Completing the IT Value Equation

Manage the entire IT portfolio to optimize IT alignment.
To be effective, client satisfaction should be measured consistently and completely. A CIO should be able to regularly monitor the extent to which business clients are happy with the systems, maintenance, service, new projects, and troubleshooting that IT delivers on a daily basis.

Truly Balanced Portfolio Management

Since the scope of IT work is broad — it requires attention to systems, client requests, client satisfaction, new projects, performance management, workforce development, and retention — the reach of a successful IT-management strategy should be equally comprehensive if IT is to be successfully aligned with business needs.

Too often it is not. Why? Because an over-emphasis on project management and the new hype around the alignment of projects form an exclusive project-portfolio-management perspective, obscuring a complete and accurate view of IT's actual workload and preventing CIOs from linking all of their department's activities to business needs.

Relying on project portfolio management as an overriding IT management strategy is only a 25 percent to 48 percent solution. The majority of work performed by an IT department — 52 percent to 75 percent — does not involve projects in any way. And while project portfolio management can and should serve as an important tool in the CIO's belt, CIOs must understand that their portfolio management tactics also apply to the IT systems and non-project work the rest of the business depends on.

To optimize IT alignment, IT executives should side-step the trap of project portfolio management as an all-encompassing governing principle and manage the entire IT portfolio, which includes projects, systems, support and maintenance, satisfied clients, and a high-performing workforce. The highest-performing CIOs should be able to view that portfolio by client (How satisfied is the sales force, for example, with IT's products and services?) or by system (Is the e-procurement system continuing to deliver its expected bottom-line benefits?).

CIOs need to spend more time aligning IT with top-level business objectives and less time grappling with the introduction of new technologies and, consequently, managing projects. Managing those strategic endeavors means tracking them — a process beyond the scope of project portfolio management disciplines and tools, and a critical difference between the tactic of portfolio project management and the strategy of IT-business alignment.

Making Alignment a Top Priority

High-performing IT executives have learned that many facets of IT's contributions must be measured and managed. The CIOs who embrace a holistic approach to IT portfolio management tend to boast continuous IT efficiency improvement, ability to reduce costs, and improved effectiveness with enterprise-wide asset deployment/management. Portfolio management enables CIOs to manage the business of IT like a financial investment portfolio, enabling them to categorize, evaluate, prioritize, purchase, and manage technology assets and projects.

The reward for CIOs who measure and manage each component of the IT value equation is better alignment with less pain. And that combination leads to greater IT value.

Chuck Tatham is Vice President, Marketing at Changepoint Corporation ( Changepoint is a leading provide of business process automation software for corporate IT departments and global services organizations.

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