Principles of portfolio management pdf


The promise of IT portfolio management is the quantification of previously informal IT efforts, enabling measurement principles of portfolio management pdf objective evaluation of investment scenarios. Debates exist on the best way to measure value of IT investment. IT investments and yet the headlines of mis-spent money are not uncommon. IT industry and academia by positioning IT as an expense similar to utilities such as electricity.

IT portfolio management started with a project-centric bias, but is evolving to include steady-state portfolio entries such as infrastructure and application maintenance. IT budgets tend not to track these efforts at a sufficient level of granularity for effective financial tracking. Finally, assets in an IT portfolio have a functional relationship to the organization, such as an inventory management system for logistics or a human resources system for tracking employees’ time. IT portfolio management is distinct from IT financial management in that it has an explicitly directive, strategic goal in determining what to continue investing in versus what to divest from. Management of this portfolio focuses on comparing spending on established systems based upon their relative value to the organization. The comparison can be based upon the level of contribution in terms of IT investment’s profitability. Additionally, this comparison can also be based upon the non-tangible factors such as organizations’ level of experience with a certain technology, users’ familiarity with the applications and infrastructure, and external forces such as emergence of new technologies and obsolescence of old ones.

Infrastructure management is sometimes divided into categories of systems management, network management, and storage management. In the rush to reduce costs, increase IT quality and increase competitiveness by way of selective IT sourcing and services, many organizations do not consider the management side of the equation. The predictable result of this neglect is overpayment, cost overruns, unmet expectations and outright failure. This type of portfolio management specially addresses the issues with spending on the development of innovative capabilities in terms of potential ROI, reducing investment overlaps in situations where reorganization or acquisition occurs, or complying with legal or regulatory mandates. The management issues with project-oriented portfolio management can be judged by criteria such as ROI, strategic alignment, data cleanliness, maintenance savings, suitability of resulting solution and the relative value of new investments to replace these projects.

IT planning and governance as a whole. IT portfolio management approach for IT investments. They argue that agility of portfolio management is its biggest advantage over investment approaches and methods. Other benefits include central oversight of budget, risk management, strategic alignment of IT investments, demand and investment management along with standardization of investment procedure, rules and plans. CIOs might face while attempting to implement IT portfolio management approach. There is no single best way to implement IT portfolio approach and therefore variety of approaches can applied.

Obviously the methods are not set in stone and will need altering depending upon the individual circumstances of different organizations. The biggest advantage of IT portfolio management is the agility of the investment adjustments. IT portfolio management allows organizations to adjust the investments based upon the feedback mechanism built into the IT portfolio management. 1973: “investments in developing computer applications can be thought of as a portfolio of computer applications. Further mention is found in Gibson and Nolan’s Managing the Four Stages of EDP Growth in 1973. Gibson and Nolan proposed that IT advances in observable stages driven by four “growth processes” of which the Applications Portfolio was key. Service Strategy volume also cover it in depth.

Various vendors have offerings explicitly branded as “IT Portfolio Management” solutions. IT portfolios statistically behave more akin to biological populations than financial portfolios. IEEE Equity,” March 2007, which focuses on “quantitative methods for measuring, predicting, and understanding the relationship between IT and value. Value to the business of existing applications.

It was launched in its first version in February 2012. Service Portfolio Management which appears to be functionally equivalent. A project is managed with a clear end date in mind, and according to a set scope and budget. It has a single easily definable tangible output. A particular project may or may not be part of a programme. A program is a collection of two or more projects sharing a common goal. Program managers control dependencies and allocate resources across projects.

A programme is likely to have a life that spans several years. Best Practices in IT Portfolio Management. Strategic IT portfolio support, which consume the bulk of IT spending. The challenge for including application maintenance and suppofolio management : governing enterprise transformation. Plight of the EDP Manager.

Managing the Four Stages of EDP Growth Publication date: Jan 01, 1974. Portfolio approach to information systems. Leveraging the New Infrastructure: How Market Leaders Capitalize on Information Technology. Cambridge, Massachusetts, Harvard Business School Press. Remenyi, Computer Weekly Professional Series. Strategic IT portfolio management : governing enterprise transformation. From business strategy to IT action : right decisions for a better bottom line.

Business Perspective: The IS View on Delivering Services to the Business. ITIL Foundation Exam, Study Guide. This page was last edited on 24 August 2016, at 22:16. Unsourced material may be challenged and removed.

When determining a proper asset allocation one aims at maximizing the expected return and minimizing the risk. In particular, a portfolio A is dominated by another portfolio A’ if A’ has a greater expected gain and a lesser risk than A. There are several methods for calculating portfolio returns and performance. Momentum Investment Strategies, Portfolio Performance, and Herding: A Study of Mutual Fund Behavior. Mark Grinblatt, Sheridan Titman, Russ Wermers The American Economic Review, Vol. Investment Performance Measurement Errors, accessed 2008-06-29. This page was last edited on 2 December 2017, at 23:29.

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