Should we pull the plug on any of them?
• When will the right resources be available to work on key initiatives?
• What are our people working on? How well are they meeting objectives?

The overall goal of IT portfolio management is for an organization to select, fund and manage a grouping of investments which, when taken collectively, generate maximum benefits to the organization. Ultimately, insight and management of enterprise IT spending will be the difference between those organizations that have the resources available to develop the next "best-of-the-class" product or solution and those that are merely "keeping the lights on".

Investment management cannot be performed at the project level

Many consultancies and software vendors would have you believe that Portfolio Management is nothing more than the conglomeration of specific project data reported to a singular source for management and review. While mature project management processes and skilled project managers will always be critical to the ultimate success of any portfolio management effort, the ability to deliver individual projects on-time and under budget is no longer enough to ensure competitive advantage. Where the ultimate goal of project management is to be stated, "We are doing things well," portfolio management seeks to answer the question, "Are we doing the right things well?"

Wherever you spend 60% or more of something is a prudent place to focus your attention

Many executives are looking to IT to drive the business. In order to derive maximum value from the adoption of portfolio management, your portfolio must consist of both existing and proposed investments. While proposed investments are often the source of increased revenue via product innovation and the development of break-through technologies, roughly 60% of all IT related expenditures are used to support existing projects and systems. Organizations cannot afford to trivialize or overlook the importance of reviewing their existing investments as an opportunity to drive cost savings via automation of processes, elimination of investment redundancy, and divesting of those projects with low ROI.

Portfolio Management success demands process adoption and the right tool to support your efforts

Although there are any number of software vendors with specialized tools designed to support your portfolio management efforts, the investment in a tool alone will not ensure a successful portfolio. Processes that support both the management and decisioning of investments need to be established and incorporated within your specialized portfolio management tool of choice.

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