Institutionalizing Portfolio Management

For all of its benefits, portfolio assessment as a one-time event will not deliver lasting gains. Although it identifies some improvement opportunities that IS managers should act on promptly, over time a one-time assessment rapidly degrades into architectural shelfware. Instead, portfolio assessment must be the first step in a process that lets IS managers continually manage the portfolio by reevaluating the linkage between IT assets and the evolution of business needs. The life span of current technologies is a fraction of that of mainframes; expecting an assessment to drive a three-year plan inevitably leads to mounting questions about its relevance and growing disappointment with its effectiveness.

A well-structured portfolio assessment should lay the groundwork for this ongoing management approach. In addition to the 4R profile, the assessment should address other key questions:

■ How do end-user and formal IS-supported solutions interact?

■ How do current IT assets support fundamental business goals and processes?

■ What is the transition and development approach for each application in the portfolio?

■ What is the life cycle condition and investment posture for each application?

■ How does the applications strategy fit with the technical infrastructure?

■ Where should IS focus its spending?

Answering these questions provides the foundation for a new relationship that aligns the IS function and its business partners around business goals. Portfolio assessment becomes the first step in a fundamental shift away from the previous pattern by the IS function of responding to a stream of requests and associated expenses driven by demands for change to existing systems or proposals. Instead, the IS function builds anew toward managing the evolution of a series of IT assets. In this new approach,

IS managers evaluate changes against the state of IT assets and the business processes they support.

The assessment itself represents a high-level plan for the development of IT assets; at the very highest level, it is a conceptual architecture for the corporation. A relevant parallel to this high-level plan is found in the model used for citywide planning and construction. Allowing for adaptations resulting from the intangible nature of computing, business processes, portfolio strategy, technical infrastructure, and code inspections all have simple equivalents in the basic planning and construction disciplines of the model (e.g., zoning plan, infrastructure plan, design approval, various permits, code inspections, and maintenance regulations). What the IS function typically lacks is the discipline of the process, the role of a city planning department, and the maintenance regulations for ongoing upkeep.

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Project Management Made Easy

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