Project Portfolio

The white paper makes a compelling case in promoting the concept of project portfolio management. It does so by stating the needs organizations have for improving their current IT investment decision making. The paper then moves to evaluate the process of implementing a project portfolio strategy.

In any organization implementing IT projects, there is a strong need to be constantly aware of all the resources at the firm’s disposal; whether these resources are being used or can be used for another project. At any point in time, a CIO must be to know which assets are being used or under-used to properly allocate them. A CIO must be able to see the sum of all the risks, benefits and cost impacts of all programs and projects under consideration and underway.

Without access to or clarity of this type information, business leaders cannot make the right decisions for their organizations. Their decisions are based on false presumptions. It is wasteful and destructive to follow this path and will likely lead to financial ruin.

The paper comments that without these tools for decision making, organizations turn to other methods such as company politics to select projects, a measure that is purely subjective and does not utilize the right talent for effective decision making. This type of approach does not maximize the value of the firm or the projects being pursued, undermining the whole purpose.

Project Portfolio Management is a concept borrowed from the financial industry, but applied in the context of Project Management. The main goal as defined by the paper is to “maximize the value/risk tradeoffs” based on an organization’s assumptions about the future. An organization would use these assumptions to manage an optimal mix of their assets depending on what level of risk they are comfortable with. This concept addresses the problem of not having clear information for effective decision making.

To further promote this concept, the authors...