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IT portfolio management: Strategy matters more than software, CIOs say

IT portfolio management features aren't a top priority for users of PPM software, a survey shows, but PPM strategy is.

A recent survey by found that seven of 10 large enterprises report having a project and portfolio management discipline, but only 38% use PPM software in pursuing their strategy.

Moreover, only one-third ranked IT portfolio management features as very important in their PPM software choice, compared with project management features, which are very important to almost 60% of respondents. The survey was conducted in May and drew 304 respondents.

We use portfolios as a tool to communicate with our legislative body. We would not be able to survive [the economy] if we did not have that tool.

Phil Bertolini, CIO, Oakland County, Mich.

Organizations do not necessarily need IT portfolio management software to enact a portfolio management strategy, and many instead rely on a mixture of other software programs. But in either case, they must have a strong IT portfolio strategy or set of processes to guide project planning, prioritization, purchasing and resource allocation, experts and practitioners agree.

The methodical approach achieved by IT portfolio management is especially important in this economic recession, when some businesses, such as large American automakers, are dropping lines of business entirely, said Mike Rollings, a senior analyst at Burton Group Inc., a Midvale, Utah-based consultancy.

 "You can either do that arbitrarily, or do it with intelligent viewpoint of what value is," Rollings said. "Portfolio management gives you a way of seeing what things are valuable to the organization, and being able to assess them in a methodical, less subjective way."

Chris Howard, vice president and director of the executive advisory program at Burton Group, said enterprise views on IT portfolio management have changed in recent years.

"If you went to our client base of Global 1,000 companies around the world three years ago and asked them if they were doing portfolio management, they would say it was important, but they had other priorities," Howard said. "Now, you get a different response -- the priorities have shifted."

These organizations are not only struggling to survive the recession, but are also using IT portfolio management to prepare for a stronger future, Howard said.

"Enterprise IT shops are in that mind-set right now of streamlining, not just for cost-cutting reasons, but to make them more nimble as the economy begins to pick up again and making the right decisions about investments," Howard said.

Recession survival via PPM software

In Oakland County, Michigan, where the IT shop services 82 departments and 62 cities, villages and townships, CA Inc.'s Clarity PPM tool does the job, says CIO Phil Bertolini.

"If you look at IT governance in general, a mature IT organization is [defined] by how they utilize PPM," Bertolini said.

The county, which has 4,000 employees, started its PPM program in 1996 when there were approximately 900 backlogged work orders in the IT queue. The county also established a project management office to oversee its PPM.

Although the project management piece of the PPM software is very important to project managers and customers, "portfolio management is very important to our IT management and our customer and leadership groups," said Janette McKenna, chief of IT internal services. "They're looking at everything in the portfolio to see our delivery."

Bertolini added, "We use portfolios as a tool to communicate with our legislative body. We would not be able to survive the economic problems here in Michigan if we did not have that tool."

A leadership group that includes members of both IT and the business oversees five portfolios in such areas as courts and justice administration, finance administration and public safety and fire, McKenna said.

Bertolini said he measures ROI based on both tangible and intangible returns, as service is considered a return in the public sector. The tangible ROI is apparent: The IT department's budget has been flat or reduced every year since 2001, yet the organization has thrived.

PPM without the software

For those firms without specific PPM software, following a PPM strategy is all the more important to portfolio management.

Patrick Meyer, application manager at The Huntington National Bank, said his company does not use PPM software but is considering a purchase for the future. 

But the Columbus, Ohio-based bank, which is part of 11,000-employee Huntington Bancshares Inc., has been following a portfolio methodology, separating projects into queues based on the line of business: retail, commercial, mortgage, insurance and more.

"We used to have a real problem with having a consolidated IT environment responsible to a dozen lines of business that didn't interact," Meyer said.

Using a combination of Microsoft Excel and Microsoft Project, representatives from the business or IT enter work requests into the system, and a team consisting of members of both groups defines priorities based on these requests.

"It's a pretty manual process for a couple of people, keeping track of the entries in the spreadsheets and migrating them over to a project environment," Meyer admitted. "There's a lot of cutting and pasting."

This means the process is prone to human error. As such, IT is currently completing a proof of concept for a specific PPM tool. "We're looking to consolidate it, simplify it and make it a more consistent workflow," he said.

Whether a new tool will change Huntington National's methodologies remains to be seen.

"We're figuring out what the tool does," Meyer said. From there, "we'll figure out whether we should use the tool to do business the way we do it now, or figure out how the tool does it and see if that's a better way."

Let us know what you think about the story; email Rachel Lebeaux, Associate Editor.

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Clarity is real porfolio management software. It is expensive and not many people understand it. I expect the results of the survey are more based on ignorance - the only project management software people really know about is MS Project - not actual preference. Portfolio management is something that most large orgs I work with struggle with - the good ones at least realize there is a struggle! :-)
My organization would be in that majority that have some kind of portfolio management in place, but don't use a special software product. Project management is mostly done in Rally, and portfolio level tracking and management is largely done is Excel. 

Of course having a portfolio management strategy is important. Our could stand to be a bit more refined, for sure! We have so many interests competing for IT resources. Sometimes the "strategy" seems to be "Do everything. And do it now."