It portfolio management addresses this key issue right from the conceptual stage of projects. The portfolio approach ensures that it projects are implemented with shared commitment, within the statutory framework. Some of the important measures implemented are:
Collaborative decision making for key and large scale projects
Stakeholder commitment and support for successful implementation of it projects
Internal stakeholders justify the it projects to external stakeholders and accountable for successful implementation
Stakeholders offer expertise and grant resources to address and overcome the project challenges at various stages
Specific project requirements are in line with the common-user, shared, state it infrastructure
Strategic value of it portfolio management: Four investment categories have been identified in the portfolio approach, within which every it investment can be measured in terms of strategic value to the business. (Sullivan, 1985)
Strategic Systems: These provide innovation and irreversible changes in the way business is conducted and ultimately gives competitive edge to the organization to combat competitive forces in the market. The high level of risk involved requires unstructured decision making and hence the results may be difficult to predict or quantify.
Key operational systems: By streamlining and leveraging existing processes, the business can derive more value and thus justify the investments already made. This also triggers review of the need for fresh investments and it may be possible to either postpone or altogether eliminate new investments.
Support systems: Designed to eliminate unnecessary business processes and simply complex functions, such systems are generally continuously upgraded as the benefits are immediately realized and the investment levels are not very significant. In this case the risks are relatively lower and hence decision making is simpler.
High-potential projects: High-risk projects, arising out of considerable research in new areas and involving major investments and radical changes in processes fall in this category. The risk is high, but so is the future benefit and hence organizations view this as an important element in the it portfolio. Decision making usually takes a long time, as the project needs to be reviewed and approved by internal and external stakeholders.
Perspective of it portfolio management:
In the United States, the Information Services Board - ISB is responsible for ensuring that the common-user state it infrastructure is capable and flexible to meet the ever changing public needs, governmental initiatives, legislative and technological changes. The portfolio approach has resulted in a series of steps that would help the government upgrade and meet the it requirements of the public on a consistent basis. (Department of Information Services, 2004)
Planning for it investments:
New it investments are like the doubled edged sword - they can either contribute significantly to the development of the organization or may result in wastage of resources. The portfolio approach provides the platform for identifying the potential benefits and drawbacks of investments. A comprehensive it planning process ensures the involvement of state authorities, business managers and funding agencies before deciding on the style and quantum of new investments. The ISB views that such decisions are more likely to succeed in the long run especially since new it investments are approved after a thorough baseline assessment of the agency's business requirements and existing it portfolio.
Qualitative assessment:
The portfolio management emphasizes continuous assessment of the computing power, network infrastructure, data management, applications and deployment of emerging technologies for the improvement of the organization. This exercise also provides an insight as to whether the organization is capable to implement the investment program and derive the expected benefits. More importantly, it also highlights the extent of the internal and external defense mechanisms within the organization to overcome the several challenges that are likely to prop up during the implementation processes.
Investment prioritization:
Since portfolio-based strategies are based on time tested theories and practices, it allows the organization to rank the it projects based on the required parameters. For instance, it will allow speeding up of critical projects, overriding other projects, without affecting the overall balance of investments and at the same time, keeping the strategy on track. It is also possible to avoid implementing projects in isolation, thus eliminating integration problems, which can undermine the very purpose of a particular investment. This approach is perhaps ideal for meeting the dynamic demands of businesses and providing the infrastructure to support the delivery of services to the relevant markets.
Enterprise-wide assessment:
IT portfolios essentially include state development and hence, they have the potential to be one of the pillars...
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