Analysis by the Meta Group suggests that an overwhelming
majority of IT portfolio are unbalanced.
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."