SmartAdvice: Adobe And Macromedia Should Ride Software-As-A-Service Trend

The companies can offer a consistent user experience for authoring, displaying, and integrating with back-end applications, The Advisory Council says. Also, a formal review and reporting process will help companies evaluate IT investments.
Question B: What IT investment-review processes have proven to be successful?

Our advice: Portfolio-investment-management is rapidly being adopted as a more formal process by a growing number of organizations to evaluate, analyze, prioritize, fund, and authorize IT investments.

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PDF file: Information Technology Investment Management
Most current and emerging best-practice companies use several common elements to help in the investment process:
  • Strategic and operating IT plans -- IT investment funds, in macro terms, are identified in the strategic and operating IT plans and budgets (e.g., capital and expense budgets) that should be aligned with and support business plans. This includes new applications, technology refresh, and "keeping the lights on" categories.
  • Business and IT steering committee and investment criteria -- Major IT investments are usually reviewed, priorities set, and approved by a business/IT steering committee based on a number of attributes. These factors include: incremental revenue, ROI, strategic fit, competitive advantage, cost reduction, share of customer spending, barriers to entry, degree of risk, customer satisfaction, and regulations.
  • IT investment management -- Several U.S. government agencies developed a formal IT-investment review-and-reporting policy and process, defining the format and content required to submit a request for IT funding. All funding requests above a certain amount must go through this process. In addition, there's a governance and review process that reviews the ongoing status of key investment initiatives until their completion and operationalization.

IT investment-portfolio-management is becoming a more formal process because it provides executive management with greater oversight over IT dollars, to assure that they're being spent effectively on initiatives that add optimum value in support of business objectives and plans. It also ensures that IT initiatives are meeting financial and other performance objectives, and that any risks are prudently managed and mitigated.

--Gad Selig

Anurag Gupta, TAC Expert, has more than 12 years experience at Intel and in enterprise platform technologies, performance, architecture, and strategy. He helps companies use technology to build sustainable competitive advantage. He is Engineering Manager at Intel responsible for the Eclipse open-source development platform program and strategy. He is active in the Eclipse Architecture Council and the Eclipse Requirements Council.

Gad Selig, TAC Expert, has more than 30 years of diversified domestic and international executive, management, and consulting experience. His experience ranges from marketing to operations, business development, systems and network integration and outsourcing, CIO, project management, process innovation, and IT strategy and governance. He has published two books and more than 30 articles. He is an associate professor of management and technology and director of the Center for Business Information Technologies at the University of Bridgeport.