Bit on Portfolio management
Portfolio: a group of IT projects under a coordinated management structure
Different ‘portfolio models’ are available:
1. –Economic return model
2. –NPV, IRR, ROI
3. –Cost-benefit model
4. –Can include less tangible factors
5. –Market research model
6. –For new products
Each considers relative value and resource/budget interactions
–Try quantifiable rankings
a) Risk and return
–Still subjectivity and disagreements
3. Divide into budgets based on type
–To align with business needs
–Ex: utilities (‘keeping the lights on’), incremental upgrades, strategic investments
One other important wing is Pyramid Rationalization
Portfolio Rationalization is management of a collection of Projects or Applications to optimize business spend and value returned.
Project Rationalization: If a company is not canceling the bottom 20% of projects yearly, then it is not managing its project portfolio effectively. We have techniques to help assess and score these projects so that they are ranked in order of their “true” ROI, clearly identifying the bottom 20%.
Technology Rationalization: Within any given company, duplicate technologies accumulate over time. These duplicates need to be identified, analyzed, prioritized and managed (rationalized) to manage and reduce yearly IT support and licensing costs. Scorpion helps by gathering the “true” inventory of ALL tools and technologies and helps you select the most suitable and affordable single technology per category. We then help train and migrate staff onto the selected tools, retire the duplicate tools and renegotiate vendor support agreements for bulk discounts/floating licenses. Finally, we put an IT governance process in place to ensure that the other tools are scanned for regularly so that they do not “creep” back inside the organization.
Overall Rationalization needs the below info roughly:
· Periodic loading of resources
· Zone Reference
· Zone Preference
· Team Mix
· Specialized H/w & S/w
IT portfolio management is the application of systematic management to large classes of items managed by enterprise Information Technology (IT) capabilities. Examples of IT portfolios would be planned initiatives, projects, and ongoing IT services (such as application support). The promise of IT portfolio management is the quantification of previously informal IT efforts, enabling measurement and objective evaluation of investment scenarios.
The biggest advantage of IT portfolio management is the agility of the investment adjustments.
IT portfolio management is accomplished through the creation of three portfolios:
- Application Portfolio - Management of this portfolio focuses on comparing spending on established systems based upon their relative value to the organization. The comparison can be based upon the level of contribution in terms of IT investment’s profitability. Additionally, this comparison can also be based upon the non-tangible factors such as organizations’ level of experience with a certain technology, users’ familiarity with the applications and infrastructure, and external forces such as emergence of new technologies and obsolescence of old ones.
- Infrastructure Portfolio - For an organization's information technology, infrastructure management (IM) is the management of essential operation components, such as policies, processes, equipment, data, human resources, and external contacts, for overall effectiveness. Infrastructure management is sometimes divided into categories of systems management, network management, and storage management. The ability of organizations to exploit IT infrastructure, operations and management sourcing/service solutions not only depends on the availability, cost and effectiveness of applications and services, but also with coming to terms with solution providers, and managing the entire sourcing process. In the rush to reduce costs, increase IT quality and increase competitiveness by way of selective IT sourcing and services, many organizations do not consider the management side of the equation. The predictable result of this neglect is overpayment, cost overruns, unmet expectations and outright failure.
- Project Portfolio - This type of portfolio management specially addresses the issues with spending on the development of innovative capabilities in terms of potential ROI, reducing investment overlaps in situations where reorganization or acquisition occurs, or complying with legal or regulatory mandates. The management issues with project-oriented portfolio management can be judged by criteria such as ROI, strategic alignment, data cleanliness, maintenance savings, suitability of resulting solution and the relative value of new investments to replace these projects.
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