IT portfolio management 101

Proving the business value of technology assets

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Many companies now recognize that mergers and acquisitions, geographic expansion, increase in business development, or cost-cutting efforts will not drive consistent and sustainable growth. As resources have become tighter over recent years, discovery and research have become accountable and performance oriented. They are inextricably linked to delivering elements of the business and strategic objectives, producing targeted and measurable results that increase value and growth consistent with the strategic intent.

Unlike the mid to late 20th century, when discovery and research could take a decade or more from initial idea through commercialization, the majority of companies today cannot afford to spend a sizable amount of resources over such a long period of time. The IT discovery portfolio provides the framework to assure investments are in line with expectations.

Ready, Aim, Fire: The IT Project Portfolio

The IT project portfolio takes input and direction from the corporate strategic plan, external and internal requests, the discovery portfolio, and the IT asset portfolio. IT projects are evaluated based on the input and assumptions made in the business case. The business case details the alignment to the business and strategic objectives, assessment of key stakeholder needs, critical dependencies and constraints, risks, value, costs, benefits, and adherence to compliance/regulations. IT projects are intangible assets in that they have not proven their mission or business value. However, investments in the IT project portfolio are the seminal building blocks in the execution of strategies—vehicles to execute change that are critical to a company’s survival. Failure to efficiently manage projects in a repeatable way will destroy a company.

The IT project portfolio focuses on all the projects in development across a company and consolidates one view of the overall value and risks. It serves as a gating mechanism for assuring projects are in alignment with the strategic intent, assumptions in the business case are adhered to, and decisions are based on accurate and timely data.

IT portfolio management is dependent on expertise in project, program, and enterprise program management:

  • Project management is focused on single project execution usually in support of a business objective (e.g., upgrade network servers, install desktop operating system). Project management is concerned with project timelines, budget, tasks, and deliverables. Close coordination with people (employees, customers, suppliers, regulators, etc.) is important in managing this aspect of the portfolio.
  • Program management is focused on coordination of multiple related projects usually in support of one particular mission or business theme (e.g., customer relationship management, supply chain management). Program management is concerned with synchronized delivery of project results, inter-project dependency management, resource sharing (e.g., people, time, and money), issue and risk management, and budget control to achieve program success.
  • Enterprise program management is a holistic view of the coordination and oversight management of all programs/projects within the enterprise. Enterprise program management is concerned with the integration of planning, strategy, resource allocation, and architecture management to achieve best value to the company. This includes value management, process management, and human capital management. The enterprise program management office plays a critical role in IT portfolio management, ensuring that projects and programs are aligned with the business direction. This office provides the management framework for improving project performance through consistency of management approach and process knowledge.
An efficiently run IT project portfolio results in driving higher project success rates. The IT project portfolio does not help companies attain 100% project success, but it improves the successful track record of project investments and helps companies learn how to “fail” properly and faster.

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