A Complete Guide To IT Portfolio Management Frameworks & Best Practices

Businesses with significant IT resources at their disposal, and projects which involve the deployment of tech assets, stand to benefit significantly from IT portfolio management.

There are frameworks designed to codify this discipline and best practices that have to be followed to ensure the right decisions are made and that money is spent efficiently.

In this guide, we’ll talk about the ins and outs of IT portfolio management so that you are in a position to harness it within your own organization.

The basics

First of all, let’s focus on the definition of IT portfolio management. It covers various aspects of IT projects, from the budget to the scheduling, and seeks to align these with the objectives of the business as a whole.

The upshot of effective management in this context should be increased growth, as well as insight-driving decision-making that wrings as much value from each subsequent project as possible.

The benefits

IT projects are becoming more complex and costly by the year, which means that it’s possible for waste to accumulate if assets are not tracked and analyzed over time.

The best practices

The path you follow to impactful IT portfolio management must be unique to the needs and scope of your company. However, there are some best practices which are generally applicable, including:

1. Having a dedicated department for IT portfolio management

You need a specific team equipped with the right tools in order to get your asset management right. If you’re trying to handle this as part of the broader IT department or expecting one or two employees to take this on in addition to their existing duties, compromises will be made.

Obviously setting up a specific department for IT portfolio management comes with its costs and potential complications. But the alternative is allowing projects to run over-budget and beyond the desired timeframe, which will leave you worse off in the long run.

2. Standardizing risk management

Much of the management process is about recognizing and minimizing risks throughout the duration of an IT project and beyond.

Projects have to be assessed according to the wider portfolio, not just on their own merits and potential pitfalls. It’s this holistic overview which is only achievable if you’ve got a framework for portfolio management in place and you seek to standardize key aspects.

3. Balancing priorities successfully

Not all projects are created equal, and so you have to work out which ones need to be at the top of the agenda and which can be pushed further down the queue.

Once again it’s about knowing the extent to which a project will be of value in terms of business growth and budgetary efficiency. And crucially, that doesn’t mean always giving bigger projects priorities because sometimes it’s the smaller ones that will bring about the most significant changes.

4. Embracing flexibility

Requirements can change rapidly, particularly within an IT department, so portfolio managers must be able to adapt to new challenges and empower colleagues with the resources they need when they need them.

5. Leveraging tools

There are solutions built for streamlining IT portfolio management, and their use makes it possible not only to stay on top of intricate projects more easily but also to make use of analytics to glean insights and provide clear evidence to help with decision-making in other departments.

The frameworks

There are a multitude of different frameworks which can be applied to IT portfolio management, many of which have been developed and refined over time through their application in large businesses, under the scrutiny of experts in this field.

While there are variations between them, there are a few things which tie together most frameworks, such as:

1. Planning

This first and perhaps most important planning phase involves determining levels of demand for a project, checking the current portfolio to see if these can be met already, and building a budget to determine what must be spent to serve the needs of the team effectively.

2. Prioritization

As mentioned in the discussion of best practices, prioritizing projects is at the core of good portfolio management.

3. Implementation

Whether kick-starting a new project or optimizing existing elements of a portfolio, the actual execution comes next and leads to follow-up categories including vendor management and test management, according to what a project entails.

4. Monitoring & reporting

Once a project is up and running, it has to be monitored persistently and analyzed to ensure that it’s operating as intended.

At this stage, frameworks require that managers establish that the business is actually benefiting from what’s been implemented. If expectations are not met, more work is needed to find out why and work out how to address this.

Involving decision-makers from other departments is again necessary here, and clear reporting and good communication will grease the wheels of progress.

The challenges

Lastly, while there are many benefits to IT portfolio management, it is not without its struggles. The first is in the actual implementation of projects, as there is often resistance to changes when they are first proposed, even if the long-term advantages are obvious.

Stimulating cooperation amongst colleagues from different teams and departments is also an obstacle, as is ensuring that every project is being prioritized and overseen as it should be when employees are stretched thin.

The bottom line

The practice of IT portfolio management has evolved over several decades, and yet it is still changing and improving all the time.

For businesses that require it, the perks are overwhelmingly appealing, even if the development and implementation of a framework will be taxing in the short term.