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Home arrow News arrow IT Management arrow Cost Benefit In IT Portfolio Management And Governance


Cost Benefit In IT Portfolio Management And Governance

Cost Benefit In IT Portfolio Management And Governance

 

For many, the cost of portfolio management and information technology (IT) governance hardly comes close to the return on investment (ROI) figures that they have earlier shelve. But for those well-versed with the in and out of IT portfolio investment and IT governance, cost against benefit is always on the side of positive ROI figures.

 

IT portfolio management and IT governance: how to do it right

 

Portfolio management is a tool usually use by IT governance in securing better ROI for investing companies. And even for manufacturing companies with business at the end of information technology line, the benefit in engaging portfolio management greatly enhances their capabilities to reap more benefits.

 

Based on the many ways a company can engage in IT portfolio management, a holistic view of IT programs and projects is necessary. From these myriad project programs, specific IT projects that will yield better ROI will be the next important concern. It should not be lost to the company, however, that the IT projects must align with company’s IT governance strategy as a whole.

 

From initial perusal of some IT portfolio managers’ work, certain planning is very important. Equally vital to the IT portfolio management is the consideration on the projected flow of ROI, not only on the intended ROI benefits, but the overall cost figures in the long run.

 

The most dangerous thing for any company is to commit grave errors on their IT portfolio management, relative to their IT governance. The first step in preventing this error in its earliest manifestation is an intelligent review of IT project proposal. A sound IT project should be containing a cost benefit ratio, with ROI figures segregated to the entire lifespan of the project; relative to the portfolio management as a part of the much larger IT governance.

 

In case portfolio managers forget, food choking is also possible for companies devouring IT projects beyond their companies’ capacity to digest. This is true even for IT projects that seem to be profitable. And the effect is worse if some of these projects are ill conceived. This will bleed dry the resources of the company, further preventing to engage in a more profitable IT project in the future. At the first instance that a bad project was not determined, the next best step is to assess if after a considerable time, the project is not doing any positive benefit on the overall figure of portfolio management originally conceived in the IT governance program to have a strong ROI.  

 

A well planned IT portfolio management however, can produce almost unlimited benefits, and with ROI figures eclipsing the original plan as part of IT portfolio management. A well thought IT governance could effectively oversee an IT portfolio management far beyond that, it was originally intended. A growing trend among IT portfolio managers is to run these investments just like any other financial portfolio.

 

The most practical way to this is balance the two types of financial portfolio. Riskier investments such as high-yield stocks should be tempered with more conservative investments like cash funds. Many IT investments falls within the range of risky investment, not so much for the IT investment itself but for he nature of IT as something that is constantly changing. Simply told, the benefit of huge ROI figures should be balanced by the cost the portfolio management will accrue in the long run.

 
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