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

2.4. IT PORTFOLIO MANAGEMENT MATURITY

The overall goal of IT portfolio management is to optimize the risk reward tradeoff when allocating resources in support of organizational objectives. When reviewing individual financial portfolios, the individual portfolio manager must analyze financial objectives, tolerance for risk, and available resources, then make appropriate decisions. In the case of individual financial portfolios, adequate metrics exist to make rational decisions with relative precision and appropriate accuracy. Most IT organizations, however, lack infrastructure for real-time reporting, performance measurement, and business analytics. Additionally, several key obstacles to IT performance exist, many of which tie back to a lack of metrics (see Exhibit 2.2).

Unlike the portfolios used by money managers in the financial marketplace where the underlying data come from mature processes governed under generally accepted accounting principles (GAAP) and generally accepted auditing standards (GAAS), IT does not have generally accepted governing principles and standardized rules and processes. Therefore, this chapter identifies a maturity model that helps meter the progress made by companies in the IT portfolio management process. The IT portfolio management maturity model allows IT organizations to benefit from rudimentary portfolio management initially but requires operational processes to be refined and matured to enable the nirvana of IT portfolio management— an optimized, ...