Managing your IT portfolio: Some things to think about!

Have you balanced your program and project portfolio? Can you say that your existing  and projected portfolios are optimized in terms of responding to changing enterprise priorities and demands. Your IT organization is responsible for the cradle-to-grave portfolio process. As part of this responsibility, you need to ensure that the IT portfolio of services (whether existing or projected) meets the enterprise’s priorities and demands. This is important because it strengthens the enterprise’s capabilities system, and thus, its right to win within new and existing businesses. In this post, I will review what COBIT 5 has to say about portfolio management goals as well share their recommended portfolio management metrics. 

 

Portfolio management goals

To improve your management of portfolio services, COBIT 5 suggests that IT organizations measure themselves explicitly against six process improvement goals:

 

1.                  An appropriate investment mix is defined and aligned with enterprise strategy. This means that investments need to focus on capabilities that “coherently” support enterprise capabilities and extend to what Booz calls the “enterprise right to win”.

Two metrics are used to measure success here:

 

  • The percent of IT investments that have traceability to enterprise strategy
  • The degree to which enterprise management is satisfied with IT’s contribution to enterprise strategy.

The first measures how well investment ties to the enterprise capability system and the second measures how well IT manages perception. This means that IT business relationship managers need to be good at telling how these things link.

 

2.                  Sources of investment funding are identified and available. This is clearly about the quality of the planning system and what I like to call “IT predictability”. Two metrics are recommended here: the ratio between funds allocated and funds used and the ratio between funds available and funds allocated. Both of these go after IT’s ability to manage investments.

 

3.                  Program business cases are evaluated and prioritized before funds are allocated. Wow, imagine what it would be like if this was not the case? Prioritization needs to happen before one dollar is spent. One metric is recommended here: the percent of business units involved in the evaluation and prioritization process. Clearly, IT needs to involve its business customers; otherwise requirements and priorities will only be guesses.

 

4.                  A comprehensive and accurate view of the investment portfolio performance exists. IT needs to holistically evaluate and show the value of its portfolio. The level of satisfaction with portfolio monitoring reports lets you know if this is the case.

 

5.                  Investment program changes are reflected in the relevant services, asset and resource portfolios. Investment needs to tie back to capabilities, services, assets and resources. Resource levels need to reflect these priorities. Clearly, this fits with improving the “right to win”. I recommend reviewing the percent of changes from investment program reflected in the relevant IT priorities to obtain this metric. This means that as priorities change, the appropriate change in IT investment is made.  

 

6.                  Benefits have been realized due to benefit monitoring. I believe if investment is tied to the enterprise capabilities system, benefits become easy to judge. I recommend studying the percent of investments where realized benefits have been measured and compared to business cases to determine success.

 

So where should you start?

Once again, my suggestion is that you start where the most immediate value can be driven. But if it were up to just me, I would start by showing an appropriate investment mix as defined and aligned with enterprise strategy. What do you think? I would love to hear back from you. Feel free to reach out to me in the comments section below.

 

Related links:

Solution page:  HP Project and Portfolio Management

Value Stream: Requirement to Deploy

Twitter: @MylesSuer

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About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...
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