In performing the interviews and preparing the results for our previous CIO Council/IAC document, Smart Practices in Capital Planning, we noted that many private and public organizations had developed relatively sound IT investment management practices. To a large extent, these practices focused on the selection of viable and valuable IT projects and initiatives.
In addition to the lessons presented in this report, there also are several general conclusions or observations that were drawn from the many interviews that were conducted:
• The selection of sound IT investments is a requirement. However, effective portfolio management also requires extensive and ongoing management and maintenance.
• The move from investment management to portfolio management occurs on a continuum. Organizations generally develop and focus on ways to manage investments first, then begin to look at the bigger picture of how a collection of investments contributes toward the achievement of business objectives.
• Good portfolio management practices develop over time. None of the organizations that provided input to this report have implemented what can be called a complete portfolio management program. Instead, they have identified, developed, and implemented key and core components—many of which have been described throughout this report.
• Assistance is readily available. Both OMB and GAO are helping federal organizations make the transition from the management of individual investments to the management of their entire portfolio. Several leading organizations have looked to consultants for assistance, and have also done a good job in sharing lessons learned and best practices with their colleagues at other agencies.
• Within the private sector, many firms are adopting and adapting portfolio management practices on their own and with the assistance of consultants.
• A variety of tools exist to help an organization develop and further mature its portfolio management processes. Inventory tools, architecture repositories, and decision support software can assist in trade-off analysis. These types of tools have been widely cited as key enablers and critical success factors for effective portfolio management.
This report provides at a summary level the lessons learned and insights gained from interviews with representatives of several government and private organizations.
During the interviews, much important and useful information was collected around each of the lessons learned. Over the next several months, the Best Practices Committee plans to prepare a series of more in-depth Portfolio Management Practice Papers. Some of the topics to be addressed will include:
• Methodologies and tools to formulate, manage, and maintain IT portfolios
• Management of portfolio risk
• Organizational roles and responsibilities for effective portfolio management
• Portfolio management within a federated organization
• Use of subportfolios to improve investment control
• Integration of portfolio management capital planning and investment control, budget formulation and execution, and procurement and acquisition processes
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