Determine the optimal mix and sequencing of proposed projects to best achieve the organization’s overall goals expressed in terms of hard economic measures and business strategy.
Get consistent decision making across the organization that ensures a focus on the right projects at the right. time.
In the information age, knowledge provides a competitive edge that no business can ignore. The challenge, however, is that with all of the hype, complexity, and confusion around information technology (not to mention a healthy dose of jargon), it is often difficult to distinguish between good and bad technology investments. That’s problematic, or at least it should be, because information technology is the central nervous system of most organizations, providing the tools to act rapidly to changes in the business environment. If the information technology is optimized, the organization can thrive, even in the most chaotic times. Optimizing information technology investments is not an option – it is a business mandate.
Information technology investments currently account for the majority of capital expenditures within many organizations; therefore, it must be treated with at least the same due diligence rigor as any other capital investment. A sound business case must exist; it must support the strategy of the organization, and it must support, and in many ways, adhere to new legislation.
We are increasingly expected to provide accurate information to multiple shareholder and stakeholder groups at light speed. But that should not be a justification for throwing caution to the wind and spending whatever it takes to accomplish that goal. Like any other investment, information technology must be actively managed throughout its entire life cycle, ensuring that both its initial and ongoing costs do not exceed the benefits it provides. We cannot afford to treat investments in information technology as unmanaged operating expenses, as they provide far too many opportunities for value creation, cost savings, and relevant, timely, and accurate information that serve as critical elements of competitive advantage.
Portfolio management provides a sound and proven business approach to optimizing investments in information technology. The investment portfolio metaphor offers a mechanism to govern investments in information technology that accounts for their value, risks, costs, useful life, and interrelationships. Much the way an investment manager dynamically manages a portfolio of financial investments, business leaders must make an intelligent buy, sell, and hold decisions around their investments in information technology to optimize revenue and growth opportunities, improve customer experience, and streamline operations; when appropriately done, the productivity improvements and cost savings that result will positively impact the bottom line and allow us to fulfill our primary obligation: driving shareholder value. For example, automated transaction processing through online order-making and order taking has created opportunities to offer complex services through dynamically packaging new customized offerings, generating additional fees, and better meeting the customer needs of a global audience. The online travel business is a good example of how information technology has served as a powerful enabler, facilitating streamlined fee-for-service and inventory management models, and providing greater access to published air, car, cruise, and hotel fares, and travel packages worldwide for both leisure and business travelers.
With the growing investment in information technology and the profound contribution of information technology within many organizations, it is imperative that the interactions between risk, reward, and value for information technology investments are proactively identified, evaluated, prioritized, and managed. Portfolio Management makes this case firmly and logically, providing evidence and case studies to support this argument. Portfolio Management highlights the impact of adopting this technique, from organizational change to governance impacts down to the bottom line. Many books present approaches to effecting positive business change. Still, Portfolio Management presents the approach and provides the steps required to transform an organization from ad hoc information technology management to information technology optimization, replete with lessons learned. Portfolio Management is not a revolutionary approach. It is an evolutionary approach that works. Online-PMO thoughtfully provides tools to measure your organization’s abilities and to help it evolve to information technology excellence.
Organizations can evolve into adaptive real-time enterprises that thrive in a world of change. Portfolio Management provides an answer to every senior business leader’s questions around the black hole of the IT budget. Portfolio Management also offers solutions to how IT professionals should breakdown the barriers and effectively communicate with business leaders in their language. Maintaining a strong balance sheet, alignment of assets, occupying and sustaining a leadership position, and achieving a profitable and relevant return on investments cannot be separated from sound practices of portfolio management, and are the fiduciary responsibilities of leaders in an information technology era.