What is IT portfolio management? What are the benefits and trends to an organization? How is it being applied and what does an organization need to implement a portfolio management successfully?

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IT portfolio management is grounded in financial portfolio management, where dollars are appropriately distributed between risky and stable investments according to a person's profile and goals. Translated to IT, this means that technology executives have a holistic view of all IT projects and resources across the enterprise, and take new investment analysis from a business-need perspective first.

Companies that adopt portfolio management have strong IT governance in place, fostered by CIOs who have a solid grasp of business issues and communicate IT value across the executive team.

The top-level merits of IT portfolio management are:

  • Helps IT directors establish project accountability
  • Ensures open communication on funding approval and denials for new projects
  • Balances investment risk and reward
  • Helps IT and business leaders collaborate, and ensures IT addresses business priorities
  • Eliminates overlapping and redundant projects
To successfully implement this approach, companies need a foundation of credible third-party ROI analysis on current and proposed projects, and an industry analysis to understand how new initiatives will achieve competitive gain.

Alinean's ValueIT™ software (http://www.alinean.com/ValueIT.asp) is the first comprehensive portfolio management toolkit specifically focused on competitive benchmarking and project analysis and improvement of ROI and Value of IT.

This was first published in April 2005

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