Portfolio Management is a practice of organizing and managing an organization's IT investments, such as applications and services, in order to maximize the value of its IT investments. It is a systematic approach to ensure that IT investments are aligned with the organization's business objectives and that the IT investments are well managed, monitored, and optimized.
The concept of portfolio management has been around for many years, but it has become increasingly important in recent years due to the rapid growth and increased complexity of IT investments. As organizations increasingly rely on technology to support their business operations, the need to manage IT investments effectively and efficiently has become more pressing.
Portfolio Management is an iterative process that involves the identification, evaluation, and selection of IT investments, as well as the ongoing monitoring and optimization of those investments. It is important to note that Portfolio Management does not just involve managing IT investments; it also includes managing the relationships between IT investments and the organization's business objectives.
The first stage of the Portfolio Management process is the identification of IT investments. This involves gathering information about existing IT investments and identifying potential new investments. This information should include details such as the cost, risk, and expected return of each investment. The second stage is the evaluation of each IT investment, which involves assessing the potential risks and rewards associated with each investment. This evaluation should also include an analysis of how each investment aligns with the organization's business objectives.
The third stage is the selection of IT investments. This involves making decisions about which investments to pursue and which investments to reject. At this stage, it is important to consider not only the potential risks and rewards of each investment, but also the organization's ability to manage the investments effectively. Once the IT investments have been selected, the fourth stage is the ongoing monitoring and optimization of the investments. This involves regularly assessing the performance of each investment and making adjustments as necessary to ensure that the investments are meeting the organization's business objectives.
A key element of Portfolio Management is the ability to effectively communicate the organization's IT investments and their value to the organization. This involves creating and maintaining an organized and up-to-date portfolio of IT investments, as well as developing an effective communication strategy to ensure that stakeholders are aware of the investments and their value.