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Home arrow News arrow IT Management arrow Best Practice Tip in IT Portfolio Management


Best Practice Tip in IT Portfolio Management

Best Practice Tip in IT Portfolio Management

 

Generally speaking, IT portfolio management is the favored industry strategy that is used by a lot of companies now to systematically evaluate as well as choose the technology investments that will provide the desired benefits.  IT portfolio management has been slowly seeking its way into fame because of the added benefits that it has been giving.

 

There is no single suggested way of doing IT porfolio management.  There are a lot right ways, but there are those that are considered to be the best practices that most project portfolio management (PPM) specialists concur to and one of which is establishing the portfolio the best way you can.

 

There are three very important steps that are required in organizing and building project portfolios. They are to build, evaluate and categorize.

 

Build

 

IT project portfolio management initially begins with building a project collection along with the corresponding related informational facts.  All active and pending projects should be put into one single database.  It is best to make sure that you have a comprehensive baseline so you should check on IT to submit all specifications related to the projects.  The most critical elements include the name, the organization involved, the sponsor, the scope and duration, the estimated project costs, estimated time frames and the assigned resources.  For active projects, you should include a summary report of the projects status, actual vs. estimated costs and the estimated date of completion.

 

Always bear in mind that the first attempt to consolidate all data is very tasking.  It is advised that you keep an orderly collection strategy so that the first datable structure is simple and very easy to understand.  It is also critical that the project portfolio gives a detailed view of both active and potential projects.  There should be at least a 2-year roadmap for IT-related projects that should be maintained in the repository.  More importantly, this database should be updated regularly althroughout the year.  You should avoid creating last-minute and crammed up portfolio when budget forecast requirements arrive.

 

Evaluate

 

It is believed that only 20% of the projects are expected to return 80% of the desired business benefits.  It is then very important to identify which projects would belong to this top 20%. This step would also involve the elimination of project efforts that are not essential, identification of projects that might require funding and resource reduction, as well as building up of potential ones for initial budgeting.  This step can be difficult to do, but it can definitely save a lot of time, cost and resources.

 

Categorize

 

At the minimum, projects in the portfolio should be organized in such a way that they, along with their budget allocations, need to be classified between discretionary and non-discretionary operational categories.

 

Projects that are non-discretionary operational are those that are required to keep the company's ball rolling and are thus, indispensable.  Those that are discretionary are those that provide the company with a form of upgrade or incremental strategy.

 

Companies normally devote its IT budget to operational projects and too little is devoted to strategic investments.  However, it has been found that those companies who spend a little more on the latter and effectively manage them seem to get more benefits.

 

When spending for discretionary projects, it is efficient to split the budget into two: one dedicated to strategic initiatives and the other for doing incremental upgrades.  You should have just the right mix of both.

 

 

In summary, the building of the project portfolio inventory can be very tasking, but the effort is very much worth it in the end.  This best practice tip for IT portfolio management is very crucial to the success of your projects and their alignments to the company objectives.  Thus, following these steps will definitely make a difference.

 
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