Computerworld - The importance of diversification has been one of the toughest lessons learned from Enron Corp.'s bankruptcy.
It's nothing new, though. In fact, diversification has been a staple of the financial world for half a century.
As its name implies, project portfolio management groups projects so they can be managed as a portfolio, much as an investor would manage his stocks, bonds and mutual funds. In the 1950s, University of Chicago economist Harry Markowitz wrote that a portfolio of diverse investments is more likely than individual investments to reduce risks and produce a higher rate of return.
In the IT world, the obvious benefit of project portfolio management is that it gives executives a bird's-eye view of projects so they can spot redundancies, spread resources appropriately and keep close tabs on progress.
But what's most appealing to many CIOs is the focus on projects as a portfolio of investments. Discussions aren't just about how much a project will cost, but also about its anticipated risks and returns in relation to other projects. This way, entire portfolios can be jiggered to produce the highest returns based on current conditions.
Since the recession began, companies have been looking at the multimillion-dollar IT investments made during the past decade and trying to determine what returns, if any, they saw from those investments and what they can expect in the future.
That's where portfolio management comes in. It takes a lot of details and organizes them in an easily digestible form. It helps executives see where money is spent, why projects are or aren't necessary and what resources are needed.
A growing number of vendors offer project portfolio management software, which has dramatically simplified the process of building a portfolio. But the first step, says Howard Rubin, executive vice president at Meta Group Inc. in Stamford, Conn., is for companies to prioritize their business strategies. Portfolios can then be assembled and assessed based on how they meet those strategic needs.
Previously, projects were approved and then managed independently. They were evaluated as a whole at the executive level only when it came time to put together annual reports. But, says Rubin, in markets that move every day, a company needs that overall view so it can keep an eye on projects in real time to make sure that all of them are working together to meet core business goals.
- PCI 3.0 Compliance In this white paper, learn how PCI-DSS 3.0 effects how you deploy and maintain PCI compliant networks using CradlePoint devices.
- Defense throughout the Vulnerability Life Cycle with Alert Logic Threat and Log Manager New security threats are emerging all the time, from new forms of malware and web application exploits that target code vulnerabilities to attacks...
- QA Automation: Reducing Test Execution While Improving Coverage A leading capital investment firm in the US was in need of a comprehensive, cost effective and flexible solution to reduce their existing...
- Protect your brand with Alert Logic PCI DSS compliance solutions Alert logic's cloud-powered solutions help organizations that process, store or transmit credit card data eliminate the burden of PCI compliance. This product brief...
- Expert Panel: Enterprise Mobility and Data Loss Prevention When it comes to enterprise mobility, it's not just about devices, it's about the way people work. Hear this expert panel discuss the...
- Princess Cruises collaborates across the globe in the IBM cloud Norm Ayers, Director of Emergency Response and Social Projects at Princess Cruises explains how IBM and Cloud helped the company rapidly scale its... All Management White Papers | Webcasts