IT Portfolio Management Making your IT portfolio management more agile

Companies invest a lot of money in their IT, in the best case only in the most useful projects: IT Portfolio Managers prioritize projects according to defined criteria. But how often do you put this ranking to the test? Not just once a year but several times, according to supporters of agile methods.

The job of an investment expert is to analyze financial assets and compile them into a portfolio in such a way that the client achieves the highest possible returns. Similarly, IT portfolio managers evaluate ongoing and planned investments in a company’s IT. Each business request of new IT capabilities, every requirement resulting from regulations has to be classified according to predefined criteria, for example using a scorecard, which illustrates at a glance: Is the project a “must” or “can”? What is the benefit of the IT product – and to what extent does it support the business strategy? What are the costs and risks involved? Does it fit into the company’s IT landscape, and is it future-proof for at least a required period of time? Only if a project achieves a high overall score it will reach the top in the ranking – with a good chance that IT will implement it.

One question which is currently occupying many companies is: How long will our IT portfolio remain up-to-date? Traditionally, IT projects are planned a year in advance as part of budget planning. But as technologies and markets change very quickly, this process is often rigid. For example, if a business unit wants to use a cloud solution at short notice, probably no budget has been reserved for it. Therefore, more and more IT managers are taking on the task of making not only the projects themselves more agile, but also the selection process. This can make sense if you take the time to proceed in a structured manner. Agility must not lead to chaos.

What has to be considered?

A permanent topic for management

The company’s decision-makers must be fully convinced of the benefits of agility. In the outmost case, they will deal with IT projects several times a month instead of once a year. There will be a constant competition between projects – which also leads to more conflicts. This will consume a lot of time and has to pay off.

Portfolio management based on backlogs

The IT portfolio managers must learn to work with so-called backlogs. In these lists, all projects are recorded, as well as project ideas and business requirements, estimated costs and the type and objective of each project: Is it supposed to increase efficiency or sales, or is it needed for legal requirements? Dependencies on other projects are on the list, too. Only projects in the backlog have the chance to be implemented. But not every task necessarily will be kept; some will be dropped in the long run. Planners who have previously worked with static portfolios will have to get used to this new procedure.

Uncertainty during the transition

It can take up to three years until an agile IT portfolio management runs smoothly. Especially in the early stages, nerves are quickly shattered. For example, when many apparently high-priority topics come in – and the IT managers are unsure how to assess the projects. Workshops in which IT specialists and business representatives jointly classify the projects can help here, for instance using a clothing size principle to distinguish S, M, L or XL requirements.

Old habits tend to persist

IT staff and management have to abandon learned processes, which is not easy. For example, individual target agreements no longer work in the way they used to. Instead of project results other aspects count, which are more difficult to measure: How flexible is the employee? How cooperative is the team leader, and how does she deal with conflicts? If employees and managers have to change their mindsets, a theoretical understanding of the new processes is not enough. Especially at the beginning, workshops and training sessions on agile work will help to live the new philosophy in everyday life.

22.03.2019, Grosse-Hornke

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