Up to 80% of IT portfolios are out of balance and most
do not recognise the relationship between assets and projects,
according to research by Meta Group.
The study showed that while international IT portfolio
management adoption was growing fast, with 42% of the study
participants applying it and 21% saying they planned to use it in
the next 12 months, most had only begun to manage their IT
portfolios in the past year.
"Many are prevented by a lack of understanding of the approach
and methodology, and lack of data and measures," said Willie Appel,
senior vice-president at Meta Group.
Other obstacles include lack of financial skills within IT, lack
of perceived benefits, and lack of interest and support from
finance directors and finance departments. "Do not tell the
business you are doing IT portfolio management," said Appel. "Use
IT portfolio management to tell the business what IT is
doing."
Appel said that firms grew into global forces with each exercise
of an option portfolio. "The combination of horizontal and vertical
processes within a business assessment model is a mapping of the
corporation's growth strategy. IT executives need someone they can
absolutely rely on, to enable speedy and effective decisions, to
improve the organisation's information agility, boost its
credibility, and add value to shareholders."
Appel criticised most companies for viewing their IT portfolios
on a strategic versus tactical basis, rather than on relative value
or risk levels, and suggested IT directors should develop a
portfolio mix from a dynamic perspective rather than as an end in
itself.
According to Meta Group, the key IT portfolio allocations
are value maintenance (usually 85%) to run the business, value
enhancement (12%) to grow the business, and value exploration (35)
to transform the business.
"CIOs should measure the organisation's ability to change this
mix proactively, to continuously be in a position to contribute to
business value," said Appel. "Portfolio management elevates,
unifies and capitalises corporate knowledge."
Appel said the ability to categorise IT assets was essential
during economic uncertainty to facilitate cost cutting and refocus
spending.
"Without a portfolio categorisation and risk management process,
CIOs could do business harm. Moreover, a portfolio approach
provides CIOs with a methodology for articulating value and risk
trade-offs, improving abilities to manage change."
Nano Mothibi writes for IDG News Service