Chapter 24

Information Technology Portfolio Management

Louis Carr, Jr.

One of the most common dilemmas of information technology management is properly and adequately measuring the value of IT for an organization. In years past, many IT departments were considered cost centers. That is to say, many in management believed that funding IT was a necessary expense that had some operational (and nonstrategic) benefit. Many managers believed IT was similar to a utility—for example, water or electrical service: It was necessary but did not really offer any strategic value.

Today, most would agree that a certain portion of an IT department's service catalog is operational, but there is a portion of the department that must be strategic and align itself with the business objectives and strategies of the organization. At the highest level, IT governance is the broad discipline and framework that can help integrate business decisions and strategy with IT decisions and strategy. One of the concepts supporting IT governance is IT portfolio management.

Most technology managers and directors would define IT portfolio management as “the management of IT projects where all IT project resources, funding and tasks are managed in a prioritized, systematic manner across the enterprise.” Although portfolio management of software applications can be construed as IT portfolio management, it is more common for IT projects to be the object of portfolio management. It is more common because IT projects ...

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