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Improving IT Governance - Page 1

Sep 1, 2004
By

Fumiko Kondo






The complexity of today's technology needs demands effective IT governance. Rational decisions about which projects to undertake or continue, and which applications to deploy, require a systematic management strategy.

Such a strategy can best be developed when investments in IT are seen as a portfolio of projects and applications, capable of being analyzed and balanced to align with overall business goals.

Assessing Assets


Smart financial investors maximize their long-term success by maintaining a balanced investment portfolio. They assess each asset -- whether it's bonds, stocks, mutual funds, or real estate -- within the context of the total portfolio to ensure they meet their financial objectives. Some assets may be working well, while others may need to be reduced or eliminated from the portfolio.

The same conceptual approach can serve as a tool for analyzing and rationalizing an organization's IT investments. Like financial investments, your company's IT projects and applications should be working to deliver the maximum possible benefit in alignment with organizational goals.

By providing a systematic process for rationalizing projects and applications, portfolio management provides management with an important tool to improve IT governance.

IT portfolio management provides a strategic overview of all current IT projects and technologies, and makes it possible to prioritize them within a centralized decision-making process. It identifies those investments that should be undertaken or maintained and those that should be rejected or terminated. It also establishes a structure within which accountability for IT projects and technologies can be maintained.

Business Alignment

The process of portfolio management means that every decision to undertake a project, or to purchase and deploy a new technology, revolves around a single question: Is the proposed project or application in alignment with the firm's business objectives? If it is not, then the investment should not be made.

Importantly, there are no sacred cows in rational IT management, and the rule that applies to new projects applies also to existing ones: if a project is not contributing satisfactorily to your firm's strategic goals, it should be discontinued -- even if the project itself is going smoothly.

Similarly, technologies that do not pay for themselves should be scrapped. Schedule a review cycle for the entire portfolio -- monthly, semi-annually, or annually, for example -- and make adjustments as needed.

If your company has many divisions, it may have implemented hundreds of different software applications. Portfolio management offers a way of bringing all of those applications into view at one time.

It's possible that many of them overlap -- deployed in various departments for the same set of tasks. Others may not be performing efficiently. It makes sense to identify and eliminate technologies that are unnecessary, obsolete, or too costly for the benefits they provide.

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