IT Portfolio Management Step-by-Step: Unlocking the Business Value of Technology

1.2. FOCUS ON IT INVESTMENTS

IT can have a significant impact on the quality of services and solutions and the performance of a company. Efficiently and effectively managed IT investments that meet business and mission needs can create new value-revenue generation, build important competitive advantages and barriers to entry, improve productivity and performance, and decrease costs. Similarly, poorly aligned and unmanaged IT investments can sink a company.

IT investments represent a profound hole within companies. There are no other investments within a company that occupy such a large and growing expenditure yet lack disciplined management, processes, and performance measurements. However, a majority of companies are aggressively scrutinizing the amount of investment allocated to IT in an effort to cut costs, achieve economies of scale, and drive shareholder value to get more and do more for less. The primary focus on IT investments is on short-term projects and priorities with near-term benefits, delaying and in many cases eliminating long-term strategic investments.

Concurrent to cutbacks in IT spending and a short-term focus, management within companies is demanding an increase in IT productivity, expanding IT's role from internally focused to customer facing and making IT more relevant to the business strategy as resources are scaled back. Customers are demanding more rapid, real-time, customized, total solutions, while competitors are forcing companies to frequently innovate ...