IT Portfolio Management
As IT becomes an increasingly large part of many businesses, it is vitally important to effectively manage IT resources, prioritize projects, and monitor outcomes to make strategic decisions. This is where IT portfolio management (ITPM) comes in. Continue reading to learn the basics of ITPM and what it can do for your organization.
What is ITPM?
IT portfolio management helps organizations establish and adopt a process for measuring and monitoring the value of IT investments. This process lets businesses manage IT investments similarly to a financial portfolio by balancing a potential return, determining if an investment fits the business objectives, and performing a risk assessment.
Once an IT department becomes sufficiently large, there may be any number of current or prospective projects to help the company stay digitally competitive, along with standard maintenance and other demands. ITPM helps categorize and monitor everything happening within the IT department. This enables stakeholders to assess costs and benefits associated with each project or directive and analyze how they align with the company’s strategic goals.
With all of the information about IT projects and duties centralized in a portfolio that continually monitors all relevant metrics, it becomes easier to understand the overall health of a company’s IT department and prioritize investments to yield optimal outcomes for the company overall.
Benefits of an ITPM system.
IT portfolio management systems can help improve communication between IT and business units in an organization. Implementing ITPM has proven instrumental in fostering better communication among professionals at every level of the company. Without ITPM, organizations miss out on competitive advantages, which set them apart from other organizations, including improved business strategy alignment.
Additional benefits of ITPM include:
- Centralized control
- Cost reduction
- More effective communication with business executives
- Increased return on investment (ROI)
- Enhanced customer service
- Respect among professional peers
- Competitive advantage
- IT infrastructure aligned with business objectives
- Better decision-making
When to implement an ITPM system.
Organizations that wish to improve communication and speed up projects while delivering quality work should consider implementing an IT portfolio management system.
ITPM can be particularly beneficial for teams that:
- Have multiple IT projects and an unclear sense of which ones best align with strategic objectives
- Notice gaps in their IT architecture that, if filled, could enable employees to work more efficiently
- Tend to neglect certain areas, such as applying regular updates or swapping out old machines with new ones
- Over-serve certain areas, resulting in more cost than benefit for a given IT investment
Steps to implement ITPM.
Although implementing ITPM in an organization can be beneficial, there are also some challenges to getting started. First, it can be very difficult for teams to estimate the benefits of different IT projects or duties accurately. Companies must establish a baseline of current costs and benefits to compare future outcomes against. IT team members may struggle with making these assessments if they haven’t had to do so before. They may also struggle with understanding business alignment due to a lack of communication between IT and other parts of the company.
Taking a staged, incremental approach to ITPM implementation can help remedy each of these challenges.
Here are four key steps for successful ITPM implementation:
- Build a registry: Teams should first identify all IT projects within the company, including current projects, ongoing projects, and planned future projects. For each project, they should provide estimates of associated costs, expected timelines, and projected benefits, gathering all of this information in a centralized registry.
- Compare with strategic objectives: The business should create a list of projects during the annual planning cycle. Each project in the list should include the estimated cost, business benefits, risk assessment, ROI, etc., to compare with the company’s strategic objectives for that year.
- Prioritize and categorize: In this next step, teams ensure the prioritization and funding of the projects that most align with their strategic objectives first. Using valuation criteria, they then rank the remaining projects in terms of importance.
- Manage and review the portfolio: The last step is one that requires continued monitoring. Costs and ROI should be regularly measured, for example, and compared to initial predictions to further refine future assessments.
How does ITPM differ from other project portfolio management?
Compared to other project portfolio management, ITPM takes less of a project-centric approach, focusing instead on the entire IT landscape. The collection of information into a portfolio allows company decision-makers to decide how to invest IT resources.
In this way, it becomes the responsibility of IT and management when things go wrong. They make decisions at a higher level in alignment with overall company goals but with input from the teams implementing them. Because ITPM places emphasis on visibility for all demands placed on IT, whether they’re generated within the department or from elsewhere in the organization, ITPM necessitates input from all levels of the business:
- Finance managers
- Executive management
- IT managers
- Business groups
Best practices for ITPM.
ITPM can save companies time and resources while simultaneously optimizing their strategic contributions to the organization. While implementing the four key steps for success listed above can help teams hit the ground running, here are a few more best practices to help organizations make the most of ITPM:
- Take one step at a time: Use a phased approach to adopting ITPM. If your organization is starting with this method, incrementally starting helps ensure that it is adopted properly. Start with a single unit before expanding into other units in the department.
- Measure results: Teams should measure the long-term benefits of the projects completed. Teams can use this data to establish expectations from the beginning to the end of the project. Measuring results assists teams in discovering any discrepancies between estimated project delivery and the actual delivery time.
- Employ the right tools: Choosing the right IT portfolio management software makes it easier to analyze and update all projects within your IT portfolio and make optimal choices for allocating resources. Workfront is the leading work management platform that empowers teams with centralized communication, insightful data, and more.
Make more informed decisions about your IT investments.
Choosing the right ITPM tool can lead to a reduction in meetings, less rework, and higher project success rates. By using an ITPM tool, management can anticipate how IT projects will impact the company’s strategic goals, optimize project planning and prioritization, and allocate resources more effectively.