Successful portfolio management requires sound processes for building consensus on what is important and how project results will be measured. Here are four value-based models to facilitate better decision-making.
This is the third in a series of articles on best practices for implementing and executing portfolio management.
If you owned a stock portfolio, you would look at industry standard metrics, such as earnings per share, or the stock’s Beta value (volatility) to decide whether stock A or Stock B was the better buy. The same principle applies to your IT portfolio. Well-understood priorities and metrics that translate your strategy into investments are a necessity. This linkage, from strategy to execution, results from building value models that describe how you create value, and how IT contributes to that process.
Here are four models that enable you to translate strategy to investment priorities and to rate investments against those priorities.
1. Strategic Road Map
The Strategic Roadmap describes how investments contribute to business results. The Strategic Roadmap should:
> Be a high level plan describing business results with clear metrics,
> Demonstrate clear linkage from investments to results,