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IT portfolio management is the application of systematic management to large classes of items managed by enterprise information technology (IT) capabilities. IT portfolios do not always focus on items that can be financially measured. Examples would be planned initiatives, projects, and ongoing IT services (e.g. application support). The promise of IT portfolio management is the quantification of previously mysterious IT efforts, enabling measurement and objective evaluation of investment scenarios. IT portfolio management started with a project-centric bias, but is evolving to include steady-state portfolio entries such as application maintenance and support, which consume the bulk of IT spending. The challenge for including application maintenance and support in portfolios is that IT budgets tend not to track these efforts at a sufficient level of granularity for effective financial tracking. The concept is analogous to financial portfolio management, but there are significant differences. IT investments are not liquid like stocks and bonds and are measured using both financial and non-financial yardsticks (e.g. a balanced scorecard approach); a purely financial view is not sufficient. Financial portfolio assets typically have consistent measurement information (enabling accurate and objective comparisons), and this is at the base of the concept’s usefulness in application to IT. However, achieving such universality of measurement is going to take considerable effort in the IT industry. At its most mature, IT Porfolio management is accomplished through the creation of two portfolios: IT Portfolio management is distinct from IT financial management in that it has an explicitly directive, strategic goal in determining what to continue investing in versus what to divest from. Information Technology portfolio management as a systematic discipline is more applicable to larger IT organizations; in smaller organizations its concerns might be generalized into IT planning and governance as a whole. IT portfolio management was first proposed by McFarlan. Significant authors contributing to the discipline of IT portfolio management include Aitken, Weill and Broadbent , Maizlish and Handler, Kaplan, and Benson, Bugnitz, and Walton. The ITIL Business Perspective and Application Management volumes also cover it in depth. Various vendors have offerings explicitly branded as "IT Portfolio Management" solutions. In peer-reviewed research, Christopher Verhoef has found that IT portfolios statistically behave more akin to biological populations than financial portfolios.
Relationship to other IT disciplines IT portfolio management is an enabling technique for the objectives of IT Governance. It is related to both IT Service Management and Enterprise Architecture, and might even be seen as a bridge between the two. | ||||||||
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