It first evaluates efforts at a 10,000 foot view so that a tiered listing of projects can be built. This organization of projects should segregate the investments with the potential of delivering the most business value from those projects considered mediocre investments and projects that, if pursued, will remove value from the business because they have a negative return-on-investment (ROI) potential.
Because of this, a pragmatic method of scoring and weighting the identified strategic initiatives is needed.
Develop a business case. For those project ideas that pass the "smell test," a comprehensive business case that expands and deepens the analysis of the project's characteristics should be pursued.
The business case analysis (BCA) is the primary tool used by the executive steering committee to support or deny decisions of investment.
The BCA must provide insight into whether your company should build or buy a system, as well as a review of preferred solution's technical architecture. It must provide decision makers the necessary information regarding project scheduling and resource forecasts.
Additionally, the BCA must drill deep into the financial aspects of the project, determining initial and ongoing costs, as well as refined and expanded ROI measures.
There are four rules of thumb that I follow that are essential to producing a successful business case:
Prioritize. By establishing business leaders as the IT steering committee and ultimately as the IT portfolio managers you are well on your way to ensuring business-IT alignment.
Use the IT steering committee to gain the perspective of senior business executives on enterprise priorities. The derived list of prioritized IT projects results in the increased alignment of IT investments and enables more efficient allocation of IT resources to the most strategic and valuable business initiatives.
Apply resources. Managing the IT staff as a single pool of delivery resources is the proven approach to providing efficient and rapid sourcing to business projects. Once you map the available IT resources (those not consumed by the non-discretionary activities required to keep the business running) to the highest prioritized business projects it becomes apparent that the discretionary IT resources are a limited commodity.
Utilize the IT steering committee to address this issue of limited IT resources by having them, along with the CIO (if you have one), establish a sourcing strategy that enables resource pool flexibility and minimizes constraints of critical roles and skills.
A recent Forrester survey of 269 IT decision makers stated that 83% of companies are in the process of adopting PPM as the way to meet today's challenge of business/IT alignment.
Having a practical approach to establishing this discipline in your organization is essential to gaining the support of business executives, the long term adoption of portfolio management and accomplishing the successful alignment of business and IT.
Jeff Monteforte is president of Exential, a Cleveland, OH.-based information strategy consulting firm, which specializes in IT governance, information security and business intelligence solutions. He can be reached at firstname.lastname@example.org.