Balancing Projects and Applications

  Governance   Portfolio Management   ProjectsAtWork  

To achieve meaningful portfolio management benefits, both application and project portfolios should be considered.

This is the fifth in a series of articles describing best practices for implementing and executing portfolio management.

There are two principle categories of costs to manage in IT organizations. Broadly speaking, they are “Run the Company” and “Change the Company” costs. “Change the Company” costs are essentially the project portfolio, which produces new or enhanced application assets. “Run the Company” costs are essentially the application portfolio and the money spent on operating tthese assets. To save meaningful dollars and ensure the highest value IT portfolio, managing and rationalizing both portfolios is a must.  

Project portfolio management is frequently seen as the next logical step up from project management. Large projects can represent a significant amount of the IT budget and are frequently of such high profile and risk that PPM seems like the safe bet to improve on. However, “Run the Company” spend is annual and recurring, and, according to recent studies, can account for 69 percent of the IT budget.

The key to success is to frame the issue in a strategic context. An organizational value chain, as discussed in the Value Model …

Please log in or sign up below to read the rest of the article.