The next step: IT portfolio and project portfolio management

Running IT like a business doesn't end with asset lifecycle management. IT executives are under sustained pressure to invest limited budgets to maximize returns and produce results in step with the organization's goals. Selectivity and timely delivery on budget are the orders of the day.

"IT projects are notorious for massive scope creep and the difficulty of accurate time estimation," says Matt Light, research director at Gartner. Adding to IT's burden, many companies launch more projects than their resources cover.

IT portfolio management and project portfolio management products address these problems. They offer financial, analytical, collaboration, and workflow tools to help prioritize resources and spending. They also monitor, review, and tweak spending on an ongoing basis.

"You not only need to determine the people resources for a project, you also want to know the cost of the hardware and software assets required to implement it," says Allan Andersen, director of Unicenter product management at Computer Associates, which plans to acquire Niku, a leading project portfolio management vendor. "The combination of asset management and IT portfolio management can give you a better idea of what it really costs to run that order processing system or e-commerce division."

Vendors and solutions in these emerging disciplines are many and varied. Vendors include Artemis, Compuware, Mercury, Pacific Edge, PlanView, Primavera, ProSight, and UMT. Some vendors focus on the project management end of the spectrum, offering solutions that integrate with Microsoft Project, whereas others cover the project analysis and prioritization end. Some zero in on new project prioritization, whereas others, such as Artemis, Pacific Edge, ProSight, and UMT, tackle IT spending as a whole.

IT project portfolio management tools help you zoom out and view myriad IT projects as an investment portfolio, much the way an investor would review a portfolio. They allow you to monitor projects throughout their lifecycles. The number of portfolios you create is determined by factors such as project size and business goals. Most solutions help you create a set of objectives that maps directly to the company's overall mission. For each portfolio, they help you balance risky but potentially strategic projects with bread-and-butter, "keep-the-lights-on" projects. Some provide dashboards to continually prioritize projects and to monitor, analyze, and review the portfolio.

There are workflow tools and templates for business unit heads or others to submit to the team new project ideas, approval processes, and monitoring tools. And, as with asset management packages, many of the IT portfolio solutions integrate with existing ERP, help desk, and other systems to import or export relevant data. If investments aren't meeting their goals, the company has the visibility to make intelligent decisions.

As with asset management, IT portfolio and project portfolio management systems are not simple to implement. "These implementations often require significant consulting, systems integration, and process changes in the organization," Light says. "There's a bit of organizational change required to get people to do things like inventory applications and go through a chartering process for their project proposals that is consistent enough to give you apples-to-apples comparison."

When properly implemented, benefits include more rational decision-making, better communication, greater visibility into IT processes, and a more thorough understanding of projects that have a direct line to the corner office.