The industry solution that has come to the forefront is project portfolio management (PPM). PPM is all about aligning technology funds, projects, and IT resources with the company's organizational priorities.
There is no one right way to build a PPM process. This is evident in the fact that there are dozens of books on the topic and dozens of software vendors promoting a variety of products and, of course, each one claims that their way is the best way to solve the PPM puzzle.
Keep it simple. Don't start by looking for a PPM system to purchase. While each software product has its own approach to portfolio management, it also inherently has specific strengths and weaknesses caused by that approach.
Unless you know the exact approach you want to take to manage you project portfolio you don't know which software will be best for you. So, for starters, use the tools that you know best. For most people that means your favorite spreadsheet application and word processor.
Look for direction from the top. Assemble business executives into an IT steering committee and schedule monthly meetings with the intent of reviewing new project requests and current project progress.
At the first meeting, use the IT steering committee to gain the required perspective on company priorities and value. Whether its increased revenue, customer retention, or cost control it should be your business leaders that tell you what is most important today.
Build a centralized view. Build a single collection of all active and requested IT projects along with their vital informational facts, such as name, sponsor, scope, estimated costs, estimated time frames, and assigned IT resources.
To make certain a comprehensive inventory is built, ensure that IT submits all IT-specific projects as well; such as server consolidations and network upgrades. Keep in mind that your first attempt at collecting all the data will be a chore, so keeping the initial database simple is critical. Initially, a spreadsheet works best.
Categorize your projects. There are three fundamental types of IT projects that you need to get your arms around. Organize your projects into the three categories of operational, incremental or strategic.
Operational projects are non-discretionary activities needed to keep the business running. These include, for example, application support activities, regulatory initiatives, and infrastructure build-outs. Don't be surprised if you discover that over 75% of all you IT project work falls under the category of operational.
This is a typical starting point for most companies and it should become an annual IT management goal to continually reduce this percentage and transfer savings over to the discretionary spending pool.
The incremental and strategic efforts are discretionary initiatives that provide some form of incremental upgrade or new capability that is expected to add value to the company.
Incremental projects are typically small efforts and number into the hundreds for a large company. These projects should be prioritized and managed at the business unit level and not by the IT steering committee.
Strategic initiatives are typically significant investments and warrant the attention of the company's top executives. It will be these projects that get assessed by the portfolio management process, as well as evaluated for priority and funding by the IT steering committee.